The Euro shows a further year of pain

With Europe’s debt crisis pushing up borrowing costs in neighbouring Spain and Italy, President Hollande has little choice but to scale back. He has repeatedly promised to slash the deficit to 4.5% of GDP this year but a 3% cut would reassure investors.

The national auditor says that France needs as much as €43 billion ($54 billion) in savings this year and next, which is setting the stage for budget cuts by President Francois Hollande.

Germany's Chancellor Angela Merkel says she is satisfied with a deal to help finance debt-laden Eurozone countries. Ms Merkel said the deal on lending would provide sufficient safeguards for the taxpayers' money used by the EU bailout funds.

The Bank of England’s Monetary Policy Committee which is led by Governor Mervyn King may raise its target for bond purchases by £50 billion to £375 billion on July 5, according to 30 of 41 economists in a Bloomberg news survey.  Eight economists however predict an increase to £400 billion, whilst the rest see a smaller increase or no change.

In the U.S. stocks fell halting a global rally, while Treasuries and the Dollar extended gains as a private report showed American Manufacturing in the U.S. unexpectedly shrank in June for the first time in almost three years, indicating a mainstay of the expansion may be faltering.

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