The crude Oil reached a new quarterly peak during yesterday’s trading session, then retreated positions. The reason for the retreat was the appreciation of the dollar, which sank to its lowest level against the euro since the beginning of May so far. Within the exchange session in New York oil price with delivery in September rose 1.5 percent to 82.55 dollars a barrel. This is the highest price of the raw material since 4 May. At night, however, took oil down, which is its first retreat for the last five days. By reason analysts indicate negative sentiment in the Asian trading session, and expectations of weak U.S. economic data later today. Among the data to be published today, are the indexes of industrial orders and consumer spending and expected sales figures for housing. Expected sequence of data to show that recovery of the largest in the world economy remains stuck. This will cause a retreat in oil prices, which traded this morning with a decline of 0.5 percent to 82.12 dollars a barrel. Exchange in London yesterday the price of Brent crude oil jumped 2.3 percent to 82.68 dollars a barrel.
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New recession in the euro area is unlikely, a depreciation of the euro will help reduce the negative effects that have measures to reduce the debt on economic growth, says Pier Carlo Padoan, chief economist of the Organization for Economic Cooperation and Development (OECD) said from CNBC. Governments need to pursue fiscal consolidation and reforms in the pension insurance system and labor market to promote economic growth, said Padoan. To convince skeptical financial markets in the effectiveness of its strategy, governments should also show that the coordinated work, he added. Even measures to reduce the debt limit growth in the eurozone, it will be partly offset by increased demand for European goods from Asian and other markets due to their better competitiveness resulting from weaker euro, he said. According to data from the European Central Bank the value of the euro against the U.S. dollar declined by 14% this year, while trade-weighted value of the euro has decreased by more than 10%. “Will there be a” W-shaped “recession in Europe? I do not think, “said Padoan, emphasizing that the massive debt following the global recession in 2007 – 2009,” is not just European history “and that Europe will deal with this problem faster than others.
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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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Lithuania will not adhere to the “painful” scheme for adopting the euro, which will shrink consumption and greatly harm the economy, said Prime Minister of the country Cubilus Andrews. The country probably will fail to meet EU requirements for the deficit within 3 percent of GDP by 2011, so the adoption of the euro can not happen before 2013, said in an interview yesterday, Finance Minister of Lithuania Ingrid Simon. “These are very ambitious and very painful measures, and, of course, there are any limits on what measures can enter,” said Cubilus. The aim is not to kill the entire economy and stability in society by reducing costs, salaries and pensions. Lithuania’s economy contracted by 14,3 per cent in the third quarter after the government took budget cuts, equivalent to 8 percent of GDP this year. Even after these stringent measures, the evaluation of the European Commission Lithuania will have a deficit of 9,7 per cent in 2011 to 9.8 per cent for this. Lithuania, whose currency – liras is tied to the euro should be introduced European single currency “as soon as possible, but the opportunities in turn have practical limits and practical measures should be introduced,” said Cubilus. The government has proposed the 2010 budget cuts of 5 percent of GDP, aimed at social welfare. Lithuania lags behind neighboring Estonia, which plans to join the eurozone from January 1, 2011, after years of using the government budget surplus for the establishment of reserves. This allowed the public finances remain intact even after the crisis hit the country.
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