US & World News

The trade deficit the U.S. has grown against all odds in June to its highest level since October 2008, due to a decline in exports and imports indicate a slowdown in global demand, according to figures released Thursday by Commerce.

The trade balance posted a deficit of 53.07 billion dollars, while the market expected it to be reduced to 48 billion.

In May, the deficit had risen to 50.83 billion (50.23 billion in the first estimate).

Exports fell 2.3% against -0.5% in May, faster than imports (-0.8% after +2.9% in May).

The rumor of a deterioration in the rating of France has prompted a new collapse of the entire stock market. "This is completely untrue," says the entourage of Baroin. View of the Ministry of Economy and Finance at Bercy.

Bercy has "formally" denied rumors Wednesday of degradation of the French debt rating by a rating agency that led to a new collapse of the entire stock market. "These rumors are totally unfounded and the three agencies Standard and Poor's, Fitch and Moody's have confirmed that there was no risk of degradation," it was stated in the entourage of the Minister of Finance Baroin.

Rating agencies Moody's Investors Service Inc.., Standard and Poor's Corp.. Fitch Ratings and have in fact all three confirmed Wednesday the sovereign debt rating of triple A with a stable outlook they attribute to France.Fitch confirmed the note on May 31 and S & P, December 23. Moody's does not usually confirms his notes.

"It's totally false", it was stressed the same source, when asked about the rumors, which also claimed that this is why French President Nicolas Sarkozy interrupted his holiday to hold a crisis meeting at the Elysee Palace . After the meeting, the Head of State said that new measures to reduce the deficit will be announced on August 24.

European shares are down sharply divided Wednesday, two hours before the close, led by falling bank stocks as a result of new concerns fueled also by the situation in Greece and the decline of Wall Street opening. The New York Stock Exchange opened sharply down Wednesday also unable to continue the strong rebound yesterday.In Paris the CAC-40 plunged almost 5% hit by bank stocks.

The perspective attached to the sovereign rating of the United States could be raised to stable if the bipartisan agreement on reducing the U.S. deficit is being implemented and if the tax cuts of the Bush era are eliminated, said Monday director of sovereign ratings Standard & Poor's.

In an interview with Reuters Insider, David Beers warned that the rating agency would closely monitor whether the U.S. Congress is at what he has committed.

S & P on Friday denied the United States of the note "triple A", giving them now rated AA + coupled with a negative outlook.

David Beers reiterated that there was at least one in three chance that the U.S. sovereign rating is lowered again within 6 to 24 months.

The European Central Bank (ECB) decided on Sunday night if it buys Italian bonds to contain the new onset of fever that gripped the euro area, it was learned from sources close to the institution.

The ECB President Jean-Claude Trichet wants his board of governors to take a final decision on the takeover of Italian paper after the announcements made Friday by the Italian Prime Minister Silvio Berlusconi on accelerating reforms to reduce the public deficit Italian, said a source close to the ECB.

The reaction of the ECB is further expected that the clock may be difficult Monday morning in European markets as investors draw conclusions from the lower by Standard & Poor's rating of U.S. sovereign debt to AA +.

According to one source, the Governing Council will meet from 17:00 GMT to make a decision. If he decides to take over Italian bonds, the ECB and central banks in the euro area will come into action on Monday morning at the opening of the markets.

Another source close to the ECB said that the Governing Council could also consider the implementation of emergency measures.It could, for example, provide liquidity to prevent a freeze in money markets.

A third source, also close to the ECB, said that the meeting was postponed in the evening to allow time for governors to analyze the measures that could be announced by Washington after the S & P lowered the debt rating sovereign.

Thursday the ECB has reactivated its share repurchase program of sovereign debt in order to calm soaring interest rates of some countries in the euro area bond markets but has so far bought only small quantities of Irish debt and Portuguese, while speculation is focused on Italy and Spain.

The European press is reluctant Sunday between disbelief and apocalyptic messages after the decision of S & P.

Germany's Welt Am Sonntag as "Der Crash" (the crash) and writes: "Nobody could have foreseen the spectacular crash, and now we need a healthy dose of gallows humor to handle such a situation."

Der Spiegel asked: "U.S. debt, euro crisis, chaos on the stock exchanges: the world will he go bankrupt?".

Also in France, the abatement is required. Le Journal du Dimanche as "The world on the edge of the crash."

The U.S. economy created more jobs than expected in July and the unemployment rate fell slightly, according to official statistics released Friday.

Last month, 117,000 non-agricultural jobs were created, according to the Labor Department.

Economists on average had forecast 85,000 jobs created.

Statistics disappointing June (18,000 births) was revised to 46,000.That of May was also revised upwards from 25,000 initially to 53,000.

Overall, the private sector has created 154,000 jobs, against 115,000 expected.

The unemployment rate retreated slightly to 9.1%, while analysts expected the same from one month to the other at 9.2%.

In July, 24,000 manufacturing jobs were created, while 11,000 were expected.

The public sector has in turn eliminated 37,000 jobs, after having destroyed 39,000 in June.

The European Central Bank has sought Thursday to come to the rescue of the euro area by buying government bonds Portuguese and Irish, and providing a new measure of liquidity for banks.

After the decision of the ECB to leave rates unchanged three – the main refinancing rate is maintained at 1.5% – its president Jean-Claude Trichet, said the buyback program obligations of the bank, dormant since March, continued.

Traders reported observing market purchases from the ECB, even though the president was speaking to the press.These speakers discussed including the acquisitions of Portuguese and Irish debt on secondary markets, but not Spanish or Italian debt.

Jean-Claude Trichet suggested the hint that the operation was actually in progress. "I will not be surprised if you were watching before the end of this conference," he said.

Investors were disappointed with the purchase of paper non-Italian and Spanish: the performance gap between the obligation to ten years Spanish and German Bund reference widened to 400 points against 386 points Wednesday closing while spread the obligation Italian / German rose to 392 points, the highest since the introduction of the euro.

"Trichet said in a hurry the recovery of bond purchases.There was no statement from the ECB, but just a vague answer to a question. We can doubt the seriousness of the ECB on this point, "said Holger Schmieding, Bank of Berenberg.

"The ECB may have missed an opportunity to act more convincingly.The key now is to see if the ECB intervenes in the Italian and Spanish bond markets, and to what extent, "he added.

RATES MAY CONTINUE TO MOUNT

Jean-Claude Trichet has acknowledged that the Executive Board of the ECB, unanimous on interest rates and measures of monetary support, was divided on the issue bonds.

"We are not unanimous, but the overwhelming majority of bond buyback operation," he said during his press conference.

At midday, the President of the European Commission Jose Manuel Barroso called for increasing the capacity of EFSF.

The ECB was called upon to act against the rapidly deteriorating situation in Spain and Italy, where crises similar to those countries already bailed out would have consequences far more serious.

Jean-Claude Trichet said the ECB would conduct an operation for six months to strengthen bank liquidity by providing facilities for short-term financing until at least January 2012.

Many banks Greek, Portuguese and Irish have more access to capital markets, and some in Spain and Italy also depend on the support of the ECB.

"Given the renewed tensions in some financial markets (ECB) has also decided to conduct an additional refinancing operation with a maturity of approximately six months (…)", submissions being paid in full, said Jean-Claude Trichet.

But despite this return mode response to the crisis, the ECB president hinted that interest rates were likely to continue to increase.Central banks in Switzerland and Japan are in contrast to the easing in order to prevent excessive inflation of their currencies.

"We will continue to monitor very closely all developments related to the increasing risks to price stability," said Jean-Claude Trichet, using a formula already used after the rate hike last month.

Before the press conference, economists believed that the use of this phrase would mean another rate hike before the end of the year.

Ford reported a 9% increase in sales of new cars in the U.S. in July, as a percentage, better than General Motors, but worse than Chrysler.

The second U.S. automaker said it had passed 180,865 units last month.

Earlier in the day, General Motors announced a 7.6% increase in sales in July in the United States.

Chrysler shows in turn a 20% increase in sales.

Around 4:35 p.m. GMT, Ford gave 2.43% to 12.05 dollars and GM shares to 27.50 2.03% while the S & P 500 lost 1.07%.

The funds invested by Libya in France should be used to purchase medicines and food aid. A demonstration in support of the rebels Libyan National Transition Council to Benghazi in May 2011.

France has earmarked 259 million dollars, 182 million euros, of Libyan assets that have been available to the National Transitional Council (CNT) for "humanitarian purchases," said Monday the French Ministry of Foreign. "These are funds that belong to the Libyan people" and that "for the purchase of medicines, food products," said CNT's new ambassador in Paris, Mansour Saif al-Nasr at the end of a meeting with the head of French diplomacy Alain Juppe.

France considers that the CNT representative body of the rebellion against Muammar Gaddafi, is now the "sole owner of governmental authority" Jamahiriya.Alain Juppe "the caller said that the process of thawing of Libyan funds was successful and has enabled the LSC to provide the sum of $ 259 million. The CNT can now benefit from these funds for humanitarian purchases, in compliance with European regulations, "said a statement from the Quai d'Orsay.

"The special envoy of the CNT was informed that he could move into the premises of the Libyan embassy in Paris", they added the same source. The French "have promised to hand over the keys soon." The embassy "is currently under the protection of the French police," said Mansour Saif al-Nasr, who took office last week in Paris.