European Shares Called Higher on Fed Stimulus Hopes
European shares are called to open higher Tuesday on the back of stronger Asian shares overnight which were boosted by renewed speculation that the Federal Reserve may yet press the stimulus button.
The FTSE 100 was called to open higher by 11 points, the DAX is seen up by 15 points and the CAC 40 higher by 14 points.
Hopes for intervention by the Fedwere ramped up after weak manufacturing data from around the world showed the toll the euro zone debt crisis is having on the global economy.
The U.S ISM Manufacturing Index showed a contraction in June –its first for nearly three years – with the worst data coming from the euro currency bloc itself.
The jobless rate in the region rose to a record high in May while factory data showed activity was steady at its lowest level since June 2009.
The euro zone’s agreement from last week’s summit showed signs of unravelling after Finnish government ministers told parliament that they and their Dutch allies would not sanction the use of the euro zone’s permanent bailout fund for buying bonds in the secondary market.
Labor reforms and privatization plans should be Greece’s top priorities, the European Central Bank’s Joerg Asmussen told Greek television. He said the reforms would be crucial to the country remaining in the euro zone.
The French Prime Minister Jean-Marc Ayrault will outline his government's immediate economic plans in a speech to parliament. On Monday the French National Audit Office revealed that tough savings and public sector job cuts would be necessary to meet European budget deficit targets.
Earlier Tuesday Barclays’ embattled Chief Executive Bob Diamond resigned from his position with immediate effect a day before he is due to attend the parliamentary hearing over the Libor-rate fixing scandal that also claimed the scalp of Chairman Marcus Agius on Monday.