DT Trading analysts explain that, in order to implement such a plan to “quarantine”
German Chancellor Angela Merkel spoke to journalists in Brussels around 4:15AM this morning, saying “the entire world’s attention was focused on these negotiations. We, the Europeans, showed today that we made the right conclusions.”
The Euro appreciated and stocks also rose. The Euro rose 0.7% against the dollar to reach $1.4007 as of 9:45AM in Brussels. The Stoxx Europe 600 Index rose 2.5%, while futures on the Standard & Poor’s 500 Index rose 1.6%.
The agreements reached early Thursday morning also had a strong effect on traders of European bank shares, in particular, of French banks. Shares of Credit Agricole and BNP Paribas shot up 12% this morning, while Societe Generale’s increased 11%. Shares of Barclay’s Plc rose 10% and those of Deutsche Bank AG, the largest creditor in Germany, rose 7.9%.
The largest world banks agreed to what Merkel called “the last word:” agreeing to give half of the value of the Greek government debt they hold to the Euro zone’s common cause of ending the financial crisis. However, DT Trading analysts think that talking about the end of the financial crisis before forming specific agreements with each of the banks is somewhat premature. The agreement involves the exchange of short-term bonds the banks already hold and which have already reached maturity, for bonds with 30-year maturity periods. The Institute of International Finance, which represents 450 financial companies, agreed to “develop specific, voluntary agreements” on the 50% curtailment of Greek debt, said Managing Director Charles Dallara early this morning at 4:26AM in Brussels. Euro zone leaders, who invited Dallara to the meeting at midnight during a break in the 10-hour summit, said that as of right now the bond-exchange deal remains voluntary.
DT Trading Limited Analytical Department
# # #
DT Trading Limited is a progressive Trust Company, dedicated to protect the customer’s financial interests and to ensure the best trading conditions. We can help you to take advantage of the current market state and increase your capital.