FTSE still declines while Eurozone leaders still assure economic stability
The Eurozone’s congregational leaders are on the ropes once more as they yet again attempt to persuade global investors that the downturn of the region’s economy will subside. Political leaders are in high hopes to gain favourable assistance by encouraging investors to further open their trades in the Eurozone with the promise that the bloc’s crisis will be resolved very soon. A recent press conference in Rome headed by several key leaders in the Eurozone namely; Mario Monti of Italy, Angela Merkel of Germany, Francois Hollande of France and Mariano Rajoy of Spain have come up with a consensus and agreed on an undisclosed plan to guarantee the stability of the economy of the Eurozone ahead of next week’s leaders’ summit.
Both Merkel and Monti have yet to divulge further information on the agreement that should reach the needed boost in economic growth in the debt ridden region to go along with the existing and tough austerity measures at present. This in turn would mean a 1 per cent European Union GDP or a whopping €130 billion. Merkel then ironically gave a blunt remark that the Union needs more Europe to rid itself of its problems. The clandestine pessimism of many Eurozone leaders may in fact turn into a promise of relief with the coming summit on Thursday and Friday as Spain’s borrowing cost have decreased quite noticeably. A ten year government bond yields have plummeted below 6.4 per cent earlier this afternoon towards the end of the week.
FTSE endures even with US shares open higher
Even though the US markets have opened relatively higher, regaining bearing from terrible losses just recently Europe still bears the struggle of being in the negative grip of Britain’s FTSE 100 and the lower 0.6 per cent at 5529 with all FTSE shares showing a similar distressing decrease in percentage . An overview of the key players’ status is as follows; the Blue chip index is on a weekly gain up to 0.9 per cent while the US Dow is up 0.5 per cent and S&P 500 is 0.4 per cent higher. On the other hand, the oil price has climbed quite strongly again over $90 after falling to an 18 month low.
Miners plunge in the Commodity bear market
The FTSE 350 mining index declined 1.8 per cent while London-listed mining firms plummeted along with commodity values which have fallen into what is known as a “bear market”. Precious commodities including oil and gold have been sold very poorly according to China’s economic survey. “Bear market” headlines were intrigued in the US as the S&P GSCI commodities had lost more than a quarter of its value since February.
Crude oil value drops to a low since 2010
The Brent crude oil price has decreased way below $90, its lowest by far since the end of 2010as over supply threatens to push the price even lower. In an inventory data given by the United States Department of Energy just this week showed that the US crude oil stocks increased by 2.9 million barrels in the last week as its highest level for nearly 2 decades.
Article is published with the permission from Gonzalo Lira. Visit Gonzalo Lira's blog to find out more