(2 Aug 2011)
1. Various of trading floor of Frankfurt stock exchange
2. SOUNDBITE (German) Stefan Scharfetter, trader:
“We are now sure that the debt ceiling is raised so that is all in order, the problem is that there is no realistic financial concept, no austerity measures. It seems all a bit wishy-washy right now and what is even more important is the economic data that came out of the US on Friday and yesterday afternoon, which is not positive at all and that is why the markets are clearly trading on the negative side.”
3. Figures on screen showing Dax has dropped 49.44 points, or 0.71 percent at 0920 (0720 GMT)
4. Various of trading floor
STORYLINE
Despite the announcement of a US deal to raise the country”s debt limit, the German Dax opened 0.8 percent down on Tuesday, due to uncertainty over US austerity measures and recent poor economic data.
Trader Stefan Scharfetter said the problem was that the US had “no realistic financial concept, no austerity measures.”
“It seems all a bit wishy-washy right now and what is even more important is the economic data that came out of the US on Friday and yesterday afternoon, which is not positive at all and that is why the markets are clearly trading on the negative side,” he explained.
Other US data this week could be crucial to investor expectations, culminating on Friday in monthly employment figures.
The consensus is that the US economy generated only 100,000 jobs in July, not be enough to reduce the unemployment rate.
US and European markets opened higher on Monday on relief that American lawmakers had averted a potential debt crisis, but shed their gains after the release of the manufacturing index figures.
Though a debt default appears to have been avoided, worries over US finances are likely to persist and a number of analysts think the credit rating agencies may
still downgrade the country”s triple A rating.
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