ECB Could Delay Overtaking Bank Supervision To Final Months Of 2014
ActionForex | Jun 21, 2013 06:19AM ET
Financial markets tumbled overnight Thursday as post FOMC selloff continued, with the DOW closing down 353pts, or -2.34%. Gold also broke 1300 psychological level as low as 1268.7. Treasury yields, on the other hand, were strong with 10 year yield closing at 2.419% and 30 year yield at 3.514%, both at a new 2013 high. The dollar index also recovered strongly and breached the 82 level. Asian markets followed and opened lower, but stabilized and reversed on short coverings. The Nikkei closed 215 pts higher at 13230, back above 13000 level. Singapore Straits times and Hong Kong HSI were nearly flat at the time of writing.
According to a survey by Bloomberg, economists are expecting the Fed to taper the monthly asset purchase target from $85b to $65b in September and end the program in June 2014. A key factor in determining the speed of scaling down the purchase is how fast the unemployment rate would drop from the current 7.6% level.
It's reported that the ECB could delay overtaking bank supervision to the final months of 2014. German finance minister Schaeuble said an "important step" is taken to the banking union, as agreements were reached on future rules for "direct recapitalization of banks". A main question was the "liability cascade" which will be discussed further. He urged to "avoid direct bank recapitalization raising false expectations".
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