Friday 25 November 2011

Key Comment - 25/11/11

"  Market volume dead as matter of time before Belgium included in SMP. QE seems only option as Merkel rejects Eurobond"
  
Cross Market News 
  • Asia-Pacific Equities continue to trade in negative territory; risk-off continues: Japan: +0.4%; China: -0.4% . 
  • China will allow trading of the Australian and Canadian dollars vs Yuan, another step toward its aim of globalizing the Yuan. 
  • China's sovereign wealth fund - China Investment Corporation (CIC) - may give "indirect" support to Europe through investments without being the nation's main route for any aid, according to the fund's Executive VP Mr Jesse Wang . .
  • ECB Governing Council member Mr Coene says an additional interest-rate cut by the ECB is probable if current trends continue.
  • According to Bloomberg, the European Banking Authority (EBA) may ask German lenders to boost their capital levels by more than EUR12bn vs. an original estimate of EUR5.18bn. The EBA will now use prices as of September 30 rather than the June prices which were used for preliminary estimates, so the changes are likely to affect most European banks. German banks have criticised the move saying it increases ongoing uncertainty in financial markets .
  • Moody's have downgraded Hungary's government bond rating by one level to Ba1 from Baa3; maintaining a "negative" outlook. 
  • British banks must prepare for the worst-case scenario of a disorderly break up of the euro, according to Mr Bailey of Financial Services Authority (FSA). He noted that while British banks are not heavily exposed to the Eurozone, they must prepare for some countries to exit the single currency – or a complete break up.

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