EUROPE’S leaders are grappling to find a solution to the debt crisis by the end of today, their latest self-imposed deadline. Eurozone plans for leveraging the European Financial Stability Fund (EFSF) could be thrashed out today, in a bid to save struggling peripheral states. Eurozone officials said last night that the International Monetary Fund might participate in the EFSF; a move that would see the UK contribute to the bailout fund.
FRENCH banks could face a ban on paying bonuses and dividends as part of a European recapitalisation programme, finance minister Francois Baroin said yesterday. “The recapitalisation will be done with the ban on dividends and bonuses under the supervision of the insurance and banking regulator. We have reached an agreement for the Eurozone last weekend,” said Baroin.
CONSUMER confidence in the U.S. unexpectedly sank and home prices stagnated, showing why the Obama administration and some Federal Reserve policy makers are pivoting to stem a housing slump that is threatening the economic recovery. The household sentiment index slumped to 39.8 this month, the lowest level since March 2009.
MARKETS:
JITTERY markets nosed dived yesterday after news broke out that a meeting of Eurozone ministers, known as Ecofin, had been cancelled. Confusion over the announcement led to false rumours that the whole crisis tackling conference had been scrapped.
THE FTSE fell off a cliff, dipping 1.48% on its open yesterday. Yet the blue chip index recovered later in the day, as it was confirmed that the wider summit of EU and Eurozone leaders will proceed as normal. The FTSE closed down 0.41%, the DAX 30 fell 0.14%, and the CAC 40 was down 1.43%.
CURRENCIES:
THE YEN held gains after Europe’s debt turmoil spurred demand for refuge, boosting the currency to a post-World War II record versus the dollar yesterday. The Japanese currency traded 0.3% from the high after Finance Minister Jun Azumi said today his ministry will take “decisive” measures to stem the yen’s rise.
ENERGY:
SUN DRENCHED Kuwait, a desert nation with no solar power plants and electricity demand that’s growing 8% a year, has set the most ambitious target for using renewable energy in the Gulf region. OPEC’s fifth biggest oil producer aims to generate 10% of its electricity from sustainable sources by 2020. Kuwait is trying to free up more oil for export and expand its generation capacity to support increased tourism, manufacturing, and home building.
COMMODITIES:
THAILAND’S worst floods in more than half a century may have wiped out as much as 14% of paddy fields in the world’s biggest rice exporter, potentially erasing the predicted global glut. The Thai export price, a global benchmark, may climb 20% to $750 a ton by December. Rice, a staple for half the world, was already the year’s best performing agricultural commodity after drought cut the U.S. harvest to the lowest level in 13 years. Prices also rose as Thailand started buying at above market costs to boost farmer incomes.
