UK economy in third quarter expanded more than was previously predicted by economists. GDP advanced 0.6% compared to earlier forecast 0.5%. Nevertheless Bank of England warns that further rapid growth is unlikely given developments across Europe as debt burden harms demand. BOE predicts UK economy may stop expanding in current quarter and in the beginning of 2012.
British Airways parent company IAG agreed to acquire Lufthansa's BMI unit for ВЈ172.5 million ($270.5 million) beating Virgin Atlantic Airways counterbid. IAG needs BMI division in UK to provide mainline operations at Heathrow, the European most active airport. Lufthansa has been thinking of sale after BMI wrecked $291 million in operating losses after takeover in 2009.
European stocks traded higher on Thursday morning partly erasing yesterday's losses, led by financials. Stoxx Europe 600 index added 0.8% at 239.18 while German DAX 30 index climbed 1.2% reaching 5,861.63. FTSE 100 index jumped 0.7% at 5,425.38 and French CAC 40 index gained 1.2% at 3,067.96.
Greece's creditors are struggling against IMF pressure to accept greater losses on government bonds, said three persons familiar with matter. Lenders require government to issue new bonds worth €70 bn ($91 bn) with a coupon at around 5%. However, IMF is forcing creditors to take smaller coupon to cut Greek GDP ratio to 120% by 2020. Without write-downs Greece's debt burden will be nearly twice
Yesterday Hungary's credit ratings were cut from BBB- to BB+ by Standard & Poor's. EU and IMF postponed talks about aid package on concerns the Hungary's central bank law will weaken monetary policy independence. Hungary is likely to have slowest growth and highest debt among EU eastern countries next year. Moody's Investors Service already lowered nations rating to junk on November 24.
Vladimir Putin, Russian PM faces a challenge to convince voters he can surpass economic performance records of his previous presidential terms. Economy expanded at average rate of 7.1% during period 2000-2008. Economic growth for current year is likely to be only 4.5%. Putin's inability to boost growth while being a premier may deter voters.
Bank of America Corp. will be forced to pay $335 million to reimburse borrowers of Countrywide Financial Corp as they were required to pay higher interest rates and fees for mortgages. Countrywide which was acquired by BOA in 2008 charged higher interest rates and fares to around 200 000 Hispanic and black borrowers, said US Department of Justice.
US shares fluctuated on Wednesday experiencing sharp drop in midday and recovering afterwards. Dow Jones Industrial Average closed 0.03% or 4.16 points higher at 12,107.74, while S&P 500 finished 0.2% or 2.42 points up at 1,243.72. Only Nasdaq Composite did not manage to recover and closed 0.99% or 25.76 points down, led by Oracle Corp sell-off.
Italy's Senate is going to vote on €30 bn ($39 bn) emergency plan today. The package of measures include levy on primary homes, pension overhaul, curb on tax fraud, all proposals aimed at curtailing borrowing costs and persuading investors that Italy is working on reducing Euro Zone's second-biggest debt. Nevertheless, analysts warn the measures may throw Italy further in recession given slowing nation's growth.
Australian and New Zealand Dollar fell, partly erasing 2-day advance on worries ECB cheap loans will not provide sound aid to tackle debt crisis. Both Australian currency and New Zealand Dollar lost 0.3% against greenback to $1.0070 and $0.7692 respectively. Currently AUD/USD is trading at $1.0101 and NZD/USD is trading at $0.7696.
The US Dollar climbed 0.8% from 11-month record high against Euro ahead of ECB president Draghi's speech later today. 17-nation currency maintained yesterday's fall on expectations Standard & Poor's will lower credit ratings for European nations, while Italy and France prepare for bond auction. On Thursday Asian trade Greenback traded $1.3044. Currently EUR/USD is trading at $1.3062.
Asian equity markets tumbled on Thursday after ECB agreed to provide massive lending to European banks, bolstering investor caution. Some analysts suggest the cheap cash will only encourage lending among banks and will not contribute to the reduction of debt burden. Japan's Nikkei Stock Average fell 0.7%, Hong Kong's Hang Seng Index gave up 0.5% while South Korea's Kospi dropped 0.3%. Australia's S&P/ASX 200 index edged
Crude futures advanced after the IEA reported larger than expected decline in US crude oil supplies. The US crude oil supplies decreased by 10.6 million barrels last week. Experts at Platts projected the fall to be 2.4 million barrels. Crude oil for delivery in February added 1.8% to $98.97 a barrel.
Gold futures declined after one-week high following the ECB allotment of the record amount of loans to the European banks as part of its refinancing operation. On the Comex division of the New York Mercantile Exchange, gold futures for delivery in February traded at USD1,616.05 a troy ounce at the U.S. morning trade, losing 0.1%.
EU plans to impose tax on carbon emissions produced by airlines, reported the ECJ. The regulation envisages all airlines operating in the EU will have to pay levy on carbon emission starting from January 1, 2012. Foreign carriers oppose the decision citing the violation of aviation pacts and too high tax payments; for example, China's airlines will have to pay 95m euros under the scheme.
Soybeans fluctuate, remaining close to one-month high as investors are eying weather forecasts in Brazil and Argentina, the world's second and third largest soy producers. Soybean futures for delivery in January traded at USD11.4538 a bushel on the Chicago Mercantile Exchange, at the early European trade, edging up 0.1% since opening.
US existing-home sales edged up 4% last month to annual rate of 4.42 million on a seasonally adjusted basis, reported the National Association of Realtors. Experts predicted the figure to rise by 15.555555% to 5.03 million units. The median price for houses decreased by 3.5% in November achieving $164,200 as compared to 2010. Housing inventory also declined by 5.8% to 2.58 million.
UK's public sector net borrowing increased less than expected last month. The figure rose to GBP15.2 billion in November from GBP3.0 billion in the preceding month. Experts initially expected the figure to increase to GBP15.8. After the data release, the Pound continued to see gains against the USD with pair GBP/USD currently trading at 1.5720, adding 0.36%.
Repsol announced that it is so hard to replace Iranian oil supplies. The news followed the speech of the Iranian minister stressing the supply disruptions in case of ban on the Iranian oil. Western economies can import more oil from Latin America, Africa and Russia, said Antonio Brufau chairman at Repsol. If after the ban on oil import Iran tries to compensate loss by negotiating
Belgium's business confidence rose more than expected this month but remained negative for the eight month in line. The business climate index added 1.6 points on a seasonally basis approaching minus 10.6 in December as compared to minus 12.2 last month, reported the National Bank of Belgium. Experts predicted the figure to improve by 1.1 points to minus 11.1 this month.
Copper futures saw essential gains, approaching one-week high after the USD suffered losses and optimism increased on the ECB sale of three-year loans. Copper futures for delivery in March traded at USD3.411 a pound on the Comex division of the New York Mercantile Exchange during the early European trade, gaining 1.25% since opening.
The recent nuclear crisis in Japan increased the world's demand of LNG to 248.5 million metric tons. The demand is likely to exceed the commodity supply by 75 million mt over the next three years, reported Global LNG Market Short and Long Term Outlook. The LNG market is likely to achieve balance by 2020 but the lack of investment flow into the industry and shortage
The Bank of Japan left its benchmark interest rate steady as it was widely expected and decreased its growth forecast. The interest rate remained between zero and 0.5%. The budget for exchange traded funds and corporate bonds purchases was also left unchanged at JPY20 trillion. After the data release, the Japanese Yen appreciated against the USD with pair USD/JPY currently trading at 77.75, 0.18% down.
The three year trend for gold indicates upward movement; however, the recent price decrease of the yellow metal below its 200-day average for the first time since 2008 signals on probable ongoing fall of the commodity price. The market sentiment for gold may become bearish next year. Currently, the gold futures trading at USD1610.85 an ounce.