90 seconds at 9 am with BNZ: NZ$ and US stocks firm on hopes for Greek rescue deal; Fitch warns of China hard landing; A$ up after surprise RBA rate hold

Here's my summary of the key overnight news in 90 seconds at 9 am in association with Bank of New Zealand, including news US stocks edged 0.3% higher overnight to their highest levels since May 2008 on hopes the Greek debt crisis may be nearing some sort of resolution.

That also boosted appetites for riskier currencies, including the New Zealand dollar, which was firm over 83.5 USc in morning trade. See more here on US stocks rising here at Bloomberg.

Greek political leaders were finalising a draft austerity plan late into the European night (early this morning New Zealand time) that would impose public service job cuts, a lower minimum wage and a fresh crackdown on tax avoidance. See more here at Reuters.

Greece's 'troika' of donors at the European Central Bank (ECB), the International Monetary Fund and the European Union are demanding the fresh austerity plan in exchange for a €130 billion bailout needed before bond payments are due on March 20.

Politicians and bankers are worried Greece may declare national bankruptcy and default on its debt without the bailout, raising the grisly prospect that Greece may be forced into an uncontrolled exit from the euro that would unleash financial chaos through the Europen banking system and its economy.

However, the draft plan still needs to be agreed by Greece's increasingly grumpy politicians, who are eyeing elections expected in April. Greek voters are sick of austerity after four years of cutbacks and economic chaos. Greece's (unelected) technocratic leader Lucas Papademos is reported to have called for a study of what an uncontrolled exit would look like.

A meeting to find consensus is scheduled for later on Wednesday and the noises coming from the various feuding political blocs is not positive. The talks are happening amid a national strike. See more here at Reuters on how none of the Greek leaders want to accept the blame for the latest austerity plan just weeks before elections.

China 'hard' landing?

Meanwhile, ratings agency Fitch has warned that a 'hard landing' for China's economy was potentially the biggest risk for the global economy in 2012. See more here at DowJones.

This is important for New Zealand because more than 60% of our exports now depend on the Asia Pacific region including Australia. That region, in turn, is driven by what is happening in China, which is now Australia's largest export partner and New Zealand's second largest export partner (Australia is our largest). The IMF has warned this week that a slump in Europe could carve 4 percentage points off China's economic growth rate, which would turn a soft landing into a hard landing. Less than 7% of New Zealand exports go to the euro zone.

No Aussie rate cut

Across the Tasman, the Australian dollar rose to to almost US$1.08 overnight after the Reserve Bank there surprisingly held its official cash rate at 4.25%. See more here on our site.

Most economists had expected a cut because households, retailers and manufacturers are struggling under the weight of high household debt and a high Australian dollar. This is despite the mining boom.

This decision not to cut made the Australian dollar more attractive for those foreign investors able to borrow at 1% or lower in Europe and the United States and then invest in Australian bonds and assets returning 4% or higher. This is known as the 'carry trade' and is bolstering the New Zealand and Australian dollars at the moment.

See more here in BNZ's currencies report on our site.

Closer to home, Radio NZ reported that Transpower would lift its power transmission charges from April to pay for investment in the national grid, which some power retailers are warning could increase prices 10%.