Reuters: US Dollar Report: GLOBAL MARKETS-Shares capped by U.S. budget, Italian worries

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

GLOBAL MARKETS-Shares capped by U.S. budget, Italian worries Mar 1st 2013, 08:50 Fri Mar 1, 2013 3:50am EST * Euro hovers near 7-week lows vs dollar * China manufacturing data lacklustre, but no recession seen * European shares start mixed By Marc Jones LONDON, March 1 (Reuters) - World shares steadied, the euro hovered just above a seven-week low and German government bonds rose on Friday, as concerns over the economic fallout from possible U.S. spending cuts and Italy's political stalemate dampened sentiment. Automatic spending cuts worth $85 billion are due to be introduced on Friday after U.S. lawmakers failed to reach a deal to avert them. The International Monetary Fund said on Thursday it would probably slice 0.5 percentage points off its 2 percent 2013 growth forecast for the world's biggest economy if the cuts are fully implemented. "Financial markets are eerily calm about the issue. Nobody is talking about the sequestration, and I worry about the seeming lack of interest when market sentiment is far from stable after sharp swings following the Italian election," said Hiroshi Maeba, head of FX trading Japan at UBS in Tokyo. After shares in Asia had edged down, European shares also got off to soft start. Italy's main FTSE MIB stock market was down 0.5 percent while London's FTSE 100, Frankfurt's DAX and Paris's CAC-40 were all broadly flat. Italy's political deadlock has raised concerns about its economic rehabilitation programme. The country's bonds were steady as trading began to gather pace, following their biggest falls in six-months this week. German government bonds, which have been the main beneficiaries of the volatility, opened higher and were last up 9 ticks at 145.07. New euro zone and UK manufacturing PMI data due just before 0900 GMT are also unlikely to change the picture of a currency bloc in recession and destined, at best, to recover only very slowly in the second half of the year. China's equivalent survey, out earlier, showed growth cooling and underlined the country's patchy economic recovery . The U.S. report is also due out later in the day. The biggest concern is that political instability in Italy, the euro zone's third-largest economy, could reignite the bloc's crisis, now in its fourth year. Some have questioned whether the European Central Bank's pledge to help struggling member states which ask for aid can be utilised if there is no workable government. The euro was slightly higher against the dollar at $1.3090 in earlier trade, a day after it notched its biggest monthly fall against the dollar in nine months. Italy's uncertainty is also expected to restrict the weekly repayments of the European Central Bank's 1 trillion euros worth of crisis loans, details of which are due at 1100 GMT. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions