Despite predictions from some major financial analysts and news sources that the Euro is headed for a certain demise, Asian stocks have continued to rise, indicating strong consumer hopes to the contrary. Rising for the third consecutive trading day, some Asian stocks saw considerable growth in today’s Asian session. Equities also rallied today after French President Hollande and German Chancellor Merkel recommitted themselves to the common currency. The MSCI Asia Pacific Index rose 1 percent to 117.02, stemming largely from the banking and insurance sectors.
Despite this optimism out of Europe, not all signs are positive, with Japan’s industrial production decreasing suddenly after Korean confidence fell, and China’s largest shipping company, China Cosco, projecting a 50 percent loss for the first quarter due to a weakened bulk market, which, like the European debt crisis, is not likely to be resolved in the near future.
With summer vacations of leading policymakers approaching, no progress is likely to be made on critical issues in the coming weeks, but important updates will be coming early this fall. Of note is September 12, the day on which the German Constitutional Court will decide on whether the 500 billion euro European Stability Mechanism (ESM), the region’s permanent bailout fund, is congruent with the German constitution. Should the finding be in the negative, the region will have difficulty protecting Spain and Italy which are continuing to crumble under their own financial crises.