SLOVAKIA’S centre left opposition party has agreed to back changes to Europe’s bailout fund yesterday in return for early elections, to be held in March 2012.The vote on boosting the European Financial Stability Fund (EFSF) will take place today or tomorrow after a debate both on the fund and the early poll.
A CONTROVERSTIAL third phase of quantitative easing could still be on the cards in the U.S., it merged last night. Two of the Fed’s 10 person committee said that, “current conditions and the outlook could justify stronger policy action”.
EUROPE’S banks face a race to bring their capital levels up to Basel III standards much sooner than anticipated under a recapitalization plan laid out by European Commission president Jose Manuel Barroso yesterday. All of the 90 banks covered by the EU stress tests will be included in a programme to get their capital up to “a temporary significantly higher capital ration of the highest quality” than the scheme to which lenders are currently working.
MARKETS:
JAPAN’S NIKKEI rose to a four week high this morning on hopes that Europe will come up with actual measures to support Greece and shore up European banks. The Nikkei climbed 1.2% to 8,839.13 by lunchtime, while the broader Topix index advanced 0.9%. Resistance looms around 8,870, a high reached in mid-September, given lingering doubts over the health of the European financial system and the global economy.
STRONG MINERS and banks boosted Britain’s top shares yesterday, keeping the index on an upward tilt, underpinned by progress in tackling the Eurozone sovereign debt crisis and recent upbeat U.S. data. However, financial bookmakers expect Europe’s main stock indexes to open lower today, despite the sharp gains in the previous session, as global growth worries resurface following weaker than expected Chinese trade data.
CURRENCIES:
THE EURO was 0.4% from a four week high before European Commission President Jose Barroso speaks in Brussels after calling yesterday for a “coordinated approach” to recapitalize the region’s banks. THE YEN rallied from its weakest level in a month against the dollar on speculation Japan’s exporters bought their currency.
ENERGY:
OIL dropped for a second day in New York after signs of weakening gasoline demand in the U.S. and slowing Chinese exports stoked speculation that demand may falter in the world’s largest consumers of crude. Futures slipped as much as 1.1% after American Petroleum Institute data showed U.S. gasoline demand fell the most in more than five years.
COMMODITIES:
THE 28% PLUNGE in zinc that drove the metal into a bear market may be ending as record demand from steelmakers erodes stockpiles and the price slump spurs producers to curb output. Prices may climb as much as 25% next year according to the median in a Bloomberg survey of 10 producers, analysts and traders.
