Here's my summary of the key news overnight in 90 seconds at 9 am, including news stock and bond markets were broadly flat overnight as expectations grow that central banks will intervene soon to stabilise European financial markets and try to restart stalled economic growth across much of China, Europe and the United States.
US stocks closed up 0.6% while British stocks fell 1.1% and German stocks fell 0.2%. Bond yields were flat near record lows in Britain, America and Germany as investors hug safe havens.
Markets are now focused on the European Central Bank's meeting tonight, the Bank of England's meeting on Thursday night and testimony from US Federal Reserve Chairman Ben Bernanke to Congress on Thursday night.
Some investors are hoping for signs from the European Central Bank of either further rate cuts or another round of LTRO (Long Term Refinancing Operations) for Euro zone banks. They are also hoping for signs of a Euro-zone wide banking union and any moves towards a Euro-zone bond where Germany guarantees the debts of Southern Europe. The Bank of England may increase its programme of Quantitative Easing or money printing to buy government bonds, while the US Federal Reserve is also being closely watched for signs it will launch a third round of QE, often referred to as QE III.
Meanwhile, Spain ramped up the pressure on European leaders overnight with an open call for the Euro-zone to bail out its banks. See more here at Reuters. It also acknowledged that Spanish government bond yields were now so high the government was effectively locked out of financial markets. See more here at Reuters and see more here in Dan Bell's Currencies report.
Closer to home, the Reserve Bank of Australia cut its official cash rate by 25 basis points to 3.5% as it responded to a slowing Chinese economy. See more here in our article from late yesterday.
The Reserve Bank of New Zealand will release its June quarter Monetary Policy Statement next Thursday. Financial markets are pricing in a 30% chance of a 25 basis point rate cut in New Zealand and see around 40 basis points of cuts over the next year.
However, the financial market view contrasts with the views of most economists, who broadly expect the next move by the Reserve Bank here will be a hike in March of next year. Borrowers who see rates rising are more likely to fix, while those who see rates falling are more likely to float. See more in my Fixed vs Floating guide.
In some good news though, Fonterra's fortnightly auction of milk powder overnight saw prices rise 13.5%. However, they have only recovered to early April levels and remain down 33% from a year ago. See more here in David Chaston's article.
The New Zealand dollar was broadly steady overnight, firming from around 75.4 USc before the auction to around 75.7 USc in mid-morning trade.
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(Updated with links)