Europe is an a "very grave" economic situation, European Central Bank President Mario Draghi said on Monday, as quoted by foxbusiness.com, but he added that euro zone government are progressing well with efforts to put their finances in order.
Speaking in his capacity as head of Europe's recently created financial system super-watchdog, Draghi added that markets had to a large extent anticipated Standard and Poor's downgrade of a slew of euro zone countries on Friday and priced assets accordingly.
But the economic situation is serious, said Draghi, who last week left the door open to further interest rate cuts following a decision by the ECB Govering Council to leave them on hold this month at 1 percent, matching their lowest level ever.
"We are in a very grave state of affairs and we must not shy away from this fact," Draghi, speaking as head of the European Systemic Risk Board (ESRB), said in testimony to the European Parliament's Committee on Economic and Monetary Affairs.
"During the last few months of 2011, uncertainty over the sustainability of certain sovereigns and resilience of the financial system, coupled with dismal growth prospects, led to severe disturbances in the normal functioning of financial markets and of the real economy. In an attempt to counteract that development, policymakers have acted," he added.
Minna Padi Investama:
Jakarta Composite Index (JCI) today may rebound with a resistance level at 3,954. Investor is advised to accumulate banking stocks which are experiencing overbought. Several stocks to monitor: BMRI, BJBR, and BBNI.
The JCI is estimated to move mixed within the range of 3,890-3,930. Economic indications which will be released by China and the result of bond auction by France may provide sentiments to the JCI. The announcement of financial result of the US giant firms will add the sentiments. Several stocks for day trading are AKRA, GJTL, UNTR, and BBNI.
The index is predicted to move within the range of 3,859-3,943. Yesterday, the index fell 0.65% to 3,909.69.
Disclosure: No position at the stock mentioned above.
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