Archive for February, 2010
Spain and Portugal, possibly a warning to Greece to avoid the impact of the crisis in the economy since the two countries were also experiencing soaring budget deficits.
Two days after European governments to allocate funds to the financial system worth U.S. $ 1 trillion, the Prime Minister of Spain Jose Luis Rodriguez Zapatero, yesterday, announced the largest budget deficit reduction since last 30 years.
Meanwhile, in Portugal, Finance Minister Fernando Teixeira dos Santos revealed his side prepares to face social pressure after the announcement of the additional deficit cuts policy.
Policy makers in the euro area is running a policy to improve market confidence, although trade unions urged the government does not allocate the aid in the form of a loan to Greece.
A number of economists said the EU had to act to help countries experiencing a deficit to the impact of the failure of the government’s financial system did not spread to the entire region. Zapatero cut wages by 5%.
“The crisis today is used as a chance to announce cut in the budget deficit. Currently the euro area need not call moral moral mistake, “said Erik Nielsen, Chief European Economist, Goldman Sachs Group Inc. in London.
Spanish bond yields on two-year duration decreased by 12 basis points to 1.861%, yesterday, after rising by 3.14% last week. Portugal showed the addition of a request from the sale of duration of 10-year bonds with a total value of U.S. $ 1.3 billion (1 billion euros).
EU bail-out strategy which is still half-hearted response by the investors also caused to drop in general prices of commodities markets.
Commodity index Reuters / Jefferies (CRB index) in trading today (11-05) opened a gap down yesterday after trading closed lower at approximately -0.24%.
Also returning investor worried about the global economic recovery process, so that crude oil prices also declined. Light Sweet Crude oil prices on the New York Mercantile Exchange observed weakening again.
Light Sweet Crude oil prices was observed to decrease by approximately -1.56% at today and traded at around 75.81 USD / bbl.
Research Vibiz analyst from Vibiz Consulting propose one that one the investor concerns that shaken the commodity markets are the occurrence of potential of moral hazard that can represent a very significant factor in creating Europe economic hollow.
Concerns were also impacted the increase in investor interest to the save haven assets like gold. Gold in the spot market price was observed to have increased approximately 1:16% at night, and traded at around 1215.80 USD / troy oz.