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Eurozone finance ministers will today launch the European Stability Mechanism
(ESM) -- the permanent EU rescue fund - -at a meeting
in Luxembourg that will include discussions on Spain and
Greece. The ESM will have funds of up to €700bn
Meanwhile, Angela Merkel,
German cchancellor, will
make her first trip to Greece when she visits Athens on
Eurozone finance ministers meeting to focus on Spain and Greece:
McNamara comments - - "The meeting of Eurozone finance ministers later today
(17.00) will focus on efforts to secure the next tranche of funding for Greece
and attempts to tackle the Spanish crisis. With the Greek government looking to
secure €6.5bn in funding ahead of the November deadline, the finance ministers
will likely make positive signals towards the Greek austerity efforts ahead of
the visit of Chancellor Merkel to Athens in which she is expected to signal her
commitment to Greece remaining in the currency union.
While an application for a bailout will not be forthcoming at this time, the
Spanish issue is also high on the agenda of today's meeting in the wider context
of the proposed pan-European banking union as Spanish officials continue to
resist efforts to enter an official programme. The details of this proposed
banking union will likely be fleshed out further at the wider ECOFIN meeting
tomorrow which all 27 member states will attend. This leaves the ministers time
today to accentuate the positives in officially launching the EU's €500bn
permanent bailout fund, the European Stability Mechanism (ESM).
In a quiet day for macroeconomic data, markets will look to the strength of
industrial production in Germany (11.00) for signs of a weakening output in Q3.
The unexpected bounce in industrial output in July (+1.3% month-on-month) is
expected to have been offset by a decline in August of 0.6% month-on-month,
leaving industrial production down 1.6% on the year."
Economic View: Politicians take over the baton;
Dermot O'Leary of Goodbody comments - - "Last week ECB President Draghi
effectively passed the baton to politicians in the race to return stability to the euro area. A series of meetings over the next two weeks will
tell a lot about the ability of these politicians in this latest leg of the euro area crisis.
The first of these meetings occurs today when the finance ministers of the 17
euro area member states meet in Luxembourg. It would have been hoped by many of these
Ministers that an aid request by Spain would be dealt with at the meeting but despite
rumours of such a request occurring at the weekend, the Spanish continue to hold out. Officially,
it is expected that an extension to the timeframe for Portugal to hit its deficit targets will
be ratified. The latest on the proposed financial transaction tax is also expected to be discussed.
Ireland and the issue of its bank debt is not on the agenda for today’s meeting.
Despite reports of continued disagreement on the scale and detail of fiscal
consolidation efforts in Greece, Olli Rehn stated over the weekend that he expects that the ministers
will issue a positive statement on the country. This may come a day before Chancellor Merkel
makes a controversial visit to Athens. Clearly diplomatic efforts are underway to ensure
that Greece remains a member of the euro area. However, we would expect the concern
surrounding Greece to continue into November given that it appears that the Troika report
will not be ready until then and there is also the tricky issue of Official Sector Involvement (OSI)
to be resolved at a European level.
ECB actions over recent months have clearly had a calming effect on markets.
While this is a necessary condition for resolving the crisis, it is not sufficient.
Politicians must also be involved. Despite the seriousness of the situation, we would not
anticipate a speedy resolution."
The MSCI Asia
Pacific Index ex-Japan fell 0.9% on Monday.
markets were closed Monday; China's Shanghai Composite Index fell 0.56%; South Korea's Kospi
dropped 0.67%; Australia's S&P/ASX 200 declined 0.28% and in Mumbai, the Bombay Stock
Exchange's Sensex 30 Index dipped 0.76%.
the Dow Jones Stoxx Europe 600 is down 1.07% in early morning trading
The ISEQ is
down 0.95% in Dublin.
Key Index Performance
Bank of Ireland Daily Report
The euro is
trading at $1.2972 and at £0.8067.
For live currency updates, check the
right-hand column of the
Finfacts home page.
The US dollar
fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry
a measure of shipping costs for dry commodities,
hit an all-time High of 11,771 on the 21st of May, 2008.
From that time it reversed and on the 5th of December, 2008 it hit a low of 663
- - close to a 1986 low.
On Thursday, July 15, 2010, the index fell for
the 35th straight session, by 9 points, or 0.537%, to 1,700 points,
last week the BDI closed up 30 points or 3.55% to 875 - - the BDI
plunged a full 70% from its recent mid-October peak of 2,173 to an all-time low
of 647 on February 3.
Freighter Oversupply Weighs on Shipowners and
Banks - -
Jan 26, 2012: The New York Times says vessels bought during the global commodity
boom are only now being delivered, putting pressure on the European banks that
financed the purchases.
skyscrapers and immaculate beaches of Singapore's seaport look out on one of the
world’s largest parking lots: mile after mile of empty cargo ships, as far as
the eye can see.
fleets bob at anchor, with empty cargo holds, off the coasts of southeast
Malaysia and Hong Kong. And dozens of newly built ships float empty near the
giant shipyards of South Korea and China, their owners from all over the world
reluctant to accept delivery during one of the worst markets ever for the global
recently as six weeks ago large freighters that can carry bulk commodities like
iron ore or grain were fetching charter rates of $15,000 a day. Now, brokers and
owners say, the going rate is $6,000 a day. If any customers can even be found.
Crude oil for November 2012 delivery is
currently trading on the
Chicago York Mercantile Exchange (CME/Nymex)
at $88.40 down $1.48 from Friday's close. In London, Brent for November
delivery is trading on the
International Commodities Exchange at
$110.90. The North
Sea benchmark accounts for two-thirds of the global market.
between the US benchmark WTI (West Texas Intermediate) used on the New York
Mercantile Exchange and Brent is at $21 - - The Globe and Mail says that for the
past 10 months, Canadian producers - - whose prices are tied to WTI - - have
been taking steep discounts for their oil compared with international crude
prices that are benchmarked against North Sea Brent, which can be shipped more
readily. In the past, WTI tended to trade at a small premium to Brent, because
it is easier to refine.
hit a peak of $28.08 (US) on Oct. 14, but has fallen dramatically since then.
After plans for more pipeline capacity at Cushing, Oklahoma, the differential
Gold spot price
price of an oz of gold is trading in New York at $1,770.30, down $11.00 from
Friday's close in New York.
Gold had hit
a record high of $1,921.05 a troy ounce on Sept 06, 2011.
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