The week's top news in world financial markets from Maximus Capital

  • 2010-03-25

Federal Reserve Bank of Chicago President Charles Evans said the U.S. central bank is likely to maintain “accommodative” interest rates for at least half a year to support economic growth. While, according to Evans, the private sector will contribute more to recovery in the second half of 2010, companies will be hiring cautiously, and the job market is likely to take longer to recover than after the early 1990s recession. On Capitol Hill, the Senate’s banking panel approved Senator Christopher Dodd’s financial-rules overhaul, heralding the biggest restructuring of Wall Street since the 1930s. Negotiations will continue as the bill goes to the Senate floor. One contentious innovation is President Barack Obama’s so-called Volcker rule, which would ban proprietary trading at U.S. banks. The rule, named after former Federal Reserve Chairman Paul Volcker, would also require U.S. agencies to prohibit investment in and sponsorship of hedge funds and private-equity funds at banks, bank holding companies or their subsidiaries.

Euro zone
Quite a turbulent week for the Eurozone. The Greek crisis was being felt by the other member countries and there is no unity of minds for dealing with its consequences. As a testimony of European market uncertainty, the dollar rose to a three-week high against the euro amid speculation European Union leaders will fail to agree on an aid package for Greece at a summit this week, stoking demand for the U.S. currency as a refuge. European Union President Herman Van Rompuy has been reported to seek an agreement on an aid mechanism for Greece before the start of an EU summit this week. On a corporate level, a high-profile court case is in the making, as the  ability to sell protected terms such as “keywords” that link Internet searches and ads may be limited by European Union court.

CEE countries
There are a number of CEE countries that emerge as unexpected benefactors of the Greece crisis. Emerging European countries are speeding up debt sales and investors are eager to buy it as the region benefits from an anti-Greece sentiment that’s overshadowing the euro area,  reports Bloomberg on the back of RBC Capital, BNP Paribas S.A. and Societe Generale S.A analysis. Governments from Poland to Romania “are trying to issue as much as possible in the first half of the year because the conditions are favorable,” said Bartosz Pawlowski, a London-based emerging-market strategist at BNP Paribas SA, France’s biggest bank. “Central and Eastern Europe have been the beneficiaries. They are trying to frontload.” On another note, Romania maintained its target to adopt the euro in January 2015, the government said in a statement issued on its Web site.

- Written using materials from Bloomberg and  Reuters Research