Here's my summary of the key news overnight in 90 seconds at 9 am, including signs financial markets are gearing up for the US Federal Reserve to announce another easing of monetary policy later this week.
The Dow closed up 0.8% at a one month high and European stocks rose for a third day on hopes the Greek crisis may be calming down and that Europe will have to come to the aid of Spain, which is groaning under the weight of heavy debts and high bond yields.
See more from Bloomberg here on the rise in US stocks and the rise in European stocks.
The US Federal Reserve's Open Markets Committee, which sets monetary policy, is set to release its decision from its two day meeting at 6 am Thursday New Zealand time. Speculation is rife the Fed will announce either a third round of Quantitative Easing to buy government bonds or a new round of 'Operation Twist', where it sells short term bonds to buy long term bonds. Both moves are designed to lower long term interest rates and encourage more borrowing and economic activity.
Elsewhere, European officials floated the prospect of an easing of the terms of Greece's current second bailout and austerity package. This came as the centre-right pro-bailout coalition of parties moved to form a government in Greece. However, German Chancellor Angela Merkel said she remained opposed to any easing of the terms of the package.
Spain remains in a world of pain as it auctioned 12 month bills and 18 month bills at yields more than 200 basis points higher than they were a month ago. The main buyers were Spanish banks who are drawing down on 3 year loans from the European Central Bank and lending to their own government. See more here at Reuters.
All this hope for monetary stimulus on stock markets boosted appetites for riskier assets such as the New Zealand dollar, which rose to 79.8 USc in morning trade.
Also, Fonterra's GlobalDairyTrade auction platform announced milk powder prices fell 0.5% in its latest fortnightly auction. The previous auction saw prices bounce a surprising 12.5%, but they remain down more than a third from a year ago.
Meanwhile, Canada looks set to join Mexico in joining the discussions about being part of the Trans Pacific Partnership trade agreement, which would include Australia and New Zealand. However, Canada was quick to say its protected dairy industry would be exempted from any such trade deal.
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