23 December 2011: ECB may consider Quantitative Easing

FTSE 100 5480 Up 42bp
S&P 500 1254 Up 83bp
NIFTY 50 India 4714 Down 42bp

Major Stories

  • ECB call for Quantitative Easing
    • Top Policymaker calls for QE to defend against deflation risks across the continent
    • ECB unhappy with Britain’s non-involvement in EU issues
    • Also debate between ECB intervention in EU countries on limiting the bond-yields/spreads between German and other countries’ bonds
    • Recently, ECB has injected Euros 489 billion in three-year loans to more than 500 banks which has relieved some tension
  • European Stocks rise
    • Open in a buoyant mood due to ECB positivity and UK’s positive 3rd Quarter results
    • Asian stocks also rallied- up 80bp
    • Rally on Wall Street too- 10year notes falling by 2bp to 6.88%
    • Gold steady at $1608/troy ounce
  • China warns EU of Carbon tax ‘trade war’
    • EU warned by China to abandon controversial carbon tax on airlines
    • EU have ruled that airlines based outside the EU must pay for their carbon pollution for landing or departing from EU airports; meant to be applicable from January 1
    • This is apparently ‘compatible with international law’
    • Also challenged by American Airlines
    • This might lead to increases in ticket costs of approx $47.5/ticket on China-Europe flights
  • Toyota forecast record sales for 2012
    • Toyota predicts record sales of 8.48 million; previous highest 8.43 in 2007
    • This would be an increase of 20% from 2011, which was disrupted due to 2 natural disasters
    • Toyota overtook GM as largest carmaker in 2008, but GM produced more this year
    • Because of these disruptions and Thai flood, it would earn Op Profit of Y180bn as compared to the predicted Y390bn
    • Moody’s downgraded Toyota from ‘stable’ to ‘negative’ on Thursday, 22nd Dec.
    • Toyota expected to overtake GM again by 2012

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