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    China inflation hits 6.5%

    China’s PPI increased by 7.5 percent year-on-year while the inflation rate rose 6.5 percent to a 37-month high in July. Inflation was driven by a14.8 percent spike in food costs, the country’s National Bureau of Statistics said on Tuesday. The data comes amid European sovereign debt concerns and worries of a ‘double-dip’ US recession, and shows that China’s inflation continues to accelerate despite an 18-month monetary tightening effort. The country’s inflation rate is now showing its highest year-on-year growth since June 2008, according to published figures. China has been trying to curb its overheated economy with tougher home-...
    On August 9, 2011 / By
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    ECB to help Rome and Madrid with bond purchases

    As European markets opened on Monday yields on Spanish and Italian bonds saw a sharp fall to 83 and 79 basis points respectively following an intervention by the European Central Bank. The ECB backed up its promise to expand its purchases of sovereign debt to support Madrid and Rome by entering into European bond markets to buy their respective bonds in an attempt to steady the markets. “The ECB will actively implement its securities markets programme. This programme has been designed to help restore a better transmission of our monetary policy decisions, taking account of dysfunctional market segments, and therefore ensuring price stabilit...
    On August 8, 2011 / By
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    US to raise debt limit

    President Obama has announced that senior Republican and Democrat party members have agreed a proposal to limit US debt by $2.4bn in order to avoid deault or downgrading from the nation’s triple A rating. Making the announcement on Sunday, Obama said the agreement will cut spending by about $1trn over the next decade. Votes in both houses are expected shortly, as many believe the deal is still set to meet resistance from Republican Tea Party members and certain sections of the Democrat party. The deal would also put in place a new Congressional committee dedicated to recommending a further deficit reduction proposal by November....
    On August 1, 2011 / By
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    Credit Suisse to cut 2,000 jobs after 52% profit drop

    Swiss banking group Credit Suisse on Thursday announced a 2Q11 net earnings drop of 52 percent year-on-year to SFr768m amid weak trading activity and currency exchange effects of the Swiss franc. The group’s wealth management division reported a pre-tax profit of SFr843m, down four per cent from 2Q10 due to “challenging” market conditions, a statement said. Credit Suisse plans to cut four percent of its global headcount, an estimated 2,000 jobs, as part of a cost savings programme that is expected to reduce expenses by SFr1bn annually starting in 2012. CEO, Brady Dougan, said: “Asset management showed a strong performance in the quart...
    On July 28, 2011 / By
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    Bank results worry markets

    Swiss bank UBS said on Tuesday it plans major job cuts to reduce costs of up to $2.5bn over the next two to three years. The announcement came as it reported a 49 percent 2Q11 decrease in net profit to CHF1.01bn from CHF2bn during the same period in 2010. Group revenues were down 14 percent for the quarter to CHF7.2bn due to lower client activity, while the drop in quarterly profit was blamed on the high value of the Swiss currency and weaker trading, according to a bank statement. The company said: “New capital and regulatory requirements, combined with a weakening economic outlook, are likely to weigh on future returns, constraining growt...
    On July 26, 2011 / By
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    Moody’s downgrades Greece to near default

    Moody’s Investors Service on Monday cut Greece’s sovereign debt by three notches to Ca from Caa1, warning the second bailout of Greece is likely to result in a default and weaken the credit ratings of the stronger European nations. The rating agency warned in a statement that it is inevitable that Greece will be deemed in default as “the support package incorporates participation of private sector holders of debt who are now virtually certain to incur credit losses. If and when the debt exchanges occur, we would define this as a default by the Greek government on its public debt.” The €109bn support package for Greece announced afte...
    On July 25, 2011 / By
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    EU leaders agree €109bn Greek bailout

    European heads of state at the emergency summit in Brussels agreed late on Thursday a new €109bn bailout package for Greece. The deal includes a reduced interest rate of 3.5 percent and a time extension to between 15 and 30 years from the previous 7.5 years. “The new programme is designed, notably through lower interest rates and extended maturities, to decisively improve the debt sustainability and refinancing profile of Greece,” the EC statement said. There will also be a net contribution of the private sector of an estimated €37bn. The figure agreed by European leaders will take into account the cost of credit enhancements for the ...
    On July 22, 2011 / By
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    Barrosso grasps Basel III

    The president of the European Commission, José Manuel Durão Barroso, warned ahead of Thursday’s Euro area summit that “nobody should be under any illusion because the situation is very serious.” Barroso urged European leaders to “show the ethics of European responsibility.” In a statement he outlined the key issues to be dealt with at the summit, saying: “The minimum we must do is to provide clarity on measures to ensure the sustainability of Greek public finances and the feasibility and limits of private sector involvement.” He mentioned the importance of tackling “the scope for more flexible action through the European Fin...
    On July 21, 2011 / By
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    Goldman Sachs to shed up to 1000 jobs

    Goldman Sachs announced late on Tuesday that it will lay off around three percent of its workforce, an estimated 1,000 staff, amid disappointing 2Q11 results. The news by the investment bank comes following lower than anticipated 2Q11 net earnings of $1.09bn after fixed income revenue dropped significantly due to a fall in trading activity. The bank reported its biggest slump in the currency, commodities and fixed income division with $1.6bn, a 53 percent decrease year-on-year. New York-based Goldman Sachs said that net income climbed 77 percent to $1.09bn, or $1.85 per share, from $613m, or 78 cents, during the same period in 2010. Goldman...
    On July 20, 2011 / By
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    IBM 2Q earnings beat estimates

    IBM reported growth in all of its key product areas and raised its income guidance for 2011 as net earnings for 2Q11 increased by eight percent to $3.7bn compared to $3.4bn in 2010, the company said late on Monday. The technology giant, which lifted its full 2011 year forecast to $13.25 a share following results, beat analysts’ predictions by $1.35bn with revenues of $26.7bn. Software revenue increased 17 percent compared with the same period of last year, to $6.2bn. Samuel Palmisano, CEO and chairman, said: “In the second quarter our long term strategic investments in the company’s growth initiatives again helped drive strong revenue p...
    On July 19, 2011 / By