Tuesday, March 23, 2010



·         Europe: DJ Euro Stoxx +0.5%; FTSE +0.7%; Japan dn 0.5%; China dn 0.7%; Hong Kong +0.3%; India +0.3%; Australia +0.9%; SP futures +2pt.

·         Greece – rift widening in Europe over best course of action to pursue – ECB president Trichet suggested that Greece could receive loans from its euro-zone partners under certain conditions, comments that appeared to put him at odds w/Germany.  WSJ       

·         Greece wants a "European" solution to its debt crisis, backing away from signals that it may seek out IMF assistance; Greece wants a European solution to its debt crisis and expects positive results from a European Union summit on March 25-26, Finance Minister George Papaconstantinou said on Tuesday – Reuters

·         European Union President Herman Van Rompuy is seeking to strike an agreement on an aid mechanism for Greece before the start of an EU summit this week, a European diplomat said.  Bloomberg

·         Greek Finance Minister George Papaconstantinou said Greece was able to keep borrowing from international markets and is in a position to service its debt.  Bloomberg

·         ECB signals concession on Greek debt; the ECB has signaled it may continue accepting Greek debt as collateral in its liquidity ops even if it gets downgraded further; Trichet said his “working assumption” was that Greece would not face problems. But in a noticeable softening of the ECB’s stance, he added that if that assumption was “too optimistic . . . then we would look at the situation”.  FT     

·         UK mortgage lending - Seasonally adjusted net mortgage lending grew just GBP2.8 billion in February compared with a GBP2.6 billion rise in January.  DJ

·         UK CPI came in +0.4%, lower than expectations of +0.6% - DJ

·         Spain - Spanish Finance Minister Elena Salgado reached an agreement on cost-savings measures with the finance chiefs of Spain's regional governments – WSJ 

·         Swiss National Bank President Philipp Hildebrand said the central bank is ready to act “decisively” against “excessive” franc gains – Bloomberg 

·         Strict austerity measures in Europe threatens a double dip recession in the region, which would place further strain on the euro.  ECB may be slower than previously expected to withdraw monetary stimulus.  Bloomberg

·         Germany's foreign minister on Tuesday rejected a charge by Greece's deputy prime minister that Berlin is reluctant to help Athens because its exporters and banks are profiting from a debt crisis that has hit the euro - Reuters

·         French March Business Sentiment Worse. 91 vs. St. 92. [DJ]

·         China – yuan forwards inch higher following Wen’s comments - Chinese Premier Wen Jiabao made conciliatory remarks that China did not want "trade and currency wars" with the United States.  Wen said a meeting coming up in May between China and the US would be very important towards defusing strains between the two companies.  Wen added Monday that China's trade surplus has been narrowing in recent months and turned into an US$8 billion trade deficit in the first third of March. Wen's remarks came after Commerce Minister Chen Deming said Sunday that China may post a trade deficit for all of March.  Reuters/DJ

·         China will have more scope to allow its currency to appreciate if the U.S. government adopts a low-key stance on the issue according to Martin Feldstein; "If the U.S. Congress and the Treasury don't talk about the Chinese manipulating their currency, if the U.S. can be quiet for two months, then I think the Chinese will be able to say that because of the great strength of the Chinese economy ... they are unilaterally raising the value of the RMB,"  (Reuters)

·         China inflation - China's consumer price index will likely fall in March compared with February as food prices have declined; During the first quarter, CPI is likely to rise 2.0%-2.5%, the National Development and Reform Commission said on its Web site.  CPI is likely to be stable in March, with rising input prices having a small impact on consumer prices, it said.  DJ

·         China - Shanghai may require real estate developers to make a full payment for land purchases within 30 days of signing contracts from 60 days currently – Bloomberg

·         China’s finance ministry plans to sell 1.8 trillion yuan ($264 billion) of government bonds this year, 13 percent more than a year earlier – Bloomberg

·         China property market update - The market is becoming increasingly concerned over asset inflation building within China, the policy response by the government to address these concerns, and the implication for China’s property sector including the developers under our coverage universe.  In our view, while asset prices have been rising rapidly in recent months, they have not reached a point yet where there is a nationwide bubble ready to burst or which will prompt the government to take pre-emptive measures that will likely harm sector fundamentals and valuations.  Daniel Fan     

·         China hotel market - State-owned enterprises (SOEs) without primary interests in the hospitality industry have been told to get out of the hotel business.  Marketwatch.  

·         Japan’s government to face large fund shortage in ‘11/’12 according to a report in the Nikkei - Japan's government may need to issue more bonds or drop some spending plans as it faces a shortage of up to 7 trillion yen ($78 billion) in funds in the year to March 2012.  Reuters 

·         Japan – BOJ minutes reveal split view on outlook - “Some embers were of the view that upside and downside risks were becoming balanced,” while others noted “considerable downside risks to the economy,” minutes of the Feb. 17-18 meeting released today in Tokyo show – Bloomberg 

·         Japan - Japan’s fiscal plan to be released by June may include a numerical goal for reducing the ratio of debt to gross domestic product, National Strategy Minister Yoshito Sengoku said – Bloomberg 

·         Singapore Leans Toward Tighter Policy - The Monetary Authority of Singapore is leaning toward tightening policy a bit in April to curb inflation but hasn't decided yet (WSJ) 

·         Taiwan - Taiwan’s IP showed further solid expansion in February. February IP rose at 35.2%oya (J.P.Morgan: 32.9%, consensus: 37.8%) compared to the upwardly-revised 70.1%oya growth in January. Seasonally-adjusted, IP expanded at 2.8% m/m in February, adding to the 1.8% m/m gain in January, with the sequential trend rising at 41.3% 3m/3m, saar. The continuous, impressive growth momentum in Taiwan’s industrial activity in recent months has been consistent with the solid trend in the global manufacturing cycle, especially with regard to the tech sector.  Grace Ng. 

·         Governments around the world are on a “charm offensive” w/the largest SWFs (sovereign wealth funds) to help insure there is a ready market for all the debt being dumped on the market this year.  FT  

·         Dubai World may ask creditors for five to eight years to re-pay its $22 billion in debt as part of a restructuring proposal that could come as early as this week (WSJ)    

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