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Yves Mersch, Luxembourg's central bank governor, has been
appointed to the executive board of the European Central Bank.
He was approved by EU leaders at the summit in Brussels last night despite
objections from the European Parliament that the ECB had not made an effort to
appoint a woman -- a rare gender in central banking.
Eurozone indicators gauge strength of economy in Q4: David McNamara of Davy
comments - - "Asian markets closed higher overnight on the back on decent
manufacturing data from China, with the slowdown in Chinese output looking like
it has now troughed. The final estimate of German Q3 GDP remained at 0.2% this
morning, with the expenditure breakdown revealing a slowdown in export growth to
1.4% from 3.3% in Q2 with domestic demand largely unchanged. But the focus will
now turn to leading indicators with the German IFO business climate index
expected to weaken further to 99.5 from 100.0 in November.
Following below 50
estimates for the PMIs yesterday, the German economy looks to have weakened in
Q4. But French business confidence may have risen in November following the
surprise announcement by President Hollande of a payroll tax cut for businesses,
largely funded by an increase in VAT rates. The flash PMIs for France still
point to a stagnant economy in Q4, but the manufacturing and services indices
rose by more than expected yesterday and today's data may lift some of the gloom
following Moody's rating cut on Monday. Overall then, no material improvement in
the Eurozone in Q4 but no further deterioration either, with composite Eurozone
PMI consistent with flat to marginally negative output on the quarter.
In the UK, mortgage approvals are expected to tick up to 32,000 in October
from 31,175 in what looks like a tentative recovery in lending in Q4, probably
boosted by the Bank of England Funding for Lending Scheme (FLS). That figure is
still half of peak levels but should strengthen into the New Year as the full
effects of the FLS take hold."
Economic View: Ireland starts to make
preparations to exit the bailout programme; Juliet Tennent of Goodbody
comments - - "The Taoiseach, Enda Kenny, confirmed yesterday that a deal on
Ireland's legacy bank debt deal will not be forthcoming prior to the end of the
year. This follows similar comments by the Minister for Finance, Michael Noonan,
and the Secretary General of the Department of Finance recently which also cast
doubt on any deal prior to the 2013 budget. A deal on the legacy bank debt that
involves the ESM is dependent on the creation of a banking union and a euro area
wide regulator. Progress to date on these issues has been slow with significant
differences between the Eurogroup leaders still to be ironed out. The Taoiseach
said he wants a deal on Ireland's bank debt to be negotiated by European finance
ministers "in parallel" with discussions surrounding the banking union. Despite
both France and Germany recognising Ireland as a "special case" a deal in
relation to Ireland’s legacy bank debt remains elusive. A restructuring of the
promissory note, that involves the ECB, remains the most likely outcome.
Both the Minister for Finance, Michael Noonan, and the head of the National
Treasury Management Agency, John Corrigan, stated yesterday that Ireland is in
the process of making preparations to exit the bailout programme. The IMF is
preparing a policy paper, due early in 2013, aimed at facilitating this with
precautionary credit lines likely to form part of the strategy.
While a deal in relation to Ireland’s legacy bank debt would help Ireland
regain market access it is not central to the Government’s, or NTMA’s, plans to
exit the bailout programme. A precautionary credit line, acting as a backstop,
may be part of the strategy, although the Government will be wary of any
conditionality that may be attached to such a facility."
US Markets
Markets were closed Thursday for
Thanksgiving Day.
Asia Markets
The MSCI Asia Pacific Index-ex Japan rose 0.8% Friday.
Japan's markets were closed China's Shanghai Composite
Index added 0.58%; South Korea's Kospi rose 0.62%; Australia's S&P/ASX 200
was flat and in Mumbai, the Bombay Stock Exchange's Sensex 30 climbed 0.20%.
Europe Markets
In Europe, the Dow Jones Stoxx Europe 600 is down 0.17% in morning
trading Friday.
On Thursday, July 15, 2010, the index fell for
the 35th straight session, by 9 points, or 0.537%, to 1,700 points,
Bloomberg report.
On Thursday this week the BDI closed up 11 points or
1.03% at
1,084 - -
the BDI is down 38.26% in 2012.
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.
The 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.
Similar 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 shipping industry.
As 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 January 2013 delivery is
currently trading on the
Chicago York Mercantile Exchange (CME/Nymex)
at $87.02 down 36 cents from Wednesday's close (markets were closed Thursday). In London, Brent for January
delivery is trading on the
International Commodities Exchange at
$110.29. The North
Sea benchmark accounts for two-thirds of the global market.
The margin between the US benchmark WTI (West Texas
Intermediate) used on the New York Mercantile Exchange and Brent is at $23 - -
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.
That spread 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 narrowed.
The spot price of an oz of gold is trading in New York at
$1,733.60, up $3.90 from Wednesday's close
(markets were closed Thursday) in New York.
Gold had hit a record high of $1,921.05 a troy ounce on Sept 06,
2011.
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