GREEK PM Papandreou’s abrupt announcement that he wants a referendum on the Greek rescue plan has forced European leaders to hold emergency talks today to tell the country that there is no alternative to the budget cuts imposed in the bailout plan. Global stocks, the euro and bonds of debt-strapped countries tumbled yesterday as concern of a disorderly Greek default mounted.
ITALIAN Prime Minister Silvio Berlusconi, under pressure to cut Europe’s second-biggest debt load, convened a special meeting of advisers late yesterday to discuss budget-cutting plans. Berlusconi held crisis talks with Merkel yesterday and his key cabinet ministers will meet today to draft measures for the country’s financial stability legislation.
A EUROPEAN manufacturing gauge based on a survey of purchasing managers in the 17-nation euro region probably fell to 47.3 last month from 48.5 in September. The figure is in line with an October 24th initial estimate. A reading below 50 indicates contraction.
THE US Institute for Supply Management’s factory index dropped to 50.8 in October from 51.6 in September, lower than the expected reading of 52 by leading economists.
HONG KONG shares fell for a third successive session overnight as investors continued to take money off the table following last month’s rally and refrained from fresh buys as Eurozone woes kept risk appetite weak.
Futures on the S&P 500 signal the US stocks gauge may extend a two-day, 5.2% drop. The Institute for Supply Management’s factory index dropped to 50.8 in October from 51.6 in September. A reading of 52 was the median forecast in a Bloomberg News survey of economists.
EUROPEAN shares are expected to rise on Wednesday, after steep declines in the previous session, on some hopes that a meeting of the US Federal Open Market Committee may signal more measures to bring the fragile economic recovery back on track.
THE YEN, seen as a safe-haven currency, advanced against 14 of its 16 major counterparts, on concern Greek Prime Minister George Papandreou’s pledge to put the European Union’s financing package to a referendum risks a disorderly default if voters reject it. The euro pared an earlier drop versus the dollar after a Greek official told reporters that the Cabinet gave Papandreou unanimous backing for his referendum plans.
OIL fell in New York for a fourth day, the longest losing streak in three months, on concern a Greek referendum on Europe’s rescue plan will worsen the region’s debt crisis and curb economic growth. Futures dropped as much as 1.3% as manufacturing in the US, the world’s largest oil consumer, was close to stagnating last month.
GOLD will rebound from its biggest monthly plunge since 2008 and reach a record by March because economic growth is stagnating and Europe’s debt crisis is unresolved, according to eight of the most accurate forecasters tracked by Bloomberg over the past eight quarters. Two declined to give forecasts.