Market information

Wednesday, November 02, 2011

The Greek Minister Papandreou got unanimous support from his ministers to hold a referendum on the European emergency package. This was the result of a 7 hour meeting last night. European leaders are not amused with the referendum. Also the reactions elsewhere in the world were negative.

The Federal Reserve will make decision on its interest rates tonight. The last two times the Fed took action because of the deteriorating economy. In August, the Fed promised to keep its interest rates low until mid 2013. In September, the Fed undertook a so-called "Twist". Analysts expect that the Fed will not take any major decisions this time.

The positive spirit on the European stock exchanges changed completely after the news on the referendum yesterday. The AEX lost 3.7%, Paris lost 5.0% and the stock exchange in Frankfurt lost 5.4%.

Especially banks and insurers were hit hard yesterday. The banks and insurers with the biggest amounts of Greek government bonds performed the worst because of increasing concerns of investors over a Greek bankruptcy.

Also on the U.S. stock exchange, the Greek referendum caused substantial damage. The Dow Jones index closed at a loss of 2.5%, S & P 500 lost 2.8% and the Nasdaq lost 2.9%. The Nikkei in Tokyo closed 2.2% lower.

The 6M Euribor decreased by 1 basis point to 1.78 %. The 10Y Swap increased by 2 basis point to 2.49%

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