90 seconds at 9 am: NZ$ over 80 USc after global markets celebrate European summit deal for direct injections of rescue funds into banks; Barclays chairman to resign over LIBOR scandal

Here's my summary of the key news over the weekend in 90 seconds at 9 am, including news global stock markets and commodities markets rallied sharply in celebration of a deal reached late on Friday after a European leaders summit that lasted 13 and a half hours.

The S&P 500 rose 2.5%, commodity prices rose 5% and the New Zealand dollar rose over 80 USc after European leaders agreed to use European rescue funds to directly inject capital into European banks, including Spain's banks.

This appears to break the nexus between bank debts and national debts, given struggling nations on the periphery of the Euro zone have often had to issue sovereign debt to bail out their banks. Under this proposal,, European resuce funds guaranteed jointly by Euro zone nations would directly inject capital into these banks, would would avoid nations being dragged ever deeper into sovereign debt by their broken banking systems. See more here on the deal at Bloomberg.

Ireland and Greece have already suggested revisiting their resuce deals which were forced (partly) by just such banking crises.

However, the summit agreed that a European banking union with a common regulator would be needed first and that a proposal would be made before the end of the year. Sceptics worry that may not be soon enough and that the 500 billion euros in the European rescue funds may not be enough to cope with 2.4 trillion euros of debt in Spain and Italy. See more here from the sceptics at FTAlphaville.

Meanwhile, investors are looking ahead to monetary policy decisions later this week from the European Central Bank and the Bank of England.

The ECB is expected to cut its official rate by 25 basis points to 0.75% and may announce some extra form of easing, including a new version of its long term lending programme. It made similar moves last year after assurances of structural reform action from European governments.

The Bank of England is expected to announce a further 50 billion euros of money printing on Thursday night.

Also in London, the Chairman of Barclays, Marcus Agius, is expected to resign this week over the LIBOR scandal that is dominating debate in the The City. See more here at Bloomberg.