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GREECE’s prime minister has abandoned his plan to hold a referendum on Eurozone membership and instead set his sights on winning a parliamentary confidence vote, a dramatic about-face welcomed by European leaders and financial markets. Capping a day of extreme political turbulence in Athens, the PM told his socialist colleagues that was no need for a referendum after the conservative opposition promised to support the terms of a 130bn bail-out from the EU, ECB and IMF.

Russian president, Dmitry Medvedev, said the BRICS group of emerging markets is ready to stump up cash to help save the Euro. Brazil, Russia, India, China and South Africa would contribute to Europe in line with their current voting rights at the International Monetary Fund, Medvedev said. In return, they expect Western powers to give them a bigger say at the Washington-based lender, he said.

President, Mario Draghi, signalled he’d rather use interest rates than the printing press to bolster growth as the debt crisis drags the euro-area economy toward recession. Chairing his first policy meeting after succeeding Jean-Claude Trichet on November 1st, Draghi unexpectedly cut the benchmark rate yesterday by a quarter point to 1.25% and left the door open to a further move. At the same time, he ruled out ramping up ECB bond buying to reduce governments’ borrowing costs, saying the program is “temporary” and “limited.”

MARKETS:

THE NIKKEI rose nearly 2% overnight, as Greece appeared ready to abandon a proposed referendum that threatened a plan to contain Europe’s debt crisis, but the benchmark still logged a weekly loss in a week plagued by concerns about Europe.

EUROPEAN shares are set to rise today, tracking gains on Wall Street and in Asia, after sources said the Greek Prime Minister agreed to stand down, diminishing the prospects of a referendum and fears of a disorderly default.

CURRENCIES:

THE DOLLAR held a two-day drop versus the euro before data forecast to show US jobs growth slowed and the unemployment rate remained unchanged, supporting the case for the Federal Reserve to consider monetary easing. THE YEN is set for its first five-day drop against the dollar in three weeks after Japan on October 31st sold the currency to weaken it.

ENERGY:

OIL traded near a three-month high in New York as signs that Europe will reach an agreement with Greece on its debt reduced concern that faltering global economic growth will limit fuel demand. Futures were little changed after climbing 1.7% yesterday, and prices are headed for a fifth weekly gain, the longest streak since April 2009.

COMMODITIES:

Wheat is heading for the biggest slump in three years as the second-largest harvest on record swells stockpiles, easing shortages that drove global food costs to an all-time high. Wheat is this year’s fifth-worst performer in S&P’s GSCI gauge of 24 commodities, followed by zinc, sugar, nickel and cotton. The index gained 3% since January 1st versus a 6.5% drop in the MSCI All-Country World Index of equities and an 8.5% return on Treasuries.

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