June 15, 2011
The euro weakened and the cost of insuring Greek and Portuguese debt rose to records as European officials failed to agree on a rescue plan for Greece. Stocks, U.S. index futures and commodities fell.
The euro depreciated 1 percent to $1.4303 at 7:10 a.m. in New York, while the Dollar Index snapped a two-day decline. Credit swaps on Greek bonds signaled a 74 percent chance of default within five years. Standard & Poor’s 500 Index futures fell 0.5 percent and the Stoxx Europe 600 Index slid 0.2 percent. Oil dropped 0.4 percent and silver sank 0.6 percent.
An emergency session of finance ministers ended with no progress on a new aid package for Greece, German Finance Minister Wolfgang Schaeuble told reporters yesterday. BNP Paribas SA, Societe Generale SA and Credit Agricole SA may have their debt ratings cut because of their investments in Greece, Moody’s Investors Service said today. U.S. inflation probably rose and industrial output picked up, economists said before reports from the Labor Department and Federal Reserve.
“We are no closer to solving the crises,” Gary Jenkins, head of credit strategy at Evolution Securities Ltd. in London, wrote in a report today. “It may well be that ultimately the only real option is some kind of fiscal union as that would buy the peripheral countries time and may act as a firebreak against contagion from the Greek situation.”
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