EUROPEAN PRESS
UK PRESS: Lord Hunt, the energy minister, is to meet industrialists in London tomorrow in a bid to calm mounting fears about the disruption that could follow a sudden shortage of oil supplies, the Guardian reports.
UK PRESS: The Chancellor must find another stg 10 billion in spending cuts and tax rises if he is to keep his promise to halve Britain's deficit, according to leading economists, the Times reports. Consumer spending - on which the Treasury is banking to power growth - is likely to remain weak for years to come, according to new reports by the CBI and Ernst & Young ITEM Club, the economic forecaster. Peter Spencer, chief adviser of the ITEM Club, said: "If the Chancellor is realistically going to get the public finances back on track, a credible, detailed and more aggressive plan must be in place," the paper said.
UK PRESS: City bankers have scoffed at the pay and terms being offered by the Treasury as it tries to recruit top-flight staff for the Asset Protection Agency, the Times reports. The APA, set up last year to oversee hundreds of billions of pounds in bad banking debts, is understood to want to more than double its directly employed staff from
25 to 55, the paper says.
UK PRESS: Alistair Darling will announce which government departments will be forced to bear the initial burden of cutting borrowing on Wednesday, in a Budget designed to add clarity and credibility to the government's deficit reduction plan, the FT reports. To counter the widespread view Labour's heart is not in the painful business of cutting the deficit, the Chancellor will reveal where he intends to make savings in Whitehall costs after 2011, the paper says.
UK PRESS: Labour's new 50% tax on high earners will leave Britain with the highest income-tax rates in the G8, just a year after the UK had the second lowest in the influential grouping, the Sunday Times reported.
It will have the joint highest personal tax alongside Japan among the world's leading economies, the paper said. Analysis by Ernst & Young, the accountants, also found that just four of the 30 countries in the Organisation for Economic Co-operation and Development (OECD) will have higher tax rates than the UK when the new top tier is introduced in April, the paper noted.
UK PRESS: The head of Britains biggest drinks group has launched a blistering attack on the Government's duty regime ahead of Wednesday's Budget, warning that further tax rises could threaten investment and jobs, the Times reports.
UK PRESS: Consumer groups are urging senior officials in Brussels to avoid blocks to online retailing as they draw up revised rules that allow manufacturers to choose how their goods are distributed and sold in the European Union, the FT reports.
UK PRESS: German chancellor Angela Merkel said a bailout for Greece should not be on the agenda of this week's EU summit in Brussels, The Guardian reports. Jose Manuel Barroso, the European commission president had called for the euro-zone countries to use the two-day meeting to agree a co-ordinated package of loans that could be quickly put in place if the Greek government decided it needed help to reduce its ballooning budget deficit. But Merkel said in a radio interview that Greece was not in danger of default and aid for the country would not be a topic at the summit, which starts on Thursday. "There's no looming insolvency,"
Merkel was cited as saying. "I don't believe that Greece has any acute financial needs from the European community and that's what the Greek prime minister keeps telling me."
UK PRESS: Institutional investors plan to increase their exposure to Asia in 2010 even though many admit that they lack knowledge and expertise in the region, the Financial Times reports citing a survey by the Economist Intelligence Unit. Just a fifth of respondents think that the Asian growth story is over-hyped, with a similar minority believing that the region's recovery from the crisis has been a product of fiscal expansion and is not sustainable. "An important shift is now gaining momentum, as institutional investors increasingly view Asia as an attractive investment destination and a strategic asset holding," said Carlo Venes, head of institutional business at Fidelity International, the fund management company which commissioned the survey.
JAPAN
JAPAN PRESS: Listed Japanese companies are expected to pay out Y2,791.7 billion in year-end dividends for fiscal 2009, 5% more than they distributed a year ago, a Nikkei survey showed. The finding reflects improved corporate confidence. As earnings recover and the financial crisis recedes in memory, firms are shifting priority from hoarding funds to rewarding shareholders. Of the 2,311 companies surveyed, 397 plan to increase or resume year-end dividend payments, up 50% from last year, the report said.
JAPAN PRESS: The Bank of Japan's holdings of Japanese government bonds rose to the highest level in more than two years in February as it aggressively purchased sovereign debt to bring liquidity to the market, The Nikkei reported at the weekend. But if such holdings keep increasing, the BOJ may rethink its JGB buying policy to ensure that the amount stays below the balance of bank notes in circulation as required by law. The central bank held Y51.56 trln in JGBs at the end of Feb, up 3.3% on the month. The recent balance growth is a result of a scheme the BOJ adopted last March to increase its monthly JGB purchases by Y400 bln to Y1.8 trln.
JAPAN PRESS: The highly anticipated Bank of Japan Tankan quarterly business sentiment survey, due April 1, is expected to show continued improvement, The Nikkei reported at the weekend. According to a QUICK Corp. survey of 30 private-sector research institutions, the median diffusion index of business sentiment among major manufacturers will rise to minus 13, up 11 points from the previous tankan. If this holds true, it would be the fourth straight quarter of improvement, the report said.
CHINA PRESS
CHINA PRESS: China is likely to see a trade deficit in March for the first time, Chinese Minister of Commerce Chen Deming said in Beijing Sunday, The China Daily reports. Chen made the remarks while delivering a speech at the China Development Forum.
ELSEWHERE
US PRESS: Hundreds of U.S. municipalities are losing money on interest-rate bets they made during the bull market in hopes of protecting themselves from higher rates. The deals backfired when rates fell, shriveling the sums paid to municipalities, the Wall St Journal reports. Now some are criticizing Wall Street and trying to exit the contracts, the WSJ says.
US PRESS: Dai-ichi Mutual Life Insurance Co.'s initial public offering, expected to be the largest global IPO in two years, was oversubscribed, as Japanese households jumped at the chance to buy a piece of one of the country's best-known insurers, The Wall Street Journal reported citing people familiar with the matter. While demand among institutional investors was less brisk in an offering that could be worth more than
$17 billion, market watchers said the strong retail showing could provide a fresh investor base for other companies considering going public to tap into, in what is shaping up to be a bumper year for Japanese IPOs.
ASIA PRESS: Thailand was locked in political stalemate Sunday with demonstrators planning a fresh protest with their own blood after refusing talks offered by the government, Channel NewsAsia reported.
Buoyed by a huge parade, the defiant "Red Shirts" said they would paint their blood on a white canvas, left over from the gallons they have splattered on the prime minister's house and offices during their week-long protests.
ASIA PRESS: Thai Commerce Ministry officials will soon meet with Prime Minister Abhisit Vejjajiva and Finance Minister Korn Chatikavanij to discuss ways to minimise the effect of the strengthening baht on export competitiveness, The Nation newspaper reported. The ministry yesterday reported that Thai exports rose by 23.15% year-on-year last month to
$14.4 billion. Imports soared 71.2% to $13.96 billion, resulting in a February trade surplus of $440 million. Despite the good trade figures, Commerce Minister Porntiva Nakasai has expressed concern over the strengthening of the baht, as it could negatively affect the country's exports in the coming months, the report said.
CHINA
CHINA YUAN: The People's Bank of China sets the dollar-yuan central parity rate at Cny6.8264 today, compared with Cny6.8263 set for the previous trading day.
M&A/CORP
UK PRESS: Dubai World, the troubled Gulf investment fund, is to ask its creditors for up to 8 more years to pay back a $22 billion debt mountain, The Sunday Times reported. The crisis-hit investment empire, owned by the Dubai state, will promise its lenders it will be able to pay back all the money it owes if it can get the extension. The debt restructuring proposals will be put to a seven-strong committee of the group's senior creditors in Dubai this week.
COMPANY NEWS: Arrow Energy has recommended its shareholders accept a new, improved joint takeover bid from Royal Dutch Shell and PetroChina, The Sydney Morning Herald reports. Under the deal, Arrow shareholders will received cash of A$4.70 per share, plus one share in a new listed entity, Dart Energy. Two weeks ago the company received an initial offer of A$4.45 a share, or A$3.3 billion, plus a one-for-one share in Arrow's overseas operations, Arrow International, generally valued at 50 cents a share, the report says.
EUROPE
GREECE: Greece has taken the necessary steps to tackle its fiscal crisis
and will not default on its debt obligations, PM George Papandreau
minister said on Saturday in a speech to his socialist party's national
council, wires reported.
GREECE: Comments from German Chancellor Merkel (see 2301ET bullet) are
out of sync with some other EU leaders. The NY Times reports comments
from Italy PM Berlusconi, saying that "if within the European Union
there is no willingness to help a country which has the euro currency
and is in the middle of a crisis, then the European Union has no reason
to exist." Berlusconi was speaking to reporters ahead of an EU leaders
summit this week.
FRANCE: The FT says French President Nicolas Sarkozy, "took a
battering" in regional elections at the weekend, with exit polls
suggesting the opposition Socialists had won 54 per cent of the vote.
Sarkozy escaped the humiliation of seeing a centre-left clean sweep of
all 22 regions of France after the exit polls indicated his UMP party
had retained control of Alsace, its last regional stronghold on the
mainland, the FT says. The centre-right was also poised to win in two of
France's overseas territorie
OTHER NEWS
KOREA: The listing of Korean life insurers on the stock market has
provoked controversy and anticipation. But as another company in the
sector made its initial public offering this week, investors may find
themselves underwhelmed, the JoongAng Daily reported at the weekend.
According to analysts at major securities firms, the life insurance
industry is forecast to see only moderate growth. Though certainly
attractive, stock in insurers is unlikely to generate high returns. "The
insurance sector in general is currently in the midst of seeking new
growth engines [such as] globalization and the launch of new products
and high-quality services," said Sean Shin, an analyst specializing in
the insurance sector at Mirae Asset Securities.
AUSTRALIA: The federal budget is not expected to return to surplus for
"a number of years" amid continuing fragility in the global economy,
Finance Minister Lindsay Tanner said according to wire reports. Tanner
said that there has been some "over-the-top" speculation by some private
sector economists that the budget will return to surplus within a year
or so. "We've still got a long, hard road to get back into surplus,"
Tanner was cited saying. "It's still going to take a number of years in
my view."
FX MARKET
FOREX: The dollar traded narrowly in Asia Monday, with flows limited by
a holiday in Japan. Euro-dollar spent the morning between $1.3509 and
$1.3547, and was trading at the low end of that range late in the
session. The pair had been weighed down by the conflicting signals from
the E.U. leaders, but rumors of option-defensive buy orders near $1.3500
kept the pair from falling through that support. Market moves in
dollar-yen were limited due to the Spring Equinox Day holiday in Japan.
The pair was holding near Y90.45, in late morning/early afternoon
dealings, at the lower end of a very narrow Y90.41 to Y90.60 range.
Dealers said Japanese exporter accounts were still seemed interested to
sell at Y90.80/Y91.00 and at Y91.20 while bids were spotted from Y90.20
through Y90.00, with stops now said to be around Y89.80/70.
IMM DATA: CFTC: Specs trimmed their net euro short positions as well as
their net yen long positions as per March 16, according to CFTC data
released Friday. The non-commercial futures-only (ex-options) section
showed that speculators decreased their net euro short position to
-46,341 contracts from the -74,551 contracts (record short) seen last
week, the CFTC said. In the yen, as per March 16, speculative accounts
had a net long of +15,197 contracts. This compared to the net yen long
of +26,288 contracts seen last week. The euro closed at $1.3769 and
dollar-yen at Y90.27 March 16, which compares to Friday's closing levels
of $1.3533 and Y90.48.
OTHER MARKETS
EUROPEAN STOCKS: Major European bourses are initially seen trading lower
Monday, taking their lead from the weaker US index futures.
Spreadbetters Cantor Index are calling the FTSE lower by 10, the DAX
down 20, the CAC down 5 and the Eurostoxx 50 down 8.
US STOCKS: US stock index futures off their worst levels in late Asian
trade, with the June S&P last 5.3 points lower at 1151.0.
US STOCKS: Globex traded US index futures are trading sharply lower
Monday, weighed by the House vote in favour of the Healthcare bill. The
S&P June contract was last down 7.6 points at 1148.7, with the Nasdaq
June contract lower by 10.75 points at 1921.5. Dow futures are also
lower, with the Nasdaq June contract down 56 points at 10631.
TSYS: With Tokyo markets closed for a national holiday, cash trade is
light Monday. Volumes are also light in the lead futures contracts,
despite the healthcare vote, with prices inching higher. The June 10Y
was last 1/32 higher at 117 even, having traded only 9750 lots in a 4
tick range
AUSSIE BONDS: The front of the Aussie curve is heading lower, with the
2Y reversing gains. The yield on the 2Y was last 1.25 bps higher on the
session at 4.89%.
AUSSIE BONDS: Aussie govvies are trading unchanged to very modestly
higher Monday. although flows are light and trading ranges are narrow.
The yield on the 2Y was last at 4.875%, lower by 0.25 bps, with the 10Y
yield lower by 0.5 bps at 5.665%. This left the 2/10-yr spread very
modestly flatter at 79 bps.
JAPAN/ADVISORY: Markets closed today for Spring Equinox Day holiday
CHINA STOCKS: Shanghai Composite Index ends morning down 0.17% at
3,062.60
HONG KONG STOCKS: Hang Seng Index ends morning down 1.69% at 21,009.10
OIL: Crude futures remain lower in late Asian trade, with the
front-month Nymex WTI contract down 43 cents at $80.25. The contract has
traded an $80.05 to $80.94 range.
GOLD: Spot gold is now trading down $0.45 at $1106.55/oz after a
$1103.52 to $1107.80 range. Tech charts show the spot rate has pulled
back through trendline support around $1108/oz, with the 5- and 21-day
moving averages converging for a bullish cross.
COMING UP TODAY( times GMT/ET)
1000/0600 SNB Quarterly Bulletin March 2010
- Slovakia zero 2-yr SLOVGB212 Tap
- Inter-American Development Bank annual meeting in
Cancun, Mexico through March 23.
1000/0600 German Chancellor Angela Merkel gives speech
at CDU party convention, in Berlin
1100/0700 Bundesbank issues monthly report
1230/0830 ECB Governing Council member Axel Weber and
Christian Noyer to participate in a debate on
"The Euro in the Financial Crisis - lessons and
perspectives", in Copenhagen
1330/0930 Brazil Feb-10 Current account
1330/0930 US 19-Mar MNI Capital Goods Index
1430/1030 US 20-Mar MNI Retail Trade Index
1430/1030 ECB holds MRO 7-day tender
1430/1030 Eurogroup President Jean-Claude
Juncker speaks at European Parliament
1500/1100 Mexico Jan-10 Retail, Wholesale sales
1500/1100 Mexico Jan-10 Service sector index
1500/1100 EMU Mar consumer confidence
1530/1130 ECB President Jean-Claude Trichet gives
introductory statement at the quarterly hearing
before the Committee on Economic and Monetary
Affairs of the European Parliament, in Brussels
1600/1100 Deadline for Tenders for US 4-Wk bills
1630/1100 Deadline for Tenders for US 3-mos, 6-Mos Bills
1645/1245 ECB Executive Board member Jose Manuel
Gonzalez-Paramo to speak at the USA-European
Union Forum: 'Looking towards the future',
in New York
1945/1545 Atlanta Federal Reserve Bank President Dennis
Lockhart speech on the economic outlook at the
Naples Council on World Affairs in Naples, Fla.
(He will repeat the speech at 1900ET)
2045/1630 Treasury Secretary Tim Geithner speaks at the
American Enterprise Institute on the subject of
financial regulatory reform.
2100/1700 The Senate Banking Committee begins the
process of drafting the language of its
financial regulatory reform legislation.
2300/1900 Treasury Assistant Secretary for International
Markets Marisa Lago speaks at the conclusion of
the Inter-American Development Bank Annual
Meeting in Cancun.