Gains for the euro despite the IMF’s claims that the a 600bn euro bailout fund for Italy is not on their agenda

Over the weekend there were reports in Italy's La Stampa newspaper that the International Monetary Fund (IMF) was preparing a 600bn euro ($794bn; £515bn) bailout fund for Italy, an amount which would ensure that Italy could keep out of the capital markets for the next 12-18months whilst Monti increases fiscal tightening in the country and decreases public debt levels.

Today however, the IMF denied these rumours, stating that the institution is not in talks with Italy regarding a bailout loan.

Despite the IMF’s claims, the European markets opened strongly today, as the rumours that a helping hand was to be offered to Italy returned some confidence in the market. These results demonstrate gains in the euro from the close of last week when the currency suffered one of its lowest weekly closes against the dollar since January.

The euro, which has held up relatively well despite the recent bond sales in the Eurozone, went through extreme volatility last week following the shunned bund auctions. Angela Markel has flagged that the markets should not overreact to the undersubscribed bund auction, claiming Germany is still a safe haven for investors.

Record figures for the Black Friday sales  

In the US, record figures from the Black Friday sales indicate a renewed consumer confidence. Black Friday, which is the day following Thanksgiving, is considered to be the start of the Christmas shopping season by many retailers, and many retailers offer one-off discounts in order to mark the occasion.

While a report by Shoppertrak suggested that in-store Black Friday sales were up by 7% on last year, at $11.4bn, Comscore claimed that at $816m (£524m), internet sales had a 26% gain on last year.

Economic Data

  • Release of US new home sales
  • Germany’s Consumer Price Index and Consumer Confidence Survey

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