Rationalization of the euro area by dividing the members of the Eurozone into two groups- creditors and debtors appears to ease the financial difficulties in the Eurozone. Creditors, more stable countries around Germany, would have to accept a trade-weighted appreciation of 20% that might impact the exports but at the same time consumers and importers will gain on the better terms of trade. The measure
Brazil is investigating oil spill in 120km from the coast of Rio de Janeiro state. The responsibility of the spill lies on the US company Chevron. About 600 barrels of oil shaped a slick on the water. Fortunately the spill moves away from Brazilian coast as more than 17 ships clearing up the spill. In case Chevron does not fulfill its obligations to clean
The center-right party headed by opposition leader Mariano Rajoy is expected to win elections on Sunday. Spain is facing hard times as markets are focusing on its prospective debt trouble. On Thursday auction Spanish bonds hit 6.8 % while Spain's IBEX-35 index on yearly basis lost 16%. Analysts predict that Sunday's vote could provide short-term release for investors, as the Popular Party promises to support
Share prices across the globe are falling as the situation in Europe remains uncertain. Asian shares were severely impacted as Japan's Nikkei index declined by 1.6%, South Korea's Kospi decreased by 2% and Hong Kong's Hang Seng dropped by 1.9%. Financial and tech stocks lost 2%. Investors' risk aversion remains high and affected financial markets overnight. Brent oil decreased by 4%.
On Thursday US equities experienced substantial losses as borrowing costs in Spain and France increased. Investor anxiety erased gains from reported improvements in jobs and housing statistics. S&P 500 lost 1.7% or 20.74 points to 1,216.18, Dow Jones Industrial Average fell 1.1% or 134.64 points reaching 11,770.95 while Nasdaq Composite dropped 2% or 51.62 points to 2,587.99.
The Sanghai Gold Exchange increased requirements on silver margin to 18%. Brokers claim that the rate is exorbitant and may severally impact retail traders. The measure is aimed at decreasing extremely high white metal's volatility thus protecting small traders from losses. The requirement the most likely to came into force on Monday, reported by Reuters. New measure impacted also COMEX silver futures that lost 1.1%
NYSE Euronext and Deutsche Boerse, two large stock exchange operators announced a merger recently. The EU is concerned that the merger will have dominating position hence too much of power in the industry. The companies wrote a proposal to the EU outlining the absence of high impact on competition.The proposal will be reviewed in the beginning of 2012.
At the moment UK economy is at bad condition with extremely low confidence, reported CBI chief, John Cridland. Decreasing consumer spendings and threat of Eurozone's debt crisis impact the economic growth of the country. Only businesses and exports can help UK economy to survive. UK companies have quite strong financial position and enough resources to invest, the only thing they lack is confidence in the
US treasure prices declined on Friday increasing yields first time since Wednesday as a response to the deteriorating situation in Europe. Moreover, experts also claim that Congress is planning further deficit reduction. Yields on 10-year notes increased by 4 basis points to 2.02%.
Following the EU bailout strategy to write off Greek debts, ABN Ampro a Dutch bank suffered losses. The bank today reported a net loss of 54m euros in period between July and September this year as compared to 341m net income for the same period in 2010. The bank possesses 1.4bn euros of Greek loans and had to write off 500m euros from this
Oil futures increased by 1.4% to $100.16 a barrel today, after drop caused by growing probability of the Eurozone's crisis. In the US crude oil climbed by 1.33% during the morning trade on the New York Merchantile Exchange. However, the price for crude oil declined again and the current price is $98.66 a barrel.
The new government of Greece is discussing measures to prevent debt crisis. Finance Minister Evangelos Venizelos made a forecast that the deficit will decline from 9% of GDP in 2011 to 5.4% in 2012. The reason is that commercial banks write off one half of Greece's debts as part of the Eurozone's bailout strategy.
Proposal envisaging ECB provide loans to IMF to finance bailouts in Eurozone that is standing at the threshold of severe debt crisis attracting more and more attention, reports Dow Jones Newswires. Germany and ECB do not accept the measure but in view of growing threat of Eurozone's recession there may not be any other alternative than to approve the proposal.
US gold futures for December delivery increased by 1%, after declining in previous sessions. Gold increase fully correlated with the dollar that dropped by 1%. Gold futures were fluctuating with resistance between $1,700 and $1,800 an ounce for a couple of weeks at the moment, after reaching more than $1,900 an ounce.
Hibbett Sports Inc. sport-goods retailer stated that its net income rose by 27% for the Q3 totaling $16 million despite economic recession in the developed economies. Estimates show that the company's sales are going to achieve $185.2 in the end of the period. Full-year per share profit is assessed as $2 a share.
Hungary plans to sign agreement with IMF in the beginning of 2012, announced the Economy Ministry of the country. Hungary already received bailout package in 2008 but did not renew agreement in 2010. Hungary did not yet pass a formal request for bailout package, reported the EU. Situation in Hungary essentially deteriorated; its currency forint is the ever-low against euro and Hungary's cost of borrowing
US stock futures rose on hopes that European leaders and ECB are planning to implement reforms to struggle with debt crisis and boost economic growth. ECB is going to buy bonds of peripheral countries. S&P 500 index increased by 0.3% and Dow Jones Industrial Average went up 0.2%.
Italy's 10-year bond yield increased by 1 basis point to 6.72% while Spain's went down by 9 basis points to 6.35%, reported FactSet Research. France's cost of borrowing decreased by about 10 basis points to 3.53%. Analysts also announced that ECB plans second round of purchases.
British banks drastically cut loans to Greece, Italy and Spain as confidence in these countries' ability to resolve financial difficulties remains low. The biggest UK banks decreased loans to peripheral countries by 24% to 10.5 billion pounds over Q3. HSBC the largest banks by number of loans slashed its exposure by 40% as reported by Financial Times.
ECB requires prompt implementation of policies worked out by the Eurozone leaders in order to struggle with debt crisis, said Mario Draghi, ECB President. Time is passing by very fast and decisions have to be implemented otherwise it will be too late. Absence of changes in the Europe increases investors risk aversion thus triggering downturn, he added.
In October Chinese home price dropped in 33 out of 70 cities observed by government, the weakest performance since the implementation of property curbs. According to Shen Jian-guang, economist at Mizuho Securities Asia Ltd, the drop is the breaking point for Chinese home market as prices begin to fall not only in big cities and for new built real estate but also in smaller cities
The incapability of European officials to stop debt crisis has reintroduced Franco-German clash over the role of European Central Bank as well as increased investor doubt over policy makers' competence. As Greek debt holder began talks of accepting 50% of losses, German and French counterparties unexpectedly showed resistance and bond yields outside Germany reached euro-era highs.
Today the new Greece's premier Lucas Papademos will present the final version of next year's budget. PM's government is rushing to meet 3-month deadline to acquire international loans and escape a country's default. New government is supported by three out of five Greek governmental parties. Papademos must put into action budget measures to guarantee a bailout fund worth $176 bn.
European uncertainty severely impacted large stock markets. The STOXX Europe 600 index dropped by 0.77% to 232.18 today at early trading. Germany's DAX 30 index went down 0.97% to 5,793.65, France's CAC-40 index declined by 0.85% to 2,984.33, FTSE 100 index lost 0.86% to 5,377.64.