Despite Dominique Strauss Kahn’s detention on alleged sexual assault charges, EU finance ministers have agreed the details of Portugal’s 78 bn rescue plan.
EU MONETARY affairs spokesman, Amadeu Altafaj, yesterday drew a distinction between “re-profiling” Athens’ debt and “restructuring”. His comments indicate that Greece’s second bailout will involve Eurozone members extending the maturity of its rescue funds. The EU insists that this would not constitute or lead to a full-scale restructuring or default.
DOMINIQUE Strauss-Kahn was due to step down as MD of the IMF this summer to contest France’s presidential election, but his arrest may bring forward his resignation. While many feel that this would present an opportunity for someone from the emerging countries to take charge, European officials on Monday insisted that the MD should be European, with Angela Merkel, the German chancellor, looking favourite.
OFFICIAL UK data revealed that net public sector borrowing was lower than expected. The data showed that spending rose £16.39bn last month, less than the predicted £18.7bn. February’s data was also downwardly revised to £7.9bn from the previous estimate of £10.3bn.
Japan’s Nikkei steadied overnight, despite global equity markets and oil prices coming under pressure on speculation that the US recovery may stall. The benchmark index had slumped more than 3% over the last three sessions, in line with a pullback in other risk assets on volatile commodity prices and as investors factor in the expected end of the US Federal Reserve’s stimulus programme in June.
EUROPEAN shares are expected to slip for the fourth straight session today, tracking weakness overnight on Wall Street, with a slide in commodity prices expected to hit heavyweight miners and oil majors as concerns over the outlook for global economic growth gathers pace.
THE EURO gained 0.3% against the dollar yesterday and remained close to that level overnight. With the EU/IMF bailout seemingly agreed for Portugal, and a renegotiated Greek bailout close to agreement, investors appear to be satisfied that EU politicians are doing just enough to keep the Eurozone together.
OIL for June delivery slid 0.2% to $97.19 in electronic trading in New York overnight, after earlier dropping to $96.76. Futures dropped 2.3% yesterday after the opening of spillways curbed speculation the Mississippi River would flood refineries and disrupt fuel supplies in the world’s biggest crude-consuming nation.
COPPER for three-month delivery slipped 0.7% to $8,780 a metric ton on the London Metal Exchange. The metal had gained 1.6% in the past three days, after closing on May 11th at the lowest level since December. Tin sank 1.4%, while lead, nickel and zinc also retreated. Silver futures slipped 0.5%, following a 2.5% drop yesterday. Gold for June delivery climbed 0.2%, following a two-day drop.