Bundesbank Estimates Economic Slowdown

Arthi Gupta
13 Dec, 2010
New York City

The European indexes gained after China held its interest rates. The Bundesbank forecasted slowdown in German economic growth. French current account deficit narrowed in October. Spanish home sales plummeted in October. Swiss producer and import prices climbed in November.

[R]4:00 PM Frankfurt – The European indexes gained after China held its interest rates. The Bundesbank forecasted slowdown in German economic growth. French current account deficit narrowed in October. Spanish home sales plummeted in October. Swiss producer and import prices climbed in November.[/R]

U.S. and Asian stocks rose after China decided to increase bank reserve requirements and left interest rates unchanged and reported a rising inflation. Italian Prime Minister Silvio Berlusconi asked lawmakers to support his government ahead of confidence vote.

In its latest Economic Survey of the euro-zone, the OECD said a new ""cross-cutting approach"" to economic and financial management is required to avoid future imbalances in a monetary union without fiscal union.

The organization called for a permanent bailout fund to rescue countries in the future ""subject to strong conditionality.""

Furthermore, the composite leading indicator for the OECD area rose to 102.6 in October from 102.5 in September, according to a report by the Organization for Economic Co-operation and Development.

Moody''s Investors Service in its Banking System Outlook said that the outlook for the Spanish banking system remains negative.

The rating agency said the driving forces for this continued negative trend are the country''s difficult economic conditions, continued asset quality deterioration as well as the government''s fiscal austerity plans.

The pace of German economic growth will slow temporarily in the coming months after robust expansion in the thirst three quarters of 2010, Bundesbank said on Monday.

""Currently available data points to a considerable slowdown in the first quarter of 2011,"" the central bank said in its latest monthly bulletin.

In Paris CAC 40 Index gained 43.94 or 1.14% to close at 3,901.29 and in Frankfurt DAX Index edged higher 34.22 or 0.49% to close at 7040.39.

French Current Account Deficit Contracts; Wages Rise

French current account deficit narrowed to €2.5 billion in October from €4.4 billion in September, the Bank of France said.

The trade deficit contracted to €3.4 billion in October from €5 billion in September, while the surplus in services trade rose to €0.8 billion in October from €0.5 billion in September.

French basic monthly wages increased 0.3% sequentially in the third quarter, following a 0.4% rise in the second quarter, the statistics office Insee said. From the previous year, it grew 1.7%. Basic hourly wages rose 0.3% on a quarterly basis and 1.7% from the previous year.

Spanish Home Sales Slump

Spanish home sales fell 17.7% compared to the same period a year ago in October to 27,200, according to the statistics office INE today.

The total number of property transactions in October was nearly 128,000, 13.8% less than for the same month in 2009.

On a monthly basis, home sales slumped 24.6%, while total property sales dropped 11.8%.

Swiss Producer and Import Prices Rise

Swiss producer and import prices rose 0.1% annually in November, according to data released by the Federal Statistics Office.

On a monthly basis, producer and import prices declined 0.2% in November.

Iceland Jobless Rate Up

Iceland''s jobless rate increased to 7.7% in October from 7.5% in September, according to data from the Directorate of Labor published today.

Sanofi-Aventis Extends Genzyme Offer

Sanofi-Aventis said it extended its tender offer for all outstanding shares of common stock of Genzyme Corp. at $69.00 per share, net to the seller in cash, without interest and less any required withholding taxes.

Gainers & Losers

Bayer AG fell 0.86% to €57.59 after the chemical and pharmaceutical company''s unit Bayer CropScience AG said, along with Evogene Ltd., it entered into a five-year collaboration to accelerate the development and introduction of improved wheat varieties.

BHP Billiton plc rose 1.05% to 2,494.00 pence.

Wereldhave NV rose 0.13% to €71.91 after the Netherlands-based property investment company said it inked deal to acquire Dolphin Shopping Centre in Poole, Dorset, England. The asset comprises an existing mid-sized, mainly covered two level, shopping centre in one of the urban areas on the south coast.