(menafn – ecpulse)
After the end of Easter holiday yesterday, trades are coming back to normal level today, where eyes will watch a French debt auction later in the day which aims to sell 7.8 billion euros of securities after the rise in Spanish bond yield last week had increasing speculations the debt crisis is not easing.
Despite the increase in the European rescue fund by 500 billion euros in addition to the current 300 billion euros to create a total of 800 billion euros to combat crisis, worries are spreading that Spain may ask for an international bailout to jolt out of the current difficult economic situation.
Spanish Prime Minister, Mariano Rajoy met yesterday the health and education ministers, seeking further cuts worth around 10 billion euros, in attempts to reduce the deficit to 3% next year to avoid seeking bailout such as Greece, Ireland and Portugal.
Meanwhile, the euro remains under pressure, especially with other worries that recovery may face troubles. Charles Dallara, head of the institute of International Finance which represents more than 450 firms, stressed on the threat of excess short-term austerity in Europe as it could hurt growth and thwart recovery.
On the other hand, Dallara said on Monday the European permanent rescue fund needs expansion to continue the support provided to debt-troubled euro area nations.
However, data released today from Germany came better than forecasts as exports advanced 1.6% in February, defying analysts' forecasts of 1.2% drop, yet below the prior 3.4% rise. On the other hand, imports surged 3.9% from a prior of 2.4%, to have widening trade surplus of 14.7 billion euros in February from a revised of 13.2 billion euros.
The European common currency touched a high of 1.3144 against the U.S. dollar following the German data yet it fell to trade around 1.3088.
In general, there are worries on global recovery after Fed's Chairman Ben Bernanke said at a conference in Stone Mountain, Georgia. the world's no.1 economy “is still far from having fully recovered” from the financial crisis, where Eyes will track announcements from U.S. officials this week to see how serious they are in terms of adding to stimulus.