Moody's Investors Service announced that rapid acceleration of European debt crisis is pressuring all of the Eurozone national credit ratings. In case appropriate measures will not be implemented, the upward trend for credit risks will persist, said Moody's Investors Service. Moody's also is planning to review whole architecture of its ratings in Europe by the end of first quarter in 2012.
UK has developed a multi-billion Pound programme in order to facilitate economic development of the country. The largest part of the money is going to be taken from British pension funds and China's investments. More than 40 infrastructural projects are planned to be launched as a part of the National Infrastructure Plan that is expected to attract private investors who will also contribute to the
Asian stocks experienced an increase as investors reacted positively on latest reports from Europe. Shanghai Composite rose 0.2%, while Hong Kong's Hang Seng Index climbed 2%. South Korea's Kospi added 2.2%, Japan's Nikkei Stock Average gained 1.6% and Australian S&P/ASX 200 index advanced by 1.9%. Several reports were published during weekend indicating progress in taming debt crisis.
International Monetary Fund claimed it isn't considering providing a bailout package either for Italy or Japan. IMF denied presence of such talks during the meeting of Group of Seven. Earlier Italian "La Stampa" newspaper conveyed that IMF may assign $798 bn loan to Italy in order to boost investors' confidence. Marc Chandler, strategist at Brown Brothers Harriman & Co., suggests IMF does not have such
In October Chinese corporate profit growth slowed down, said the National Statistics Bureau. The net income for industrial companies added 12.5% in October on yearly basis losing about a half the 27% pace from previous 3 quarters this year. Corporate profit growth in China is sluggish as Europe struggles to tackle its debt crisis which is hurting exports demand.
Canadian dollar fell against US dollar to a 7-week record low as surging Italian yields signalled that European debt crisis is deepening. According to Hidetoshi Honda, the strategist of Mizuho Corporate Bank, the sentiment towards Eurozone's debt is plunging every day. Canada's national currency lost 0.4% against its US peer and reached C$1.0515 in Toronto morning trading session. The pair currently trades at C$1.0494.
On Friday British pound appreciated against Euro as investors perceived UK's national currency as safe haven amid Eurozone's debt fears. The Pound appreciated versus 14 of 16 it major counterparts. Sterling gained 0.7% reaching ВЈ0.8553 versus EUR. Jane Foley, Rabobank International's senior strategist believes the sterling may appreciate towards euro reaching ВЈ0.8485. The pair currently is trading at ВЈ0.8555.
Russia's largest private oil producer OAO Lukoil Holdings reported the net profit in Q3 decreased by 20%. The company announced net profit for period was $2.24 billion as compared to $2.82 billion in 2010. The current profit is far away from expected $3.18 billion, according to a survey conducted by Dow Jones Newswires. Overall production of the company declined by 5.3% to 2.11 million barrels
US stock futures decreased on the worries about spreading debt crisis in Europe. Futures on the Dow Jones Industrial Average lost 71 points to 11,163 while futures on the Standard & Poor's stock index decreased by 9.19 points to 1,150.8. Nasdaq futures lost 17 points to 2,144. The drop occurred after Italy's bill auction on Friday.
After closing lower on Thursday at 5,127.60, UK's benchmark index FTSE 100 extended its losses during Friday trade dropping 0.8% to 5,088.29. BHP Billiton PLC and Rio Tinto PLC were among main decliners both giving up 1.8% after metal prices declined. The drop in FTSE 100 is closely linked to overall drop in European markets as Angela Merkel rejected issuance of Eurobonds and Hungary was
On Friday auction Italy sold 8 bn euros ($10.6 bn) in 6-month notes. Italian bonds were sold at a yield of 6.504%, the highest rate in 14 years. Yield has surged by 3 percentage points since last auction in October 26. Demand for bonds was 1.47 times bigger than the offer. During previous 2 debt auctions country was made to pay highest yields since 1997.
Gold futures decreased below $1,700 an ounce; yellow metal lost $17.10 to $1,678.80 an ounce at electronic trading on Globex. The losses followed the increase in Dollar index by 0.5% to 79.496. Increase in the Dollar value usually pushes gold price down as higher greenback makes the commodity more expensive for other currency holders.
Germany's benchmark DAX 30 kept downward trend on Friday giving up 0.7% to 5,388.77 as German Chancellor Merkel strictly rejected issuance or common bonds as possible solution for debt crisis. Banks and auto makers made most negative impact on the index. Commerzbank AG and Deutsche Bank AG each dropped 1.6% and 1.3% respectively while Volkswagen AG lost 2.6%. DAX index is following downward path since
Prices for Russian Ural oil increased this week on the tensions between Iran and Western countries which fear they will cease Iranian oil imports. The UK and Canada already imposed financial sanctions on Iran, France proposed banning Iranian crude oil imports across Europe. The countries protest against Iranian nuclear program.
Italian retail sales have been decreasing for five months signaling on the worsening situation in the third-largest EU economy. Retail sales declined by 0.4% in September, Istat reported. Economists projected sales to be flat. Total decline in sales for Q3 is estimated as 0.6%. Industrial production also fell in Q3 contributing to bleak economic outlook of Italy.
European equities erased gains and swung back into downward trend as Financial Times reported that European Financial Stability Facility may not manage to raise sufficient amount of funds to boost its firepower over 1 trillion euros. Stoxx Europe 600 Index lost 0.3% reaching 219.43 in morning trade. According to FT even lower funding level might be problematic to reach.
Japan's seasonally adjusted unemployment rate is projected to remain at 4.1% in October, the same as a month earlier. Meanwhile, the proportion of job offers to seekers improved to 0.68 in October as compared to September 0.67, according to survey of Market News International. However, the experts claim the decrease in jobless rate does not necessarily imply better economic situation in the country.
The outlook for UK's housing market has worsened in last months as unemployment rises and economic growth fades. Centre for Economics and Business Research (CEBR) lowered price growth predictions and currently its analysts claim that housing prices may decline by 1% this year and climb in 2012. The CEBR has cut its forecast for home value growth in 2012 from 2.4% to 1.6%.
The German government decreased its forecast for public deficit to 1% of GDP from 1.5%, reported Handelsblatt. However, the debt level is still high, even though it is expected to decrease to 74.5% of GDP by 2015 while the target is 71%. Total deficit figure for the year is projected to be 1% falling from 4.3% in 2010. For 2012 the central bank predicts
Spanish premier Mariano Rajoy has required proposals from academics how to make a "bad bank". Proposals are expected to outline mechanisms to purchase damaged assets (e.g. real estate) from commercial banks at reduced prices. Spain needs about $133 bn from EFSF or IMF to provide asset transfer to bad bank.
The euro fell by 0.4% against US dollar to $1.3267, hitting seven-week low. Investors lose confidence in euro and euro-based assets after no certain solutions to the spreading debt crisis coming from the meeting of the EU leaders. The euro also was down against British pound by 0.07%, currently EUR/GBP is traded at 0.8608.
Italian short-term debt has a higher yield compared to long-term debt signaling on distress in the bond market. Yields on Italian bonds increased while the price of bonds fell. The yield on two-year bonds increased by 37 basis points to 7.45%, reported by FactSet Research. Meanwhile, five-year bonds yield increased to 7.61% and 10-year bond yield jumped to 7.17%.
One more sign of instability of property market in China is that more construction companies face essential delays in payments from property developers. More than 80% of construction companies experience delays in payment, reported Credit Suisse. Moreover, builders were asked to slow down the speed of work on the current construction projects.
Hungarian stocks decreased rapidly after it was announced that the country's credit rating was decreased to junk status by Moody's Investors. The rating agency claimed Hungary's ability to implement fiscal consolidation is doubtful; moreover, there is turmoil in public-sector debt cut. The BUX index was down 4.3% in the early trade in Budapest.