Luxembourg Prime Minister Jean-Claude Juncker, chair of the euro-area finance ministers, indicated an impromptu meeting of European leaders in Frankfurt failed to resolve differences ahead of a summit scheduled for this weekend. The disagreements among policy makers came as banks lobbied against forced recapitalisation and deeper writedowns on Greek debt.
THE US Federal Reserve’s ‘Beige Book survey’ released yesterday showed companies reported more doubt about the recovery even as the economy maintained its expansion last month. The survey said many Fed districts described the pace of growth as ‘modest’ or ‘slight’ in September, even though overall economic activity continued to expand.
Greek Prime Minister George Papandreou won a preliminary vote in parliament on a new austerity bill in Athens yesterday, bolstering his chances of securing further international aid for the country. The in-principle vote will be followed by a final vote on all articles and in total later today.
Slovenia had its long and short-term sovereign credit ratings cut by S&P, which cited the nation’s deteriorating fiscal position. The ratings were reduced to AA-/A-1+ from AA/A-1+ and the outlook is stable, S&P said.
MARKETS:
US stocks fell yesterday as traders jumped to sell in a hair-trigger reaction to fresh reports underscoring that Europe remains far from a solution to its debt crisis. A weak economic outlook from the US Federal Reserve was responsible for the initial move lower in the afternoon.
ASIAN stocks fell overnight, wiping out this week’s gains as a split emerged among European leaders on a rescue plan and the Federal Reserve said companies grew more pessimistic about the US economy.
EUROPEAN shares are seen dropping today, tracking falls on Wall Street and in Asia as hopes faded that a comprehensive plan to ease the Eurozone debt crisis would be presented on Sunday at an EU summit.
CURRENCIES:
THE EURO declined against the dollar and the yen, halting a two-day advance, as a split between France and Germany over Europe’s rescue strategy surfaced before finance ministers meet in Brussels tomorrow. Demand for the euro waned after S&P cut Slovenia’s credit ratings and a Finnish lawmaker said plans to boost the region’s rescue fund through leverage could disguise potential costs.
ENERGY:
OIL dropped a second day as Europe struggled to tame its debt crisis and the Fed said companies were increasingly pessimistic about the US economy, stoking speculation commodities demand may falter.
COMMODITIES:
Silver, the best-performing and most-volatile precious metal of the past year, may rebound from a bear market as investors bet on growth in developing nations and an extended European debt crisis. While silver has swung from losses of 3.2% to gains of 103% over the past 12 months, exceeding moves in gold, platinum and palladium, it is still on track for its highest-ever annual average.
