ZuluTrade Blog

The EU-IMF Troika is expected to give Greece an extra two years until 2016...

Market View | Thursday, November 1, 2012 4:34 AM GMT

 Good Morning , 

- Risk  is  off and Eur/Usd  drop at 1.2926 .   

- Asian equity markets are notably mixed, with China indices well in positive territory while Japan, Australia, and Korea are in the red.Japan's Nikkei Stock Average up by +0.21%, Hong Kong's Hang Seng rising by +0.56%, and  China's Shanghai Composite rallying +1.64%, while South Korea's Kospi fell -0.72% and Australia's S&P/ASX 200 lost -1.32%.

- Greece’s debt-load is rising much faster than expected as the country spirals into a sixth year of depression, ratcheting up the pressure on Germany and Europe’s creditor states to accept debt-forgiveness for the first time. Finance minister Yannis Stournaras said public debt will reach 189pc of GDP, far higher than estimates of 179pc published just weeks ago.

- The new estimates exceed the worst-case scenario sketched by the International Monetary Fund and demolish any hope that Greece can claw its way back to solvency.  The Greek economy is still caught in a vicious circle. It will contract by further 4.5pc next year, while the budget deficit will remain stuck at 5.2pc, according to forecasts in the 2013 budget.

- The EU-IMF Troika is expected to give Greece an extra two yearsuntil 2016 to meet budget targets but the issue has already been overtaken by events.

- The IMF now fears that the debt will still be 150pc of GDP in 2020. It has already stated that it cannot take part in any further aid packages unless the debt in on track to fall below 120pc.

- German Chancellor Angela Merkel has implictly acknowledged the limits of her austerity strategy, calling for a eurozone growth fund able to command up 2pc or even 4pc of the region’s GDP to channel investment to regions trapped in slump. The fund is not a fiscal stabilizer, and is in any case unlikely to be up and running for years. The proposal may help mitigate the next crisis, a decade or more ahead. It offers no solution to the immediate crisis.

Eurogroup’s Juncker: Greece Must Enact Reforms Before Lending Deal Is Made

-  Italy ,  Five months before an election that will be crucial not just for this country but the whole euro zone, Italy is mired in some of its greatest political uncertainty since World War Two. Nobody knows what electoral system will be used or who the candidates will be in a parliamentary poll that will be marked by Italian voter anger over the pain of austerity.

- Bank of England's Charlie Bean signals no more QE .  Mr Bean appeared to signal a change of stance in a speech in Hull that is likely to mean quantitative easing (QE) is voted down next week, when the Bank’s nine rate-setters make their monthly decision.

 - China bad banks loans to rise over the next 3-years .  China leaders held last meeting before its 18th National Party Congress for Thursday Nov 8th; current Vice President Xi Jinping is expected to be named as the new President.

- China’s new home prices rose for a fifth month as sales picked up in a sign government curbs are helping stabilize the property market. Prices climbed 0.17 percent to 8,768 yuan ($1,405) per square meter in October from September

- Japan PM Noda did not disclose election date following Diet debate; LDP leader Abe's remarks indicated that unless the PM specifies the timing of the lower house dissolution, both opposition parties will not work with the govt in passing key bills during the extraordinary parliamentary session

- Moody's comments on Singapore banking system: Sees outlook on banking system Stable but to face some headwinds from expansion


Have a nice day !

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