US CONCERN OVER EURO ZONE CRISIS - US stock markets were sharply lower overnight, because of worries that Europe's issues will hit the US economy, and have knock-on effects on a global economic recovery. The main US indices were around 4% lower, they are lower in Asia now and expected to open lower in Europe too
Craig Peckham, of Jeffries and Co in Boston, says the US is worried that the EU's costly bail-out package and the austerity conditions attached to it will slow down the rate of euro zone growth. He says it comes at an especially fragile point of the global economic recovery. The analyst says that Americans fear there will be less local demand in Europe, which will have a knock-on effect on exports from the US to Europe. He points out, however, that the US had bigger trading partners than the EU with the likes of Canada and Mexico.
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EUROPEAN FINANCE MINISTERS SEEK TO RESTORE MARKET CALM - Today's meeting of European Finance Ministers in Brussels is looking to restore calm to the markets. They have had a lot to absorb in recent weeks - the massive $750 billion bail-out, and the sudden banning of trade in certain types of financial products by BaFin, the Financial Regulator in Germany.
Hans Stamm, from law firm Dechert in Munich, says the very short notice announcement of the ban on some certain types of naked short selling was politically driven. He says the effects of the ban will actually be very limited on market trading, both in Germany and Europe. Trading on these issues will still be possible using futures or swaps. He also says it will just have a limited effect in Ireland.
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MORNING BRIEFS - The US Senate has approved an overhaul of financial regulation there, with President Barack Obama set to sign the reform bill into law and force big banks to restructure. The new rules introduce a consumer financial protection office to police the sale of credit products; they empower the government to seize a failing, systemically important firm and they ban deposit-taking banks from certain types of trading.
*** The Construction Industry Federation claims that the value of public building projects is running 'substantially below' what the Government has committed to. Its own research found that the value of public construction projects awarded in March and April was below €60m, and that there were no projects in 28 of 35 city and council areas. Director general Tom Parlon said the CIF understood that the Government was considering its infrastructure priorities, but in the meantime a 'serious vacuum' had emerged.
*** British Airways today posted record annual losses of £531m sterling. Revenues plunged by £1 billion. The airline has been hit by recession, a harsh winter and a first wave of industrial action in March. BA's CEO Willie Walsh said the current financial year 'could hardly have had a worse start' due to the disruption caused by Iceland's volcanic eruption, which closed most of European airspace for almost a week in April.
*** The IDA has said that a business software company, SAP/Business Objects, is to begin recruiting 75 additional staff in Dublin immediately.
*** On the currency markets, the euro is trading at $1.2622 cents and 87.53 pence sterling.
