The US Dollar was slightly lower against the Euro after news about increased business confidence in Germany. Higher level of confidence backed up the demand for riskier assets; however, debt crisis in the euro-zone still makes the outlook pessimistic. US Dollar is 0.27% lower and EUR/USD is 1.3382.
Shares of Banco de Valencia, seventh-largest Spain's bank, decreased on Thursday when they restarted trade after its bailout bySpanish central bank. Spain provided EUR1 billion to the Banco de Valencia. During the first 45 minutes shares fell by 22% causing decrease in equity to EUR286 million.
The growth in yuan deposits in Hong Kong slowed down but the overseas market for yuan will continue to rise, said Norman Chan, chief executive of the Hong Kong Monetary Authority. The inflow-outflow yuan ratio decreased to 0.8-to-1 in September. The decline in yuan deposits does not imply yuan lost appeal in foreign market, the decline is likely to be a short-term, said Chen Daofu,
European stocks increased after the Germany's Ifo business confidence index increased. The Stoxx Europe 600 index gained 1% to 222.36. The German DAX 30 index increased by 1.5% while French CAC 40 index rose 1.6%. The FTSE index increased by 0.6% to 5,171.88.
China's Central Bank announced the reduction in reserve requirements for rural banks. The ratio is decreased back to 16%. Each November the central bank checks the financial situation in rural banks and adjusts reserve requirements depending on the banks' ability to meet the lending target for farming businesses set by the central bank. The program is aimed at stimulating growth of the rural areas.
Arcadia, owner of Top Shop and BhS, announced a 38% profit fall and plans to reduce costs by closing down 260 shops in the next years. The total sales worldwide in 3,100 shops decreased by 4.4% from the beginning of the financial year. The company decided to cut its profit margin by 1.8% that would cost company ВЈ52.4m.
Credit Suisse Group announced it plans to close its US unit, Credit Suisse Private Advisors, as part of strategy aimed at increasing profitability of private banking sector. The US unit will be merged with Credit Suisse's private banking unit in US. The shift will allow the company to streamline its operations and increase efficiency, said Alex Biscaro, Credit Suisse spokesman.
German GDP growth increased in Q3 meeting the forecasts, according to Federal Statistics Office. Country's output increased by 0.5% in Q3 as compared with Q2. Experts stressed that large investments and consumption ensured stable economic development of the country in Q3. Private consumption increased by 0.8%. However, the economists claim that there is a probability of recession in next quarters.
Boss of Indian-based microfinance company SKS announced about his resignation after being accused of speculation. The company was top-performer on the Indian markets; the share price cost 1,304 rupees in August. However, the company was accused of charging exorbitant interest rates and using aggressive methods for debt collections. The share price lost 90% after accusations.
China is going to introduce the iron ore physical trading platform in the end of 2011 aimed at providing more transparent business transactions for local and foreign traders. China Beijing International Mining Exchange plans to introduce own iron ore index in line with launching online platform for trading, said Dong Chaobin, exchange president.
The euro edged up against USD after being seven-week low. EUR/USD achieved 1.3394 on the Asian trade, gaining 0.31%. However, euro position remains unstable as recent failure of the German bond auction creates fears about debt crisis keeps spreading to the strongest EU economies thus increasing investors' risk-aversion.
Hong Kong real estate developers seek to raise property sales because of credit-restriction in the country, reports Barclays Capital. The number of loans available in Hong Kong was also impacted by withdrawal of many European banks from the market. Essential contraction in credit availability forces property developers to boost sales in order to sustain the cash flow.
Italian premier Mario Monti may push French President Nicolas Sarkozy and German Chancellor Angela Merkel to relieve euro zone budget targets and help stimulating growth. Monti is going to present his vision of way how to tackle debt crisis in today's talks in Strasbourg. Italian PM has emphasized that economic growth is one of the main determinants to stop expansion of debt woe.
Gold futures for December delivery decreased by 0.4% to $1,695.90 an ounce on the New York Mercantile Exchange. The yellow metal's appeal as safer investment option has declined showing quite strong positive correlation with stocks and other commodities. Investors risk-aversion increased pushing the demand down after failed German auction impacting both US stock and gold market.
The Japanese Yen appreciated against most of its 16 major peers ahead of German report which is likely to show sharp drop in business confidence for fifth month in a row indicating Japanese Yen as safe haven. On Thursday morning trade Japanese currency increased 0.3% against US dollar reaching ВҐ77.09. In yesterday's New York trade the Yen strengthened against the Euro from ВҐ103.15 to
The decline in China's PMI might have overstated the real manufacturing slowdown in the country even taking into account weaker domestic demand since September, said Credit Suisse analysts. Special government-sponsored PMI that more evaluates situation in large-state companies is likely to indicate less drastic fall than reported on Wednesday, added Dong Tao, Credit Suisse analyst.
Australian 10-year government bonds extended gains as drops in German notes boosted concern that debt crisis may hit also region's biggest economy. Australian 3-year yield declined by 83 bp reaching 3.05%, the biggest drop since 2008 while 10-year borrowing rate plunged to 3.806%. Matthew Johnson, UBS AG's strategist in Sydney said, investors are interested in diversifying their investments amid European uncertainty and Australian bonds are good option.
China plans to allow foreign investors to access its bond market and advised China's companies to expand their bond issuance overseas, said a senior central bank official. China tries to open up its bond market to internationalize yuan and decrease the country's dependence on the USD. At the moment there are more than 30 overseas investors who provided over 10 billion yuan to the China's
David Miles, policy maker at the Bank of England, suggests the uncertainty whether all 17-euro member countries will keep the common currency is constantly increasing. Euro area's crisis has damaged economic outlook for UK, Miles added. He also pointed out difficulty to predict any developments not only 6 months but also few days ahead as large number of risks are involved.
Shares of HTC, well-known Taiwan-based smartphone producer, decreased by 7% after the company announced cut in the growth forecast. Revenue decrease was caused by increased competition and weaker demand, reports HTC. In October HTC announced a decline in revenues to T$ 125bn as compared to T$ 135.8bn in three previous moths. The company expects no growth compared to 2010.
Europeans biggest economy's business confidence probably dropped in October, reaching 20-month record low, as deepening debt crisis may push Germany into recession. Economists surveyed by Bloomberg expect confidence index to fall from 106.4 to 105.2, the lowest level in 20 months. The Ifo institute will release a report today in Munich.
China's navy is going to participate in exercises in the Pacific Ocean in the next few days. The navy exercises caused concerns in the rest of the region - in Vietnam and Philippines that have had some clashes with China recently. Moreover, some experts consider it is a China's response to the US announcement regarding location of its navy forces in Australia. However, China
US stock-markets have been falling for six weeks already. On Wednesday S&P 500 index moved beyond its support level of 1,192 to 1,162 while Dow Jones lost 60-points. Europe dives into crisis impacting investors' confidence. Pre-Christmas time usually implies fund managers window-dressing; however, this year companies shock public by reporting massive layoffs thus undermining foundations of business. Changes are needed as otherwise stock markets may collapse.
A strike in Portugal that has already lasted 24 hours has stopped public and air transportation. People expressed their protest against austerity measures as the government is going to reduce spending on public services drastically. Hundreds of people are going to join the strike today making it one of the biggest in country's history. Two major labor unions representing about a million of workers also