European debt crisis: Markets rally ahead of crucial Greek talks

Asian markets rebound as George Papandreou and Angela Merkel prepare to discuss Greece’s bailout 7.55am: Here’s a few events to watch out for today: • Spain and Italy to auction government debt – this morning • Greek PM George Papandreou addresses a conference for the Federation of German Industries – this morning, Berlin • CBI Distributive Trades Survey (measuring UK retail sales in September): 11am • Greek property tax vote – 7pm CET, Athens • Papandreou/Merkel “working dinner” – evening, Berlin 7.45am: Japan’s finance minister has also hinted today that his country could offer some support to Europe “If there is a scheme that is based on a firm process, involves a reasonable amount of money and could provide the world and markets with a sense of security regarding a Greek bailout, I would not rule out the possibility of Japan sharing some of the burden,” Jun Azumi told Reuters. Japan has its own financial problems (including the biggest debt-to-GDP ratio in the G20), and its fiscal reduction plan partly depends on decent economic growth – unlikely if the EU debt crisis triggers a global downturn. Its exporters are already suffering from the strength of the yen, which hit a ten-year high against the euro on Monday. We know Azumi is serious, as last week he said Tokyo would “supportively think about” supporting Europe. How would this work in practice? It could buy up bonds from weaker eurozone nations, helping to drive down their borrowing costs. Or, as the second largest contributor to the International Monetary Fund, its support would be important if the IMF did increase its support for Europe. 7.35am: Good news – the financial markets are in upbeat mood. Asian markets have all risen today ( see the latest prices here ), and Japan’s Nikkei just closed 2.8% higher at 8,609.95. That’s a healthy rebound from Monday’s two-and-a-half-year low. City traders expect a strong start in London, with the FTSE 100 being called up more than 100 points. We saw yesterday that the markets are pretty jittery, and it probably wouldn’t take much to send share prices down again. Here’s the view of Chris Weston , institutional trader at IG Markets: Sentiment in equity markets changed markedly just after the European close last night, with traders suddenly becoming increasingly confident that European leaders can now reach an agreement to successfully contain the debt crisis. With stock prices having been decimated in recent days, this was sufficient to see the bargain hunters flood back into the market. We’re looking at some big upswings in Europe ahead of the open although sustaining these gains – and ensuring we can continue to grind higher – will rely on two key points. Investors must hold their nerve and at the same time central banks and finance ministers need to remain ‘on message’ as any suggestions that the rescue plans may go awry will likely be enough to see markets take fright once again 7.30am: Good morning, and welcome to our live coverage of another important day in the European debt saga. Greece is top of the agenda today. Prime minister George Papandreou is meeting Angela Merkel in Berlin tonight for dinner, to “discuss the economic situation in Europe”. Papandreou will also address a business conference during his visit to Berlin. And the Greek parliament will vote on an unpopular property tax – just one small part of its latest austerity package. Transport workers are organising strike action, and protesters are expected to gather in Athens to register their anger. Riot police clashed with demonstrators on Sunday – will we see a repeat? We’ll also be tracking the latest efforts to construct a rescue package for the eurozone. Last night, German officials were insisting that Europe is a long way from agreeing a plan – was the €2trn bailout that hit the headlines last weekend just wishful thinking? Is Europe as indecisive and divided as ever? European debt crisis Stock markets Euro Financial crisis Market turmoil Greece Germany European Central Bank Graeme Wearden guardian.co.uk

Posted by on September 26, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.