President Obama embraced a $3.7 trillion debt-cutting plan by a bipartisan group of senators that would combine tax increases and spending cuts, saying it could end a congressional deadlock over raising the US borrowing limit. The news spurred optimism lawmakers will reach an agreement that will help the nation avoid a threatened default on August 2nd.
CHINA, the world’s fastest-growing major economy, may expand more than 9% this year, even after the central bank boosted interest rates and controlled lending, a respected economic indicator revealed today. Growth may be strong enough to withstand more monetary tightening as local governments raise spending on low-cost housing and manufacturers build more factories in inland provinces.
AS EUROZONE leaders prepare for their emergency summit in Brussels tomorrow, some finance ministers have started to focus on eurobonds as part of the solution. While jointly issuing bonds with the most creditworthy European countries may help debt-laden nations tap markets at lower interest rates, it could also raise borrowing costs for Europe’s largest economy, Germany.
A RALLY by recently beaten-down banks and commodity issues halted the FTSE 100 fall of 5% over the previous eight trading days, although gains were limited by ongoing worries over Eurozone debt worries.
US STOCKS recorded their best day since March on Tuesday after strong corporate results and renewed hope for an agreement in Washington on thorny budget issues boosted investor confidence.
JAPANESE shares rose overnight as indications of progress on a U.S. budget-reduction deal boosted investor confidence while encouraging quarterly numbers from Apple and IBM helped Asia’s beaten-down tech sector gain for a second day.
EUROPE’s main stock indexes are expected to rise today, adding to the previous session’s tentative rebound, helped by earnings hopes and signs of progress on a US budget-reduction deal. Gains, however, could be limited as investors remained cautious ahead of Thursday’ Eurozone summit.
THE EURO, which had risen earlier as Italian and Spanish yields fell, gave up the gains as German Chancellor Angela Merkel doused expectations for Thursday’s emergency euro zone summit, saying expectations for a single, final solution to the Greek crisis was unrealistic.
CRUDE for August delivery advanced in New York overnight, extending yesterday’s 1.6% increase. The contract, which expires today, rose after the industry-funded American Petroleum Institute said US crude supplies fell the most in six weeks. An Energy Department report today may say inventories dropped for a seventh week, the longest run of declines in two years.
GOLD snapped an unprecedented 11-day winning streak yesterday on the news that the US is closer to a debt solution. The precious metal regained some ground overnight, however, as Eurozone woes remain in focus.