Top Economics News

Equity markets have appeared hesitant and versatile throughout the session. The European equity markets ended in a disorganized, while at the same time, Wall Street also hesitated between increases and decreases.

Investors have welcomed the drop in bond yields Italian and Spanish through purchases of securities by the European Central Bank in the secondary market.

Traders also mention the idea that the ECB would lend the International Monetary Fund (IMF) to assist countries in the euro area.

But operators remain skeptical, however.

U.S. inventories of crude oil fell against all expectations last week, said Thursday the U.S. Agency for Energy Information (EIA).

Crude inventories fell 1.37 million barrels to 338.09 million. Economists on average had expected a rise of 400,000 barrels.

Gasoline inventories fell 2.11 million barrels (consensus: 300,000), to 204.17 million.

The reserves of distillates, which include heating oil, fell by 6.02 million barrels (consensus: -2.0 million) to 135.87 million.

The rate of capacity utilization of refineries dropped 2.7 points to 82.6%.

Around 3:50 p.m. GMT, U.S. crude reduced its losses, yielding 1.3% to 95.80 dollars a barrel.

European leaders are determined to act in a coordinated response to the crisis in the euro area, said Wednesday the executive director of the International Monetary Fund, Christine Lagarde.

On the eve of the G20 summit in Cannes, the former French Finance Minister acknowledged that could occur in spurts, a thinly veiled reference to the surprise announcement of a referendum in Greece, but it ensured that the determination of the Europeans was decisive.

When working at B20, which brings together representatives of world's largest companies, in Cannes, she explained that global growth was slowing, but she persisted.

She added that the downside risks weighing on growth, suggesting a negative interaction of financial and economic, as well as the risk of social unrest.

About the crisis in the eurozone, "I've never seen so much determination and will to act in a coordinated manner," said Christine Lagarde.

"You will see (reactions such as) 'but what does it speak? What have we seen two days ago?' Of course, things are not smooth, sometimes in fits and starts major, "she added.

"But what matters is what was decided on October 27 in the morning (…) and what will count tomorrow, in the days, weeks and months, it is the resilience and determination of the partners the euro, European partners, "added Christine Lagarde.

All eyes are on Berlin where German parliamentarians must vote on a proposed reform of the European Financial Stability Fund (EFSF) earlier this afternoon after a speech by Angela Merkel.The Chancellor will then travel to Brussels for EU summits and the euro area, which should provide practical solutions to the debt crisis.

At 9:30, the CAC 40 lost 0.35% to 3163 points while the Eurofirst 300 was almost stable.

European markets are down, investors holding their breath awaiting the outcome of the day announced as crucial for the future of the euro area.

"It is expected that the Bundestag decides on reinforcements EFSF and the role of the ECB in managing the crisis," said a trader based in Paris.

Values, PSA fell sharply under the influence of lowering its forecast for 2011 after a third quarter marked by lower volumes and increased competition on prices in Europe.The group is likely to reduce its workforce by 10% in Europe.

Ingenico, in contrast, was part up 5% in early trade Wednesday of the Paris Bourse, the manufacturer of payment terminals has published the day before its sales for the third quarter.

The euro remains firm and resolutely clings to a level above $ 1.39, while the German Bunds are hesitant, waiting for a clearer trend in equity markets.

Spot gold rose 1% touching a high of more than a month, reflecting investor fears that the crisis drags on still.

Olympus still has the title fell 6.81% Friday, the market value of the Japanese and melted with about 50% since last Friday, the day he announced the dismissal of its chief executive Michael Woodford.

Investors have pushed the action and the manufacturer of cameras and optical instruments of precision to a low of two and a half years, adding to even more pressure on the group to be explained on unusually high consulting fees paid in connection with an acquisition and revealed by the ousted leader.

Olympus acknowledged Wednesday it had paid $ 687 million (498 million) in financial advisors in the purchase of the British manufacturer of medical equipment Gyrus.

These fees represent a third of the price of the acquisition, whereas traditionally they account for only 1% or 2% of the value of a transaction, according to a PriceWaterhouseCoopers study commissioned by Michael Woodford.

POLICE PROTECTION

The latter told Reuters on Thursday it had filed for protection under the British police after submitting new information to investigators British anti-fraud regarding fees.

In the data transmitted to the authorities by Michael Woodford, a former investment banker from Japan appears to be the central figure in the matter of fees.

According to these documents, Hajime "Jim" Sagawa was the owner of AXIS, a financial services company little known American who received the exorbitant fees reported by Michael Woodford.

Olympus, which denies any impropriety, said the fees had been paid to its subsidiary AXIS Axam Investments, a company registered in the Cayman Islands, including Hajime Sagawa was a member of the Board, the report of PricewaterhouseCoopers.

Reuters visited the home of the latter, a former Nomura banker, only to find that his wife, who assured that her husband had done nothing wrong.

INVESTIGATION OF SESC JAPAN

Michael Woodford has also written to the Securities and Exchange Surveillance Commission (SESC), the authority of the Japanese financial markets, asking him to consider the case Olympus.

An investigation by the SESC could take months. Financial Services Minister Shozaburo Jim said the policeman of the financial sector would work, but refused to comment on individual cases.

"Olympus has clearly withheld information to investors. And even if she is not guilty of actions contrary to law, management has breached its obligations vis-à-vis shareholders.It should take responsibility, "said Shigeo Sugawara, manager of Sompo Japan Nipponkoa investments in Asset Management.

Olympus may have to spend significant impairment likely to weaken its balance sheet. And even if, according to manager, many candidates would be interested in the instruments of precision optics group, no one would touch it before the case is improper fees paid.

The company is now worth some $ 4.5 billion.

Brokers have suspended their coverage of Olympus as key shareholders and require that the group be made public links between management and its financial advisors.

The German Government has almost halved its growth forecast for next year, reduced to 1% against 1.8% auparavan.

After several economic research institutes, the German government has significantly revised down its growth forecast for next year, noting the slowdown in the economy under the weight of the financial crisis in Europe. Berlin now expects growth of Gross Domestic Product (GDP) by 1% in 2012, nearly half its previous estimate of 1.8%, said Wednesday sources close to the government. This forecast should be formalized Thursday by the Ministry of Economy.

The reduction comes as no surprise. Signs of a slowdown in the dynamics have increased recently. The latest business survey, the ZEW, which measures the expectations of analysts and institutional investors, reached Tuesday its lowest level since December 2008.The Ministry of Economy considered himself last week that the risks had "significantly increased" for the first European economy, strong exports. Germany suffers from weaker growth in its European partners, which absorb 60% of its exports.

The main economic research institutes predicted the country in their autumn report, which is the basis for forecasts of Berlin, a decline in GDP in the fourth quarter 2011, followed by stabilization at a low level. The export will not contribute to growth next year, they warned.

Strong last year after the terrible recession of 2009, German growth has largely continued this year and should reach 2.9%, putting Germany in the forefront of Europe.

German manufacturers of cars, machine tools and chemicals filled their order books since last year, and "the companies still much to do to fulfill their orders," Analysis Carsten Brzeski, economist at ING, "this time, they are much better prepared to face a crisis of Lehman type ". The recession following the collapse of U.S. investment bank in 2008 had occurred in a phase of over-capacity of German industry, breaking net momentum.

In the area of ​​machine tools, high of about one million employees and a major exporter, the production growth should slow markedly course next year, warned Tuesday the federation VDMA, but at 4%, remain fully is honorable.

The sequence of events for the German economy, that is "an anchor of stability and growth in Europe" in the words of its Minister of Economy, will very much depend on the outcome of the debt crisis.

EU leaders promise solutions in the coming weeks, and the business press them to do so. But if the remedies proposed were not sufficient to stem the crisis, "the German economy would be penalized more than expected, and would fall into recession," predicted institutes last week. The export collapse, consumer confidence, yet relatively untouched because of a strong labor market, would be reached, and the banking crisis handicap investment, according to worst-case scenario.

Total discovered gas and oil off the coast of Norway, announced Thursday the Norwegian Petroleum Directorate.

According to preliminary estimates, this discovery is to be between 19 million and 101 million barrels.

The discovery was made in the Norwegian Sea, about 8 miles west of the oil and gas Norn.

"The development of this discovery will be considered in conjunction with other deposits in the region," said the Norwegian Petroleum Directorate said in a statement.

To dig the well that led to this discovery, Total was allied with Norway's Statoil, authorities said.

Standard & Poor's Tuesday lowered a notch credit rating of ten Spanish banks, including the two largest in the country, pointing to the darkening economic prospects and a housing market still depressed.

Fitch Ratings has reduced its share shortly after the note of six banks in the wake of its decision, announced Friday, to lower the rating of Spain by two notches to AA-.

Among the banks downgraded by S & P are Santander and BBVA, key institutions of the country.Their two notes back from AA to AA-and carry a negative outlook.

S & P also revised the rating outlook for four banks, reducing it from stable to negative, and placed the bank under review with negative implications.

The prospect of all banks rated by S & P is now negative, meaning that further declines are possible notes.

Fitch, Banco Santander fell from AA to AA-and Banco Bilbao Vizcaya Argentaria (BBVA) from AA-to A +.

Other banks involved include Banco Popular Espanol to BBB +. This note is placed under review with negative implications because of its exchange offer launched on Banco Pastor.

Job creation increased this summer and the growth of the wage bill is expected to exceed 3.6% this year. Good news for Social Security accounts. A turnaround is not excluded. Officers, employees

Not everything is black on the employment front. Although the number of registered unemployed at employment center is rising considerably and the last three months. But several indicators released today by ACOSS (the agency responsible for collecting contributions for Social Security) have shed light on this first day of autumn.

After a slight dip in May and June, reports of recruitment of more than a month in the private, non-temporary, considered a leading indicator of labor market, rose 4.6% in August compared in July, to 648,000, an increase of 10.6% over the year. Declarations of hiring on permanent contracts are also up: 290 000 in July.Levels comparable to those before the crisis, during the period 2002-2007.

This flow of hiring has drawn the net job creation on the rise (+0.2% over three months in July, 1.6% yoy). Other indicators on the financial health of companies also are facing: the default rate, requests for payment deadlines and the number of bankruptcy remained broadly stable.

"Our data are quite encouraging" while "the overall context is excellent," said during a press briefing Pierre Burban, the President of ACOSS. "There was the first half of job retention and maintenance of payroll," he said. Indeed, the wage bill increased by 0.9% in the second quarter compared to the first and 3.8% year-over-month rolling.Growth consistent with the long-term average over the decade 2000-2008.

1.5 billion of revenue in addition to the social security

The really good news is that even if the wage stagnation for the next six months, the growth overhang already reached 3.55%. According to ACOSS, the annual increase should exceed 3.6%, 0.4 points above the government's latest forecast in the supplementary budget in June. Good news for Social Security should be able to save at least 1.5 billion euros in additional revenue.

But all is not rosy either. The second quarter was marked by a slowdown in the dynamics of the curve of employment. Thus, the increase in job creation was twice as high in the first quarter (+0.5%), and the amount of overtime, which had been buoyant in recent months has slowed sharply in July, 1.1%.In addition, temporary employment, considered a leading indicator of the labor market, fell by 0.6% while it rose by 5% per quarter in recent months.

These indicators are perhaps the first signs of a turnaround in the labor market, timely adjustment of enterprises to the economic impact varies from one to three months. Or the stock market crisis erupted in late July and has been a really dramatic turn for the banks in August. It is also the end of August the government took note of the slowdown in the French economy and revised its outlook for 2011 and 2012 downwards.

The Greek authorities have promised Sunday drastic measures to avoid non-payment of debt interest payments and get the next tranche of international aid, but have not announced anything new.

George Papandreou, head of government, gave up a visit to the United States to chair a cabinet meeting on the eve of a crucial deadline for the release of this new installment.

His finance minister Evangelos Venizelos will present Monday, as part of a teleconference, the plan of fiscal consolidation to inspectors of the European Union and the International Monetary Fund (IMF), which will decide whether to release the eight billion euros, of which Athens will be needed in October.

After the Council of Ministers, Evangelos Venizelos stressed the need for budgetary targets for 2011 and 2012, and the deficit next year.

"I want to avoid a default.To stabilize the situation, to remain in the euro area (…), we must make strategic decisions, "he said without further detail.

The government will meet again after his meeting with the inspectors to detail the measures adopted.

Fault of payment of that portion of eight billion euros, Greece is insolvent next month.

This week, the government blamed the widening deficit in a recession stronger than expected and decided to impose a new property tax which he expects around two billion euros per year.

The "troika" formed by the inspectors of the IMF, the EU and the European Central Bank (ECB) may, however, that this tax does not change the situation and really requires more information on how the government intends to do it to correct the public accounts.

"The troika believes that the recently announced property tax alone will not bridge the budget deficit and pushed for conservation measures, downsizing and wage in the public sector," said a senior Greek.

OPPOSITION wants to renegotiate

International donors are also concerned about the lack of political consensus on how to implement out of the crisis.The conservative New Democracy, spurred by a growing popular discontent after two years of austerity, propose them, measures to boost growth.

Their leader Antonis Samaras called Saturday for early elections, saying that the path followed so far produced no results despite the sacrifices required of the population.

"A renegotiation with our donors to stimulate the economy is a condition to get out of this crisis," he said Sunday at a news conference.

The Socialist Party of George Papandreou has a majority in parliament, but internal differences associated with radical protests against the austerity could lead to early elections, say some observers.

In an interview with Bild am Sonntag, the German Finance Minister Wolfgang Schäuble considers that Greece must have a clear mind about his future in the euro area.

"Belonging to a currency union is an opportunity but also a heavy burden. The measures to align its very difficult and the Greeks must decide whether to bear this burden," he said.

"No one should kid ourselves: without a positive assessment by the troika of the commitments of Greece, the next installment will be paid.So the Greeks must have numbers proving that they stick to the plan. "

His French counterpart Francois Baroin recalled his part that the plan of aid to Greece was a loan, not a gift, save for the euro.

"The observers are in place, they continue their work.Greece knows what she has to do it we have said, she has commitments, she has duties vis-à-vis its creditors, it has the requirement to provide answers. "

In the meantime, the Greek newspaper Kathimerini writes Athens plans to make the country's banks credit guarantees of up to about thirty billion to enable them to access the emergency stop of the central bank.

Excluded from the interbank market, Greek banks have become dependent on the ECB for their refinancing, borrowing in its operations in the money market, in exchange for guarantees in the form of sovereign bonds and other assets.