UK CBI Realized Sales Released
The UK CBI Realized Sales missed expectations coming out at -44 from the previous -25. A drop to -35 was forecast.
The GBP fell to session lows following this weaker than forecast data.
REUTERS
ECB’s Gonzalez-Paramo on the Wires
ECB’s Gonzalez-Paramo: 2009 defined by a severe adjustment and 2010 is the year of ‘gradual’ recovery
- Reiterates that inflation has declined since the summer of 2008
- Sees recovery in the interbank market
- Market rates below 2% supporting recovery
German Ifo Business Climate Release
The German Ifo Business Climate came out at 82.1 from the previous 82.6. A drop to 82.2 was forecast.
IFO’s Nerb: Exepects ECB to cut rates by 50bps, should cut by 100bps
- Expectation signal turning point ahead with stimulus showing impact by Q3
IFO: Companies are not expecting sharp improvement; bottom has yet to be reached
- Retailers have grown more pessimistic
EUROZONE’s Juncker Comments
EU’s Juncker: Not planning to increase stimulus plans on demand of US; Sees ‘timid recovery’ near end of 2010
***Reminder: Back on Jan 26, EU’s Juncker: Seeing economic recovery growing in Q4 2009
***On Mar 18th ECB’s Trichet commented that 2009 will be very difficult, reiterates that 2010 could be a year of moderate recovery
***On Mar 11th IMF’s Strauss Kahn commented that slow action on banks could jeopardize expected recovery in 2010
BoJ Deputy Governor Yamaguchi on the Wires
BoJ Dep Gov Yamaguchi: Cannot rule out additional rate cuts at the moment but must consider impact on economy and market
- Not planning to purchase newly issue JGBs
- L/T rates will not rise while economy is weak
- Uncertain if quantitative easing policy boosted economy
Japan’s Finance Minister Yosano Comments
Japan’s Fin Min Yosano: Feb exports figures were “shocking”
**Note** Feb Exports y/y: -49.4% v -47.6%e (-45.7% prior), record decline
BoJ Governor Shirakawa Comments
BOJ Governor Shirakawa: Japan’s economy is not facing the risk of deflationary spiral, watching price trends carefully
- Note, on Mar. 18th, Shirakawa said there was limited room to purchase additional JGBs, and cited no plans to alter JGB purchase regulations
WSJ Comments on Treasury’s “Private-Public” Plan Goal
WSJ “Heard on the Street”: The goal of Treasury’s “private-public” plan is for investors to buy toxic assets from banks, but agreement on price will be difficult
- Despite the complexity of pricing “legacy assets”, attracting a number of bids would force the banks to come up with more realistic valuations. Authorities will also be able to intervene in bidding process by confirming bidders’ valuations based on the currently performed balance sheet stress tests
- Much lower asset values could threaten insolvency for certain banks, and the Treasury will have to decide which banks will be seized and which will be bailed out.
- In the longer term, the Treasury’s plan will still be beneficial by mobilizing private sector to bid for banks’ assets
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