The FTSE is down almost 100 pts at 5562 at 8:45am and European markets similarly sharply lower with the Spanish IBEX index down over 3% (200 pts) and plumbing the recent 8 year lows towards the key 6000 level as worries over GreecE again resurface and the Euro looks to test the psychologically important 1.20 level.
Greece’s creditors meet this week amid doubts that the country will meet its bailout commitments. German Vice Chancellor Philipp Roesler said he’s “very skeptical” that European leaders will be able to rescue Greece. The troika of international creditors — the European Commission, the European Central Bank and the International Monetary Fund — will arrive in Athens tomorrow.
After euro finance ministers failed to staunch a fresh low for the single currency last week with the approval of a 100 billion-euro ($122 billion) aid package for Spain, the troika will be tasked with determining the fiscal position of the nation where the crisis began almost three years ago. Greece is clamoring for more help as efforts to cut its debt to 120 percent of gross domestic product by 2020 fall short.
The International Monetary Fund will stop paying further rescue aid to Greece, making the country’s insolvency in September more likely, the Der Spiegel magazine reported yesterday, citing unidentified European Union officials.
The Spanish 10-year bond yield climbed to 7.368 percent today, a euro-era record and very worrisome as the breaching of the 7% level has heralded bail outs in Portugal, Ireland and Italy
Adding to the negative tone, China’s economic expansion may cool for a seventh straight quarter to 7.4 percent in the three months to September, said Song Guoqing, a member of the People’s Bank of China monetary policy committee.