1. President Obama pushes European officials to avoid knocking down the common currency ahead of today's meeting in Brussels. 17-member countries' Finance ministers today will attempt to develop details how the EFSF will increase its firepower to back national debts with guarantees. Officials are preparing for the summit scheduled on December 9 to recoup investors' confidence.
According to economists familiar with the region, Asian national banks might be preparing to reduce interest rates, as the increasing negative impact from European debt trouble hurts growth. Thailand is planning to cut its borrowing rate tomorrow, while Philippines is expected to lower its benchmark on December 1. Last week Citigroup Inc and Morgan Stanley lessened economic estimates for Asian countries.
Japan's unemployment rate soared more than was predicted by economists. In October jobless rate surged to 4.5% compared to 4.1% in September. The actual rate exceeded the forecast by 0.3 percentage points and reached 3-month high. Rising unemployment level pushes central bank to intervene an increase stimulus package as Europe's crisis spreads.
Asia's stocks closed higher on Tuesday expressing investors' optimism about European leaders' ability to provide solution for debt turmoil. Shanghai Composite rose 0.6%, while Hong Kong's Hang Seng Index gained 0.5%. South Korea's Kospi added 1.7%, Australia's S&P/ASX 200 index experienced modest increase of 0.2% and Japan's Nikkei Stock Average surged 1%.
Standard & Poor's may decrease France's triple-A credit rating to negative in a period between seven to 10 days, reported La Tribune, France's newspaper. The newspaper referring to anonymous source announced the agency planned to report about credit downgrade last Friday but delayed it for unknown reasons.
Panasonic Corp. announced it will supply lithium-ion batteries for Toyota's new plug-in version of hybrid car Prius. It is the first time Panasonic provides its lithium-ion rechargeable batteries for car manufacturer. Toyota plans to launch the new model on January 30 in Japan and estimates sales around 35,000-40,000 units.
The dollar decreased against the euro in Asian trading as hopes for solving the debt crisis in the euro-zone increased investors' confidence in common currency. The euro climbed to $1.3363 from $1.3307 in late North American trade yesterday. The British pound also added against greenback to $1.5520. The dollar index declined to 79.094 from 79.236.
China is going to send a delegation to Europe in 2012 aimed at buying European assets, said Chen Deming, Chinese Minister of Commerce. More than 25% of country's forex reserves are in euro –denominated assets and it seems viable to invest or even to buy European equities. Moreover, Europe needs FDI and China is willing to invest, Deming added.
India's growth rate is expected to have declined in the period between July and September; the rate is projected to fall below 7%, being two-years low. The decrease indicates the necessity to cease the central bank's policy aimed at lowering inflation rate. However, despite changing interest rates for 13 times since March last year, the inflation rate is still above 9%.
Steel stocks increased after the news about takeover bid for Commercial Metals Co. Carl Icahn, one of the investors, offered $1.73 billion for the company or $15 a share. Carl Icahn already has a 10% stake in Commercial Metals Co. Shares of other steel producers increased after the announcement. Shares of United States Steel Corp. gained 7.5% and shares of AK Steel Holding Corp. added 6.8%.
Canadian stocks increased on news about European agreement on the regional bailout that lifted investors' sentiment. Toronto's benchmark S&P/TSX Composite Index gained 267.23 points or 2.3%. The Canadian dollar was higher against USD by 1.1%. All stocks were mainly higher with the leading metal and mining stocks, surging by 5.8%.
CPI in Germany remains stable in November, according to official preliminary data. Analysts expected CPI to increase by 0.1% in November. Yearly CPI rose to 2.4%, mainly in compliance with forecast after increasing to 2.5% in October, the German Federal Statistics Bureau reported.
Electronic Arts Inc. shares advanced 6% in morning trading after Citigroup increased company's rating to buy from neutral. EA shares currently have high appeal after losing 17%; it seems to be a promising start for the company in pre-Christmas time, said Neil Doshi, Citigroup analyst. The target share price remained at $26 a share.
The Euro experienced gains against the yen hitting 9-day high as hopes for combating with the crisis in the Eurozone increased demand for the Euro. EUR/JPY achieved 104.23 at the European afternoon trading, the pair consolidated at 104.37 with euro gaining 1.42%.
Sales of new US homes edged up 1.3% in the previous month to an annual rate of 307,000, according to the government report. Experts expected sales to reach an annual rate of 320,000 on a seasonally adjusted basis. The sales gained 8.9% as compared to the previous year but the market remains in the worst condition in modern times.
Energy stocks have followed the trend of mainly growing stock prices on more optimistic outlook on the Eurozone developments. The NYSe Arca Oil Index increased by 3.7%, the NYSe Arca Natural Gas Index gained 3.5%. Top performers among energy companies were Alpha Natural Resources Inc. gaining 8% and Peabody Energy Corp. adding 5.6%.
Experts of bankrupt MF Global UK Ltd. announced a timeline when clients of the company can get their funds back. The clients have to submit claims from December 8 to March 30 with the purpose to get back their funds back in 14 days after the claim was accepted by administrators. A timeline creates more certainty about the number and scale of claims thus allowing
Consumer credit risk fell for seventh consecutive quarter as consumers try to strengthen financial position, reported TransUnion, a credit data firm. The company's risk index declined by 4.9% in the Q3 to 120.62. However, the decrease in credit risk seems to ease as there is slight increase in the usage of credit cards and applications for credit, said Chet Wiermanski, global chief scientist at TransUnion.
Daimler, German industrial group, plans to eliminate production of its luxurious Maybach marque. The decision was caused by the unsuccessful attempts to compete with Rolls Royce and Bentley over the last 10 years. Instead of Maybach the company is planning to produce new, more luxurious types of Mercedes.
OECD indicated the EU crisis as the major risk to the global economy. A firm action is needed to rectify the situation; for example, essential boost of the capacity of EFSF and more support from the ECB is required. The OECD projects the GDP growth in the EU to fall from 1.9% in 2011 to 1.6% in 2012 and an increase by 2.3%
The government of Belgium sold over 2 billion euros of bonds hitting the expected range despite recent downgrade of its rating by Standard & Poor Rating Services. Bids surpassed supply 2.6 times. The Belgian Debt Agency expected to sell from 1.5 billion to 2 billion euros of bonds in total. The yield on 10-year government bonds decreased by 9 basis points to 5.69%, reported FactSet
The Euro increased against USD after the successful Belgian auction where the sales exceeded the expected level causing a decline in the Belgium cost of borrowing. The success of the auction signals improving situation in the Eurozone and thus strengthens the Euro. EUR/USD hit 1.3398 during the European afternoon trade gaining 0.90%.
Qantas, the flag carrier of Australia, announced net income to be between A$140 m and A$190 m in 2011 as compared to A$417 m in 2010. The profit was impacted by the increased fuel prices and strikes of the company's employees demanding better working conditions and higher salary. The strikes affected over 70,000 passengers and cost A$19 m for the company .
Soybean futures increased on the more positive economic perspective for the EU caused by hopes that the EU leaders will put more efforts in struggling with the debt crisis. Soybean futures for January delivery rose by 1.4% on the Chicago Mercantile Exchange after 13-month low and approached USD 11.2312 a bushel at the early European trade.