US Supreme Court decided to consider the legality of President Obama's health care law. The judges will assess whether Congress surpassed its rights by forcing people either to purchase insurance even in case they are ready to pay for health services themselves or to pay penalty. The court is likely to have major impact on presidential campaign as the verdict will be announced in June,
Moody's Investors Service is considering downgrading Credit Suisse Group AG's credit rating as the bank reported loss and revenue at the wealth management dropped. Moody's set Credit Suisse's Aa1 and Aa2 ratings on assessment for a reduction. On November 1 Credit Suisse announced it will reduce nearly 1500 jobs and review its securities after reporting quarterly loss.
On Tuesday representatives of IMF warned China that its banking system is exposed to serious risk. IMF named uncertain national banks' asset quality, credit boom accompanied by rising property prices and lending outside prescribed banking sector as the main threats to Chinese financial intermediaries. According to IMF, Chinese banking system is likely to be seriously affected if several risks create difficulties simultaneously.
Interim PM of Greece insisted on Greece staying in the Eurozone as it is the only option to struggle with crisis. He also stressed the necessity of activating bailout package as soon as possible. Making decisions and implementing policies in line with these decisions is of paramount importance for government, added Papademos.
Bank of America plans to sell 10.4bn of China Construction Bank shares for about $6.6bn in cash. Bank of America is under pressure because of global crisis and bad loans. The bank has to increase its capital base in compliance with new global regulation Basel III that obliges banks to have higher capital to asset ratio.
Asian stocks experienced a sharp decline as Italian and Spanish borrowing costs surged; rising concerns among investors that debt crisis might strengthen. Japan's Nikkei Stock Average lost 0.6%, Hang Seng Index trader 1.1% lower while China's Shanghai Composite fell 0.1%. Australia's S&P/ASX 200 slipped 0.4% whereas South Korea's Kospi decreased 0.6%.
Mario Monti expressed his intention to be in charge of PM of Italy until elections in 2013 . It will be difficult for Italy to overcome financial problems, but the country is strong enough to survive, he said. Despite sound promises and start of formation of new administration, investors' confidence remains low and Italy's 10-year bonds still yield more than 6%.
Mario Monti, prospective Italian PM met political resistance on creating a government as Italian borrowing costs surged and markets returned to downward trend, indicating concern on whether he will be able to tackle debt turmoil. Yesterday Monti strained to make parties agree on taking part in his new government. Monti pointed out that without their support he will not be able to end debt crisis.
Japan's GDP grew first time after March's earthquake; the indicator was up by 1.5% in Q3. However, analysts fear the growth is not sustainable because of strong yen and global fiscal problems. Moreover, floods in Thailand impacted Japanese supply chain thus affecting the recovery after slowdown. Exports are also likely to fall thus hindering Japan's recovery, said Yamamoto.
Chancellor Angela Merkel claimed it is essential to comprise political coalition in Europe to ensure bondholders that euro-region officials are sober about tackling debt turmoil. Merkel emphasized that all 17 euro zone countries should stick to common currency, though serious changes in current policy should be implemented. Chancellor also suggested in order to regain bondholders' confidence, EU and euro region should grow simultaneously.
On Monday morning session European stocks experienced a decline offsetting returns inspired by the nomination of new Italian PM. Stoxx Europe 600 index lost 0.3% reaching 240.27, German DAX 30 index dropped 0.2% to 6,043.59 while CAC 40 index decreased 0.5% to 3,133.73. FTSE 100 index remained flat at 5,545.27 and only Italy FTSE MIB index kept increasing to 15,863.97, attaining 0.5%.
US Labor Department announced initial claims for unemployment benefits decreased by 10000 to 390000. MarketWatch predicted it to be 398000. However, the situation in the country is still difficult as only 80000 job places were created in October while 250000 jobs per month are necessary to satisfy natural increase in labor force. US unemployment rate is 9% in October.
On Sunday the officials of Asia-Pacific Economic Cooperation (APEC) summit presented a Honolulu Declaration according to which they are pledged to create a unified regional economy. Declaration emphasized that global challenges have strengthened APEC members' willingness to cooperate. According to APEC leaders, trade liberalization will play a key role in global recovery.
In view of the global economic problems participants of the APEC summit agreed that further liberalization of trade is of critical importance for sustainable growth in future. At summit US president discussed US enlargement plans in Asia-Pacific region and his free-trade agreement, called Trans Pacific Partnership. Other North American countries as Canada and Mexico also are interested in joining Asian-Pacific free-trade zone.
N.Z. dollar advanced against US dollar two days in a row after government reported 5-year record increase in retail sales. Aussie and kiwi strengthened against greenback as Asian stocks rallied on investors' optimism about Greece's and Italy's new leadership. In Sydney evening trading session New Zealand dollar gained 0.2% to USD reaching $0.7869, while Aussie added 0.2 % to $1.0292.
After booming prices in property market the industry has started to cool down. The government tightening policies have led to an overall fall in real estate prices. Prices for new apartments in Beijing dropped by 5.1%. Analysts fear that restriction policy may impact country's economic growth. However, officials announced no changes in policy and continuation of price decrease in the industry.
The China Banking Regulatory Commission announced that three banks can issue 110 billion yuan bonds to provide loans for micro- and small-enterprises. The measure is aimed at stimulating development of small firms as they experience difficulties in raising finance, especially after government's credit restriction policies. Loans to small companies amounted 8.8% of all loans in September.
In the light of the recent developments in Europe the stability of the Eurozone is under threat. Reforms aimed at euro stabilization will be difficult to implement but the collapse of single currency will lead to a catastrophe, said Tony Blair. Eurozone has to coordinate its tax and spending to sustain euro and recover after recession, he added.
The precious metal for December delivery went up by $1,795.10 an ounce on the Comex division, New York Mercantile Exchange in Asian trading. Lower dollar stimulates purchasing of dollar-priced commodities like gold as they become more profitable investment option for other currency holders. Other metals also gained on weaker dollar, copper rose by 3% to $3.57 a pound and silver was up by 0.4% to
Major consumers of China's exports are exposed to economic problems due to debt crisis in the Eurozone and unemployment in US. China's exports are falling causing decrease in the country's growth pace. China's annual growth rate is likely to be about 8% in the next 10 years as compared to more than 10% in the previous years, said Li Yang, vice president of the
According to Donato Marra, presidency general secretary, economist and former EU commissioner and Mario Monti was appointed to replace ex-premier Silvio Berlusconi as Italian PM on Sunday. Monti in his brief announcement thanked President Napolitano for trust and promised to do as much as possible to help Italy tackle hard economic situation. Monti eventually will receive approval from the Italian law makers.
According to PM Najib Razak, despite global slowdown, Malaysian economy is expected to grow around 5% this year. Malaysia is predicted to accelerate in 3rd and 4th quarter after growing 4.6% in the 1st and 2nd quarter. PM Najib suggested that country is less export dependent on euro-region and slowdown in Europe will not have critical impact on Malaysia.
Shanghai Stock Exchange confirmed it is ready to allow foreign companies to trade stocks. According to Xu Ming, international stocks board's vice president, trading should begin soon. Trading of overseas stocks will aid Shanghai Stock Exchange to become worldwide financial center in 10 years. Listing in China's stock exchange would provide overseas firms with access to Chinese yuan and increase their market value.
On Monday Asian markets advanced as Italy approved the austerity measures and appointed a new government leader Mario Monti lessening investor fears of enduring Eurozone debt crisis. Japan's Nikkei Stock Average added 1.1%, Hong Kong's Hang Seng Index rose 2.4% while Shanghai Composite Index climbed 1.6%. South Korea's Kospi gained 2.3% and Australia's S&P/ASX 200 index increased at a slowest pace reaching 0.2%.