Broadgate: Market News 13/3
13 March 2012
Euro-area finance ministers signed off on a second Greek bailout, paving the way for the first payment of 5.9 billion euros in March. A total package of 130 billion-euros ($170 billion) will be awarded to the country over the next three years from the European Financial Stability Facility, the euro region’s temporary rescue fund. To win new the aid package, Greece had to sign on to deep budget cuts and complete the world’s largest-ever sovereign debt restructuring.
“The new Greek program is not only in its starting blocks, but has been politically adopted tonight by the euro group,” Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of 17 finance ministers, said in Brussels late yesterday. Euro finance officials will give a formal approval tomorrow, March 14, a day before the International Monetary Fund board votes on its contribution.
Asian stocks rose and the price of oil climbed ahead of data expected to show the fastest U.S. retail sales growth in five months. U.S. retail sales probably rose 1.1 percent in February. As the global outlook improves, data also shows growing confidence among German investors. A German sentiment gauge from the ZEW Center for European Economic Research reached a one-year high.
Japan’s central bank rejected lawmakers’ calls to expand asset purchases for a second straight month, spurring stocks to surrender gains and prompting the yen to rise. The bank instead unveiled a 2 trillion yen ($24 billion) increase in a program aimed at lifting Japan’s long-term growth rate, with 1 trillion yen of the credit to be in U.S. dollars. This comes after political pressure from lawmakers within the ruling Democratic Party of Japan, who urged more aggressive steps to counter deflation.
Japan’s economy is showing signs of rebounding from a contraction last quarter. Machinery orders rose a more-than-forecast 3.4 percent in January, a report showed yesterday, and industrial production and retail sales also exceeded economists’ median estimates.
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