The European markets finished in the red on Wednesday, following the unexpected decline in U.S. GDP for the fourth quarter. Investors also continued to play it cautious ahead of the announcement from the 2-day FOMC meeting, which is due to be released later today. While few expect any shift in the Fed’s accommodative stance for the time being, investors look to the central bank’s accompanying statement for any signals of possible monetary tightening before the end of 2013.
Economic activity in the U.S. unexpectedly contracted in the final three months of 2012, according to a report released by the Commerce Department on Wednesday, with GDP falling for the first time in over three years.
The report showed that GDP edged down by 0.1 percent in the fourth quarter after surging up by 3.1 percent in the third quarter. The modest drop came as a surprise to economists, who had expected GDP to increase by about 1.0 percent. The decrease also reflected the first drop in GDP since the second quarter of 2009.
Spanish region Catalonia has requested EUR 9.07 billion in bailout money from the country’s regional liquidity fund, the regional government said in a statement on Tuesday. This is on the top of EUR 5 billion sought by the region in August last year. Catalonia is the most indebted of Spain’s 17 autonomous regions.
Catalonia said it intends to use as much as EUR 7.68 billion to meet the debt payments. The remaining amount will be used to help the government attain its deficit targets.
More euro area banks are expected to tighten credit standards for corporates in the first quarter of 2013 than in the previous quarter, the latest bank lending survey by the European Central Bank revealed Wednesday.