Treasury prices surged on Monday, pressing down the borrowing costs as investors expressed scepticism that the actions proposed by EU officials will solve key problems in short-term period. Yields for 10-year bonds declined by 4 b.p. to 2.02% while those on two-year notes fell by 2 b.p. reaching 0.21%. Borrowing costs for 30-year bonds lost 4 b.p. to 3.07%.
US stock index futures fell on Monday as investors became unconvinced whether the tools announced by EU leaders during the summit will manage to solve the debt crisis. The futures on the Standard & Poor's 500 index lost 9.2 points to 1,243.80, while those on Dow Jones Industrial Average gave up 73 points reaching 12,070. Nasdaq 100 futures dropped 12.5 points attaining 2,306.
On Monday German shares declined after Jens Weidmann the Bundesbank President denied speculations that ECB will expand its role after European officials agreed on new fiscal treaty. German DAX 30 lost 1.5% in early afternoon in Frankfurt. Previous week German benchmark edged down 1.6% after ECB rejected conjectures it will stimulate bond purchases. On the downside were two leading nation's banks, as Commerzbank AG and Deutsche
On Friday Dow Jones Industrial Average climbed 1.55% or 186.56 points and finished at 12,184.26 as European officials' achieved progress eased investor worries about debt crisis and US consumer confidence surged. 29 out 30 constituents ascended. Caterpillar Inc. and General Electric Co. led the gains adding 3.28% and 3.25% respectively. On the upside was also Boeing Corp. which gained 2.51% after receiving a $2.8bn order
Euro experienced a sharp decline on Monday after Moody's Investors Service told it will revisit credit ratings for EU countries. According to Moody's European summit last week provided few new actions and majority of proposed measures are similar to earlier announced ones. After Moody's statement 17-nation currency plunged 1% reaching $1.3253. Currently EUR/USD is trading at $1.3262.
On Friday US benchmark S&P 500 Index finished at 1,255.19 gaining 1.69% or 20.84 points after European officials managed to find consensus on fiscal ties and US customer confidence reached a 6-month high. On weekly basis the index experienced an increase of 0.9%. Financial companies were leading the gains. Morgan Stanley added 3.16%, and Bank of America Corp. surged 2.33%. Tech stocks also contributed positively
Foreign exchange analysts are lowering their forecasts for the 17-nation currency at the rapidest rate this year as ECB President Mario Draghi's borrowing rate reduction abandon one of the Euro pillars of maintenance. Investors are dumping assets denominated in euro, as EU officials fail to stop concern that Spain and Italy will capitulate to a debt crisis. Ken Dickson, Standard Life Investments currency investment director expects additional ECB
In October the industrial production of India dropped the first time since 2009 depreciating bond yields and the rupee. Output at utilities, mines and factories decreased 5.1%. Economists surveyed by Bloomberg predicted only a 0.7% decline. Today's figures may force central bank to consider benchmark interest rate cut, said analysts.
US shares ended up on Friday, after European officials agreed on tighter fiscal boundaries and US consumer confidence reached a 6-month high. Dow Jones Industrial Average gained 1.6% or 186.56 points and finished at 12,184.26. S&P 500 Index advanced 1.7% or 20.84 points reaching 1,255.19. Nasdaq Composite surged 1.9% or 50.47 points closing at 2,646.85.
Aerospace firm Boeing Co received order list-valued at $2.8 bn from Etihad Airways. The United Arab Emirates based company has ordered 2 model 777 freighters and 10 model 787 Dreamliners. Etihad Airways currently uses 1 model 777 freighter and 8 model 777ERs. After the deal it will be the biggest large jet customer of Boeing Co.
On Friday the Canadian domestic currency strengthened against 11 of 16 its major peers on European latest plan and on the stronger-than-expected growth in US economy. Canadian dollar gained 0.3% to C$1.0169 per US dollar in Toronto trade, strongest figure since November 1. On monthly basis loonie has appreciated 1.4%. USD/CAD currently is trading at C$1.0208.
European shares opened down on Monday, led by mining companies and financials. Stoxx Europe 600 index lost 0.7% or 1.79 points reaching 238.73 and FTSE 100 index dropped 0.5% or 28.8 points to 5,598.60. German DAX 30 index declined 1.3% or 80.94 points to 5,907.70. French CAC 40 index edged down 1.1% attaining 3,136.08.
Italian borrowing costs jumped on Monday after Moody's Investors Service alerted that the credit ratings of EU countries stay under pressure as last week's summit delivered only a few new instruments to tackle debt crisis. The borrowing costs on 10-year Italian domestic bonds added 19 b.p. reaching 6.43%, said FactSet Research. France and Italy will have debt auctions later today.
Moody's Investors Service still is considering reviewing the credit ratings for all EU nations at the beginning of 2012, said the agency on Monday. According to Moody's such decision is made amid enduring lack of decisive policy tools. European summit last week provided few new actions and majority of proposed measures are similar to earlier announced ones, told agency.
The Australian dollar depreciated against US dollar after report confirmed that the country's trade surplus contracted more than expected indicating that woes in Europe is harming global growth. Aussie lost 0.4% to $1.0174 on Monday trade after experiencing 0.5% gain on Friday. New Zealand dollar gave up 0.3% to $0.7729. AUD/USD currently is trading at $1.0101, while NZD/USD is trading at $0.7665.
Fitch Ratings is ready to reduce growth prospects for Asian countries as European debt turmoil push down the economic outlook for the region. Quarterly expectations for Asian nations are going to be downgraded in nearest future, said Andrew Colquhoun, the head of Asia-Pacific Sovereigns. China's economy, is cooling as export demand from Europe weakens.
US unemployment rate dropped less than firing rate indicating that companies still lack confidence to employ new workers. In November jobless rate has dropped to 8.6% from 10.1% in October. In contrast applications for jobless allowances have declined 40%. Julia Coronado, BNP Paribas North America chief economist suggests that absence of demand in economy drives a wedge between unemployment rate and jobless claims.
US unemployment rate dropped less than firing rate indicating that companies still lack confidence to employ new workers. In November jobless rate has dropped to 8.6% from 10.1% in October. In contrast applications for jobless allowances have declined 40%. Julia Coronado, BNP Paribas North America chief economist suggests that absence of demand in economy drives a wedge between unemployment rate and jobless claims.
Japan decided to extend its tax breaks on fuel-efficient cars in an attempt to support its domestic car production. The tax breaks had to expire in April 2012 but now they are prolonged until April 2015. Domestic vehicle production was impacted by natural disasters as well as the strong yen and the new measure is likely to bolster the growth of the sector
Hu Jintao, China's Presidents, has promised to stimulate imports as part of the global trade boosting strategy. He said the imports might achieve $8 trillion in five years as compared to $1.39tn of imports in 2010. Imports of the country increased by 22% and exports jumped by 14% in November, according to official data.
The nuclear reactor owned by France's government, Areva, is likely to report about large loss this year, according to French industry minister. The financial position of Areva was impacted by Japan's nuclear disaster of Fukushima in March. The company is likely to write-down about 1 billion euros of its assets' value. Areva will unveil the new strategy later this week
The New Zealand dollar declined against the US following the EU leaders' summit which resulted in agreement on stronger economic integration but did not provide exact measures to combat the crisis. NZD/USD approached 0.7704 at the late Asian trade, being the daily low. The pair subsequently consolidated at 0.7695, losing 0.77% since opening.
The government of South Korea cut unexpectedly the growth forecast citing the fall in exports. The Asia's fourth-largest economy is projected to grow by 3.8% this year and by 3.7% next year, according to the Ministry of Strategy and Finance. Analysts predicted the growth to expand by 4.5% for 2011 and 2012. Korea exports growth are likely to fall to 7.4% in the next
Australia's trade surplus fell to 1.6 billion Australian dollars on a seasonally adjusted basis in October. The indicator was at A$2.2 billion in preceding month, reported Australian Bureau of Statistics. Exports achieved A$25.7 billion; analysts expected the surplus to be A$2.0 billion, according to ABS.