PRESS DIGEST – Financial Times – July 23

July 24, 2010 By Leave a Comment

The Financial Times ECB CHIEF CALLS FOR GLOBAL TIGHTENING European Central Bank chief Jean-Claude Trichet said industrialised countries should cut public spending and raise tax to consolidate present recovery here

BLACKSTONE FUND HITS $13.5BN

Investment firm Blackstone (BX.N) has raised $13.5 billion for its new buy-out fund, making it the biggest since the financial markets crisis began. here

DESMOND READY TO BUY FIVE

Newspaper magnate Richard Desmond has made a £104 million pound bid to buy Five, making him the first individual to control a UK public service broadcaster if successful. here

MINISTER WARNS OIL SHOCK “LIKELY” WITHIN DECADE

Energy Minister Chris Huhne said Britain was “very likely” to face an energy crisis within the next decade that could trigger economic volatility. here

BT SOUGHT AUDITOR CHANGES AFTER 1.6 BLN POUND WRITEDOWN

British telecommunications provider BT (BT.L) asked its auditor to change members of its credit team after optimistic profit assumptions led to a 1.6 billion pound writedown. here

GM BUYS AMERICREDIT IN $3.5BLN DEAL

General Motors [GM.UL] agreed to buy Texas-based AmeriCredit for $3.5 billion in cash in order to boost its sales to non-prime car and truck buyers. here

(Summary compiled by Reuters)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Romania – Factors to Watch on July 9

July 10, 2010 By Leave a Comment

July 9 (Reuters) – Here are news stories, press reports and events to watch which may affect Romanian financial markets on Friday.

FLOODS

Kristalina Georgieva, E.U. Commissioner for International Cooperation, Humanitarian Aid and Crisis Response, is going to visit together with Prime Minister Emil Boc flooded areas from Galati county. She is also expected to meet other Romanian officials and hold statements at 1500 GMT.

ROMANIA REJECTS ALL DEBT BIDS, MKTS EYE INFLATION

Romania rejected all bids at a tender to sell 3-year treasury bonds on Thursday, signalling the finance ministry is still unwilling to sell debt at yields above 7 percent and may struggle to finance its budget deficit. [ID:nLDE6671AD]

FLOODS CUT 10 PCT OF ROMANIA WHEAT CROP TO 6 MLN T

Romania will likely reap a smaller than forecast wheat crop of around 6 million tonnes this year because of extensive floods which have sharply cut yields, the agriculture ministry told Reuters on Thursday. [ID:nLDE66719I]

ROMANIA INDUSTRIAL OUTPUT DOWN 0.3 PCT M/M IN MAY

Romania’s adjusted industrial output ROIP=ECI edged down 0.3 percent on the month in May and was up 4.1 percent year-on-year, data from the National Statistics Board showed on Thursday. [ID:nBCR000045]

* For an instant view of analysts on the data please see [ID:nLDE6670CU]

DACIA

Carmaker Dacia, controlled by France’s Renault (RENA.PA), sold 181,286 cars in the first half of the year and plans to produce 330,000 cars by the end of the year in the Mioveni factory.

Ziarul Financiar, Page 1

ECB CHIEF IN ROMANIA

ECB President Jean-Claude Trichet and other central bankers will be in Romania at the beginning of September for the 130 anniversary of Romania’s central bank, governor Mugur Isarescu said.

Ziarul Financiar, Page 3

FOREIGN INVESTMENTS

About 100 French companies plan to invest in the Romanian market in 2010, especially in the industry sector, said the trade counsellor of the French embassy in Bucharest.

Adevarul, Page 20

NOTE- For a diary of forthcoming Romanian events, double

click [RO/DIARY], and a calendar of east European economic indicators, see [CONV/DIARY].

For other related news, double click on: ————————————————————— Romania Market Debt [RO-DBT] Romanian forex [RO-FRX] Romania Market Report [ROL/] Romanian money [RO-M] Emerging Market Debt [EMRG/DBT] Emerging forex [EMRG/FRX] All Emerging Markets news [EMRG] CEE indicators [CONV/DIARY] All East Europe News [EEU] E.Europe equities [.CEE] TOP NEWS — Emerging markets [TOP/EMRG] TOP NEWS — Convergence watch [TOP/EAST] Romanian indicators [RO/ECI] Main page of Reuters poll —————————————————————

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

ECB’s Trichet says susterity plans don’t risk stagnation

June 25, 2010 By Leave a Comment

(Reuters) – Budget austerity plans will not drag the euro zone economy into stagnation, European Central Bank President Jean-Claude Trichet was quoted on Thursday as saying.

In an interview with Italy’s La Repubblica newspaper, he urged governments to push ahead with necessary budget and structural reforms, repeating calls for more fiscal discipline in the 16-nation bloc.

“As regards the economy, the idea that austerity measures could trigger stagnation is incorrect,” Trichet said, according to an English-language transcript published on the ECB’s Internet site.

“I firmly believe that in the current circumstances, confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today.”

Trichet said Germany was showing the right commitment to tackle budget problems with its plans for 80 billion euros ($98 billion) in budget cuts over the next four years, and said Italy was on the right track.

The ECB has urged a system of sanctions and incentives, including a separate budget watchdog, as part of an overhaul of EU fiscal rules.

The Stability and Growth Pact “should be the equivalent of a federal budget in terms of ensuring sound policies. This is why we want the Stability and Growth Pact to be strong, solid and fully respected,” Trichet told the paper.

DENIES DEFLATION RISKS

In a letter to G20 leaders last week, President Barack Obama warned against the premature withdrawal of stimulus policies and urged flexibility in implementing fiscal policy to safeguard and strengthen the recovery.

Billionaire investor George Soros said on Wednesday Germany’s budget savings policy risked destroying the European project, pushing weaker euro zone members into a cycle of deflation. [ID:nLDE65M0TD]

Asked about the risk of deflation, Trichet said: “I don’t think that such risks could materialize,” adding that inflation expectations were well anchored.

Trichet said the euro, which has recently recovered from four-year lows, was a very credible currency because it had safeguarded price stability and was therefore a “major asset” to investors.

Asked if he expected concrete results from the upcoming Group of 20 meeting in Toronto, Trichet said he was confident important decisions would be taken by the end of the year.

A bank tax, banks’ capital and rating agencies were all important elements, he said. “I am confident that we are on the right track, knowing that a number of important decisions are to be taken at the G20 meeting in November this year.”

He declined to comment on Bundesbank President Axel Weber’s criticism of the ECB’s decision to buy government bonds, and on the profile of his successor. Weber and Italy’s central bank governor Mario Draghi are seen as the frontrunners to replace Trichet in November 2011.

“I have a very heavy responsibility, with all my colleagues of the Executive Board and of the Governing Council. And my mandate expires in one year and four months. That is a long and demanding period of time. It is premature for me to comment on my possible successor,” he said.

(Reporting by Krista Hughes; Editing by Jan Dahinten)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

UPDATE 1-ECB’s Trichet: austerity plans don’t risk stagnation

June 25, 2010 By Leave a Comment

FRANKFURT, June 24 (Reuters) – Budget austerity plans will not drag the euro zone economy into stagnation, European Central Bank President Jean-Claude Trichet was quoted on Thursday as saying.

In an interview with Italy’s La Repubblica newspaper, he urged governments to push ahead with necessary budget and structural reforms, repeating calls for more fiscal discipline in the 16-nation bloc.

“As regards the economy, the idea that austerity measures could trigger stagnation is incorrect,” Trichet said, according to an English-language transcript published on the ECB’s Internet site.

“I firmly believe that in the current circumstances, confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today.”

Trichet said Germany was showing the right commitment to tackle budget problems with its plans for 80 billion euros ($98 billion) in budget cuts over the next four years, and said Italy was on the right track.

The ECB has urged a system of sanctions and incentives, including a separate budget watchdog, as part of an overhaul of EU fiscal rules.

The Stability and Growth Pact “should be the equivalent of a federal budget in terms of ensuring sound policies. This is why we want the Stability and Growth Pact to be strong, solid and fully respected,” Trichet told the paper.

DENIES DEFLATION RISKS

In a letter to G20 leaders last week, President Barack Obama warned against the premature withdrawal of stimulus policies and urged flexibility in implementing fiscal policy to safeguard and strengthen the recovery.

Billionaire investor George Soros said on Wednesday Germany’s budget savings policy risked destroying the European project, pushing weaker euro zone members into a cycle of deflation. [ID:nLDE65M0TD]

Asked about the risk of deflation, Trichet said: “I don’t think that such risks could materialise”, adding that inflation expectations were well anchored.

Trichet said the euro, which has recently recovered from four-year lows EUR=, was a very credible currency because it had safeguarded price stability and was therefore a “major asset” to investors.

Asked if he expected concrete results from the upcoming Group of 20 meeting in Toronto, Trichet said he was confident important decisions would be taken by the end of the year.

A bank tax, banks’ capital and rating agencies were all important elements, he said. “I am confident that we are on the right track, knowing that a number of important decisions are to be taken at the G20 meeting in November this year.”

He declined to comment on Bundesbank President Axel Weber’s criticism of the ECB’s decision to buy government bonds, and on the profile of his successor. Weber and Italy’s central bank governor Mario Draghi are seen as the frontrunners to replace Trichet in November 2011.

“I have a very heavy responsibility, with all my colleagues of the Executive Board and of the Governing Council. And my mandate expires in one year and four months. That is a long and demanding period of time. It is premature for me to comment on my possible successor,” he said. (Reporting by Krista Hughes; Editing by Jan Dahinten)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

ECB’s Trichet sees no deflation risks emerging in euro zone

June 25, 2010 By Leave a Comment

June 24 (Reuters) – European Central Bank President Jean-Claude Trichet was quoted on Thursday as saying he does not see deflation risks materialising in the euro zone.

Bonds

In an interview with Italy’s La Repubblica newspaper, he also denied that budget cuts would drag on growth in the 16-nation region.

Aasked about the risk of deflation, he said: “I don’t think that such risks could materialise”, adding that inflation expectstions were well anchored.

“As regards the economy, the idea that austerity measures could trigger stagnation is incorrect,” Trichet said, according to am English-language transcript published on the ECB’s Web site. (Reporting by Krista Hughes)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , ,

FOREX-Euro up on Spain auction; caution before ECB

June 11, 2010 By Leave a Comment

LONDON, June 10 (Reuters) – The euro rose on Thursday as strong demand at a Spanish debt auction eased concerns about how the country will fund its large debt, but caution before a European Central Bank policy decision capped gains.

Peripheral euro zone government bond yield spreads over German benchmarks narrowed after the auction of new three-year bonds. [ID:nLDE6590T9] [ID:nLDE6590U7] Widening spreads in recent days have weighed on the single currency.

But traders said market players were wary of taking on long euro positions ahead of the ECB decision, with option expiries at $1.20 and $1.21 later in the day also helping to confine the single currency within a $1.20-$1.21 range.

Technical analysts said the euro’s downward trend would remain intact barring a move above $1.2135, the 50 percent retracement of the 2000-2008 euro rally.

The ECB is expected to hold rates at 1.00 percent. It could offer extra funds to banks to ease strains from the euro zone debt crisis, and bank chief Jean-Claude Trichet will be pressed for details of its bond-buying programme. [ID:nLDE6560K2]

“The ECB decision is all about event risk,” said Gavin Friend, currency strategist at nabCapital. “It is difficult to see anything positive coming out of it, although the mood is likely to be set by the broader market backdrop.”

“The Spanish auction has cemented euro support a little. It adds to the story that the euro may be due a bit of a bounce as it has come a long way down in a relatively short space of time,” he said.

At 1005 GMT, the euro was up 0.6 percent against the dollar EUR= at $1.2052, above Monday’s four-year low of $1.1876. Traders said investors were tending to sell on rallies towards $1.21, but a break above $1.21 could see the euro extend gains.

Severe debt problems in a number of euro zone countries, coupled with concerns about the future of the euro have caused the currency to fall around 16 percent against the dollar since the start of the year.

Against the yen, the euro rose 0.1 percent to 109.50 yen EURJPY=R. The dollar was down 0.2 percent at 91.04 yen JPY=, staying above its 200-day moving average at 90.90 yen.

ECB AWAITED

The ECB’s decision is scheduled for 1145 GMT, with Trichet’s accompanying news conference at 1230 GMT.

“If they continue to buy bonds that may be seen as positive, but on the other hand they haven’t succeeded so far in stabilising yields,” said Antje Praefcke, currency strategist at Commerzbank in Frankfurt.

The Bank of England announces its policy decision at 1100 GMT with no change to interest rates expected. [BOE/INT]

Earlier, Dai Xianglong, chairman of $114 billion China’s National Social Security Fund, said the euro would gradually stabilise and the U.S. fiscal deficit remained a big concern, which helped lift the euro back above $1.20.

The comments came as a relief as some in the market have said the euro zone debt crisis could prompt central banks, including China’s, to cut their euro reserves.

The euro was also helped by China confirming exports jumped 48.5 percent in May from a year earlier, which buoyed shares and riskier currencies. [ID:nTOE65605K]

The Australian dollar rose 1.7 percent against the U.S. dollar AUD=D4, buoyed by strong Australian jobs data, while a rate rise in New Zealand dollar lifted the Kiwi 1.6 percent versus the U.S. dollar NZD=D4.

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Trichet: ECB not favouring French banks -TV

June 1, 2010 By Leave a Comment

May 31 (Reuters) – There are no grounds to claim that the European Central Bank’s bond-buying programme would benefit especially the French banks, ECB President Jean-Claude Trichet said on Austrian television.

Bonds | Global Markets

When asked about German reports that the ECB enables above all French banks to get rid of their holdings of Greek government bonds, Trichet told Austrian national television ORF: “It’s absolutely false. All our decisions were made by the Governing Council to ensure the proper transmission of monetary policy.”

Trichet also repeated the ECB would not compromise on its price stability goal. (Reporting by Sakari Suoninen; Editing by Leslie Adler)

Filed Under: International News Tagged With: , , , , , , , , , , , , , ,

France pressing for euro zone leaders group-press

June 1, 2010 By Leave a Comment

May 31 (Reuters) – French President Nicolas Sarkozy is pressing his European partners to set up a group of euro zone leaders with a secretariat to act as an economic government for the single currency bloc, Le Monde said on Monday.

Currencies | Global Markets

“Nicolas Sarkozy is looking for ways to get Germany back into the European game,” the newspaper said in an article published on its web site.

“According to his entourage, the French president once again envisages the creation of a forum of heads of state and government from the euro zone, with a secretariat, which would be the true economic government of Europe,” it said.

The newspaper noted that Germany had already rejected similar proposals for a formal body to coordinate economic governance in the euro zone.

But it said Paris believed firmer budget commitments by euro zone governments and other concessions, such as approving Bundesbank President Axel Weber to succeed Jean-Claude Trichet as the head of the European Central Bank could help sway Berlin.

“If it judges that the guarantees that have been obtained are sufficient, Germany might accept the Eurogroup,” Le Monde said.

The newspaper said that French authorities were moving cautiously with the idea in order not to provoke any open rejection from Berlin.

“The French president has taken the precaution of not describing publicly the economic government which he envisages because a display of Franco-German disagreement could be fatal to the euro,” the newspaper said. (Writing by James Mackenzie; Editing by Charles Dick)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Bernanke, Trichet see key emerging economies role

May 31, 2010 By Leave a Comment

(Reuters) – The heads of the Federal Reserve and the European Central Bank on Monday both singled out emerging economies as key to global financial stability.

Federal Reserve Chairman Ben Bernanke said the world economy depends ever more on emerging markets to maintain strong domestic growth and economic and financial stability.

“Improvements in emerging market policies and policy frameworks … have ramifications beyond the emerging market economies themselves,” he said in videotaped remarks prepared for delivery to a conference sponsored by the Bank of Korea.

Bernanke did not discuss the outlook for the U.S. economy or interest rates.

His remarks were echoed by European Central Bank President Jean-Claude Trichet who said in separate videotaped comments to the conference that emerging economies have been a source of strength in the global financial crisis.

“One distinctive aspect of this crisis has been its originating in industrial economies. Emerging countries have also been severely affected, but as a group remained a source of strength for the world economy,” Trichet said in the prepared comments.

Commenting on South Korea, Bernanke said actions taken by its government and central bank since the Asian financial crisis of the late 1990s helped it weather the crisis that swept economies around the world in 2007-2009.

South Korea had amassed a budget and trade surplus and pushed banks to prepare for shocks, Bernanke said. In addition, its central bank’s move to focus on domestic price stability rather than on stabilizing exchange rates also helped the country during the turmoil.

As a result of a formal inflation-targeting regime adopted by South Korea’s central bank in 1998, it could lower rates during the crisis without scaring investors off, Bernanke said.

“In earlier crises, foreign investors were not inclined to give emerging market policy makers the benefit of the doubt when they promised low inflation and sustainable fiscal policies,” he said.

(Reporting by Krista Hughes in Frankfurt and Mark Felsenthal in Washington, Writing by Jonathan Thatcher; Editing by Tomasz Janowski)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Geithner calls for action on euro debt crisis

May 27, 2010 By Leave a Comment

U.S. Treasury Secretary Timothy Geithner said on Wednesday that financial markets want to see euro zone countries put into action their $1 trillion standby package designed to stabilise the European currency.

Geithner, on a visit to London, also urged Europeans to work for a globally consistent approach to financial reform as the European Union said it might go it alone with a crisis levy on banks.

After talks with his British counterpart, George Osborne, Geithner said of the EU plan to support indebted states: “It’s a good programme (and) has got all the right elements. What markets want to see is action.”

The fund would provide heavily conditioned loans to euro zone governments that had difficulty borrowing on capital markets after a separate bailout for Greece failed to calm fears of a sovereign debt default in southern European countries.

European shares rallied by 3 percent from Tuesday’s nine-month lows and Wall Street was more than 1 percent up but the euro remained under pressure amid continuing signs of banks’ reluctance to lend to euro zone counterparts exposed to south European sovereign debt.

Geithner’s stress on coordination of new regulation appeared aimed chiefly at Germany, Europe’s biggest economy, which stunned markets and angered EU partners by unilaterally banning some speculative financial trades last week.

He is due to meet German Finance Minister Wolfgang Schaeuble in Berlin on Thursday after dinner in Frankfurt with European Central Bank President Jean-Claude Trichet.

On his flight to Europe from China, Geithner told reporters he would “emphasise the importance of a carefully designed global approach” to the next stage of financial reform.

Business television channel CNBC said he would also urge the Europeans to stress test their banks to identify those that need new capital and restore market confidence in the banking system.

The executive European Commission outlined a framework on Wednesday for a levy on banks’ assets, liabilities or profits to pay in advance for the cost of future crises, setting the stage for a showdown on the tax at G20 summit in Toronto next month.

“On this question, we can go forward by ourselves, on our own,” Barnier told Reuters. “It is not up to the United States to pay for the financial stability of Europe.”

The Commission said the proceeds of a bank levy should be ring-fenced for national bank resolution funds, putting Brussels at odds with France and Britain, which want the money to help strapped national budgets.

Fears that Europe’s debt crisis could engulf some banks have made them reluctant to lend to each other as happened during the 2007-2009 financial crisis.

The costs for banks to borrow dollars from each other crept up to a new 10-month high on Wednesday.

Money markets are “pricing in for a credit crunch”, said Michael Pond, Treasury strategist at Barclays Capital in New York. “A crisis of confidence is developing once again.”

For a graphic on Greek bailout, click http://link.reuters.com/rad45k

For a graphic on the euro zone, click http://link.reuters.com/fyw72j

OECD UPBEAT

The Paris-based Organisation for Economic Co-operation and Development said the global economy was recovering faster than expected from recession with Asia leading the way but remained at risk from huge debts in developed countries.

The OECD survey was relatively upbeat about the euro zone, forecasting growth of 1.2 percent this year and 1.8 percent in 2011 — a more optimistic forecast than the European Commission’s 0.9 and 1.5 percent respectively.

The OECD also said banks remained vulnerable, noting the high price of credit default swaps to protect bond investments.

European regulators conducted a confidential assessment of the solvency of national banking systems last September, but their reassuring conclusion failed to dispel doubts because they did not test individual banks or publish detailed findings.

Any European stress tests would have to differ from those conducted by U.S. regulators early last year, because Europe lacks a huge bailout fund like the $700 billion Troubled Asset Relief Program to plug any capital deficiencies found.

GERMAN BAN “COUNTER-PRODUCTIVE”

A senior U.S. Treasury official said Washington was unhappy with Berlin’s “counter-productive” decision to go it alone in banning naked shorting of shares in top financial companies and sovereign euro bonds and related transactions in sovereign credit default swaps.

Geithner has also criticised European Union proposals to regulate hedge funds and private equity, warning that they could discriminate against non-European funds.

Far from yielding to widespread criticism, Berlin proposed on Tuesday extending restrictions on such speculative trades to include all shares, a government source said.

In the latest move in a German-inspired Europe-wide austerity drive meant to restore market confidence, Italy’s cabinet approved a multibillion-euro package of budget cuts designed to slash the government’s deficit to beneath the EU ceiling of 3.0 percent of GDP by 2012.

The 24 billion euro ($29.49 billion) plan includes a four-year freeze on public sector salaries, and a reduction in state personnel by replacing only one in five leavers.

EU Economic and Monetary Affairs Commissioner Olli Rehn said Italy’s budget cuts were “very significant” and would help restore confidence in the euro zone. Credit ratings agencies Standard and Poor’s and Moody’s both said the package put Italy’s finances on a sounder footing and should assure markets.

Italy’s largest trade union, CGIL, with about five million members, said it would decide on a national strike after evaluating the measures to be presented by Prime Minister Silvio Berlusconi later on Wednesday.

(Additional reporting by Sumeet Desai in London, Daniel Flynn and Deepa Babington in Rome; writing by Paul Taylor, editing by Mike Peacock/Toby Chopra)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

ECB’s Trichet says Italy not in situation of Greece-report

April 10, 2010 By Leave a Comment

MILAN, April 9 (Reuters) – Italy is not in the same situation as Greece and has shown a degree of resistance in the present difficult period, ECB president Jean-Claude Trichet said in an interview on Friday with Il Sole 24 Ore.

“In particular it (Italy) has been able to contain its yearly public deficit,” Trichet said.

He said the ECB encouraged Italy to rigorously apply its recovery programme.

Trichet reiterated that the question of Greece going bankrupt was not in discussion “in light of the decisions taken by the Greek government to reduce its public deficit and the declarations of heads of state and government of the Eurozone.”

Trichet said a “clear bipartisan agreement is needed in countries wishing to enter the Eurozone”.

“It is not possible to enter or leave the Eurozone as if getting on or off a bus,” Trichet said.

(Reporting by Stephen Jewkes)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Germany sets tough terms for EU help for Greece

March 24, 2010 By Leave a Comment

Germany signalled for the first time on Tuesday that it may accept European financial aid for Greece as a last resort, but only if the IMF helps first and euro zone partners accept tougher budget discipline rules.

A senior German official spelled out Berlin’s conditions for any aid mechanism ahead of an EU summit starting on Thursday:

* Greece would have to be unable to access credit markets;

* the IMF would have to contribute to any rescue;

* European Union states would have to agree to negotiate “additional instruments” to enforce budget discipline, beyond existing rules that failed to prevent Athens running up huge debts and deficits that have shaken the euro zone.

“The condition for action, as a last resort, is that Greece’s financing on the capital markets is exhausted,” the official said.

“Furthermore, it would be necessary for the International Monetary Fund to provide a substantial contribution,” he said, stressing there will be no decision on actual aid at the summit.

European diplomats said France and Germany, co-founders of the single currency, were working on a joint position on Greece for the summit, including a possible role for the IMF, which Paris has hitherto rejected as anathema inside the euro family.

European Central Bank President Jean-Claude Trichet and Eurogroup chairman Jean-Claude Juncker have said involving the Washington-based lender would send a damaging message that the euro zone was incapable of handling its own problems.

“The message from Berlin is crystal clear really, which is that Greece still needs to continue not just with consolidation but to test the markets out and if necessary use the IMF,” said Julian Callow, Chief European Economist at Barclays Capital.

“The implication is that Germany will support Greece only if the IMF channel does not deliver,” he said.

Credit ratings agency Fitch said it doubted EU leaders would offer Greece aid at the summit but failure to reach a deal would not trigger a downgrade as long as the IMF option was open.

“As long as the market is prepared to make the money available to the Greek government at any reasonable price — current rates are reasonable given circumstances although not desirable — we would have no immediate reason to change the rating,” Chris Pryce, a director at Fitch Ratings, told Reuters.

That could leave Greece raising funds at market rates of more than 300 basis points over benchmark German bonds, adding hundreds of millions of euros a year to its debt service bill despite Athens’ pleas for help to reduce its borrowing costs.

France and Spain called for a special meeting of leaders of the 16 nations that share the euro zone ahead of the regular two-day EU summit which opens on Thursday afternoon. The Eurogroup has held only one such summit previously, at the height of the global financial crisis in October 2008.

POSITIVE OUTCOME?

Greek Finance Minister George Papaconstantinou said he expected a positive outcome and was encouraged by comments from EU institutions on ways to support Greece’s efforts to cut its giant budget deficit and public debt.

“Based on these statements, we expect a positive result on Thursday,” he told an investment conference in Athens.

“There must be a political mechanism to ensure the stability of the euro zone and support the efforts made by every country,” he said, adding that data for the first two months of 2010 show Greek revenues rose and spending fell sharply.

German Chancellor Angela Merkel faces massive public opposition to any bailout ahead of a regional election in May in which her centre-right coalition’s upper house majority is at stake, and has said there will be no talk of aid at the summit.

The risk premium that investors charge for holding Greek debt rather than German bonds narrowed to 327 basis points from around 344 at Monday’s settlement close on hopes of a deal, although it was still above last week’s levels.

Greece needs to refinance some 16 billion euros in maturing debt between April 20 and May 23 and is hoping that a public display of an EU emergency support mechanism, which would not need to be activated, will be enough to force down the cost.

The crisis over Greece’s debt, expected to hit 120 percent of national output this year, and its budget deficit, which reached 12.9 percent of GDP last year, has shaken confidence in the euro single currency.

German coalition leaders meeting in Berlin voiced full support for Merkel’s tough stance towards Greece.

Hans-Peter Friedrich, floor leader of the Bavarian Christian Social Union, sister party of her Christian Democrats, said it was great to see the chancellor standing her ground “and not letting herself be forced into any concessions”.

Diplomats said European Council President Herman Van Rompuy, who will chair Thursday’s summit, was working for a compromise that would satisfy Merkel and prevent the bloc’s divisions over Greece spilling into the open again and destabilising markets.

The nominee for vice-president of the European Central Bank, Vitor Constancio, pointed to a possible solution, telling a European Parliament hearing that giving Greece credit would not be an illegal bailout if the loans were not subsidised.

Papaconstantinou stressed that Greece was not bankrupt and was not going to the EU summit as a beggar.

“We want to play by euro zone rules. Greece has full access to financial markets as it proved with its recent 10-year bond sale. Obviously, we would like the spreads to fall but I believe this will gradually happen as the stability programme is implemented,” he said.

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Global confidence rises as Bernanke sees sign of recovery

May 13, 2009 By Leave a Comment

Confidence in the global economy rose to the highest level in 19 months as central bankers pointed to signs of a recovery and stress tests on US banks reassured investors, a Bloomberg survey of users on six continents showed.

The Bloomberg Professional Global Confidence Index climbed to 38.72 in May from 21.2 in April, the biggest increase since the survey began in November 2007. Because the number is below 50, it means pessimists still outnumber optimists.

Federal Reserve chairman Ben S Bernanke and European Central Bank President Jean-Claude Trichet are among policy makers who have signaled the recession may be easing. While unemployment is projected to keep climbing, factories are increasing production as inventories run down, helping push the MSCI World Index up 37% from the year’s low in March.

“The world economy is past its worst and that exuberance is spilling into stock markets,” said Alvin Liew, an economist at Standard Chartered Plc in Singapore, and a regular survey participant. “We need more evidence to confirm a sustained recovery, and even when that comes, it will be a sluggish one.”

The survey of more than 1,300 Bloomberg users was conducted between May 4 and May 8. Since the previous survey, Treasury secretary Timothy Geithner said the US financial system is strong enough to support an economic recovery, the ECB cut its benchmark rate to a record low of 1 percent and indicators in Japan showed its recession may be abating.

A measure of US participants’ confidence in the world’s largest economy rose to 34 from 23.9, the survey showed. Sentiment jumped in most other markets, with the index for Japan climbing to 29.6 from 22.2. The gauge for Western Europe advanced to 23.7 from 14.2.

Bloomberg

Filed Under: Business News Tagged With: , , , , , , , , , , , , , , , , , , ,

FOREX-Yen hits 1-mth high vs euro as risk appetite ebbs

April 24, 2009 By Leave a Comment

Yen hits 1-mth high vs euro, but later gives up gains

* Bank of America’s bad loans jump, underscores banks’ woes

* Euro mired near one-month low vs dollar, focus on ECB

By Masayuki Kitano

TOKYO, April 21 (Reuters) – The yen briefly hit a one-month high against the euro on Tuesday as renewed concerns about the U.S. banking sector tempered risk appetite and triggered buybacks of the Japanese currency.

The yen initially added to the gains it made on Monday when U.S. equities slid after Bank of America (BAC.N) reported a jump in non-performing assets, underscoring the banking sector’s troubles. [ID:nN20380236]

In addition, the yen drew support after breaching key chart levels in the past few sessions against currencies such as the euro and the Australian dollar, market players said.

“Equities are weak and market players who had bought higher-yielding currencies against the yen earlier amid signs of optimism are dumping their positions,” said a trader for a major Japanese bank.

There have been signs of improving investor risk appetite in recent weeks, as could be seen in the Australian dollar’s rally to six-month highs against the yen and the dollar last week.

The euro fell to 126.10 yen on trading platform EBS, its lowest since mid-March. But it later rebounded to 126.95 yen, up 0.3 percent from late U.S. trading on Monday. The euro rose 0.1 percent against the dollar to $1.2930, but was not far from a one-month low of $1.2888 hit on EBS on Monday.

The euro has been under pressure in the past few sessions, hurt by uncertainty over what policy steps the European Central Bank may adopt next month.

ECB President Jean-Claude Trichet signalled on Sunday during a trip to Tokyo that the bank’s next move could likely be an interest rate cut of 25 basis points.

But Trichet kept mum on details of plans for unconventional policy responses that are due to be unveiled at the ECB’s policy meeting on May 7.

The Australian dollar rose 0.3 percent to $0.7009, regaining a bit of the ground it lost the previous day, when it fell more than 3 percent.

The Australian dollar also edged up 0.6 percent against the yen to 68.79 yen, after sliding more than 4 percent on Monday.

The Australian dollar hit six-month highs of 73.49 yen and $0.7328 last week, supported by growing views that the worst of the global economy’s woes may be over. (Additional reporting by Satomi Noguchi; Editing by Hugh Lawson)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

FOREX-Euro hits 1-month low vs dollar on ECB uncertainty

April 20, 2009 By Leave a Comment

ECB President Trichet signals small rate cut

* Trichet gives no details of unconventional steps

* Yen gains broadly as share prices fall

* Aussie retreats from a 6-mth peak vs euro

By Satomi Noguchi

TOKYO, April 20 (Reuters) – The euro hit a one-month low against the dollar and a three-week trough versus the yen on Monday due to uncertainty over policy steps the European Central Bank may take.

The Australian dollar earlier climbed to its highest in more than six months against the euro but then retreated sharply after Asian shares fell, prompting investors to reduce risky bets including the Aussie, also pushing the yen broadly higher.

ECB President Jean-Claude Trichet signalled on Sunday during a trip to Tokyo that the bank’s likely next move could be an interest rate cut of 25 basis points.[ID:nT138276]

But Trichet kept mum on details of plans for unconventional policy responses that are due to be unveiled at the ECB’s next policy meeting on May 7.

Trichet also dismissed any suggestion that ECB policy makers were divided over how far it should go and said he did not think zero interest rates would be appropriate for the ECB. [ID:nSP404768]

Market players are keen to see whether the ECB will follow the Federal Reserve, the Bank of England and the Bank of Japan in making asset purchases to contain the financial crisis.

“The euro looks set to fall further, following the same path as the dollar, sterling and the yen did when they faced month-long selling after their central banks adopted unconventional measures,” said Kengo Suzuki, a currency strategist at Shinko Securities.

The euro fell as low as $1.2967 on trading platform EBS, its lowest since March 17, before recovering to $1.2994, down 0.4 percent on the day.

“The euro is facing selling pressure because the market feels from Trichet’s recent comments that he probably wants to lower the euro,” said a manager of forex trading group at a large Japanese bank.

Trichet said on Friday that saying the euro was weak did not reflect the current situation. The euro was trading around $1.31 at the time of his remarks. The ECB chief also said he appreciated U.S. comments that a strong dollar was in U.S. interests. [ID:nTKF104338]

The euro erased earlier gains against the yen and fell to a three-week low of 128.14 yen on EBS. It then traded at 128.47 yen, down 0.6 percent.

The dollar also shed earlier gains and was down 0.3 percent at 98.85 yen .

The Australian dollar earlier climbed to its highest since early October against the euro, as firmer U.S. stock markets and signs of a pickup reflected in economic data late last week supported demand for riskier assets.

But investors later quickly reduced bets on the Aussie as regional stock markets fell, with the Nikkei average .N225 losing 1 percent partly on caution ahead of more U.S. company reports this week including Bank of America BAC on Monday.

The euro fell as low as A$1.7993 before rebounding sharply to A$1.8121, up 0.6 percent on the day as traders covered euro-short positions.

Traders said expectations that Asian and Oceanian countries will recover faster than European countries due to resilience in the Chinese economy could continue lending strength to the Aussie against the euro in the long run. (Editing by Michael Watson)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

RPT-DIARY-Japan April 16: Reuters Tankan, Fujitsu-Cisco briefing

April 17, 2009 By Leave a Comment

(Repeats with no change to text)

**** Ohayo gozaimasu from Reuters Tokyo newsroom ****

— For real-time forecasts and updates of Japanese economic
indicators click ECONJP

— For top Japan news click on [TOP/JP]

— All events in Tokyo unless stated otherwise.

— Times, when available, shown in GMT; asterisk* indicates
GMT is previous day.

— Inclusion of an event in the diary does not always mean
that Reuters will report on that item.

———————————————————–

Thursday, April 16

ECONOMY/POLITICS/MARKETS

2330* — Reuters Tankan for April

0130 — Enhanced JGB liquidity offer

0300 — Prime Minister Taro Aso speaks at a reception hosted
by business lobby Nippon Keidanren

0300 — Yojiro Takita, director of Academy Award winner
“Departures” to speak at the Foreign Correspondents’ Club of
Japan. (http://www.e-fccj.com/node/4469)

0415 — Enhanced JGB liquidity offer result

0600 — Democratic Party of Japan senior official Naoto Kan
holds a regular news conference

COMPANIES

— Day two of Finetech Japan flat panel/flat TV trade show.
Speakers include Samsung Mobile Display Vice President Woo Jong
Lee.

0200 — Fujitsu Ltd (6702.T), Cisco Systems (CSCO.O) to brief
on unified communication business

———————————————————–

Friday, April 17

ECONOMY/POLITICS/MARKETS

— Japan and the World Bank will co-host a Pakistan Donors
Conference in Tokyo.

— Government’s monthly economic report

— Finance Minister Kaoru Yosano holds regular news
conference after cabinet meeting.

0030 — Governor Masaaki Shirakawa’s speech at the Bank of
Japan branch managers’ meeting

0300 — European Central Bank President Jean-Claude Trichet
speaks at an event in Tokyo hosted by the Research Institute of
Japan.

0500 — Consumer confidence index for March [JPCONI=ECI]
ECONJP

0700 — Japan finance ministry holds meeting with primary
dealers on JGB issuance

0835 – Japan finance ministry to brief on meeting with
primary dealers on JGB issuance

COMPANIES

0200 — Hitachi Ltd (6501.T) to brief on its lithium ion
battery business

0230 — Arianespace CEO Jean-Yves Le Gall to brief on the
outlook for Ariane rockets

0600 — Fujitsu Ltd (6702.T) to brief on its research and
development strategy

———————————————————–

Saturday, April 18

ECONOMY/POLITICS/MARKETS

0100 — Richard Holbrooke, U.S. Special Representative for
Afghanistan and Pakistan, speaks at the Foreign Correspondents’
Club of Japan (http://www.e-fccj.com/node/4475)

0300 — European Central Bank President Jean-Claude Trichet
speaks at the Foreign Correspondents’ Club of Japan

———————————————————–

Monday, April 20

ECONOMY/POLITICS/MARKETS

— Nong Due Manh, General Secretary of the Central Committee
of the Vietnamese Communist Party, to meet with Prime Minister
Taro Aso

0600 — Finance Minister Kaoru Yosano and Bank of Japan
Governor Masaaki Shirakawa to deliver speeches to annual meeting
of Japanese trust banks.

COMPANIES

0200 — Fujitsu (6702.T) to brief on new networking service

0430 — Hitachi Ltd (6501.T) new president Takashi Kawamura
to hold news conference.

———————————————————–

Tuesday, April 21

ECONOMY/POLITICS/MARKETS

— Finance Minister Kaoru Yosano holds regular news
conference after cabinet meeting.

— Asian Development Bank and Mitsubishi UFJ seminar on
emerging Asian capital markets. Speakers include Makoto Utsumi,
CEO of Japan Credit Rating Agency and Douglas Hodge, Asia Pacific
chairman of PIMCO Japan

0130 — 20-year JGB auction

0300 — David F. Gordon, Head of Research and Director, Global
Macro Analysis, Eurasia Group, speaks on “U.S. Security
Perspectives on Asia” at the Foreign Correspondents’ Club of
Japan.

0345 — 20-year JGB auction result

COMPANIES

0430 — Sharp Corp (6753.T) to unveil new models of Mebius
laptop PCs.

———————————————————–

Wednesday, April 22

ECONOMY/POLITICS/MARKETS

2350* — Trade balance data for March [JPTBAL=ECI] ECONJP

0230 — Former opposition Democratic Party leader Katsuya
Okada, seen as possible successor if current leader Ichiro Ozawa
quits over fundraising scandal, speaks on “A change in government
– Changing Japan”

0600 — Yu Yongding and Zhang Bin, members of the Chinese
Academy of Social Sciences, speak at an Asian Development Bank
Institute conference on the global economic crisis

COMPANIES

0930 — Square Enix Holdings Co Ltd (9684.T) to brief its
business strategy.

0930 — Deryck Maughan, Kohlberg Kravis Roberts partner and
former Salomon Brothers CEO, speaks at Thomson Reuters seminar on
“The Global Financial Crisis: Implications for Japan”

———————————————————–

Thursday, April 23

ECONOMY/POLITICS/MARKETS

0000 — Fan Gang, adviser to the People’s Bank of China,
moderates a discussion at an Asian Development Bank Institute
conference on the global economic crisis

0130 — Two-year JGB auction

0345 — Two-year JGB auction result

0500 — Three-month weather forecast

COMPANIES

0600 — KDDI (9433.T) 2008/09 results

———————————————————–

Friday, April 24

ECONOMY/POLITICS/MARKETS

2350* — Corporate services price index for March

COMPANIES

0400 — JFE Holdings Inc (5411.T) 2008/09 results

———————————————————–

Sunday, April 26

ECONOMY/POLITICS/MARKETS

— Asian Ministerial Energy Roundtable to be hosted by Japan
and Qatar. Saudi Arabia, Qatar, other Middle East producers and
major Asian consumers expected to attend.

———————————————————–

Monday, April 27

COMPANIES

0200 — Nippon Yusen KK (9101.T) 2008/09 results

0200 — Kawasaki Kisen Kaisha Ltd (9107.T) 2008/09 results

0230 — Mitsui OSK Lines Ltd (9104.T) 2008/09 results

0350 — Daihatsu Motor Co (7262.T) 2008/09 results

0530 — Mitsubishi Motors Corp (7211.T) 2008/09 results

0600 — Sharp Corp (6753.T) 2008/09 results

———————————————————–

Tuesday, April 28

ECONOMY/POLITICS/MARKETS

2350* — March retail sales data [JPRSLS=ECI] ECONJP

COMPANIES

0220 — Denso Corp (6902.T) 2008/09 results

0430 — Nippon Steel Corp (5401.T) 2008/09 results

0500 — Sumitomo Metal Industries (5405.T) 2008/09 results

0530 — Kobe Steel Ltd (5406.T) 2008/09 results

0600 — Honda Motor Co (7267.T) 2008/09 results

0600 — NTT DoCoMo (9437.T) 2008/09 results

0600 — Yahoo Japan Corp (4689.T) 2008/09 results

0730 — Nippon Oil (5001.T) announces May refining volumes

———————————————————–

Wednesday, April 29

— National Holiday (Showa Emperor’s Day)

———————————————————–

Thursday, April 30

ECONOMY/POLITICS/MARKETS

Bank of Japan holds policy board meeting [JPINTR=ECI]
ECONJP

2350* — Industrial output for March [JPIP1=ECI]

0330 — Reuters Japan Global Asset Allocation poll for April

0430 — Oil product sales data for March, 2008/09

0500 — March housing starts data [JPHST=ECI]

0500 — March construction orders data [JPCORD=ECI]

0600 — Bank of Japan releases semi-annual report on Japan’s
economic and price outlook

1000 — Monthly intervention data

COMPANIES

0330 — Sojitz Corp (2768.T) 2008/09 results

0500 — Sumitomo Corp (8053.T) 2008/09 results

0600 — Canon Inc (7751.T) Q1 results

0600 — Softbank Corp (9984.T) 2008/09 results

0700 — Itochu Corp (8001.T) 2008/09 results
———————————————————–

Friday, May 1

ECONOMY/POLITICS/MARKETS

2330* — Nationwide consumer price index for March, Tokyo CPI
for April [JPCPI=ECI] [JPCPIT=ECI] ECONJP

2330* — March jobless data [JPJOBA=ECI]

2330* — March all household spending data [JPALLS=ECI]

0130 — March preliminary wage earners’ cash earnings data
[JPOVRT=ECI]

0500 — Bank of Japan to release full report on semi-annual
outlook for economy and prices

0600 — Nuclear run rate data for April

============================================================

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

No pickup for eurozone economies before 2010, ECB says

April 9, 2009 By Leave a Comment

Frankfurt – European economies can only expect to begin their recovery in 2010, the European Central Bank (ECB) predicted Thursday.

This year, global demand is likely to remain very low since global economies including the eurozone are “in a serious downturn,” the ECB wrote in its monthly newsletter, published Thursday.

The ECB responded to the economic downturn last week with a 0.25- basis-point rate cut to 1.25 per cent, the lowest interest rate since World War II.

ECB President Jean-Claude Trichet did not rule out further rate cuts. (dpa)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,