Trembling Markets Stabilize

Published: May 10th 2010
in Economics » World

stock exchange
Pic: archive

Toronto's main stock index opened up much higher on Monday after global policymakers came up with an emergency rescue package worth around $1 trillion aimed at preventing Greece's debt crisis from spreading through the euro zone.


Under the terms of the bailout, Greece must cut its budget deficit from 13.6 per cent of gross domestic product – the second highest in the EU, after Ireland – to 8.1 per cent this year, and to 3 per cent, the EU's deficit ceiling, by 2014. If successful, the effort would translate into about €30-billion of spending reductions and tax hikes


European and Asian shares rallied on the news. Wall Street is also set for a strong rebound with stock futures up about 4 percent.


The Bank of Canada announced on Sunday it would re-establish a US$30 billion currency swap agreement with the U.S. Federal Reserve in response to liquidity pressures in European markets.


U.S. oil prices rallied more than $3 per barrel to above $78 after policymakers agreed a $1 trillion rescue package to stabilise world financial markets and try to resolve the euro zone debt crisis. Gold arrested a slide that knocked it nearly 2 percent down on Monday as investors feared a $1 trillion emergency package to prevent a sovereign debt crisis spreading through the euro zone may ultimately spark inflation.


The Canadian dollar jumped more than 2 per cent against the U.S. dollar on Monday as market confidence was renewed after policymakers agreed to an emergency aid package to stabilize European sovereign debt issues.


With files from the Canadian Press

Related articles: (markets, stock, greece, debt, rescue package, bailout)
Share with friends Print this page Read later Recommend 2 times