Greek Prime Minister George Papandreou agreed to step down to allow the creation of a national unity government intended to secure international financing and avert a collapse of the country’s economy. Papandreou met with Antonis Samaras, leader of the main opposition party, and agreed to form a government to lead Greece “to elections immediately after the implementation of European Council decisions on October 26th”. Both sides will meet again today to decide who will be the head of the new government, with a separate meeting to discuss the time frame and the government’s mandate.
ITALY’s parliament will vote tomorrow on the 2010 budget report amid an unravelling of Berlusconi’s majority and a surge in the nation’s borrowing costs. Two Berlusconi allies defected to the opposition last week and a third quit yesterday. Six others called for the Prime Minister to resign and seek a more broadly backed government in a letter to newspaper.
DAVID Cameron is planning to preach the importance of “moral markets” due to fears that Labour’s attacks on big business are playing well with voters. Although the UK’s Prime Minister will pour scorn on what he sees as Ed Miliband’s crude distinction between “good” and “bad” companies, he will maintain the Tories are committed to the so-called “good business” agenda.
CHINA’s stocks fell for the first time in five days on speculation last week’s rally was excessive relative to earnings prospects and before a meeting by Greek leaders to decide who will head a new unity government. FUTURES on the S&P 500 signal the US stocks gauge may extend last Friday’s drop of 0.6%. Markets in India, Singapore, Malaysia and the Philippines are closed for a holiday today.
EUROPEAN shares are expected to drift higher in early trade on Monday as Greek Prime Minister George Papandreou agreed with the opposition on a new coalition government to approve a bailout deal, although gains could be short-lived, analysts said.
Concern that Europe’s sovereign-debt crisis will spread and global economic growth is slowing has buoyed demand for havens such as the franc and yen, spurring Swiss and Japanese policymakers to intervene in currency markets. The franc sank 0.8% versus the euro after the central bank signalled it is ready to act if the currency’s strength threatens Switzerland’s economy.
OIL rose for a fourth day, gaining as much as 0.7% in electronic trading in New York. Crude gained for a fifth week in the seven days ended November 4th, the longest winning streak since the period ended April 3rd 2009. Prices have risen 3.7% in the past year.
HEDGE funds reduced wagers on higher commodity prices for the first time in four weeks on mounting concern that Europe’s failure to contain its debt crisis will slow economic growth and demand for raw materials. GOLD for immediate-delivery climbed, and gold futures rose for a second week, reaching the highest since September 22nd, on increasing demand for what are perceived as the safest assets.