Jun 10
1
US pushing Europe on stress tests
International Report 1st June 2010
The Nikkei dropped 49.76 points to close at 9,718.94; the Topix dropped 0.2% to close at 878.42. The FTSEurofirst 300 closed the session up at 0.3% to close at 1,001.11 points, which was its worst month since February 2009.The Dow Jones fell 122.36 points, or 1.19%, to close at 10,136.63. The Standard & Poor’s 500 Index dropped 13.65 points, or 1.24%, to close at 1,089.41. The Nasdaq Composite Index fell 20.64 points, or 0.91%, to close at 2,257.04.
According to the ECB, over the next 18-months Eurozone banks face write downs of €195bn (£165bn). In its latest Financial Stability Report the ECB stated that the write downs could be even larger due to the heightened sovereign debt risk and the impact of government belt-tightening pulling the economic growth lower. The report was also concerned that banks could struggle to refinance long-term debts estimated to be €800bn by the end of 2012. The ECB has stated that borrowing costs could surge as banks fight against indebted governments to attract creditors on the bond market. According to an adviser to the Chinese central bank, the problems in China’s housing market are more severe than those in the US before the financial crisis. This is because they combine a potential bubble with the risk of social discontent. In a bid to calm jitters over the health of the Eurozone’s financial system, US officials have stated that they wish Europe to publicly release the results of bank stress tests
Due for release today is the AUD Cash Rate, AUD RBA Rate Statement, GBP Manufacturing PMI, CAD BOC Rate Statement, CAD Overnight Rate, USD ISM Manufacturing PMI and the AUD GDP q/q.
