Still No Resolution in Cyprus

March 22, 2013

The Cypriot government has until Monday to raise EUR 5.8 billion, or the country will not receive bailout money from the ECB troika.  A rumor that Laiku Bank might close sent depositors scrambling to ATMs. 

Not much data were released overnight.  The IFO business climate index for Germany was the main item, and it was weaker than forecast.

The dollar fell 0.4% against the yen and 0.2% versus the euro, Swissie and sterling.  The buck is 0.1% firmer against the Canadian, New Zealand and Australian dollars and unchanged versus the Chinese yuan.

Share prices in the Pacific Rim and Europe are mostly lower.  Japan’s Nikkei slumped 2.4% in spite of Prime Minister Abe’s comment that a previous JPY 44 trillion limit on deficit bond issuance could be exceeded.  Equities fell 1.7% in Indonesia, 0.5% in Hong Kong, 0.3% in Singapore and India, and 0.1% in South Korea.  Stocks in Europe are so far down by 0.6% in Spain and France, 0.3% in Germany and 0.1% in Britain.

Ten-year sovereign debt yields drifted two basis points lower in Japan, Germany, and Britain.

Oil firmed 0.2% to $92.64 per barrel.

Gold edged 0.1% lower to $1611.60 per ounce.

The IFO business climate index for German industry and trade declined 0.6 points to 106.7 in March but remained 2.4 points higher than January’s score and 6.6 points better than the trough last October.  The setback this month occurred mostly in expectations, not current conditions.  After a 7.7-point advance in wholesaling in February, such sank by 6.3 points in March.  Manufacturing retreated slightly, but improvements were seen in retail and construction, the latter to its best level since German unification in 1990.  IFO’s service sector business climate index fell to 23.5 in March, trimming an improvement to 25.1 in February from a reading of 16.6 in January.

Germany’s index of leading economic indicators rose 0.3% in January, while the index of coincident indicators went up 0.4%.

The French statistical agency, Insee, reported an unchanged business sentiment index of 90 in March and predicted that GDP would be unchanged in the first quarter and up just 0.1% in 2013 as a whole.

Dutch business sentiment was weaker than forecast in March with a negative 4.8 reading after minus 3.6 in February.  Dutch consumer spending was 2.3% lower in January than a year before, marking the 18th on-year drop in a row.

Polish retail sales dropped 2.6% in February and by 0.8% from a year earlier, while that economy’s jobless rate rose another 0.2 percentage points to 14.4%, highest since March 2007.

According to MNI, business sentiment in China posted a reading in March of 58.39, about halfway between 60.98 in February and 55.16 in January.

Japanese stock and bond transactions last week generated a JPY 951 billion net capital inflow after an outflow of JPY 184 billion the week before.

Australia’s index of leading economic indicators rose 0.2% in January, reversing December’s drop of the same amount.  The coincident indicators index did the same, only to a lesser magnitude of 0.1%.

New Zealand job ads advanced 1.0% in February, their largest monthly gain in nine months.

Taiwan’s jobless rate edged down 0.08 percentage points to 4.16% in February, marking its fourth straight drop.

No U.S. data releases are scheduled this Friday.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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