Greece’s parliament begins today to debate a deeply unpopular austerity plan, which international lenders are demanding to see approved this week to avert the threat of bankruptcy. Without approval for the measures, the EU & IMF say they will not disburse the fifth tranch of Greece’s 110bn euro bailout programme.
US CONSUMER spending probably rose in May at the slowest pace in almost a year, reflecting fewer new-car purchases and dimmer employment prospects, economists said before the Commerce Department’s spending report due out today.
CHINA’s premier Wen Jiabao said that the country can keep full-year inflation within 5%, affirming forecasts that price gains in the country will slow in the second half from the fastest pace in almost three years.
EUROPEAN shares are set to dip today, extending an eight-week losing run and mirroring weakness in Asian equities, as uncertainty over the outcome of a Greek vote on austerity measures kept investors cautious.
The Nikkei and Hang Seng indexes fell sharply overnight, as Eurozone debt worries weighed on markets before a crucial parliamentary vote due this week and after a fall in overseas banking shares. Stocks in Shanghai rose for a fifth day as Premier Wen’s positive statement on inflation signalled that the government is confident of subduing inflation that accelerated to 5.5% in May, the fastest pace since July 2008.
MAJOR European markets extended their losing run to eight weeks on Friday, the longest losing streak since 1998, as uncertainties about Greece’s debt crisis persisted, and with Italian banks falling heavily.
THE DOLLAR rose to its highest level since June 16th against a basket of currencies, as the euro stayed under pressure ahead of the Greek parliament vote. However, the euro has strengthened 5.7% against the dollar this year, only second to the 12% gain made by the Swiss franc. Most of the common currency’s gain occurred in the first quarter as the ECB indicated in March that higher interest rates were on the way and EU leaders established a permanent rescue mechanism for the region.
BRENT OIL slipped more than $1 a barrel overnight, extending the previous week’s losses, as the US dollar gained ahead of a vote by Greece to clear unpopular fiscal austerity measures.
GOLD prices held steady on Monday, aided by active buying on the physical market in Asia, while a stronger dollar weighed along with caution as investors awaited a Greek parliament vote this week that is crucial to securing a sovereign debt bailout.