Friday, February 26, 2010

Today’s Top Stories 02.26.10

Today’s Top Stories
· Equities worldwide put up a strong performance overnight (with Europe, HK, India and
Australia all rallying more than 1%) encouraged by the afternoon rally in the US
· Euro update in the WSJ – pg. 1 article says that some “heavyweight” hedge funds have
put on large bearish bets against the euro, w/some thinking it could fall to parity vs. the
US$. Bloomberg (citing the FT) is reporting that German banks will shun Greek gov’t
debt going forward. The next big catalysts for the euro: 1) European Economic Affairs
Commissioner Olli Rehn will travel to Greece on Mon and could announce additional budget
cuts; 2) the Mar 4 ECB meeting (recall Reuters earlier this week reported that the ECB is
likely to extend banks' access to unlimited funds at fixed interest rates into the start of the
third quarter); 3) Greece is expected to launch a bond issue next week; 4) Greece on Mar 16
will provide the next update on its budget cut measures.
· China & Yuan – press report raising speculation action could be taken on the yuan -
China is carrying out stress tests on labor-intensive industries to gauge the effect a stronger
yuan would have on earnings, the 21st Century Business Herald reported today –
· China suffering labor shortage; hurting export recovery; In Dongguan, a manufacturing
centre near Guangzhou, the local government estimates that there is now just one worker for
every two jobs FT
· UK eco data was mixed on the whole - UK Q4 GDP was revised higher but offset
somewhat by a drop in UK home prices.
· Japan - Japan rose slightly on back of better eco #s (i.e. Japan IP and retail sales both came
in stronger)
· Foreclosure prevention – the White House may expand the foreclosure prevention plan by
banning all foreclosures unless they have been screened and rejected by the Home Affordable
Modification Program (HAMP). Bloomberg/NYT
· Washington to use its power to lift more families into middle class - By altering how it
awards $500 billion in contracts each year, the government would disqualify more
companies with labor, environmental or other violations and give an edge to companies
that offer better levels of pay, health coverage, pensions and other benefits; administration
officials see the plan as a way to shape social policy and lift more families into the
middle class – NYT

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