May 10
12
Stock and bond markets fall in Asia, Europe and United States
Interntional report: 12th May 2010
The Dow Jones dropped 0.34%, to close at 10,748.26. The Standard & Poor’s 500 Index plunged 3.94 points (0.34%) to close at 1,155.79. On the other hand the Nasdaq Composite Index gained 0.64 points, or 0.03%, to close at 2,375.31. The Nikkei gained 53.70 points to close at 10,464.80; the Topix jumped 0.6% percent to close at 937.40.
Yesterday, in order to stablise the euro, Germany’s cabinet approved the largest national contribution to the emergency package. Yesterday, relief at the European Union’s move to restore investor confidence gave way to doubts of whether the weaker Eurozone economies can meet their side of the bargain and deliver budget cuts. On Monday, the 16-nation single currency surged to nearly $1.31 and then fell below $1.27 yesterday, as traders wondered whether the bailout package will only buy European countries time to deal with their fiscal deficits. The European Central Bank’s decision to start buying Eurozone government bonds was also seen as a risk in compromising the central bank’s independence. On Monday, the emergency plan initiated a strong rally in world stocks and the euro. Yesterday, stock and bond markets fell in Asia, Europe and the United States with investors showing concern that the plan was not a long-term solution to the problems that have affected the currency area. Yesterday, the European Central Bank (ECB) boosted cash supply in the market via its short and long term liquidity operations.
Due for release today is the EUR German Prelim GDP q/q, GBP Claimant Count Change, GBP BOE Gov King Speaks, BOE Inflation Report, CAD Trade Balance, AUD Employment Change and the AUD Unemployment Rate.
