As the markets opened this morning, European shares rose and another day of unpredictable trading has got underway. In early trading, the FTSE 100 rose by 0.5%, Germany’s Dax increased by 0.7% and Frances Cac by 0.4%. Although these rises are not expected to continue over the course of the day due to ongoing concern over the financial situation in the eurozone.
The concerns mainly revolve around how the mountains of debt held in the eurozone will affect its banks. Last week it was revealed that Greece was planning to exchange the government bonds held by banks and private lenders for bonds which have lower interest rates but are paid over a longer period of time. It seems that Greece is still aiming to see these plans through. This could have negative consequences on the rest of the eurozone and could force many other countries to take the same action.
There are also growing fears regarding the US economy as well as the European economies. Yesterday research conducted by Markit showed that the UK service sector had dramatically declined and confidence in the eurozone had dropped considerably last month. In the US, there are mounting concerns over the possibility the American economy could fall into a recession.
Data that was released last week revealed that in August, no new jobs were created in the US. On top of that the American government states that the level of unemployment is likely to remain relatively unchanged until the end of next year.
A speech to be given by President Obama concerning plans to create new jobs is scheduled for 8 September.
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MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.