Business & Financial News

The European regulator of financial markets (ESMA) announced Thursday the ban on short selling in Belgium, France, Italy and Spain from Friday, August 12.

The Esma has also said it will prove tough on breaches of proper functioning of the market and will strongly encourage States to prevent such behavior.

Germany said Wednesday it was not necessary to strengthen the European Financial Stability Fund (EFSF), while the European Commission called last week to the revaluation of all components of EFSF, including its size.

"He (EFSF) is far from exhausted.In saying that, all is said, "said the spokesman of the German government at a press conference.

The current capacity is 440 EFSF billion, increasing to $ 750 billion if we add the contributions of the European Union and the International Monetary Fund, participating in bailouts of countries in the euro area.

The emergency EU summit on July 21 has dramatically reformed the EFSF into an embryonic "European Monetary Fund."

But European leaders have not committed one way that investors called for: EFSF give more firepower.

The fund, which borrows on the markets with the guarantee of the member states of the euro zone and then lend to countries in difficulty, has now committed at least 142 billion euros of aid, benefiting Greece, the Ireland and Portugal.This leaves 298 billion to meet future deadlines.

However, economists have calculated that a bailout would cost Spain EUR 290 billion and an emergency program for Italy would represent some 490 billion euros.

The pressure of the German electorate

Last week, the debt crisis in the euro area has experienced a new peak, yields greater than 6% stake in Spanish and Italian sovereign debt raising fears that Rome and Madrid in turn must seek the assistance of EFSF.

It was against this background that Brussels had called a reassessment of all components of the EFSF to convince markets that the euro area could resolve the debt crisis.

Since the beginning of the week, thanks to such repurchase obligations to 10 years in Italy and Spain by the European Central Bank, the financing costs borne by Italy and Spain returned to more affordable levels, around 5%.

The words of the spokesman for the German government illustrate the difficulties faced by Berlin to convince voters of the merits of the government's commitment in resolving the debt crisis in the euro area.

For example, nearly two-thirds of the conservative party of Angela Merkel are dissatisfied with the management of this crisis by the Chancellor, according to a poll released Wednesday.

Sixty-two percent of respondents say they are worried about the image returned by the CDU (Christian Democratic Union) and CSU (Christian Social Union), according to the survey of the Forsa institute for Stern magazine.

Approximately 52% of 578 members of both parties questioned in the survey said they opposed the bailout of the partners in Berlin in the euro area and only 42% approve of the plan of aid to Greece, Ireland and Portugal.

The survey was conducted on 4 and 5 August, before the lull caused by the acquisition of Italian and Spanish bonds by the ECB.

Fears that Germany's leading economic power in the euro area also enjoying growth prospects correct and historically low financing costs, pay the bulk of the bill for the debt crisis have resulted in an increase in German five-year CDS, which reached the level of CDS UK.

The Paris Stock Exchange and other European markets down sharply leave late Monday morning.

The European equity markets began the session on a rebound led by Spanish and Italian debt buybacks by the European Central Bank after the decision to degrade the credit of the United States as "AAA".

Around 11:30, the CAC 40 index lost 1.8% in Paris, 3.19,87 points after touching a low of 3199.63.

London lost 1.63%, 2.36% Frankfurt, Milan 0.58%, Madrid reducing earnings (0.38%).

The index key values ​​of the euro area, EuroStooxx50 lost 1.03%.

The President of the European Central Bank Jean-Claude Trichet wants a decision this Sunday on the redemption of bonds by the ECB Italian officials said a source close to the institution.

A conference call of the ECB is expected in the afternoon.No communication is scheduled at the end of the meeting, they added the same source.

Thursday the ECB has reactivated its share repurchase program of sovereign debt in order to calm soaring interest rates of some countries in the euro area bond markets but has so far bought only small quantities of Irish debt and Portuguese, while speculation is focused on Italy and Spain.

If the decision to intervene is taken, the ECB and national central banks will begin to redeem bonds at market opening Monday, it was even said.

The trade deficit of France was greatly reduced in June to 5.598 billion euros, after 6.415 billion (revised) in May, according to data CVS / CJO published Friday by Customs.

Nine economists surveyed by Reuters on average expected a deficit of 6.5 billion euros, with estimates ranging from -5.0 to-7, 5 billion.

The deficit for May was announced in early July to 7.42 billion euros.

The balance accumulated since 1 January amounted to EUR -37595000000, -24817000000 against the first six months of last year.

Exports FOB data CVS / CJO came out to 34.575 billion euros against 34.583 billion in June in May.

Imports fell to 40.173 billion euros from 40.998 billion in May, explained that Customs include a decline in imports of energy products and transport equipment.

In June, France sold its 27 Airbus reported 2.036 million euros against 21 in May to 1.334 million.

Hitachi and Mitsubishi Heavy Industries has started negotiations for a merger, it was learned Thursday from three sources familiar with the discussions.

The negotiations, which have not been officially confirmed despite press leaks, cover a reconciliation of the two industrial activities in the field of energy generation and development of power systems "intelligent" ("smart grids") , the sources said.

Mergers are often seen in Japan as a last resort for firms in difficulty, but analysts point out that a strategic combination would enable Hitachi and Mitsubishi to achieve economies of scale to overcome the strong yen and win competitiveness.

"If the merger is confirmed, it would be very positive news for the Japanese industry, because companies would not get competition in the conquest of foreign capital projects, which would increase their chances while supporting the economy countries, "said Kiyoshi Noda, a fund manager at MU Investments.

Hitachi, the leading Japanese electronics industry but also a player in nuclear energy, posted its first net profit in five years on the year ended in March, after losing about $ 14.3 billion (9 , 99 billion euros) over the past ten years.

For its part, Mitsubishi Heavy Industries, a supplier of power plants and aerospace equipment from Boeing including Areva and continues to incur losses on its shipbuilding activities and aviation.

A merger of two industrial conglomerates would create the second largest player in the heavy equipment behind General Electric, with a turnover of about $ 150 billion.

Thursday at the Tokyo Stock Exchange, Hitachi ended up 1.73%, while Mitsubishi Heavy jumped 3.44%.

Market pressure on Italy has intensified Tuesday, endangering the ability of the second most indebted country in the euro area to fund and push the Italian authorities to meet urgently.

Italian bond yields rose to 10 years in meeting its highest level since the creation of the single currency, 11 years ago, reaching approximately the same level as the Spanish paper rate with the same maturity, also increased.

This catching highlights in the eyes of the market, concerns about the ability to Rome to meet its deadlines are supplanting concerns about Madrid.

The benchmark index of the Milan Stock Exchange Tuesday touched their lowest level in 27 months, weighed down by the collapse of banks with strong exposure to the Italian debt.The title of Unicredit fell 4.43% to 1430 GMT, while Intesa Sanpaolo yielded 3.36%.

For its part, the pan-European FTSEurofirst 300 index reached a low of 10 months, investors feared that the global economic downturn that seems sketched out does not penalize further European countries in trouble with their finances.

"The fear of the market, see the world falling into recession again (…) and in the euro area, the peripheral markets are those who will suffer most," said Alessandro Giansanti, strategist for ING in Amsterdam.

Zapatero defer taking vacation

According to a source familiar with the matter, the Italian Minister of Economy Giulio Tremonti was to preside on Tuesday a meeting of the Financial Stability Committee, with representatives of the Bank of Italy, the financial markets authority (Consob) and the insurance regulator (ISVAP).

This meeting comes on the eve of a statement to parliament by Silvio Berlusconi, President of the Council, the country's economic situation.Wednesday morning, Jean-Claude Juncker, Eurogroup President Giulio Tremonti will meet in Luxembourg.

In Spain, the President of the Government Jose Luis Rodriguez Zapatero decided Tuesday to delay his departure on vacation, to follow the latest developments in the crisis, including the new surge in the risk premium attached to debt in Madrid.

The yield spread between Spanish and German bonds to 10 years rose above the symbolic threshold of 400 points, a level not seen since the creation of the euro area, before retreating.

For its part, the Italian paper to 10 years has seen its performance surpass the 6% above which have increased concerns about the ability of Rome to pay.

"The above 6% was seen as a yellow line for Italian yields, and now it is crossed, people do not want to accept any risk apart from Germany," said one trader.

Consequence of this strong demand for German bonds, the 10-year Bund was stopped Tuesday to offer a premium vis-à-vis inflation, a first for over half a century.

While most European leaders are on vacation, several international institutions have given verbal support to Rome and Madrid face this new fever.

The European Commission (EC) has expressed "confidence in the ability" of both countries to take steps to keep their finances afloat.

Angel Gurria, Secretary General of the OECD, said in an interview with Reuters that Italy kept its budget under control and was taking the right decisions to reduce its deficit.

DOUBTS ABOUT THE PLAN HELP TO GREECE

Italy is under fire of the markets because of its slow growth and its debt ratio, which represents 120% of its gross domestic product (GDP), the second highest ratio in the euro area behind Greece with nearly 160% of its GDP.

In addition, political instability in the center-right coalition in power in Rome fueling market concerns, including legal proceedings initiated against the president Silvio Berlusconi.

The difficulties of Rome and Madrid, two heavyweights in the euro area, also cast doubt on the financing of programs of aid already granted to Greece, Ireland and Portugal under the auspices of the European Union and International Monetary Fund (IMF).

While Italy and Spain to finance yields much higher than the rate of loans granted to Greece (3.5%), the EC said Tuesday that all countries involved would participate in the plan.

"There is no question that a country does not participate in the next tranche of aid to Greece, including Italy and Spain," said the spokeswoman Chantal Hughes EC.

"However, if a country faces a financing cost higher now than when the next tranche of aid will be paid, there is a mechanism for ensuring that this gap is compensated," she said.

Wall Street opened with sharp rebound Monday, boosted by the announcement of an agreement in extremis on raising the U.S. debt ceiling.

In early trade, the Dow Jones advanced 1.06% (130.99 points) to 12,274.02 points.The S & P 500, larger, gained 1.13% (14.85 points) to 1307.13 points while the Nasdaq composite market clinching 1.37% (37.80 points) to 2794.10 points.

Barack Obama announced late Sunday night that the Democratic and Republican leaders had reached a compromise, ruling out the risk that the world's largest economy in default of payment.

The agreement, which must be submitted to a vote of both houses of Congress on Monday, came after the U.S. stocks last week recorded its worst weekly performance in 2011, weighed down by fears of a deadlock in negotiations.

"The agreement is obviously useful in view of the government's ability to pay its debts, and this leads to a relief rally," Judge Wayne Kaufman, John Thomas Financial Analyst in New York, which estimates that the market fell excessively lately.

Despite this last-minute agreement, concerns remain about a possible lowering of the sovereign rating of the United States, as well as the debt crisis in Europe, and some analysts warn that the rebound on Wall Street could be short-lived.

Values, Ford and Amazon advanced 4.0% and 1.4% on positive recommendations from the review of Barron's.