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World: News You Don’t Want to Miss [12-Oct-2011]

By admin on October 12, 2011

Asian markets were up in overnight trading with the Shanghai Composite jumping 3.04%. Europe is up and U.S. futures are sharply higher as markets anticipate Slovakia’s decision on the EFSF.

Slovakian leaders are meeting again to vote on the expansion of the European Financial Stability Facility (EFSF), after a party in the ruling coalition failed to back the plans in yesterday’s vote. The government lost its confidence vote and the President is expected to appoint an interim cabinet, meanwhile Slovakia is expected to approve the expansion of the EFSF in its second vote.

Eurozone industrial production rose 1.2% month-over-month in August, against expectations of a 0.7% decline. Capital goods production jumped 2.1% from the previous month, while non-durable consumer goods climbed 1.1% for the same period.

Austerity continues to beat down on the UK economy. Unemployment rose 0.4% quarter-over-quarter to reach 8.1% for the three months ending August 2011. The total number of unemployed people increased by 114,000 over the quarter to reach 2.57 million, the highest number since the quarter ending October 1994.

August machinery orders rebounded in Japan, with bookings up 11% in August from the previous month. Electrical machinery orders were up 29.5%, while IT-related machinery orders were up 74.6%. This is a refreshing sign, as markets expected investment to fall because of the slowdown in the global economy and the extremely strong yen.

The minutes of the FOMC’s September meeting will be released at 2 PM ET today. In September Fed chairman Ben Bernanke announced plans to embark on Operation Twist and markets will be watching to see if the Fed will stimulate the economy.

The U.S. Senate approved its controversial currency bill last night that would impose tariffs on imports from countries that manipulate their currency. The bill is unlikely to pass the House or be approved by the President, meanwhile, China fixed the yuan much lower against the dollar last night.

U.S. private equity firm Bain Capital is expected to buy restaurant chain Skylark from a unit of Nomura Holdings for $3.4 billion. The deal would give Nomura’s earnings a slight boost and allow it to slash its risk assets to meet new global capital regulations to be introduced in coming years.

In earnings news, Pepsico’s Q3 earnings grew 7% to $1.31 per share, on revenue of $17.6 billion. Aluminium producer Alcoa beat revenue expectations when it announced Q3 earnings after the bell yesterday, but net income fell 47% sequentially, to $172 million, or $0.15 per share.

BONUS – CARLOS TEVEZ could find out today that Manchester City want him suspended for another four weeks. City have completed their own investigation into his apparent refusal to come on as a substitute in the Champions League match at Bayern Munich.