Broadgate: Market News 22/3
22 March 2012
Both European equity futures and the euro rose after news that Greece’s prime minister won parliamentary approval for an international bailout. The euro climbed 0.4 percent. European markets have stabilized with the greater speculation and confidence that government leaders are containing the region’s debt crisis.
The Stoxx Europe 600 Index has rallied 25 percent since September 22, when it closed at a two-year low. Euro Stoxx 50 Index futures added 0.5 percent as of 7:01 a.m. in London. In contrast, Asian stocks fell to a one-week low amid concern that China’s economy is slowing.
Federal Reserve Chairman Ben S. Bernanke said Europe must further strengthen its banks and that its economic situation “remains difficult” although stresses have lessened, according to testimony prepared for delivery to U.S. lawmakers today. This echoes the Federal Open Market Committee’s statement last week that “strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook.”
Recent economic reports have shown strength in the U.S. economy as the threat from Europe has eased. The Commerce Department reported yesterday that builders broke ground on 698,000 homes at an annual rate in February, close to a three – year high. Building permits, a key indicator of future construction, rose to the highest level since October 2008.
U.K. Chancellor of the Exchequer George Osborne is due to speak to Parliament at 12:30 p.m. in London. He will need to claw back about 5 billion pounds ($8 billion) a year, largely from the wealthy, to fund giveaways which he has already suggested will feature in his annual budget today. Osborne is constrained by his commitment to keep Britain’s AAA credit rating. He aims by 2017 to erase the bulk of a deficit that constitutes more than 8 percent of gross domestic product.
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