European Contagion

Worries continue to swirl around the world with a number of European countries experiencing funding pressure. The stockmarket in the US went into free-fall last night being down 1000 points at one point before ending down 347 points. There is some speculation that the sell-off was due to a human or computer error.

In times such as these there is always a flight to quality. As such the AUD has been sold off and is currently around .88 and the long end of the yield curve has rallied significantly - a massive 30 points in the 3 years. The curve has flattened significantly over the last few weeks.

Government Guarantee
At times such as these it's a welcome comfort that up to $1m in deposits with any ADI is guaranteed by a stable AAA rated government until October 2011.