Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the European Central Bank (ECB) failed to sterilise its bond purchases overnight as banks were unable to return enough funds to the central bank. (Video due shortly)
Meanwhile ECB lending to European banks hit its highest levels since the Lehman Brothers collapse as signs emerge of intense stress within the inter-bank lending system in Europe.
Wholesale money markets have virtually frozen in Europe since last Thursday's shock bond auction failure in Europe. Some commentators are warning the Eurozone could break up and collapse violently within the next two weeks as European leaders and bankers fail to stop contagion in the European debt crisis. See more here at Reuters.
Meanwhile European ministers are struggling to beef up their European Financial Stability Fund (EFSF) and have even started talking to the International Monetary Fund about finding help. Also, Italy had to pay a record 7.89% to sell 3 year bonds overnight, which is seen as unsustainable for Italy. See more here at Reuters.
Deposits at Greek banks are dwindling fast and various leaders have warned of wholesale runs on Southern European banks unless a solution can be found fast. See more here at Bloomberg.
A French newspaper warned that Standard and Poor's could warn within days it may cut France's AAA credit rating because of the exposure of its banking system to Greek and Italian government bonds.
Meanwhile, Britain has announced another round of budget cuts as it warned of much slower economic growth and higher unemployment. Chancellor George Osborne released his 'Autumn statement', which included a slashed economic growth forecast, a capping of wage growth for public servants at 1% once their pay freeze ends in 2013, an extra 111 billion pounds of debt issuance over the next five years and a delayed return to surplus by 2016. Osborne also accelerated a rise in the pension age to 67 from 66 by 8 years. See more here at BBC.
Australia also announced a deterioration in its budget outlook yesterday. See more here at Business Spectator.
Although our Finance Minister Bill English remains confident New Zealand's budget outlook is on track. See more here in Alex Tarrant's article.
In the United States American Airline filed for bankruptcy protection. See more here at Reuters.
US and European stocks were mildly firmer overnight. The New Zealand remains firm over 76 US cents.
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