90 seconds at 9 am: NZ$ slides to 79.5 USc as global growth fears and financial volatility grow; US jobs growth weak; Sarkozy loss new blow to German-led European austerity plan

Here's my summary of the key news over the weekend in 90 seconds at 9 am, including news that French President Nicholas Sarkozy has become the 11th European leader to be kicked out by voters since the onset of the global financial crisis.

Sarkozy's loss is the first by an incumbent French President in 30 years and signals another voter rejection of the German-led austerity pact designed to keep bond holders happy and keep the euro together. The euro is fast becoming another type of 'gold standard', one that was eventually abandoned by many countries during the Great Depression.

The loss is expected to increase financial volatility and raise doubts in financial markets about the ability of Germany to hold together the austerity pact aimed at crunching budget deficits lower to keep confidence in the euro. However, voters are rebelling against the social pain caused by rising unemployment and cuts in public services. In recent days European politicians have begun talk about softening the German-led push to reduce budget deficits.

All this is raising uncertainty about a return to solid global economic growth. Figures released late on Friday night showing weaker than expected US jobs growth in April also unnerved those hoping for a solid economic recovery.

The S&P 500 fell 1.6% and European stocks fell 2%. This move to take 'risk off ' saw commodity-linked currencies like the New Zealand dollar slide again, extending their losses seen earlier in the week. The New Zealand dollar fell to a fresh 4 month low of 79.5 USc in early trade.

Wholesale interest rates have also fallen in New Zealand to their record lows in recent days as investors see weaker growth and inflation raising the prospects of a cut in the Official Cash Rate in the next six months.