Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


World Week Ahead: Deal or no deal for Greece?

World Week Ahead: Deal or no deal for Greece?

By Margreet Dietz

Nov. 26 (BusinessDesk) – Two deals might help extend last week's momentum on equity markets in the US and Europe -- one that helps the US avoid its fiscal cliff and a second that would end the immediate threat of Greece defaulting on its debt.

Optimism was fuelled on both fronts last week, though the timing for an agreement by US lawmakers on preventing automatic tax increases and spending cuts worth about US$607 billion set to kick in on January 1 remains more open-ended. Officials from the White House and Congress will resume negotiations this week.

US President Barack Obama said on November 18 he was "confident" a new US budget deal would be reached. Meanwhile, EU commissioner Olli Rehn on Thursday said he saw no reason a deal on Greece could not be concluded tomorrow when euro-zone finance ministers, the International Monetary Fund and the European Central Bank meet again.

Greek Finance Minister Yannis Stournaras expressed confidence that the IMF would ease earlier deficit targets imposed on the debt-stricken nation, thus opening the door to the transfer of more funds. "It's a done deal,” Stournaras told reporters in Brussels on Friday after meeting with EU officials and IMF Managing Director Christine Lagarde, Bloomberg reported.

Commitment to resolving budgetary and debt issues that risk hampering both US and European economies bolstered stocks last week.

In the Thanksgiving holiday shortened week in the US, the Dow Jones Industrial Average gained 3.3 percent, the Standard & Poor's 500 advanced 3.6 percent and the Nasdaq Composite climbed 4 percent.

In the past five days, the benchmark Stoxx Europe 600 Index jumped 4 percent. It is the first time the gauge has gained every day of the week since July 1, 2011, according to Bloomberg.

The advance in European stock prices came even though EU leaders struggled to see eye to eye in talks about the next seven-year budget for the region and a two-day meeting late last week ended in failure.

European Council President Herman Van Rompuy said they decided to abandon the special summit on the 2014-2020 EU budget, worth about 1 trillion euros, and would try to reach a compromise early next year, according to Reuters.

On the US economic front in the days ahead, investors will eye the latest reports on durable goods orders and consumer confidence on Tuesday, weekly jobless claims on Thursday, the Chicago Purchasing Managers Index and personal income and outlays on Friday. The Federal Reserve's beige book is due on Wednesday.

Also, three reports on the housing market might confirm the recent data indicating strength and optimism in this industry's pace of recovery.

The S&P/Case-Shiller home price index for September, due Tuesday, is expected to show the eighth straight month of increases, while new home sales for October, due Wednesday, and October pending home sales data, due Thursday, are also expected to show a stronger housing market, according to Reuters.

The US Treasury is set to auction US$35 billion of two-year notes on Tuesday, US$35 billion of five-year securities Wednesday and US$29 billion of seven-year debt on Thursday.

The first clues on how retailers fared on Black Friday, the day after Thanksgiving, will also provide a helpful indicator on the state of the American consumer. The National Retail Federation predicts sales during the holiday season to increase 4.1 percent this year, down from last year's 5.6 percent growth.

On Friday, Europe offered some surprisingly good economic news. The Ifo institute's business climate index unexpectedly rose, climbing to 101.4 in November from 100 in October, the first increase in eight months.

That helped the euro finish what had already been a good week on an even more positive note, rising 1.8 percent against the greenback and climbing 3.2 percent against the Japanese yen in the past five days.

“Certainly sentiment towards euro has changed,” Camilla Sutton, chief currency strategist in Toronto at Bank of Nova Scotia, told Bloomberg News. The euro “rallied slightly again after we got German confidence numbers, which highlighted better-than-expected business sentiment.”

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news