Despite expected plunge on European anxiety, US stock indices rallied on Tuesday as investors bet the overall news are so bad that Federal Reserve and European central banks will be forced to introduce stimulus. S&P 500 index surged 1.17% or 15.25 points and finished at 1,324.18. Dow Jones Industrial Average gained 1.31% or 162.57 points and closed at 12,573.80. Nasdaq
The outflow of Greek deposits has increased ahead of upcoming parliamentary elections. Investors are worried country may move towards quitting Euro. Daily withdrawals fluctuate in the range between EUR 100 million and EUR 500 million, banker that wanted to remain anonymous said in the interview with Bloomberg. Another banker assumed that withdrawal yesterday may have reached EUR 700 million.
The job vacancies in London's main financial district surged by 25% in May, Astbury Marsden reported. In absolute terms the number of new job vacancies advanced from 3,455 in April to 4,320 in May. Derivatives and foreign exchange businesses were the main new jobs' providers. On yearly basis the vacancies still are 35% down, Astbury Marsden added.
Italy start to face signals that tax increases might be too high, Alberto Alesina, Harvard University professor suggested on Wednesday. VAT tax revenue have dropped, government data showed on June 5. The amount gathered over 12 months is the lowest in 6 years. Former PM Berlusconi lifted VAT by 1% to 21% in September 2011. The fall in tax receipts
Karolina Ekholm, Riksbank Deputy Governor claimed the Sweden's exposure to Greek economy is insignificant. Therefore the Nordic country would not suffer from Greek Euro exit. Sweden a country that refused to introduce Euro currently is a haven for sovereign debt traders. Swedish 10-year notes trade at 1.49% today.
US retail sales are expected to have weakened in May, first time this year. Slower employment growth is likely to have curbed demand for vehicles as well as overall consumer spending, economists predicted on Wednesday. Analysts expect a 0.2% drop compared to a 0.1% advance in April.
German Chancellor Merkel's government reduced the amount of bills and bonds it plans to sell in 2012. Federal government plan to auction EUR 256.9 billion of debt instead of earlier set target at EUR 260.4 billion. Finance Ministry cut sales of notes with a maturity more than one year and added bonds with a shorter maturity of maximum 12 months.
The New Zealand Dollar and Australian Dollar modestly weakened against their major peers on Wednesday fuelled by worries the outcome of Greek elections may deepen European debt turmoil. Economists predict markets to be nervous until elections. Aussie gave up 0.1% to USD 0.9950 while Kiwi traded flat at USD 0.7769. Currently AUD/USD is trading at USD 0.9944 and NZD/USD is trading at USD 0.7767.
Esprit Holdings plunged to 15-year record low in Hong Kong morning trade after its CEO Ronald Van der Vis resigned. He is the second top executive that quits in 6 months. Esprit shares tumbled 21% to HKD 10.64 on Wednesday, the most since 1997. Van der Vis claimed he is resigning due to family and personal reasons.
Spanish borrowing costs for 10-years sovereign bonds reached a 15-year record high on Tuesday after Fitch Ratings forecast that country's PM Mariano Rajoy will fail to meet budget deficit goals that he set earlier. Yield for Spain's benchmark bond hit 6.83% yesterday, the highest level since 1997. Surging yields raise concerns that possible Spanish and Italian bailout would exhaust EU
Japan's core machinery orders, leading indicator of capital spending, increased more than economists expected in April, rising 5.7 % amid the Yen's appreciation and Eurozone's turmoil. Compared with year earlier, core orders grew 6.6% in April. The figures showed that robust domestic demand will stimulate Japan's economic recovery.
The French government officials are revising growth forecasts for the next year. According to the Bank of France, the economy of France is predicted to shrink in the Q2 for the first time since 2009. Cooling growth would build up pressure on French President Francois Hollande to meet budget commitments. Mr. Hollande promised to reduce the budget deficit to 3%
The ECB reiterated that common banking union development is critical to prop up the Eurozone's financial system, even though Germany's central bank said that such a decision might be risky and "premature". Vitor Constancio, the ECB's official, also claimed that the ECB should exercise power of monitoring European banks, as the bank has required knowledge and institutional resources to carry
U.K. markets edged higher during a choppy session this Tuesday on the growth of miners. The FTSE 100 index rose 0.5 per cent to 5,461.78, while Barclays retreated 1.7 per cent and Lloyds Banking Group PLC slumped 1 per cent.
European stocks jumped this Tuesday, as markets stabilized after a choppy session on the previous day, due to Spain aid request from the EU for the country's banking sector. The Stoxx Europe 600 index gained 0.3 per cent to 242.53. The Spain IBEX 35 index climbed 0.6 per cent to 6,557.40 and The French CAC 40 index rose 0.4 per cent to 3,053.59.
The greenback lost ground on Tuesday after a 1 per cent decrease of May import prices. The ICE dollar's index, which shows currency's relation to its six major counterparts, slipped from 82.507 to 82.463. The single European currency inched higher to $1.2501, compared to $1.2491 in the previous session.
According to the State Secretariat for Economic Affairs located in Bern, Switzerland's government increased their estimates for the country's GDP from 0.8% to 1.4% for 2012. It appears that the Swiss economy is bouncing back with the KOF indicator boosting for 4 consecutive months in May, the consumer index reaching its one-year peak in April and the BCHN possibly surpassing order growth of 10%
Futures for crude oil bounced off the record low since October 2011, as the oil minister of Saudi Arabia promised not to raise output ahead of OPEC meeting on Thursday. On the NYMEX, July delivery futures for light sweet crude were traded at USD83.19 per barrel, which was a 0.6% growth during the U.S. morning trading session.
German DAX index traded higher on Tuesday, as investors sentiment was lifted by hopes the Federal Reserve may propose measures to stimulate economy. The gains however, were limited as Spanish borrowing costs continued to climb and reached 6.73%, a record high since November 28. For almost every stock that gained, two posted a drop within the index. Semiconductor provider Infineon
UK FTSE 100 index edged higher on a choppy trade on Tuesday led by GlaxoSmithKline and miners. Moreover data showed UK's annual industrial output contracted for a 14th straight month in April. Rio Tinto and BHP Billiton partly rebounded from yesterday's drop, adding 1.2% and 1.5% respectively. Pharmaceutical giant GlaxoSmithKline gained 0.6% on news its subsidiary Stiefel will acquire prescription
Hong Kong's main stock index followed US and Asian market trend on Tuesday weighed down by concerns over Spain's ability to halt its debt. Hang Seng index deteriorated 0.43% or 81.07 points and ended at 18,872.56. Technology sector performed worst, giving up 2.4%. Financial shares and resource stocks sent the index lower. Tencent Holdings dropped 2.4% and China Resource Power
Spain bonds dropped one more day after Fitch Ratings agency announced that government led by Prime Minister Mariano Rajoy will fail to reach budget deficit targets. The yield of a 10 year government debt increased by 17 basis points reaching 6.68%. The spread against German bunds increased by 9 basis points and reached 5.29% by 2 a.m. GMT. European commission forecasts 6.4% and 6.3% Spanish budget
On Tuesday, the Euro was growing versus the Japanese Yen, but gains seemed to be capped by Spanish worries and uncertainty over Greek elections. EUR/JPY peaked at 99.79, and later consolidated at 99.40, which was a 0.23% growth since the beginning of the European afternoon trading session. The pair's support is likely to be found at 98.52, whereas resistance may be at 100.61.
Oil futures edged lower during electronic training on Tuesday, due to increased concerns regarding upcoming Greek elections. Petroleum for July delivery retreated 61 cents, a 0.7 per cent decline, to $82.09 a barrel.