Quentin Grafton, a Professor of Economics at the Australian National University says the long-term trend is likely to be lower prices. He says the Chinese economy poses a risk to Australia.

 

There is a fragility in the Australian economy that a lot of people don't understand, do not appreciate that we need to be cognitive at the back so there is not a business as usual I thought I can say. We need to lift out again. Otherwise there will be shots coming our way and you will be … 

 

Falls in the iron ore price weighed on mining stocks and in turn the broader market: 

 

The All Ordinaries Index fell by point six percent, as the ASX 200. The HP and Reo Tinto lost over one percent each; Fortescue Metal was down over three percent. The gold miners lost ground. Telstra reversed earlier gains. The Australian Dollar is worth 93.45 US cents. 

 

The European Central Bank has surprised analysts with another cut to the official Euro-Zone interest rate. The 10-basis-point cut takes the official rate to almost nothing, at 0.05%.

 

The ECB has also launched an asset purchase program to buy debt products from banks but it has stopped short of adopting the quantitative easing used by the US Federal Reserve.