Gold futures fell below the key support levels to the lowest price since October as stronger US dollar and concerns over the euro-zone forced investors to sell gold holdings to increase liquidity. On the Comex division of the New York Mercantile Exchange, gold futures for delivery in February traded at USD1,613.15 a troy ounce at the U.S. morning trade, tumbling 3% since opening.
After closing 1.1% higher on Tuesday UK's FTSE 100 sharply retreated during Wednesday after Italy faced record high borrowing costs and Federal Reserve rejected prolonging quantitative easing. UK benchmark lost 0.9% falling to 5,441.99 during afternoon. On the downside were banking and resource stocks. Barclays PLC dropped 2.91% while RBS lost 1.76%. Royal Dutch Shell PLC and BP PLC each declined around 1%. Metal producer Rio Tinto
German DAX 30 index lost about 1% reaching 5,723.65 on Wednesday led by car makers after news that Fed will not provide additional quantitative easing. Volkswagen AG and BMW AG dropped 2% and 4% respectively, while Daimler AG tumbled 2.3%. Retailer Metro AG declined 2.3%. German markets took little relief from debt auction where 2-year bills produced record low yield of 0.29%. German benchmark index
S&P 500 Index dropped 0.87% or 10.74 points reaching 1,225.73 on Tuesday after Fed decided to leave its key interest rate unchanged and retail sales rose at slower pace than predicted. 9 out of 10 S&P 500 industries experienced a decline led by economic growth dependent companies. Sears Holdings Corp., Alcoa Inc. and Bank of America Corp. each tumbled about 2.3% while leading consumer electronics
Japan's Nikkei Stock Average declined 0.39% or 33.68 points to 8,519.13 as markets anticipated Fed report it will not apply expansionary monetary policy to stimulate growth. On the downside were resource companies with Mitsui Mining & Smelting Co tumbling 1.4% and JFE Holdings Inc dropping 0.9% Export dependent Japanese car producers also extended their loss: Honda Motor Co declined 2.2% and Suzuki Motor gave up 1.1%. On the upside were energy
On Wednesday Hang Seng Index lost 0.5% or 92.74 points and finished at 18,354.43 after Federal Reserve said it will not promote growth by new asset purchases. Resource stocks mostly deteriorated as Chalco lost 3.1% and HK & China Gas gave up 0.57%. Banks provided mixed contribution to the index. Bank of China Ltd. appreciated 0.4% while HSBC Holdings PLC dropped 1.8%. Clothing trader Esprit
The European common currency fell below $1.30 level against US dollar on Wednesday as Italy faced record high borrowing costs on is 5-year debt. Euro lost 0.3% touching $1.2995 in afternoon trade. Kathleen Brooks, Forex.com director admitted $1.30 is a psychological level that hasn't been violated for 11 months and the break signals worsening investor sentiments.
US stock index futures climbed higher after investors absorbed the results from German and Italian bond auctions. Futures on the Standard & Poor's 500 Index rose 3.9 points at 1,224.1, while those on Nasdaq 100 traded almost flat at 2,268.2. Dow Jones Industrial Average futures gained 24 points reaching 11,919.
On Wednesday Italy and Germany sold bonds with sharply contrasting yields for same maturity bills. While Germany sold 2-year bills worth €4.18 bn at an average cost of 0.29%, Italian central bank had to pay 6.47% on €3 bn five-year notes, a new euro era record high. To compare, in November Italian borrowing cost for same maturity papers was 6.29%.
Germany's borrowing costs traded 5 b.p. from a record low on Wednesday before bond auction. Borrowing cost on 2-year German bonds was 0.29% in London market trade, while 10-year yield was flat at 2.02%. Analysts predict that German bond auction results will be highly dependent on Italian notes auction.
Ben S. Bernake, Fed chairman pointed out his worried European crisis may halt US expansion in two years and therefore further intervention from Fed might be needed. Bernake said Federal Reserve policy makers may consider stimulating growth measures during their next meeting due January 25. Some analysts expects new program of asset purchases next year.
Inditex, the world's leading clothes retailer, reported unexpected increase in profits by 10% supported by rise in Asian online sales. The total net profit for the first three quarters of 2011 jumped to 1.3bn euros as compared to 1.17bn euros for the same period in 2010 with increase is sales by 10% to 9.7bn euros. The company claimed it would not raise prices but will increase the
In the UK, the number of residents applied for unemployment benefits increased much less than analysts expected while the unemployment rate remained the highest since 1996, according to official data. The number of claimants increased by 3,000 on a seasonally adjusted basis in November compared to 17,000 previously expected. The unemployment rate stays at 8.3% with 2.64 million people being unemployed.
The pace of economic expansion of Germany is expected to decrease to 0.4% next year due to weak world's economy and debt crisis in the euro-zone, reported Ifo Institute. The institute predicts the GDP to expand by 3% in 2011 after 3.7% increase last year. The company outlined high instability in the euro-zone as the major factor that may severely impact Germany.
Thomas Cook, a large travel agency, announced it would close about 200 stores in the UK in two years as compared to 125 close downs previously reported. About 661 people lost jobs on Wednesday due to closure of 115 stores. The closures and layoffs followed the Thomas Cook's report on ВЈ398m loss for 2011.
Worsening situation both in the euro-zone and in the US affect the economic expansion of China. The country may use government spending instead of bank lending to ensure sustainable growth of the infrastructure and manufacturing sectors in the next year, claimed Lin Yifu, the World Bank's senior vice-president. The GDP is likely to remain above 8% in 2012, he added.
Residents of Egypt are going to vote in the second round of the elections after the revolution period. The first election's round indicated that Islamist parties gained about 47% seats. The new parliament is expected to appoint a committee to create a new constitution outlining civil rights for the post-revolution period.
Sweden's Tele2, telecommunications operator, decreased its forecast on the growth of the number of customers in Russia and announced it will concentrate on the existing customer base rather than attracting new clients. Currently, the company expected to have about 20.7 million clients in Russia next year as compared to 21 million earlier predicted. However, Tele2 believes Russia is the main growth market for the company.
Norwegian central bank is likely to cut its repurchase rate for first time since 2009, as European debt turmoil harms growth. Norges Bank is expected to reduce its overnight rate by 0.25 percentage points from 2.25% to 2.0%, said majority of economists surveyed by Bloomberg. Norway faced shrinkage in manufacturing output in November, first time since in 18 months.
Russian PM Vladimir Putin may distance himself from President Medvedev to recapture public support ahead of presidential elections due March 2012, said researchers familiar with the matter. Vladimir Putin has less than 3 months to implement a new plan as United Russia party has become highly unpopular amid accusations of election fraud.
The UK national currency extended gains against 17-nation currency on London Wednesday trade. British Pound reached less than ВЈ0.84 per euro, for the first time in 10 months. The Pound appreciated 0.3% both against Euro and Greenback to ВЈ0.8393 and $1.5517, respectively. EUR/GBP currently is trading at 0.8402 while GBP/USD is trading at $1.5520.
Italian five-year bills declined on Wednesday as country was going to sell notes with a total value of around 3bn euros. Borrowing costs on Italian bonds surged 11 b.p. reaching 6.9% in London morning trade. 10-year yields climbed 9 b.p. to 6.77%, while yields for 2-year bills ascended 25 b.p. at 5.91%.
On Wednesday European equity markets opened lower led by mining companies and financials after Federal Reserve decided to keep benchmark interest rates untouched and did not extend quantitative easing program. Stoxx Europe 600 index lost 0.5% at 236.18, while French CAC 40 index tumbled 0.8% reaching 3,053.09. UK FTSE 100 index traded down 0.7% at 5,451.84 and German DAX 30 index declined 0.8% attaining 5,736.54.
Italian officials have received letters containing bullets and letter bombs in last few days as extremists protest against austerity plan. An official from Equitalia, Italian tax collection agency was injured in face and hand after opening a letter bomb. Italian radicals claimed they have also tried to attack Josef Ackerman in a similar way. Monti said that violence should be stopped before it turns into