90 seconds at 9 am: Markets steadier as investors await Fed and ECB confirmation of fresh money printing to restart US economy and settle euro crisis; NZ$ hits record high vs euro

Here's my summary of the key news overnight in 90 seconds at 9 am, including news investors settled down overnight into a waiting and watching pattern in expectation the US Federal Reserve and European Central Bank (ECB) will confirm new stimulatory measures later this week to restart growth in the US economy and stave off a collapse of the euro zone.

The US Federal Reserve is widely expected to launch a third round of money printing to buy long term government bonds known as Quantitative Easing ( QE III) as early as Thursday, while the hope is the ECB will muster the necessary political consensus for fresh buying of Italian and Spanish bonds.

There remain doubts about the ECB stimulus, despite comments from the ECB President Mario Draghi, Italian Prime Minister Mario Monti, French President Francoise Hollande and German Chancellor Angela Merkel this week that they would do 'whatever it took' to save the euro. Markets believe this means Europe will use its temporary rescue fund, the European Financial Stability Fund (EFSF) to buy Italian and Spanish bonds directly from governments, while the ECB restarts its programme of bond buying in secondary markets.

However, Germany's central bank, the Bundesbank, is opposed to these measures and there remains doubts about what can be agreed at an ECB meeting due late on Thursday.

European stocks rose 1.6% on hopes for fresh ECB stimulus from the Thursday meeting. See more here at Bloomberg.

Spanish and Italian bond yields fell in anticipation of ECB-sanctioned bond buying. The Spanish 10 year bond yield fell to 6.61%, while the Italian 10 year yield fell to 6.03%. However, the German 2 year bund yield fell to minus 0.08% after fresh Eurozone confidence figures showed a worse-than-expected slump to three year lows. See more here at Bloomberg.

This Eurozone weakness saw the New Zealand dollar rose to a fresh record high vs the euro of 66 euro cents.

US stocks fell around 0.1% with the markets on hold for the Fed's decision on Thursday and ahead of key jobs figures due on Friday. See more here at Bloomberg.

The New Zealand dollar was solid around 80.8 USc in morning trade. Traders will be watching National Bank Business confidence figures due later today for direction for the New Zealand dollar.

Meanwhile, local investor confidence fell in June to a net 0% in June, the ASB investor confidence survey showed. Investors preferred term deposits again for the first time since the fourth quarter of 2011 over rental property, although Auckland rental property investors remained buoyant.

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So right now we,
1) have crippled ourselves with debt.
2) dont want to stop taking...
3) dont want to pay it back so are passing the problem onto future generations as,
This will take 20 to 30 years to sort out....and in some cases when the UK says 2061 its all but 50 years....
The only 3 options are,
a) Default, that will cripple pension funds and OAPs savings etc who wont be able to pay out as they own or will get stuck with most of the debt. Taxes will have to rise to balance short fall and thats BIG tax rises.....a new 70+% top rate....45% instead of the present 30%...etc....WFF bye bye, economy, bye bye, Imports, bye bye, 20% un-employment as all the service industry and retail workers have no jobs and claim WINZ to boot...so a lot less spending so a depression.
b) Inflate, good for pension funds while it lasts, sort of, everyone else is screwed and well we might as well default as bond holders will want huge rates to compensate for inflation. Taxes will have to rise to pay that....thats BIG rises, it cant be sustained anyway, so back to a)
c) Balance the books by raising taxes and pay it back....which cripples the already all but dead economy. If you said 10% of GDP per year payback thats 2 decades of a recession like status........
so far c) strikes me as the least risk of major pain ie a depression...but Pollies will not get elected, so c) wont happen until we are like greece. Congrats voters you are doing it to yourselves.
and thats just the debt........
then the expectations of the BBs....
then Peak oil
etc etc
I dont see how anyone seriously considers sustained inflation overall will occur....what is essential will be "expensive", if only because we will be earning less...everything else will be "cheap" or not available.

Such wisdom would need a background of real-world experience.
Are you Arnold Nordmeiers son in law?
I have said It here before. Crank up the Import Substitution factory's now.  We are going to need them! Steven, you surely spelled out the reasons why.

Makes sense Steven, but only according to the way economies/govts. operate now. 
Not an issue if we change the way we live. 
"We believe humanity is now facing an unprecedented challenge, which requires us radically to rethink the way we see the world and organise ourselves. Never in our history have humans faced so many interconnected global crises of our own making - from climate change and economic collapse to ecosystem and community breakdown, species extinction and social inequity.
The globalization of the industrial system over the last century has pushed the Earth beyond her capacity to mitigate the impact of humans and created enormous inequity amongst humans. The era of excess, instant gratification, and production and consumption as our raison d'être, will have to end if we are to bequeath a viable planet to our children. Insatiable economic growth cannot continue if our children are to have a future. The dominant culture needs to find ways to grow other than accumulating endless things. Surely our human intelligence we are so proud of can aspire to more than becoming mindless consumers?
If we do not understand that the crises we face are symptoms of a deeper moral, ethical and spiritual crisis, no technical fixes will help us. Creating a viable future is about justice - for humans, for the Earth, and future generations of all species. To quote one of Gaia's friends and supporters, Teddy Goldsmith (1928-2009):
"The ecology we need is not the ecology that involves viewing the ecosphere on which we depend for our survival at a distance and with scientific detachment. We will not save our planet by means of a conscious, rational and unemotional decision, a sort of ecological contract based on a cost-benefit analysis.
A moral and emotional commitment is required. Indeed, one of the key tasks of ecology must be to redirect our emotions so that they may fulfil the role they were designed for: to commit us to what should be the overriding human enterprise of maintaining the critical order of the ecosphere."
We cannot solve the problems we have created with the same thinking that created them in the first place - Albert Einstein" www.gaiafoundation.org
"Earth Jurisprudence is the term first used by cultural historian Thomas Berry to name this philosophy of governance and law which understands that the Earth, not human interests, are primary. It accepts that humans are born into an ordered and lawful Universe, to whose laws we need to comply if we are to be a benign presence on Earth.
The many interrelated crises, which we are living through now – from mass species extinction to climate change and social and economic inequity – are a result of a radical break in human principles of governance over the last few centuries, where law has been used to legitimise social and ecological destruction. Short-term human interests fuelled by an insatiable drive to accumulate money and power, have been enshrined in law in total disregard for the well-being of the larger Earth Community. This is reflected by the fact that in 1886 corporations were granted the same rights as individuals without proportional responsibilities. However other species have not been given the rights of an individual human.

Earth Jurisprudence provides the foundation for restoring a mutually enhancing relationship between humanity and Nature. It calls on humans to fulfill their responsibilities to the wider Earth Community - to maintain the health of the Earth as a whole and all the different species living on Earth." http://www.earthjurisprudence.org/


Does anybody else think this is just becoming more and more like a bad, b grade horror movie?  You know what's going to happen, the acting is shite, the dialogue makes no sense, the storyline is dragged out to retain some element of suspense and yet you can't seem to tear yourself away from watching it because you think maybe, just maybe there'll be a different ending to what you expected.

LOL, yes couldnt put it better myself.......sadly there is no other channel to flick over to.

Great analogy!

From the UK
Surprised to hear that more than 20,000 graduates from the year of 2011 were still unemployed six months after they graduated? We shouldn't be. This is a full-scale tragedy written, orchestrated and adapted for real life by the Government, and the victims are our young people.
in North California,
I found out whats up with all the dope. These dopey gitts allow up to 90 pants if its medicinal, 90 plants wow, thats some serious usage. My neighbors are doing there bit to help the cause. some counties have no limit. Most people appear to just ignore the limit, like at the coast at Eureka which is its number one industry. If you are going to legalise drugs why not do it properly.

Andrew, I spent a night in Eureka once, back in the eighties.  I met up with a friendly group of young people, one of who described downtown LA as "like an acid trip". I still remember the embarrassed silence when I said that I had never had an acid trip.   

YoungTel, have you fixed that yet? Because in Eureka today its would be easy.  Eureka is a ghost town, like Astoria in Oregon but worse. No shops, no jobs just empty. Arcata is better as its got the university. Eureka is like Woodville in NZ but with 40,000 people.
"I spent 90% of my money on women, drink and fast cars. The rest I wasted". George Best

sorry to be regurgitating the telegraph this morning but the UK is in deep trouble

Mortgage approvals and lending slumped in June, Bank of England data showed, reflecting broader economic weakness due to extra public holidays and wet weather.

The Bank said mortgage approvals fell to 44,192 last month, down from 50,544 in May, the lowest reading since December 2010 and well below analysts' forecasts of a reading of 49,000. Net mortgage lending also slipped, shrinking by £355m, which was the sharpest drop since December 2010.

Only Mario Draghi's ECB can avert global calamity before the year is out

Mario Draghi has promised the moon. The European Central Bank’s council had better deliver on his pledge this week. If it does not, the crisis will surely escalate out of control in August or soon after.
 And we think our exports are going to keep going up.


Great post up top there Steven.....followed by meh's anaolgy.....good reading, made me want to scream at the B horror......hurry up and f&%king die already....Greece went viral to become the only show in town..........Ha....!.
 Still, you gotta laugh ain't ya...I mean if you don't ...your likely to be curled up fetal like or hanging from the rafters......yeah you gotta laugh.
As early as Thursday you say Bernard..? we shall see, shall we.?...did you get that from Ben personally..? ....or old school , like when the Markets tell him what he's going to do in advance in an effort not to have the Fed disappoint them ........
There may be some QEIII in the  wind Jim......but not as we know it....