The European Union has made clear that Greece will not abandon and leave the growing crisis with the country’s obligations to endanger the eurozone, writes Financial Times. “It is clear that economic policies are not only a national issue, but also Europe, told reporters in Brussels, European Commission President Jose Manuel Barroso. According to senior EU officials in Greece last resort may receive emergency assistance from the governments of the euro area and by the EC, but without the participation of the International Monetary Fund. Euro zone countries and European authorities did not specify how Greece would help, since they fear that it will reduce pressure on Greece to cope alone with their problems and that would confuse an already turbulent financial markets. Immediate priority for the country to show that it is serious in its intention to reduce public spending, improve tax collection, to publish reliable financial and statistical data to deal with corruption, EU representatives stressed.
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Plenty of economic news, quarterly financial reports and data on the labor market in the U.S. made investors on Wall Street to take a cautious stance at the beginning of today’s trading session. The U.S. President Barack Obama confirmed that the creation of new jobs in the United States will be a major priority of the government this year in his statement before Congress. Meanwhile, in the Swiss resort town of Davos to hold the World Economic Forum, and today French President Nicolas Sarkozy called for a thorough rethinking of capitalism and criticized the scheme for payment of bonuses, which have no relation to the quality of management. Participate in the forum and renowned investor George Soros, who called for reducing the size of banks. Before the start of the session weekly data on new applications for unemployment benefits showed that initial unemployment in the United States remains relatively high during the past week. Moreover, the data were disappointing for the orders for the production of durable goods, whose value increased four times less than expected by 0.3 percent on a monthly basis in December. Among the most important quarterly results are those of carmaker Ford Motor, which came to an annual profit for the first time since 2005 and those of the communication company Motorola, which returned to profit in the fourth quarter of 2009, Procter & Gamble, involved in the index Dow Jones IA, turn out a profit of 4.66 billion dollars for the last three months of 2009
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The Mayor of London Boris Johnson warned the bankers to stay in the City of London, warning that the temptation to move to Switzerland to them face unexpected risks, officials said. “I am told that there are some parts of the canton of Bern, where men are not allowed to urinate made after 10 o’clock at night so as not to disturb their neighbors,” Johnson told a reception organized by the Japanese investment bank Nomura in the ski resort of Davos, which is currently being held traditional World Economic Forum. His comments in the room full of bankers, were made on the news that some hedge funds and investment bankers leave London and move to Switzerland to avoid the EU regulations or imposed in the UK tax revenue over a specified amount and on bonuses. “Time is the master of the universe to show that they can be both servants of society,” said Johnson, a former journalist and a frequent guest on satirical TV shows.
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The Prime Minister of Greece George Papandreou has denied speculation that the country must be saved with a loan from the European Union. Thus he denied rumors that the union will pour substantial sums to help countries in the fight against serious and crisis. In recent days in the French press, there have been allegations that Brussels is considering a rescue operation to help Greece. The reason is the volatility of the euro, which is largely due to precisely the problems of our southern neighbors. According to Papandreou, however, are all “speculation” and not true. He threw the blame for the problems that face his country and the euro on speculators who wager against the single currency. For this purpose we use a country with difficulties, as is now Greece. They become subject to powerful lobbies and carried out an attack against the currency throughout the euro area, transmits Air Force. Papandreou, however, acknowledged that his country has itself to blame for budget problems there. Therefore not be addressed criticism nor the EU nor the politics of the European Central Bank.
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The first month of the new year has brought a loss of securities markets in the Asian and Pacific region. National stock indexes registered significant decreases on a monthly basis, which are highest for measures of stock in China and Hong Kong. They lost between 6% and 10% of its value last month amid a tightening of monetary policy of many central banks. The regional index MSCI Asia Pacific fell 2.5 percent below its closing by the end of December 2009 This is the strongest part of its loss in February 2009 then the stock measure, which covers the securities markets in ten Asian countries, plus Australia and New Zealand, losing 10 percent in one month and fell to multi-floor because of the crisis in the global economy. During today’s trading MSCI Asia Pacific sank 1.7 percent to 117.05 points up and is on track to record strong weekly loss of 4.5 percent. This is the strongest weekly decline for the regional index of March 2009 The reason for this largely rose the news that the central banks of China, India and the U.S. tightened its monetary policy, which will reduce investments in financial assets. Central Bank of India today increased the minimum mandatory reserves commercial banks must hold as a deposit on it. The rate now stands at 5.75 per cent of their deposits to the previous 5 percent, cited by Bloomberg. This is a measure to withdraw excess liquidity from the economy of India, which along with China is the fastest growing Asian country.
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JPMorgan Chase will launch its global branch banking, which will offer commercial banking multinational corporations transmit Financial Times. This will instruct the bank alongside Citigroup and HSBC. From JPMorgan plans to invest more than $ 100 million in commercial banking division, which will consist of 300 people. The activity will initially be focused on emerging economies such as China, India and Brazil reveals Financial Times. JPMorgan is the aim of reducing their dependence on the weak U.S. economy and to benefit from the problems of Citigroup, have shared the bank’s executives told the newspaper.
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The price of oil futures go up for the first time in four days after nearly three weeks of decreases in the price of energy resources. During today’s e-commerce in Asia, oil briefly rose above $ 74 a barrel, after economic data from Japan showed that industrial production rose in December, while unemployment has experienced the decline. U.S. light crude for delivery in March, slightly more expensive by 0.1 percent to 73.70 dollars per barrel in today’s times of e-commerce exchange in New York. Earlier today the price jumped to 74.03 dollars per barrel. By the end of yesterday’s session, oil futures fell by 3 cents to 73.64 dollars per barrel. This is their lowest closing levels of 21 December. Since the beginning of this month, the energy input is depreciated by 7 percent and is on track to record its first decline in monthly basis for the past six months. Oil prices ended the last trading session of the 2009 level of 79.36 dollars per barrel on 14 January and is now trading below that level.
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The U.S. economy has a serious request to exit the severe economic crisis, it became clear from data on gross domestic product in the last quarter of 2009. It grew by 5,7 per cent in seasonally adjusted and aligned on an annual basis. This is the sharp rise in U.S. GDP by the end of 2003 onwards. The increase comes after the U.S. economic growth of 2,2 per cent in the third quarter of 2009. Analysts’ estimates were for growth of 5.4 per cent. Despite the high score, however it is too early for definitive evaluations Since several revisions to the data. Although over the last two quarters of 2009 to the U.S. economy grew for the whole last year reported a decline of 2,4 per cent. This is the worst performance of the U.S. economy from 1942 onwards, when it was registered a decline of 10.9 percent. Among the positive data make a bad impression with business investment, which suffered its biggest decline from 1942 to date, writes Market Watch. About two-thirds achieved in the last quarter of the year growth was due to selling of stocks in the economy. If they are removed from the calculations, the estimated growth of 2,2 per cent annually, which is a signal of continued weakness in the U.S.
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The U.S. market analysts predict a new shock to the markets. After Obama’s intentions to repair the banking system radically, according to them, now it is time for China to throw bombs in markets. This time, however, no room for panic, because it is forecast that China will take once an increase in the value of its currency. This should give a strong impetus to the markets, as can be extremely useful for most economies in the world. At this stage, however, nothing is certain, so do not make the mistake to trust fully the hearing, Brian Kelly warns of Kanundrum. “Many foreign exchange traders talking about this for quite some time, but so far nothing like that has happened,” he said. Kelly himself believes that it is very likely to happen. “There are political and economic will in China to do so, he believes. “From an economic standpoint, if inflation continues to grow, they will be most useful to let the yuan to rise and to suppress growth in prices. Purely political, such a decision would simply make the situation of China to the world a favor, “he said.
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In less than an hour after the opening of auction the sale of a 5-year Greek government bond was declared interest securities 9 billion, says Reuters. Market expectations of the Greek government was neighbor to distribute securities up within the framework of 3 to 5 billion, says Finance.news.bg. According to various sources of interest for the purchase of securities worth 16-17 billion. According to a banker involved in today’s auction, the average price achieved for this auction is for approximately 350 basis points interest rate spread. Thus the yield of 5-year Greek bonds is now at 5.97% to 2.32% return for their German equivalent (Bunds). This very successful auction and lead to a decline in interest rate spread between 10-years Greek and German bonds to 297 points after earlier today spread was 309 points to a record peak on Friday at 318 basis points. The news caused contraction of the interest spread between 10-year debt of Spain / Germany by 5 basis points to 87 points. The news helped to a strong surge in share prices of Greek banks on stock markets around 4 percent since the last weeks they were subjected to aggressive sales.
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