Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with the BNZ, including news that Moody's has warned it may downgrade Spain's sovereign credit rating by as much as two notches from AAA because of its deteriorating growth prospects.
The Dow fell 1.1% immediately after the Moody's news and the S&P 500 fell below its key 1,040 support level on fresh fears a European meltdown would disrupt any global economic recovery. US jobs figures due late on Friday will be crucial for the market outlook.
The New Zealand dollar fell sharply again to 68.5 US c in early trade, moving in tandem with the US stock markets as it has in recent months. It had been up at 71.5 US c as recently as Monday.
Some good news however from Europe, where the European Central Bank lent less to banks than expected before a deadline tonight. The ECB is ending its special one year loan facility and some were worried a move to a 3 month facility would unleash banking volatility.
Meanwhile back in New Zealand, it's July 1 and prices have increased for petrol and power because of the Emissions Trading Scheme. Car registration costs are also rising along with ACC levies. Inflation is expected to hit nearly 6% later in the current year as GST increases from October 1.
Also, we have yet to hear from Allied Farmers, which was due to renegotiate a loan with Westpac yesterday, or South Canterbury Finance. Allan Hubbard said he would have a deal for an overseas investor to put money into South Canterbury by June 30.
Also, Southland's SBS Bank has agreed to merge with Hawkes Bay's HBS Building Society.
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