Serious talk of Greek exit from eurozone; Fears of capital flight and contagion; China eases bank capital rules after weak output
Here's my summary of the key news over the weekend in 90 seconds at 9 am, including news that serious talk is growing that Greece will be allowed to exit the euro.
European central bank players and European officials spokes about how Greece might exit and how to limit any damage.
The election of parties against austerity plans has forced European officials to consider their options. Angela Merkel's pro-austerity party was heavily defeated in the North rhine Westfalia state over the weekend.
The Greeks themselves still think they can reneg on their austerity plans and stay in the euro. But European companies are increasingly pulling their cash out as soon as they earn it to avoid having it stuck in Greece in the event of an exit and a return to a vastly devalued Drachma.
Meanwhile, China lowered the reserve requirements for its banks by 50 basis points to 20% over the weekend after weaker than expected industrial output figures raised fears about a hard landing in China.
Many now expect China's leadership to cut interest rates to boost the economy, although there is some doubt about whether the now-fractured leadership can take decisive action in the middle of a once-in-a-decade leadership transition.
The New Zealand dollar was solid just above 78 USc in morning trade, but did test lower over a volatile weekend dominated by the Greek worries and news of a shock US$2 billion loss by credit derivative traders at JP Morgan.
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