US & World News

Japan is considering a new intervention on the foreign exchange market to stem the rising yen, which reached a record high Friday against the dollar, the daily Nikkei reported Saturday.

If the yen continues to rise, the Japanese authorities will once again intervene in the market to slow the progression of the yen, the newspaper said without citing its sources.

Faced with the volatility of world markets, investors preferred safe haven on Friday as the yen. The dollar fell below 76.25 yen before rebounding.

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 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%.

Chevron, the second largest U.S. oil company, reported Friday a profit up sharply from April to June, supported by strong crude prices and improved refining margins, which offset the decline in production.

Earnings increased to $ 7.7 billion, or $ 3.85 per share, against 5.4 billion, or $ 2.70 per share a year earlier.

The turnover has meanwhile increased by 30% to register $ 69 billion.

The Thomson Reuters consensus I / B / E / S expected EPS of 3.56 dollars and sales of 71.58 billion dollars.

Barrels of oil equivalent per day, production stood at 2.69 million, compared with 2.75 million products a year earlier.

Chevron set a target to produce an average 2.79 million barrels of oil equivalent in fiscal 2011. These forecasts assumed that the courses would be lower.

French rival Total, for its part announced Friday the results down in the second quarter, affected by maintenance operations and political unrest in Libya, but said his confidence for the second half.

The day before, Exxon Mobil posted a profit below expectations, affected by an activity lower than expected in the refinery.

The title Chevron dropped by around 0.7% by 1430 GMT.

Peabody Energy has teamed up with ArcelorMittal to submit an offer of $ 5 billion on the Australian Macarthur Coal, the world leader of pulverized coal.

A 15.50 Australian dollars per share, the offer exceeds 40% of the closing price on Monday (11.08 Australian dollars).

ArcelorMittal and Peabody confirmed Monday mid-day for submitting a joint bid to the board of Macarthur.

The coal market is currently very healthy, especially because of the increasing demand for raw steel.

Macarthur has been the subject of a takeover battle between candidates in 2010 and had then agreed to enter into discussions with Peabody that had made the best offer at 16 Australian dollars per share.

The talks had ended when Peabody had lowered its offer, due to the government's decision to impose stronger Australian industries of coal and iron ore.

For its part, ArcelorMittal is already the second largest shareholder of Macarthur, with a 16.2% stake.

The largest shareholder, Citic Resources said it would consider joint bid ArcelorMittal-Peabody, which is subject to the approval of regulatory authorities and the meeting of 50.01% stake in Macarthur.

"The board makes no recommendation on the proposal, but will seek to discuss with ArcelorMittal Peabody and the issues of prices and conditions," Macarthur said in a statement.

The number of unemployed went back up in May, 0.7%, according to statistics from job center.

The decline in unemployment in France was halted in May, showed statistics released Tuesday by the Ministry of Labour and job center.

The number of job applicants in category A (those who carry on any business during the month) in France rose by 17,700 (+0.7%) last month to $ 2,686,800.

This is the first increase since the beginning of the year. In one year, the number of unemployed in category rose by 0.3%.

By adding the persons engaged in small (B and C), the increase in the number of unemployed reached 1.0%, 39,400 more people in one month, reaching 4,078,500. On an annual basis, this figure represents an increase of 3.8%.

Europeans demand a new vote that Athens austerity plan before you pay the money to repay its creditors. Otherwise, Greece will default on its debt. With a risk of chain reactions throughout the euro area. Thousands of "outrage" expressed Sunday, June 19 against the austerity of Syntagma Square in Athens.

Pressed to act quickly Friday by Nicolas Sarkozy and Angela Merkel, the finance ministers of the euro zone agreed Sunday night to complete the fifth installment of the loan of 110 billion made a year ago. The payment of this installment of 12 billion euros, financed by the EU and the IMF, however, is strictly conditional on the adoption of a new austerity plan in Greece. By putting the pressure on Athens, the euro area is playing with fire.Persistent fear of a shipwreck Greek also continued to weigh on European stock markets Monday and bank stocks. Here's what could happen in the coming days, ahead crucial for the events.

Greece rigor vote

The Greek Parliament has to decide June 28 on the 2012-2015 multi-year budget plan, which provides further savings measures, to 28.4 billion euros, and a wave of privatizations expected to report 50 billion. The announcement of the new austerity plan and the fear of selling off of many state enterprises have attracted strong popular protest, forcing the Prime Minister George Papandreou to reshuffle his team. The purse strings are now held by the man of experience and a politician Evangelos Venizelos. To lock his fragile majority, George Papandreou will first undergo Tuesday in a vote of confidence from Parliament.Despite some defections within his party, Pasok, he should win both races – the socialist majority in effect holds 155 seats out of 300. Athens also expressed "confidence" in the adoption of the austerity plan in Parliament.

Thus, nothing precludes the payment of EUR 12 billion as expected by Greece to meet its repayment schedule in the short term. In the longer term however, the situation in Greece remains a concern. The country's debt amounted to 340 billion euros, more than 150% of GDP. Despite a reduction of six points of its deficit in 2010, Athens has not regained the confidence of the markets which require it of interest rates long-term record of nearly 17%. This is why the euro area has decided to grant an extension of a hundred billion euros to cover the needs of the country by 2014.The outline of this new financial assistance plan should be finalized at the next meeting of the Eurogroup, on 3 July.

Finally, if European leaders manage to agree on the terms of the loan. Berlin in fact requires banks and other private creditors involved in this new aid. Which may be likened to a default or event of credit rating agencies and thus panic in financial markets. The solution seems to be emerging now is that of a "roll-over" of the Greek debt. In financial jargon, this means that creditors when loans mature, replace them "voluntarily" by others of the same amount. But whatever the solution, the question of the ability of Greece to repay its debt remains. The crisis is far from over.But this is not the austerity measures that will boost domestic demand. On the contrary …

Greece refuses rigor

Even if the government succeeds in passing Papandreou's new austerity plan in Parliament, it is not certain that the population accepts it. The announcement of the budget plan has already led hundreds of thousands of Greeks on the streets for two weeks. And mobilization is unwavering. Thousands of "outraged" have yet shown Sunday on Syntagma Square in Athens. Nearly half of the Greeks want the release of the new Parliament austerity plan developed by the government for a new international aid and avoid a collapse of public accounts, according to a poll published in the Sunday edition of To Vima. For political analyst George Sefertzis Greek, the street will not drop weapons as the government will not be dropped.The country plunged into political chaos serious right-wing opposition with no more favor in the eyes of the Greeks that the socialist majority in power.

In such a scenario, the EU and the IMF have said they therefore would not pay the 12 billion planned, and Athens could not repay 2.4 billion euros owed to its creditors on July 15 this year. This means that Greece will default on its debt. A paradox because the loan refusal would trigger what the Europeans fear most. This raises the question of the reality of the threat. The Belgian Finance Minister Didier Reynders, in fact, compares the failure of Greece to that of Lehman Brothers. "If Greece was the first to default, then the looks would turn to other countries such as Ireland, Portugal, Spain, Italy, Belgium can be but also France," says it in an interview with La Tribune on Monday.

According to the specialist markets Georges Ugeux, a default of Greece would extend to all private and public debt of the country, far in excess of one trillion euros. This would cause the immediate collapse of Greek banks, so depositors and businesses. What would happen then to Greece? An output of the euro area would be inevitable in order to enable the country to devalue its currency and to win quickly in price competitiveness. Except that again, it would not be without consequences for the euro area. AAA-rated countries such as Germany and France, the ECB should recapitalize to the tune of at least 190 billion, injecting massive amounts into money markets and save the German and French banks. But beyond the cost of the event, the very survival of the euro area would be threatened.

The Italian government has asked Lorenzo Bini Smaghi to resign from the Executive Board of the European Central Bank, as part of a tacit agreement reached between Paris and Rome wants to ensure the accession of Mario Draghi as the monetary institution.

Former Governor of the Bank of Italy, is the only candidate to replace Jean-Claude Trichet, whose term ends in late October, but his ambition could face a refusal by Lorenzo Bini Smaghi to resign.

"There is a formal request from the government to resign Bini Smaghi," he said Thursday at the Press Council President Silvio Berlusconi.

MEPs endorsed Wednesday the appointment of Mario Draghi as President of the ECB, and the Heads of State and Government of the EU must validate definitively at a summit in Brussels on 23 and 24 June

Although there are no rules governing the nationality of the Executive Board of the ECB, several countries in the euro area have indicated they would not accept the presence of two Italian members within the monetary institution.

"To get the consent of France to Mario Draghi, our candidate for the ECB, there must be a French seat on the Executive Board of the ECB, this should happen through the resignation of Bini Smaghi," said the head of Italian government.

Lorenzo Bini Smaghi, who sits on the Executive Board since 2005 and whose term expires in 2013, declined to comment on the announcement.

"No comment, I do not answer," he told reporters.

In a speech earlier in the day, Lorenzo Bini Smaghi criticized the attempts of political interference in the functioning of the ECB, insisting on the independence of its members.

Last week, the vice-president of the ECB's Vitor Constancio has also considered that there should be no political pressure for the resignation of board members.