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| Version 1 | Version 2 |
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| Eurozone markets shrug off latest warnings | Eurozone markets shrug off latest warnings |
| (40 minutes later) | |
| Markets have seemingly lapsed into a pre-Christmas calm, shrugging off fresh warnings about the eurozone crisis. | Markets have seemingly lapsed into a pre-Christmas calm, shrugging off fresh warnings about the eurozone crisis. |
| A quiet but positive tone in stock markets on Thursday continued into Friday trading in Europe. | |
| Italy's long-term borrowing cost fell back for a second day towards 6% - a still high, but not critical, level. | Italy's long-term borrowing cost fell back for a second day towards 6% - a still high, but not critical, level. |
| This was despite a downgrade of seven major banks by credit rating agency Fitch, and IMF head Christine Lagarde warning of a "gloomy" economic outlook. | This was despite a downgrade of seven major banks by credit rating agency Fitch, and IMF head Christine Lagarde warning of a "gloomy" economic outlook. |
| Ms Lagarde warned that if the problems in the eurozone are not dealt with, the world could face another 1930s-style depression. | Ms Lagarde warned that if the problems in the eurozone are not dealt with, the world could face another 1930s-style depression. |
| Tranquillity | Tranquillity |
| European stocks hardly budged during Friday morning trading, having climbed 0.5%-1% on Thursday. | |
| By early afternoon the German Dax and French Cac 40 indexes were both flat for the day, while London's FTSE 100 was up 0.6%. | |
| The euro has also continued a moderate rebound off an 11-month low against the US dollar it set on Wednesday, rising to $1.3075. | |
| Market volatility has fallen noticeably this week - as is traditional in the run-up to Christmas when many traders and investors close out their books for the end of the year and head off on holiday. | Market volatility has fallen noticeably this week - as is traditional in the run-up to Christmas when many traders and investors close out their books for the end of the year and head off on holiday. |
| But the tranquillity is in contrast to the violent movements in stocks seen since a sharp slump in markets at the start of August as the eurozone debt crisis spread to Italy and began to raise questions about the future of the single currency. | But the tranquillity is in contrast to the violent movements in stocks seen since a sharp slump in markets at the start of August as the eurozone debt crisis spread to Italy and began to raise questions about the future of the single currency. |
| Italy's implied 10-year cost of borrowing in bond markets fell to 6.4% on Friday afternoon, having peaked at almost 7% on Wednesday. | |
| That is still far higher than the 1.9% that Germany has to pay. | That is still far higher than the 1.9% that Germany has to pay. |
| Emergency loans | Emergency loans |
| Only two weeks ago rumours were circulating the market that one or more of the major European banks may be about to collapse, bringing the eurozone crisis to a head before the end of the year and potentially sparking a global financial crisis similar to 2008. | Only two weeks ago rumours were circulating the market that one or more of the major European banks may be about to collapse, bringing the eurozone crisis to a head before the end of the year and potentially sparking a global financial crisis similar to 2008. |
| On Thursday, Fitch cut its credit rating of major banks: Deutsche Bank, France's BNP Paribas, Credit Suisse, Barclays, Citigroup, Bank of America and Goldman Sachs, citing the difficult financial and economic conditions. | |
| The two other major rating agencies - Moody's and Standard & Poor's - have also been busy reviewing and cutting the credit ratings of European banks for similar reasons in the past few days. | The two other major rating agencies - Moody's and Standard & Poor's - have also been busy reviewing and cutting the credit ratings of European banks for similar reasons in the past few days. |
| S&P has also put 15 of the 17 eurozone governments on review for downgrade - threatening France and Germany with the loss of their top AAA ratings. | S&P has also put 15 of the 17 eurozone governments on review for downgrade - threatening France and Germany with the loss of their top AAA ratings. |
| However, interventions by central banks to prop up the banks have apparently reassured markets that a capitulation is not imminent. | However, interventions by central banks to prop up the banks have apparently reassured markets that a capitulation is not imminent. |
| First, the US Federal Reserve agreed at the end of last month to lend dollars more cheaply to the European Central Bank, meaning the ECB could in turn provide emergency dollar loans to eurozone banks. | First, the US Federal Reserve agreed at the end of last month to lend dollars more cheaply to the European Central Bank, meaning the ECB could in turn provide emergency dollar loans to eurozone banks. |
| Then, at the central bank's regular interest rate announcement last week, ECB head Mario Draghi announced a string of new measures to prop up the banks. | Then, at the central bank's regular interest rate announcement last week, ECB head Mario Draghi announced a string of new measures to prop up the banks. |
| These measures included new three-year loans, as well as the ECB's acceptance of a much broader range of collateral for its other emergency loans. | These measures included new three-year loans, as well as the ECB's acceptance of a much broader range of collateral for its other emergency loans. |