The Gross domestic product (GDP) of Italy had fallen to 5% in 2009, while the budget deficit reached 5.3 percent of GDP, figures released today data from the Italian statistical office. In 2008, the country’s budget deficit was 2.7 percent of GDP, while the central bank forecast last month for the economy were to shrink by 4.8 percent. Also announced in February forecasts of the Italian Statistical Institute are to increase GDP by 1% for 2010, a deficit for the year amounted to 5.1 percent of Gross domestic product (GDP). Earlier today it became clear that the unemployment rate in Italy has risen in January to 8.6 percent from 8.5 percent in December. Announced data coincided with the average expectations of economists.
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The Swiss company Nestle lay a better than expected preliminary report, giving an argument of analysts who firmly pledged the company as a preferred investment in Europe. Revenues from sales of main products of the company rose by 4.1 percent in 2009, indicating stability amid the crisis. This is to bring Nestle revenue of 108 billion Swiss francs (99.91 billion dollars). Preliminary expectations of analysts was for sales growth of 3,9 percent to 105.9 billion francs, transmit CNBC. “The progress over the last year growth of 4,1 per cent against the backdrop of a complex environment shows that we are able to note an increase greater than that of the sector as a whole,” stated the CEO of Nestle Paul Balk. Operating profit of Nestle for the year 2009 amounted to 15.7 billion francs.
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The U.S. central bank began tightening cycle of monetary policy. This happened quite a surprise, since no signals were given prior to such intentions. Policy on withdrawal of money from the system began with an increase in the discount rate that commercial banks pay the Fed on its direct loans from the central bank. He was raised by a quarter percentage point to 0,75 percent. Among the reasons the central bank is that commercial banks must rely more heavily on money markets to raise the necessary funds, rather than resorting to the services of the Fed. These changes are considered as a step toward normalization of credit facilities the Fed,” says the official release of the institution. “No change is expected to lead to further tightening in financial conditions for households and businesses and they are not intended to signal a change in the outlook for the economy or monetary policy,” the Fed explained. After news of the dollar shot up sharply since the central bank’s actions are perceived by the market as a signal that is to tighten monetary policy. The dollar jumped to a level of 1,3485 EUR / USD, as at an earlier stage had reached a level of 1,3444 EUR / USD.
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The Greek government spokesman George Petalotis categorically denied the information that the government is negotiating with the International Monetary Fund (IMF) loan of 35 billion euros, police agency ANA-MPA. “No such initiative and such an agreement,” stresses a spokesman, asked to comment on Replication in the media in this sense. The Government is determined and has the national debt difficult to win the battle to revive the economy, improve the image of Greece abroad and restore confidence in the country, said Petalotis. “In this titanic battle, the government is not seeking services and loans, but need political support from its partners and the necessary time to implement its program to stabilize the economy,” the spokesman further stated. Asked to comment on the pressure of EU countries for the implementation of new restrictive measures, the spokesman said that by 15 March will be assessed a situation which is not yet complete “and that” until an assessment of what has happened so far can not comment more. Petalotis said that the proposal for the establishment of a committee of inquiry to investigate the fraudulent statistics about the state of public finances and over-indebtedness of the country will be tabled for debate in parliament next week probably.
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The three main stock indexes in the U.S. I found myself in negative territory at the beginning of the last session of the week for Wall Street, after Federal Reserve unexpectedly raised interest rates on loans which commercial banks in the country. Investors took that as a sign of recent increases in base rate in the U.S. and opted to take a cautious stance. The index of the 30 largest and most traded stock companies, Dow Jones Industrial Average falling by 0.1% to 10 383.68 points and a half hours after the beginning of the session. Broader index S & P 500 gave up 0.1 percent to 1 105 points, mainly because of reductions in financial, energy and extractive companies. On the Nasdaq Stock Exchange main index Nasdaq Composite lost 0.2% to 2 236 points. Previous three sessions brought to the state index increases because of the good data on housing and factory sector. The encouraging financial results of the largest PC maker in the world also Hewlett-Packard stock increased optimism. The surprise Fed decision, announced after the end of the session on Wall Street on Thursday, dipped indexes in Asia and Europe today.
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The price of oil recorded several sharp movements in the past day. The black gold initially rose significantly, passing over 79 dollars a barrel, then retreated with quotes around the dollar. As part of yesterday’s session of the New York Stock Exchange with oil delivery in March rose by 2,2 percent to 79.06 dollars per barrel, the highest close since 14 January. It came because of the temporary stabilization of the euro, which has triggered interest in investing in commodities. Late in the evening, however, the U.S. Federal Reserve raised the discount rate by a quarter percentage point to 0.75 percent, which acted as a powerful catalyst for the dollar. Thus, the dollar rose to 1,3485 EUR / USD, after yesterday the euro was more than 100 pips more. This led to reduced interest in investing in raw materials and oil prices fell with 1,3 per cent to just over $ 78 a barrel. The Exchange in London yesterday of Brent crude oil with delivery in April rose by 2 percent to 77.78 dollars per barrel.
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Hungary gave the receipt of a new tranche of aid from the European Union, said European Commission (EC). From Brussels, however, specify that the money will remain available to the country in case of need. “Given the sustainable improvement of their external finance Hungary wants unblock international aid, said in a statement the European Commission, which notes that the country has dropped from its financing and in November. In Budapest the Minister of Finance Peter Osko confirmed the news to journalists, noting that it will be used the next tranche down – or the Commission or the International Monetary Fund (IMF). The reason is that “the country’s financing was provided by the markets,” AFP reported. Encounter serious difficulties from the effects of the global financial crisis in Hungary get a loan from a total of around EUR 20 billion from the IMF, EU and World Bank to deal with the effects of international capital leaking. This was the first country in the EU, which resort to emergency measures. EU promised to allocate aid to 6,5 billion euros, far Hungary has benefited from three tranches: a $ 2 billion euros in December 2008 and March 2009 and 1,5 billion euros in July 2009
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Sovereign wealth fund Dubai World, which again is bound to lead to tensions in financial markets, will propose plans to restructure its debts. The intention of the Fund are to seek warrants for conversion of debt to 22 billion dollars. One option is for every dollar debt fund to return 60 cents, transmit Market Watch, citing sources from the country. This will happen after a period of seven years and within this period will be paid principal and interest. Only interest would be paid in the last year, and the government of Dubai will be the guarantor. The second option, which is expected to be proposed, provides for obligations to creditors to be made in full, but by assets and shares of the division of the Dubai World Nakheel. The company specializes in construction and is the creator of ambitious projects such as palm and The World. “We think that banks would probably accept the first proposal,” it said in a message of Credit Suisse. According to financial institution creditors are expecting such a development and recovery of 50-60% of their loans to the fund. While it seems unattractive for banks that option is better than bankruptcy, indicated by Credit Suisse. The reason for this is that bankruptcy financial institutions will have to classify 100% of its exposure to the fund as a bad loan, as it happens around 40% of the position. From an accounting point of view it is more profitable, think of the bank.
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The Green Wave of the U.S. stock exchanges increases brought the three main index at the beginning of today’s session, after it became clear that the country’s industrial sector continues to grow for the seventh consecutive month in January. Along with increasing production and increasing utilization of production capacity at factories, mines and utilities. Shortly before this good news for the housing sector showed that the number of new housing projects in which developers in the United States have begun to work increased for the third consecutive month in January. State of the housing sector is one of the most important orientations for the overall state of the economy by increasing activity and it portends growth of gross domestic product. Dow Jones IA, which comprises 30 most frequently traded companies in the United States with the highest market capitalization rose by 0.3 percent to 10 301 points an hour after the start of trading. Broader index S & P 500 grew by 0.4% to 1 098.99 points, supported most of the extractive and financial companies. Nasdaq Composite, which brings together companies from the Stock Exchange Nasdaq, rose by 0.3% at 2 221.73 points. Federal Reserve data showed today that the index of industrial production in the United States rose by 0.9 percent on a monthly basis in January. The index traces the value of output of factories, mines and utilities. Utilization of production capacity increased from 71.9 percent in December to 72.6 percent in January.
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The price of crude oil increased sharply in the past day and the quotations passed over 77 dollars a barrel. Major role it played for speculation that Greece will not need support from the EU to cope with the limitation of their budget deficits. This led to strong growth in the price of the euro, which restored much of the lost against the U.S. dollar in recent days. The single currency rose to 1,3770 EUR / USD, having risen to 1.28 percent yesterday. However, since November the euro is moving with a decline of 9 percent. For the positive sentiment in the oil market influences and optimistic ending the session on the New York Stock Exchange. Because good news for the region’s manufacturing activity in New York yesterday, the shares registered in the U.S. growth rates. As a result of all this, within yesterday’s trading session in New York, U.S. light crude rose by as much as 3.9 per cent (2.88 dollar) to 77.01 dollars per barrel. Thus was achieved the highest growth of 30 since September last year. Night quotes continued its upward movement this morning and move to more growth of 0,5 per cent to 77.37 dollars per barrel.
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