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90 seconds at 9 am with BNZ: Standard and Poor's may cut 15 Eurozone sovereign ratings, including Germany and France; Fonterra auction up 2.6%; RBA cuts, but will banks follow

90 seconds at 9 am with BNZ: Standard and Poor's may cut 15 Eurozone sovereign ratings, including Germany and France; Fonterra auction up 2.6%; RBA cuts, but will banks follow

Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including shock news yesterday that Standard and Poor's is considering downgrading the sovereign credit ratings of 15 Euro zone countries, including both Germany and France.

See more here at CNN.

France's rating may even be cut by two notches. The news was a bombshell amid tense negotiations expected to result in a new European Union treaty proposal at a summit on Friday. See more here at BBC.

There is even talk the European rescue fund, known as the European Financial Stability Facility (EFSF), may have its credit rating downgraded. French bond yields spiked higher, increasing the pressure on the European banking system, which cannot afford to write down the value of its European government bonds.. See more here at Bloomberg.

European stocks fell 0.5% and US stocks were broadly flat in late trade after the Standard and Poor's news, which is seen making any solution to the the European financial crisis more difficult. See more here at Bloomberg.

The New Zealand dollar was firm around 78 USc in morning trade as markets watched the European crisis. See our interactive chart below and BNZ's currencies report here on our site.

Also, relatively strong results overnight from Fonterra's fortnightly milk powder auction helped support the currency. Prices rose around 2.6% despite the global economic turmoil. See the full results here at GlobalDairyTrade.

Meanwhile, the Reserve Bank of Australia cut its cash rate from 4.5% to 4.25%, pointing to slowing growth in China and a two-speed economy in Australia, where mining is doing well but manufacturing and retailing is struggling under the weight of high household debt and a strong currency. See more here at SMH.com.au

However, the big four Australian banks have yet to pass on the cut to floating mortgage borrowers, risking big political and public relations fallout. They may argue that funding costs for their foreign debts have risen because of the European Financial Crisis, but borrowers and politicians may see it differently, arguing the banks are bolstering their profits at the expense of customers. See more here at SMH.com.au.

The Bank of Queensland has passed the rate cut on to its customers.

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11 Comments

Only one course of action open for the euro polly fools now....make the issuing of ratings on sovereign bonds a criminal offence( unless they are given AAA)...followed by the issuing of ratings on the banks....throw the ratings agencies staff in jail...

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Who rates the raters,because these guys are often at the bottom of the cliff as we have seen in the past.

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 "One of Canterbury's newest MPs wants to ban the burqa and arm bank tellers, dairy owners and taxi drivers." herald

One of winnies brighter party colleagues!

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Mate banning the burqa will make armed dairy owners angry!! Do we really want that?

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Not the burga...the burqa.....of course dairy owners will be angry if the burga is banned!

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Yes but it's their rellies who wear that thing!!

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Storm in a burger LB....remember the days when men had to wear a hat...not any old hat but one fitting their station in life....tophat for Steed....cap for the peasant....and the other half had to cover the ankle...jeez oh dear all the blokes was bumping into each other cos they walked everywhere with their eyes on the hidden ankles....so many accidents...men run over by horses....

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.... the only dairy farmers who will be angry if the burqa is banned are ones with very ugly sharemilkers ......

No sense in scaring the cows is there , not when you're pulling the udder one ......

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Hey....HEY you lot in the Met office.....close the fridge door will you...!

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The NZHerald appears to have turned over the EQC rock and a whole lot of scam and pollution is now being exposed....will the CCC and Cera be required to carry out decontamination work quickly to put the rock back on top of the scams and hide the pollution!

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