90 seconds at 9 am: Stocks fall sharply; Spanish and Italian bond yields rise; China slows; commodities fall

Here's our summary of the key news overnight in 90 seconds at 9 am, including news that the world equity markets are falling, and falling quite sharply. The Dow is down over 1.5% in late trading, and the Americans are following European markets which are down about 3%. The Italian stock market was down almost 5%.

A surge in Spanish and Italian bond yields fueled concern Europe’s debt crisis is worsening. Borrowing costs in Spain approached 6% even after the Spanish government announced new budget cuts. And as we reported yesterday, the implications for the more than 400 bps spread between Italian and German 10 year bonds is now sinking in, and this is undermining market confidence.

The situation is not helped by more signs of weakness in China. They reported an unexpected trade surplus in March, but that was because imports slowed markedly. Chinese exporters are being hit hard by Europes woes, and the IMF is downgrading its growth forecasts for China.

And important political moves are occurring in China with the completion of the purge of Bo Xilai and the arrest of his wife on murder charges.

All this gloom has had markets retreating from 'risk' and that means our dollar has fallen overnight. It now buys US0.8130, down almost 1 cent from its high yesterday. The New Zealand dollar has pulled back from most other major currencies, and the TWI is currently at 72.75.

Reflecting these risks, gold was up, but oil was down - Brent crude was down almost 2.5% - and copper was also down, almost 2%.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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David I think the whole unemployment statistic is what is undermining confidence not just in the Markets but in the E.U. as a concept in itself.....
 Right about now I'd bet there are squillions of unemployed citizens who wished they had never bought into  the idea.....
 It can only get worse from here in the short run..........Downside, China will have even further reduced trade with the E.U. as civil unrest spreads like contagion.
Upside...the Warehouse will be doing two for one deals every other day for the foreseeable future.
You know China really does need to look at the Yuan......see the long game...get some balance out  there.
 Sooner or later .....I'm alright Jack....cops a lashing from the envious.

John Hussman tells it like it is:

Good read andyh.....extract sample spot on the money...just pissing in the wind....sooner or later the haircut must be given ...and then endured.
Regardless of the fact that QE has had no durable economic benefits (more on that below), and does little but to repeatedly lay fresh wallpaper over the rotting edifice that is the global banking system, the main effect of QE has been to provide temporary support for the most speculative corners of the financial market after they have been pummeled.

Good article...A.J.  ..ta.,.the yuans revaluation would certainly give credibility to Obamas export target.
 I note on the repubulican outlook he did not include their willingness to involve themselves with confrontations, which have in the past got in the way of their delivering the American Dream. 

A little bit of business news trivia announced on "The Business" last night. Not in the MSM today. Business Spectator remains silent. Fairfax Media has made an offer of $20 million for "Business Spectator" the most prominent and independent electronic fringe media outfit in Australia. Where to for Fairfax Media in New Zealand. One guess.

um ....er.....was Bernard drinking Chardon or Don...hmmm lemme see now....oh I just know the Fairfax moderator's going to hate me....unless...the dealbreaker...is none other than the Gumster hisself.....!!
I will survive...ooooh yeah I will survive..