Here's my summary of the overnight news in 90 seconds at 9 am in association with Bank of New Zealand, including news French President Nicholas Sarkozy has announced plans for a unilateral financial transaction tax of 0.1% that starts in France alone as early as August.
Many eurozone countries have agreed the need for such a tax, often called a Robin Hood or Tobin Tax, but have failed to get everyone to agree. Britain has rejected the idea as too damaging to jobs in the City of London, while the rest of Europe is worried that anyone who imposes the tax unilaterally would see banks move elsewhere in Europe, or into Asia or America. See more here at Bloomberg.
However, Sarkozy is behind in the polls and faces defeat in Presidential elections in April and May unless he can win the support of voters, who are angry about slow growth, rising unemployment and the role of banks in the Global Financial Crisis.
Sarkozy, who leads the centre right parties in France, faces defeat at the hands of the centre left candidate Francois Hollande, who also supports such a tax. A wild card in the election is the leader of the far right National Front, Marine Le Pen, who wants to pull France out of the euro altogether.
Meanwhile, European stocks fell 1% and the Dow was down 0.2% in late trade as nerves about the European sovereign debt crisis returned. A much touted deal to restructure Greece's deal is still yet to be finalised on the eve of a regular crisis summit of European leaders. See more here at Bloomberg.
Italian bond markets were steady overnight after a well received auction of Italian bonds, but Portugese Credit Default Swap spreads, which are bought as insurance against a default on government debt, rose to record highs. The markets are now pricing in a 73% chance of a Portugese default. See more here on the Euro crisis summit at Reuters.
Across the Atlantic, US consumer spending was weaker than expected in December despite incomes growing at their strongest rate in a year. Many consumers are tightening their belts and saving more. See more here at Reuters.
Closer to home, Roeland van den Bergh reports at the Dominion Post that insiders are saying Air NZ Chief Executive Rob Fyfe may announce his resignation before the end of next month to take a job as the head of one of Britain's biggest airlines, possibly British Airways or Virgin Atlantic.
The New Zealand dollar fell slightly overnight, but remains solid over 82 USc.
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