Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news European Central Bank (ECB) President Mario Draghi has dashed hopes the central bank would print money and massively buy European government bonds to solve the European debt crisis.
Draghi's rejection of this 'big bazooka' idea surprised and disappointed markets, who had thought Draghi hinted last week he might intervene massively if Europe's governments improved their budget coordination.
Markets had initially welcomed the ECB's decision to cut its official cash rate by 0.25% to a record low 1% and to loosen collateral rules for banks to borrow from the ECB for periods of up to 3 years.
European stocks fell 2.5% and US stocks were down 1.4% in late trade. See more here at Bloomberg.
The New Zealand dollar fell to 77.2 USc immediately after Draghi's comments from as high as 78.8 USc beforehand.
Investors typically sell 'riskier' currencies such as the New Zealand dollar whenever they get nervous about financial market conditions and the global economic outlook, given the New Zealand dollar is seen as exposed to more volatile commodity prices.
The disappointment over the ECB's stance came at a crucial time on the eve of a crisis summit in Brussels where Germany and France are hoping to push through an agreement to change the European Union treaty with tougher rules for budget coordination.
Europe is desperately trying to create a single budget policy to match its single monetary policy. French President Nicholas Sarkozy warned of an explosion in the Euro zone unless a solution can be found at this summit. See more here at CNN.
Meanwhile, the European Banking Authority (EBA) has told Europan banks they need to raise 115 billion euros in fresh capital to strengthen their balance sheets to cope with the increasingly toxicity of their European bond holdings. See more here at Bloomberg.
The Bank of England held its interest rate as expected at a record low 0.5% and pledged to continue with its own money printing. See more here at BBC.
Elsewhere, in the world of Insurance, NZ Herald reported Warren Buffett's Berkshire may be a bidder for AMI Insurance. The Age reported a rumour that Wesfarmers, which owns Lumley Insurance, may launch a takeover bid for IAG, which owns State and NZI here.
(Updated with more detail, links)