IN THE U.S., there were few signs of a consensus emerging as the IMF urged the nation to get past its debt impasse. Republicans will push legislation to cut $1.2 trillion in spending over the next 10 years in exchange for a short term $1 trillion increase in the borrowing limit, with no tax hikes. Democrats hope to trim $2.7 trillion from the deficit over 10 years, but allow the U.S. to keep up debt payments until after the next election.
PRIME Minister David Cameron warned yesterday that Britain’s path back to growth “will be a difficult one” ahead of growth figures today that will reveal that Britain’s economy flat lined for most of the year. GDP figures from the Office for National Statistics are expected to show that the economy grew just 0.2% between April and June.
BANK OF KOREA Deputy Governor Kim Jae Chun said economic growth will pick up in the second half and exports are “pretty strong” leaving room to concentrate on quelling inflation. “A possible economic slowdown is not on our list of policy concerns,” Kim said yesterday. “The economy will pace up in the second half on a year-on-year basis”.
ASIAN stocks rose as forecasts for higher earnings at companies from Canon Inc. to Baidu Inc. countered concerns on the deadlock on the U.S. debt ceiling. The MSCI Asia Pacific Index increased 1.1%, Japan’s Nikkei 225 advanced 0.7% while South Korea’s Kospi index increased 0.4%. Australia’s S&P/ASX 200 index climbed 1%.
EUROPEAN shares are expected to edge higher today, mirroring the gains in Asian stock markets, on hopes that an agreement in Washington to raise the debt limit will ultimately be reached, while stronger metals prices are likely to support mining companies.
THE DOLLAR fell to a record low versus the Swiss franc. The green back also slid below 78 yen for the first time since March as Obama urged Congress to address future deficits. Gains in the Yen were limited on speculation Japanese officials will intervene to weaken it.
OIL rose as Barack Obama warned that the U.S. debt stalemate threatens to seriously damage the economy. Crude for September delivery climbed as much as 0.4%, to $98.80 a barrel in electronic trading on the New York Mercantile Exchange.
GOLD traded within 0.6% of an all time high as U.S. lawmakers remained deadlocked on how to tackle the country’s debt crisis. Gold futures in New York were 0.2% higher at $1,616.90 an ounce after touching an all time high of $1,626.30 yesterday.