Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news Greek politicans voted in favour of an austerity package needed to avoid default.
However, another vote on the implementation of the package is scheduled for tonight and European banks need to agree on a debt rollover later this week. There remain doubts on whether such a rollover would trigger a formal default by ratings agencies. See more here at Bloomberg.
Greece's debt remains unsustainable and many believe it will ultimately have to default and possibly leave the euro zone in national bankruptcy.
Stock markets, oil prices and currencies rose on relief that an immediate default is unlikely. German stocks rose almost 2% while US stocks were up aroun 0.8% in late trade. Some had feared a Lehman Style freeze on credit markets if Greece had defaulted. See more here at Bloomberg. See more here Reuters on the resulting riots.
Riskier currencies, including the New Zealand dollar, also rose.
The New Zealand dollar rose to 82.2 USc and 71 on a Trade Weighted Basis, which is near a 4 year high. It also rose to a record high vs the British pound of over 51p.
Meanwhile, Standard and Poor's warned the United States its AAA sovereign credit rating would be immediately downgraded to D if the government defaults on August 2 in the event its debt ceiling is not raised. See more here at Reuters.
Talks between Republican and Democrat leaders broke down this week, raising fears of a default.
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