European leaders meet on Thursday to revamp their debt crisis-fighting strategy and break the deadlock that concerns investors and is prompting warning of contagion from the IMF, which last week called for a “greater sense of urgency”.
RESULTS of the stress tests, released on Friday, saw just eight out of 90 banks fail to maintain sufficient capital in an “adverse” scenario devised by the European Banking Authority, although many analysts feel that the tests were too easy as they didn’t include the risks from a Greek default. All four major UK banks passed, with RBS coming out weakest.
PRESIDENT Barack Obama said Republican lawmakers should agree to raising revenue in any deficit-cutting deal, noting he has agreed to consider cuts to entitlement programs such as Medicare. Obama has been trying to break an impasse over whether to include cuts in entitlement programs and tax increases in the deal.
WORLD Bank President Robert Zoellick will today call on countries to get out of their defensive positions on trade and push for a broad agreement that could help the struggling global economy. His speech to the WTO today will say he is disappointed with the global round of trade negotiations, and that WTO members need to “think big” on a far reaching global trade deal.
HONG KONG shares edged higher on Monday, helped by banking shares, as turnover dwindled on investor caution ahead of corporate earnings and as debt crises in the euro and the US remained unresolved. On the mainland, the Shanghai Composite finished the morning session slightly lower, dragged down by property-related counters after reports that the country’s real estate markets cooled in the second quarter.
THE S&P 500 ended down 2.1%, the Dow lost 1.4% and the Nasdaq fell 2.5% last week. It would have been worse if Google’s results on Friday had not distracted investors from worries about US and European debt. With little sign of these concerns abating, investor caution is likely for the week.
EUROPEAN stock indexes are expected to fall today, adding to last week’s losses, as results from the bank stress tests failed to dispel investors’ concerns over the potential impact from the region’s sovereign debt crisis.
THE EURO fell the most in a week against the dollar and slid to a record versus the Swiss franc on concern European leaders will fail to agree on measures to contain the region’s debt crisis at a summit this week. The euro fell even after the EBA said that only eight of the 90 banks failed its stress tests.
OIL slipped before European leaders hold a special summit this week after eight of the region’s banks failed stress tests. Concern the crisis is spreading pushed the euro lower against the dollar, limiting the appeal of commodities priced in the US currency.
GOLD surged to a record and is set for the best run of gains in more than three decades as US politicians failed to reach agreement on raising the debt ceiling and Europe’s sovereign crisis lingered, boosting haven demand.