Global shares steady as U.S. totters on fiscal cliff

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U.S. stocks edged up on Monday and global equities wrapped up a strong year as U.S. lawmakers held last-minute talks to avoid a budget crisis that many fear could cripple the world economy in 2013. Traders still at their desks on the last day of the year were focused on Washington, where politicians were trying to strike a deal that would prevent $600 billion of automatic tax increases and spending cuts from taking effect in January. Economists fear such a blast of fiscal austerity could shrink output in the world's biggest economy by about 4 percent, which would threaten a fragile global ... (Read the full story)

President Obama to make statement on budget talks at 1:30pm ET

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BREAKING (Read the full story)

AP Sources: 'Fiscal cliff' deal emerging

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The contours of a deal to avert the ‘fiscal cliff’ are emerging that would raise tax rates on couples making over $450,000 a year, raise the estate tax rate and extend unemployment benefits for one year. That’s according to officials familiar with the negotiations. The deal in the works would return tax rates on families making over $450,000 to 39.6 percent. The tax on estates worth more than $5 million would increase to 40 percent. And unemployment benefits would continue for one year. The officials say the White House and Republicans are at an impasse over what to do about automatic, ... (Read the full story)

EUR/USD – Over the Cliff We Go?

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On the final trading day of 2012, EUR/USD has edged lower, and has fallen below the 1.32 level. Despite intensive talks in Washington to try and avert the fiscal cliff, the likelihood of a last minute breakthrough on Capitol Hill before the January 1st deadline does not appear likely. Market releases ended the year on a high note, as US Pending Home Sales jumped 1.7%, well above the forecast of a 0.3% decline. With the markets closed on Tuesday for the New Year’s holiday, trading volumes remain thin. This has reduced liquidity and could result in increased volatility as we wind up 2012. There are no ... (Read the full story)

Europe’s New Year’s Irresolution

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Will the eurozone crisis end in 2013, or will it drag on throughout the year, and perhaps even deteriorate anew? This is likely to be not only the crucial question for the European Union’s further development, but also a key issue affecting the performance of the global economy. While the EU clearly needs internal reforms, two external political factors are central to its prospects this year. The first is America’s self-imposed fiscal cliff, which, if not avoided, could throw the United States into recession, with massive repercussions for the world economy, and thus for Europe. Second, a hot war in the ... (Read the full story)