Wednesday, 30 November 2011

Euro area to boost rescue fund as economic confidence weakens

Eurozone ministers took another step on Tuesday towards resolving the debt crisis. Reuters reports:

Euro zone ministers agreed on Tuesday to ramp up the firepower of their rescue fund but couldn't say by how much and raised the possibility of asking the IMF for more help after Italy's borrowing costs hit a euro lifetime high of nearly 8 percent...

The 17 ministers agreed on a detailed plan to insure the first 20-30 percent of new bond issues for countries having funding difficulties and create co-investment funds to attract foreign investors to buy euro zone government bonds.

Confidence in the eurozone economy has been weak though. The European Commission's economic sentiment indicator fell to a two-year low of 93.7 in November from 94.8 in October.

In contrast, confidence in the US continues to recover. The Conference Board's consumer confidence index rose to 56.0 in November from 40.9 in October.

There were mixed data from Japan on Tuesday. The jobless rate jumped to 4.5 percent in October from 4.1 percent in the previous month but household spending continued to improve, falling just 0.4 percent in October from a year ago compared to a 1.9 percent decline in September.

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