General News

Yesterday, it was reported that Finland will receive the collateral it demanded as a condition of providing aid to Greece. The Finnish government was able to secure the collateral, but it won’t protect the country’s taxpayers from having to pitch in for financing a second wave of the crisis. “The value of the deal is in the eye of the beholder,” said Ville Pernaa, director of the Parliamentarianism at the University of Turku. “But this isn’t really what Finland sought to begin with.” The issue is that the government’s refusal to develop a plan for Finland to assist Greece that was more advantageous to the Finnish electorate could inflame talks between skeptics within the country that hold the third biggest bloc in parliament. The “True Finns” party, led by Timo Soini, which is directly encouraging Greece to default and to admit that the Euro is a failed experiment, is the second most popular party in the country after the National Coalition...

The continuing rally on the risk asset markets yesterday was buoyed by the positive news coming out of the Euro zone. At a meeting with Greek Prime Minister George Papandreou, German Chancellor Angela Merkel yet again announced that Germany will provide all necessary aid to Greece and not allow the country to leave the Euro zone. Greece’s parliament voted 115 to 142 to pass the prime minister’s initiative to introduce an additional tax on property, which says that the country’s leadership is trying to meet all the conditions to qualify to receive another 8 billion Euro tranche of aid.  In addition, the Greek parliament also ratified changes to the agreement on the European Financial Stability Fund (EFSF) aimed at increasing it. Tomorrow, September 29, the German parliament should ratify these changes; when all 17 of the Euro zone countries ratify the amendments, the new agreement will come into force. Riding on this news, the unified currency rose by the end...

Yesterday at the close of trading in New York, US stock markets rose, bouncing back from their earlier losses. Lower than expected unemployment claims in the US and the German parliament’s approval to increase the European Financial Stability Fund helped to compensate for the drop in the middle of the week, which came at the expense of high-tech companies and the consumer sector. Greek bonds increased, and the Euro appreciated. The Standard & Poor’s 500 Index went up 0.8% to 1,160.40 at the close of trading in New York, recovering after a 1% drop the day before. The Nasdaq Composite Index fell 0.4%, while the Stoxx Europe 600 increased 0.7% after banking sector stocks strengthened. Yields on two-year Greek bonds fell 453 basis points to 65.24%. Natural gas went down 1.4% in price after the US reported growth in supplies at the same time that oil prices rose. DT Trading analysts believe that on Friday, at the close of the month,...

Greek finance minister Evangelos Venizelos announced that his country will do “everything possible” to reach target budget levels and to prevent Greece from being made a “scapegoat” for the global economic crisis. Venizelos, who is also the deputy prime minister of Greece, promised that his country will always remain a member of the Euro zone. In order to allay investors’ fears, he said that the debt crisis will not lead to Greece leaving the currency union. “Greece wants this and will do this,” he said during an address in Washington today after taking part in the IMF and World Bank’s annual meetings. “We are ready to take the necessary measures and pay any political price” to improve the economy, the minister summed up. Greece still hasn’t met the conditions for the second tranche of an international emergency line of credit since questions remain about whether it can meet the conditions. DT Trading economists believe that Greece will begin restructuring its debt...

In morning trading in Europe today, stock indices bounced back from a two-year low after the G-20 countries pledged to provide a “firm and coordinated” answer to the problems facing the world economy. American futures garnered support while Asian stocks fell. Adidas AG (ADS) went up 2.9% after its main competitor Nike Inc surpassed its predicted annual sales and reported that the company’s profit exceeded estimates. The Rio Tinto Group nevertheless took a fall among commodity producers after bronze prices dropped. The Stoxx Europe 600 Index increased by 0.6% to 216.2 as of 9:20AM in London, although just yesterday it was down 4.6%. Futures on the Standard & Poor’s 500 Index increased 1% and the MSCI Asia Pacific Index fell 1%. Despite the rebound, DT Trading analysts are anticipating the markets to drop further as long as the threat of rolling back into an economic recession exists on both sides of the Atlantic. The correction that began at the end of the week...

Italy's credit rating was downgraded yesterday evening by ratings agency Standard & Poor's. This was Italy’s first downgrade in the past five years after Greece’s worsening financial situation has heightened concerns that the “Greek contagion” will also take hold of countries like Spain and Italy. S&P lowered the country’s rating from A+ to A, saying that the weakening economic growth, “fragile” government, and increased borrowing costs will create difficulties for decreasing the second largest debt burden in Europe. Yields on 10-year Italian bonds increased today by three basis points to 5.619%, which is 385 basis points more than yields on analogous German bonds. The European Central Bank had to buy Italian and Spanish bonds last month after their yields increased to a record high for the Euro amid fears that they will be the next victims of the two year-long debt crisis which led to bail-outs for Greece, Ireland, and Portugal. Another ratings agency, Moody’s Investors Service, will decide next month whether...

The Euro is losing value against the dollar for the second day in a row while Asian stocks plummeted after European politicians were unable to present a plan to put a halt to the region’s debt crisis. Gold prices increased and the dollar appreciated against most other major currencies. DT Trading experts report that the Euro had dropped 0.8% to 1.3689 as of 8:20AM in Hong Kong. The MSCI Asia Pacific Index dropped 0.6%, not accounting for Japan. Meanwhile, futures on the S&P 500 Index fell 1.3% and gold ascended 0.7%. The dollar index, which measures the value of the dollar against the currencies of six of the US’s main trading partners, increased 0.6%. EU finance ministers announced at their summit that the 18-month debt crisis is not leaving room for tax cuts or additional expenses for stimulating the economy, which is on the brink of stagnation. Economic reports on Germany this week show reduced investor confidence and a drop in...

Stocks rose yesterday during trading in America, boosting the Standard & Poor’s broad market index even higher for a third day in a row. The Euro also appreciated after the German and French leaders expressed support for Greece to stay in the Euro zone. Speculation also grew around the fact that China may help out the biggest European debtors. Italian and Spanish debt securities grew immediately after Zhang Xiaoqiang, the vice-chairman of the National Committee for Development and Reform, said that China is ready to buy bonds from countries suffering from the debt crisis. The S&P 500 rose 1.4%, closing at 1,188.68. At the same time, December futures on the index slid down less than 0.1% as of 7:21PM in New York. The Stoxx Europe 600 Index rose by 1.5%, while the Euro went up 0.6% to $1,3755. Yields on 10-year treasury bonds fell by one basis point to 1.98%. Oil futures fell 1.4% to reach $88.91 per barrel after...

According to a report published by the UK Bureau of National Statistics, the level of inflation in the country rose in August. The Consumer Price Index went up 4.5% in annual terms compared with July growth of 4.4%, and inflation was up 0.6% in the monthly dynamic. This time, 34 analysts guessed right with their predictions on this figure. Last week, the Bank of England decided to leave the country’s interest rate unchanged. Experts believe that this was not an easy decision for the Bank’s leadership to make. On the one hand, the UK’s economy needs the support of a low interest rate, but on the other hand, inflationary pressure twice the amount of the target level is interfering. After the inflation figure was released, the British pound garnered support. The results of yesterday’s auction of Italian government bonds were quite obvious: investors are still very careful and are demanding even more profits. Demand for Italian bonds was as low as...

While the markets were waiting for the European Economic and Financial Affairs Council meeting results, The Single currency has managed to ease back again versus the greenback under the pressure of having €2.5B EU Trade Balance deficit in July while the markets were waiting for €1.7B surplus from €1.5B deficit in June after it had failed to get over its previous resistance at 1.3935 falling below 1.377 whereas it has started its rising following the news of offering 3 months loans by the ECB for the European banks in an coordinated action with the Fed, SNB, BOE and BOJ for underpinning the US dollar liquidity into the European banking system for longer time as this has been allowed for just one week by the ECB. God willing, further EURUSD declining can meet over the short term supporting levels at 1.3702, 1.3635, 1.3554 then 1.3494 again whereas it has started to correct its loses reaching the current levels and the breaking of...