Here's my summary of the key news overnight in 90 seconds at 9 am, including news US stocks fell sharply on Friday night and again in early trading overnight as worries mounted over corporate earnings.
US stocks have rallied 15% to near five year highs this year on hopes US and European monetary stimulus would boost global activity. Now investors are looking at the evidence of whether all the stimulus is boosting activity in the real economy and in corporate profits.
However, there have been weak results in recent days from the likes of Google, Microsoft, General Electric and McDonalds. US stocks were down 0.5% in late trade and fell more than 1.5% on Friday night. They eventually closed flat after a late rally. See more here at Bloomberg.
The New Zealand dollar, which often rises and falls with appetites for riskier assets globally, fell to 81.6 USc by this morning, having reached over 82.2 USc on Friday. See more here in Mike Jones currencies report on our site.
Meanwhile, investors in New Zealand are looking ahead to Thursday morning at 9 am when new Reserve Bank Governor Graeme Wheeler announces his first decision on the Official Cash Rate.
Markets are pricing in a 15% chance of a cut in the OCR, but all economists expect Wheeler to hold the rate at 2.5%.
Most economists do not expect the OCR to rise until late next year as the inflation-sapping effects of slow growth globally and a high New Zealand dollar keep inflation expectations well within the Reserve Bank's 1-3% target band. See Alex Tarrant's preview here.
Meanwhile, Hong Kong was forced over the weekend to defend its peg to the US dollar as some speculate it will pushed up beyond its target range. The Hong Kong Monetary Authority (HKMA) bought US$600 million worth of US dollars to try to stop it from rising. A hedge fund manager called William Ackman from Pershing Square is betting the Hong Kong dollar will be forced off the peg. See more here at Bloomberg.
Elsewhere in another sign of slowing growth in Asia, Japan reported exports fell 10% in September from a year ago as demand from Europe and the United States was weak and Japan's territorial dispute with China hit sales of Japanese made cars and electronics in China. See more here at Bloomberg.
(Updated with late rally in stocks to close flat)
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