In order to present the solution of a stable market sentiment, the EU leaders is urgent need to address three major problems. First, countries must agree on bank recapitalization. Secondly, in the case without increasing the burden of all countries, the expansion of the total € 440 billion European Financial Stability Fund (EFSF) also become the focus of the market.
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from the recent market reaction, the optimistic expectations about European debt problems, the program may be introduced to support the stock market continued to rise. However, analysts believe that European debt problem will be how to resolve the relationship between Italy and Spain, it will further Greek footsteps, the relationship between how Europe's debt crisis in the evolution of very heavy pressure from the European Union second summit.
writedowns
Greek bonds are also a major focus of the EU summit. According to overseas media reports, the EU requirements, write-downs as much as 60 percent, while European banks still adhere to the 40 percent cuts.
Bank of England Governor Mervyn King said yesterday that the EU summit can not solve the fundamental problem facing the euro area, only to secure the 1-2 years of breathing space.
the same time, international oil prices yesterday, shares rose more than 3% of the euro against the U.S. dollar hit a 1.395 level, but then come down.
three major problems to be solved
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In addition, according to overseas media reports of a draft EU summit, euro zone leaders will require the ECB to take unconventional measures. It is reported that the unconventional measures the European Central Bank in the secondary market purchase of bonds into a debt trap countries. However, German Chancellor Angela Merkel World Steel Pipe News , yesterday made it clear that, do not accept the European Central Bank will continue to implement the Summit draft the wording of unconventional measures.
cautious market sentiment
However, the EU Economic and Monetary Affairs Commissioner Ryan's spokesman, said yesterday that the parties will soon reach an agreement. However, the problem of the magnitude of writedowns, the spokesman declined to respond.
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EU officials said that countries close to agreement on bank recapitalization, France and Germany on how to use the EFSF to prevent the spread of the debt crisis in Europe is also close to an agreement. At the same time, a working group composed of senior officials by the euro-zone countries are currently studying how to start the European financial stability tools, repurchase from secondary market for Italian government bonds. If this program is implemented, this will be the European financial stability tool for the first time to intervene.
investors still looking forward to the Second Summit will be able to announce a compelling plan, but ahead of the summit results, market sentiment became more cautious. Asian markets were mixed yesterday, the MSCI Asia Pacific Index was essentially flat, the intraday volatility of European stock markets downstream. U.S. stocks yesterday morning fell hundreds of points. Barclays Capital recommends investors remained cautious ahead of the introduction of specific measures in the EU World steel pipe network editing .
23, the end of the first round of the EU summit did not come up with concrete results to the second round of the EU summit held today must give an account of the market.
known as "Dr. Doom" Roubini said that developed economies are suffering from the recession of the new one. The EU summit reached what kind of agreement, the euro zone will be disbanded.
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