Obama stays firm on taxes for rich

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President Barack Obama held his ground on the “fiscal cliff” Tuesday.  In an interview with Bloomberg Television Obama stressed that no budget compromise was possible without the wealthiest Americans paying their fair share of common expenses.  With less than a month left to confront budget cuts and tax increases that will take effect from January 1st unless Congress acts, Republicans seem increasingly in disarray over how far to go to compromise with Obama’s demands. In the interview Obama took a conciliatory tone, but  excluded any further tax burdens on an embattled middle class.

 The insecurity over whether total budget cuts and tax hikes amounting to  USD 300 billion would be implemented in some few weeks time, has severely affected markets. Wall street finished slightly lower in a quiet session with thin trading volumes. Hewlett Packard  recovering from last week’s onslaught when its share prices dropped 15 % in one day, was together with Intel who announced a buy-back of own shares,  the winners.

 Asian shares rose Wednesday  led by surging Chinese equities.  The MSCI index for Asia-Pacific shares outside Japan were up 0,6 percent. Shanghai shares surged 3 percent to reclaim the 2000 point level. Hong Kong shares jumped 1,3 percent.  Nikkei also inched up on a statement from Bank of Japan confirming willingness for more aggressive monetary easing. USD/JPY which during yesterday’s trading strengthened substantially and reached 81,75, fell  back in morning trade   to 82,25 supporting exporters.

 Better than expected terms for a Greek bonds buy-back plan raised optimism that Athens will secure much needed emergency aid to avert a default. The news took the euro/USD above 1.32 level for the first time in months. The Euro was also helped by Obama’s statements that weakened the dollar and increased risk sentiments.  Gold saw a new set-back and fell to 1685. It has recovered to 1701 in morning trade.  Oil prices have as well recovered from yesterday’s lows.  Brent crude is up 0,2 % trading above USD 110 a barrel. 

Follow with our Daily market review on http://www.uwcfx.com/en/market-reviews.html 

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