Wednesday, April 14, 2010


·         Europe: DJ Euro Stoxx +0.5%; FTSE +0.5%; Japan +0.4%; China +0.1%; Hong Kong +0.1%; India dn 0.2%; Australia +0.9%; SP futures +2.6pt.
·         Greece may be forced to activate the EU/IMF joint aid framework within the next two weeks according to Fitch - “I don’t think they would go as far as waiting to be seen as failing in the market,” Pryce said in a telephone interview from London. “They would prefer to go to the EU. It could well be a week or two. I don’t think they could leave it much longer than that.”  Bloomberg 
·         Greece – German economist could threaten legal action against Greece aid - A German economist plans to launch a legal challenge at the Constitutional Court against the euro zone aid package for Greece; Joachim Starbatty, a professor at Tuebingen University and prominent euro sceptic, was quoted by the Rheinische Post paper as saying the aid package breached the EU's Maastricht Treaty (Reuters) 
·         Greece - Europe’s rescue package for Greece may turn out to be three times as large as originally announced, Handelsblatt reported; the package might amount to as much as EU90B; The European Union described as “speculation” a German newspaper report that the EU aid package for debt-burdened Greece could total as much as 90 billion euros ($123 billion) over three years.  Bloomberg 
·         Greece - Soros warns of Greek "death spiral" - believes that the rescue package is only "a little step" that may not stop Athens falling into a "debt spiral".   CNBC
·         Finance Minister George Papaconstantinou said no EU nation will stop Greece if it needs to tap an aid package offered by euro-area finance ministers.  Bloomberg 
·         Portugal - IMF chief economist Simon Johnson said on April 12 that the EU should consider a “pre-emptive” package for Portugal. The Iberian nation, which is striving to cut its budget shortfall under 3 percent by 2013, will receive a report today on its progress from the EU.  Bloomberg 
·         Portugal - The European Union said Portugal may need additional budget measures this year in order to meet its deficit target.  “The Portuguese stability program is ambitious and quite concrete for the years 2011-2013, but additional measures of fiscal consolidation might be needed, especially for this year”  Bloomberg
·         ECB could roll out new collateral rules - may limit the amount of risky assets financial companies can post as collateral for loans – Bloomberg
·         Germany’s Merkel faces growing political risks over acquiescence to the Greek bailout.  WSJ  
·         German elections - Merkel’s Christian Democratic Union and its Free Democratic Party coalition partner are short of a majority in North Rhein- Westphalia; an election is scheduled for May 9 – Bloomberg
·         Funds shun Europe as 'no-go zone' after Greek crisis - Global fund managers have changed their views of the euro area dramatically since the Greek crisis - London Telegraph 
·         Eurozone Feb. IP rose more than expected. +0.9% m/m vs. St. +0.2% m/m. DJ
·         China & interest rates - China’s central bank may not need to raise benchmark interest rates until the second half of this year, Zhu Baoliang, chief economist at Beijing-based State Information Center, said in a telephone interview today; “Lower-than-expected loan and money supply growth indicates that monetary authorities’ measures to curb liquidity are effective,”  - Bloomberg
·         China & rates – Geithner said China is likely to move toward a more flexible currency because its practice of pegging the yuan to the dollar limits the Asian nation’s ability to conduct monetary policy – Bloomberg
·         Chinese property prices jump at a record pace - Prices for residential and commercial property rose 11.7pc in 70 cities across China in March, figures from the National Bureau of Statistics showed on Wednesday - London Telegraph 
·         China’s government will crack down on price speculation in the property market and curb attempts to hoard land, according to a statement today by the Chinese Housing and Urban-Rural Development Ministry.  Bloomberg
·         China’s insurers could face tough property rules - The rules will not allow Chinese insurers to invest in residential housing or to invest directly in commercial property (Reuters).  
·         China should stop “piling up greenbacks” in order to create a more balanced economy, Yu Yongding, a former advisor to the nation’s central bank, wrote in a commentary published today in the China Daily newspaper – Bloomberg
·         China raises fuel prices as expected; will increase gasoline and diesel prices by as much as 4.6 percent starting today – Bloomberg
·         China’s commodity imports surpassed market expectations in March, with the increase in both prices and quantities of imported raw materials contributing toward the country’s first monthly trade deficit since April 2004.  These surprisingly strong figures go against previous market expectations that import levels would moderate due to high costs and elevated stockpiles.      
·         China - The number of stock-trading accounts opened in China fell 40 percent in the week ended April 9 from the previous week to 240,951, according to the China Securities Depository & Clearing Corp.’s Web site. Bloomberg
·         China - A magnitude 6.9 earthquake struck China’s Qinghai province on the Tibetan Plateau, killing about 400 people and injuring 8,000. Bloomberg
·         China - China’s economy may have expanded 11.7 percent in the first quarter, the fastest pace in almost three years, making officials more likely to raise interest rates and scrap the yuan’s peg to the dollar. Bloomberg
·         Singapore in a surprise move boosted the value of its currency; sparking speculation China may follow soon; The Monetary Authority of Singapore said it will seek a “modest and gradual appreciation” in the local dollar and shift to a stronger range for currency fluctuations; Singapore also raised its eco growth outlook (from 6.5% to 9%).  Currencies across Asia rallied as investors bet governments will switch to fighting inflation from stimulating growth – Bloomberg
·         South Korea - Moody's Investors Service on Wednesday raised South Korea's sovereign rating to A1 from A2 (Reuters)
·         South Korea - JPMorgan's takeaway comments on the Moody's upgrade - Moody's upgraded Korea's sovereign credit rating to A1 today from A2 and left the outlook at neutral. The upgrade leaves Moody's in line with Fitch, while S&P's rating lags by one notch. We concur with Moody's upgrade today, and we would expect S&P to follow.    
·         Japan – BOJ vows to maintain easy policy even as economy rebounds; BOJ will stick to its easy monetary policy to beat deflation even though there are signs that Japan's economy is improving due to a rebound in overseas demand, the central bank's governor said on Wednesday; BOJ could raise its outlook on prices – Reuters 
·         Japan - Japan’s ruling party has called for drastic monetary easing to devalue the yen by 30pc and halt the slide into deflation, putting it on a collision course with the Bank of Japan - London Telegraph 
·         Former Japan Minister Masuzoe May Form New Party, Kyodo Says. Yoichi Masuzoe, Japan’s former health minister, may form a new political party with Osaka Governor Toru Hashimoto and Miyazaki Governor Hideo Higashikokubaru, Kyodo News said. Bloomberg

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