US & World News

Oil prices have come down sharply on Tuesday on the New York market, signing their second straight session of declines and displaying the entire month of August, their first monthly decline since May.

The October contract on the U.S. light crude ended down $ 2.78, or 3.72%, to $ 71.92 a barrel on the New York Mercantile Exchange.

At the time of closing in New York, a barrel of Brent crude fell by $ 2.11, or 2.75%, to 74.49 dollars.

Throughout the month, a barrel of crude oil shows a decline of 7.03 dollars, or 8.9%, the largest decline in percentage terms since May

Oil prices are hurt by concerns about slowing growth, weak demand and rising inventories.

"The volatility associated with the end of the month has lowered future today," said Mark Waggoner of Excel Futures.

Traders now await the figures of the American Institute of Petroleum on a weekly inventory in the U.S. that must be disclosed in the evening.

Societe Generale on Wednesday posted a net income multiplied by 3.5 in the second quarter of 2010, above expectations, thanks to a decline in its stores and a smaller than expected loss in its toxic assets, and confirmed objectives.

The second French bank by market value after BNP Paribas, says that it achieved a net profit of 1.084 million euros for the quarter ended in June, where the consensus reached by the editor of Reuters expected a general result to 732 million.

His provisions for potential loss on the credit over the period fell by 6% but the rate of decline in the cost of risk is much slower than some of its rivals, reflecting a more cautious speech of SocGen on the strength of economic recovery.

BNP Paribas and British bank HSBC, for example reported Monday in stores near their level before the crisis.

"The economic recovery that began in late 2009 confirmed, but it remains fragile," said Frederic Oudéa, CEO of Societe Generale, said in the statement.

"Especially in Europe, growth prospects remain subdued," he adds.

Penalized by the toxic assets, and author of "profit warnings" on its books of 2009, SocGen tries since the beginning of the year to convince the market of its ability to turn the page on the financial and economic crisis and the of the Kerviel affair.

The new management team led by Frederick since May 2009 Oudéa promised mid-June to double the profits of Societe Generale in two years and is targeting a net profit of six billion euros in 2012 against a target of three billion this year.

The bank is also considering acquisitions but said it does not fund them through capital increases.

Besides the new strategic plan, the results of resistance tests conducted on 91 European banks and the announcement by the Basel Committee's flexibility to draft new banking regulation has been a breath of oxygen to the action SocGen, long shunned by investors.

In the past four weeks, the title, boosted by good news on the European banking sector jumped 40%. Since the beginning of the year, however, still leaves nearly 8% and continues to underperform its benchmark Stoxx 600 European banks.

Despite advances in EU Member States towards the Parliament, the reform of the European financial supervision remains blocked until at least early September, we learned from diplomatic and parliamentary.

On Tuesday, however, a new compromise between the bloc on this reform, in gestation for over a year, had hinted at an early agreement.

But further discussions held Wednesday morning between representatives of governments, the Parliament and the Commission were ultimately unsuccessful and the participants decided to cancel the meetings scheduled next week to do again until the fall.

"There will be no further talks before late August or early September and I think we can say that the talks failed, it was said parliamentary sources.

"The core issue is Article 6 which concerns the principle of direct supervision exercised at European level by the new supervisors," the source said, adding that the objective was to find a consensus with all states, including Great Britain.

A second source later confirmed the postponement of talks and held that "one or two additional steps the council (of EU ministers) in the direction of the European Parliament would be required to obtain an agreement."

In a statement to Reuters, the EU Internal Market Commissioner, Michel Barnier, said the objective was to find "a dynamic and balanced compromise.

"We are in the final straight but there is still some way to go," he said.

TECHNICAL MEETINGS

Without result, Wednesday's meeting helped to bring some positions of Parliament and Member States.

This applies to certain powers given to the European Council of systemic risk and the three new authorities in supervising the banking, insurance and markets.

These could permit, under certain conditions, products or financial practices, such as short sales.They would also be binding mediation in cases of disagreement between two supervisors.

The principle that the authorities could apply directly to a settlement without going through the national supervisor, in emergencies, is also acquired, as it does not undermine the budgetary sovereignty of States.

Moreover, these emergencies could be declared by the authorities but would instead be covered by the European Parliament alongside the Member States.

In contrast, the principle of supervision at European level for the European entities of pan-European nature, such as clearing houses, remains a problem.

A source close to the discussions, meetings at technical level should be organized in the coming days to work on these issues.

The Belgian presidency of the EU should work to include this item on the agenda of the meeting of ambassadors of Twenty-seven of the next week to lay the groundwork for negotiations in September.

The objective remains that the states and the Parliament adopt these texts in the first half of September so that authorities can start to work as planned on 1 January 2011.

The International Monetary Fund (IMF) raised its forecast for global growth in 2010, citing the strength of the economies in Asia and rising private demand in the U.S., while warning against the risks inherent in the crisis sovereign debt of the euro area.

The downside risks have increased significantly, mainly because of turmoil in financial markets again since the beginning of the crisis of sovereign debt, but it is unlikely that we are seeing a recession "W", says IMF .

It carries its global growth forecast to 4.6%, while it predicted 4.2% in April, but left unchanged at 4.3% for 2011.

"In our baseline forecast, there is nothing like a recession in 'W'," said Olivier Blanchard, chief economist of the IMF during the presentation of the document.

"In this context, the new forecast is based on the implementation of measures to rebuild confidence and stability, particularly in the euro area."

Olivier Blanchard said that the statement of results of resistance testing was a step towards greater transparency while stressing the need for a return of public spending to sustainable levels.

Austerity PESERA IN GREAT BRITAIN

Under one scenario considered by the IMF, based on the assumption that the consequences of the crisis of European sovereign debt as violent as those of the collapse of Lehman Brothers, the global GDP growth would be reduced 1.5 percentage point in 2011.

The continuing fragility of the U.S. labor markets and housing problems of the euro area and the slowdown in manufacturing activity in Asia have raised many questions among investors who wonder about the possibility of a sudden slowdown in growth for the remainder of the year.

The IMF lowered its growth forecast Thursday for 2011 in Great Britain, Canada, in the euro area, emerging economies and Japan.

According to IMF forecasts, GDP growth in the euro zone will be limited to 1% this year, according to what it expected in April, but it should stand at 1.3% in 2011, 0.2 percentage point less than what was previously announced.

The U.S. economy should she enroll at 3.3% in 2010, against an estimate of 3.1% three months ago, and 2.9% in 2011, against 2.6%.

The most brutal review announced Thursday is to the liabilities of the UK whose new government has begun a course of austerity that may affect growth.

The IMF expects UK growth of 1.2% in 2010, 0.1 percentage point lower than April and 2.1% in 2011, down 0.4 percentage points.

The recovery should continue at low speed in France by the end of the year, with a growth rebound in the second quarter but remain moderate then provides INSEE.

In his memo on the economy released Wednesday, the Statistical Institute expects a 0.5% of GDP in the second quarter and growing 0.4% in the next two quarters.

For the full year, growth would be 1.4%, in line with the government's forecast and just enough to stabilize unemployment.

The acquired at year end would be +0.6% and should in this case a 0.8% growth in each quarter of 2011 for achieving the government target of 2.5% was calculated INSEE which the forecast is however limited to 2010.

After rising 0.5% in the fourth quarter of 2009, GDP stagnated in the first three months of 2010 (+0.1%), fearing a relapse of the economy even if this figure is likely to be revised upwards on Friday when the national accounts are published in detail.

Entitled "In mid-stream, Note Insee business survey suggests a continuation of the recovery but at a moderate pace and with high uncertainty.

Turbulent waters

"An upturn in global activity was engaged for several quarters but there is still some way to go in this crisis and in waters which may be turbulent," said Sandrine Duchêne, head of the Business cycle, at a press conference.

Two forces are at work in France as in other advanced economies, "she said.On the one hand, the global recovery, but more beneficial to the country heavily exposed to foreign trade such as Germany or Japan, the other the need for fiscal consolidation that has already resulted in the listing Plan rigor.

"The year 2010 is a transition year between recovery and fiscal consolidation," said Sandrine Duchêne.

"In the very short term, the second quarter looks good but there is currently a cap on surveys which is expected a slowdown in activity by the end of the year."

According to INSEE, the attenuation of growth in the second half will not call into question both the positive contributions of the first quarter, namely the beginnings of a revival in business investment and re-creations of net jobs in the commercial sector.

"This trend will continue throughout the year but the pace of recovery will be slow and does not transmit only gradually income households," said Sandrine Duchêne.

In this context and with unemployment still high but stable, Insee sees household consumption stagnated in the second quarter as the first, before rising moderately (0.3%) in the next two quarters.

Demand for business will be limited but the depreciation of the euro will bring them a breath of fresh air by making their exports more competitive.

POSITIVE EFFECT OF THE EURO

In total, according to projections by INSEE, the recent decline of the euro should have a positive impact of 1.6 points on exports this year and 0.5 percentage points on growth that otherwise would therefore was only 0.9%.

Business investment in turn will benefit from improved market opportunities but will remain constrained by production capacity remains under-used, with a rate currently of 76% – ten points below the long-term average.

After eight consecutive quarters of decline, Insee sees the investment by non-financial leave of 0.6% in the second quarter, but he would decline a further 2.0% in total over 2010, following a drop of 7.9% in 2009.

Regarding employment, creation of the 24,000 net new market sectors in the first quarter – after seven quarters of destruction – would be followed by 8,000 others in the second, 4,000 and 15,000 in the third to the fourth, a total gain of 51,000 jobs this year 337,000 after destruction in 2009.

After six quarters of strong growth, the unemployment rate would remain stable for its 9.5% in France (9.9% in the counties overseas), to its highest level since late 1999.

Insee said its forecasts are surrounded by uncertainties. A resurgence of financial stress and / or the impact of measures to reduce the deficit might weigh on growth, since, unlike the depreciation of the euro, if continued, would allow countries Eurozone to benefit more from the dynamism of world trade.

The Chinese authorities have allowed a wave of increases in the minimum wage face the discontent of workers illustrated by growing social conflicts, the media reported Friday.

In Beijing, the minimum monthly wage will be raised by 20% to 960 yuan (115 euros) from 1 July, reported the newspaper Global Times. The increase is twice as large as the increase traditionally announced each year (10.02%) from the capital has introduced a minimum wage in 1994, said the English-language daily.

Beijing is one of 30 provinces or municipalities in China have increased the minimum wage or are about to do.After a recent increase, the metropolis of Shanghai (east) offers the highest minimum wage in the country, to 1120 yuan per month, or 134 euros, according to the official.

These increases come as the harsh working conditions of millions of workers in China are subject to debate, at a time when the third world economy with growth in double digits. Ten employees of the Taiwanese group Foxconnse committed suicide in recent months in southern China, apparently victims of high stress at work and a 11th died of exhaustion in another factory of electronic components, in northern China.Foxconn announced Wednesday a wage increase of 30% of its Chinese employees.

In addition, employees of a factory of spare parts of the Japanese manufacturer Honda are on strike demanding better wages last week, crippling the entire production until Friday before obtaining satisfaction with an increase of 24 % of their salaries to bring them to 1,910 yuan (228 euros).

Despite spectacular economic growth, labor compensation has fallen against the wealth created since the beginning of economic reform in China: it accounted for 56.5% of GDP in 1983, but 36.7% in 2005, recently argued a union official.