Greek PM, Minister Lucas Papademos, faces a vote of confidence in his six-day old government today as he races to secure financing designed to avert a collapse of the economy and keep Greece in the euro. Lawmakers in parliament will cast their ballots in a roll-call vote, giving the premier a three-month mandate to implement budget measures and ensure bailout of 130bn.
Eurozone bond markets suffered a mass sell-off yesterday as investor fears spread beyond Italy and Spain to triple A-rated France, Austria, Finland and the Netherlands. The premium that France and Austria pay over Germany to borrow rose to levels that investors say are no longer consistent with top credit ratings.
German frustration over Britain’s approach to the Eurozone crisis erupted on Tuesday after Volker Kauder, a close ally of Angela Merkel, accused the UK of selfishness just days before a meeting between the two countries’ leaders in Berlin. To applause, he said it was not acceptable that the UK was “only defending its own interests” rather than that of the wider EU by opposing a European tax on financial transactions.
ITALIAN PM-designate Mario Monti said after European markets closed yesterday, that he is convinced Italy can overcome the crisis and he’ll meet with President Giorgio Napolitano tomorrow to present his Cabinet.
US stocks rose yesterday, boosted by swift steps toward formation of a new Italian government and stronger-than-expected reports on the US economy. Stocks sensitive to economic growth led the rally, with technology and industrials the best performers. But despite Tuesday’s advance and after posting gains in five of the last six weeks, the S&P 500 is flat for the year and trapped in a tight range. The index could find tough technical resistance to continue its rise today.
ASIAN stocks dropped for a second straight session, and futures on the S&P 500 Index indicate that the fall may continue in the US when markets open later.
EUROPEAN benchmark indexes are expected to fall today, losing ground for a third session on mounting fears the debt crises in Greece and Italy would spread to France and Spain.
THE EURO sank to five-week lows against the dollar and the yen as Spain and France prepare to sell securities tomorrow after a slump in Eurozone debt signalled the region’s debt crisis is spreading. The euro has dropped 1.6% over the past six months, according to Bloomberg Correlation-Weighted Indexes. The yen has gained 7.8% and the dollar has risen 3.9%, the best performers among the 10 developed-nation peers tracked by the gauge.
OIL dropped from the highest level in more than three months after US crude stockpiles increased and a surge in Italian bond yields stoked speculation Europe is failing to contain its debt crisis.
Cotton output in Australia, set to be the third-biggest shipper, may surge as much as 25% to an all-time high after floods boosted water supplies and prompted record plantings, according to producers’ group ‘Cotton Australia’. Increased production in Australia will add to global supplies, pressuring prices that have tumbled 55% from a record in March on ICE Futures US in New York.