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Ireland's Economy: A briefing note prepared for the Taoiseach
Enda Kenny by his Department, warns that meeting 2011 fiscal targets, will pose
major delivery challenges: "delivery of 2011 expenditure targets will pose
major challenges, particularly in terms of efficiency savings in the public
service; tax returns will also be dependent on growth outcome; any slippage on
expenditure side will require further discussions with IMF and possible
The briefing says "there is need to prepare for further
adjustments over 2012-14 period, including expenditure review: a comprehensive
expenditure review is an opportunity to reflect Programme for Government
priorities in revised spending estimates for 2011-14, while providing certainty
about expenditure for those years; however it is a major undertaking."
Documents were released to the Irish examiner
under the Freedom of Information Act.
Market to focus on ECB and Bank of England policy meetings: Davy
economist, Conall Mac Coille, comments -- "Both the
European Central Bank (ECB) and Bank of England (BoE) will hold
their monthly policy meetings this week. European output price data
are expected to indicate that companies raised prices by 6.7% in the
year to February, and by 0.8% on the month. These supply chain price
pressures will reinforce expectations of a rate rise by the ECB this
week. Markets have priced in a rate rise in April following ECB
President Trichet's comments at last month's press conference, which
were interpreted as signalling that a rate rise was imminent.
In an otherwise slow day for macroeconomic data, the market
may also focus on the release of the EC Sentix investor confidence
survey which is expected to fall slightly from 17.1 in March to 16.0
in April. The Sentix measure has recovered steadily to similar
levels to those that preceded the intensification of the credit
crisis around September 2008, but rising oil prices and the prospect
of an ECB rate rise may have contributed to a small decline in
confidence in April. And for the same reasons, Irish consumer
confidence, due to be released by close of business Tuesday, is
likely to indicate that the Irish consumer sees little improvement
in economic prospects.
In the UK, a rise in the BoE's policy rate and the prospect of
a rate rise at the May meeting is far less certain than the market
expects in our view. On Friday, the UK manufacturing PMI fell very
sharply from 60.1 to 57.9. This could indicate that some of the
weakness in the consumer spending indicators released over the
recent past is beginning to bear down on UK manufacturing output.
And most economic forecasts for the UK rely in rebalancing of the UK
economy away from domestic demand to the manufacturing export
sector. But Friday's release indicates that the pace of expansion in
UK manufacturing slowed sharply in March. Today, the UK PMI for the
construction sector is expected to fall back to 54.8 in March from
56.5 in February.
The minutes of the last Monetary Policy Committee (MPC)
meeting indicated that most members wanted to see more evidence of
the strength of activity in the UK economy in the first half of
2011. So, with the indicators suggesting a slowdown in both
construction and manufacturing and the outlook for the services
sector and consumer spending remaining weak, the MPC is unlikely to
raise rates this month."
Mitul Kotecha, head of global FX strategy at Credit Agricole CIB, says the ECB will lift rates this week to combat rising inflation:
Petroceltic: Davy analyst, Caren Crowley, comments --
has released (April 4th) its preliminary results for the 12 months
to end-December 2010.
Analysis: The results give some colour on the much anticipated
partial farm-out of Petroceltic's 75% interest in the Isarene
licence in Algeria. A farm-out transaction has been agreed with a
third party and is awaiting approval from state authorities. The
proposed transaction will provide Petroceltic with a refund on
certain back-costs, a ‘substantial’ carry on the current appraisal
drilling programme and a deferred consideration which will be
contingent on the success of current drilling.
Management has reiterated its guidance for the large gas
condensate Ain Tsila discovery on its Algeria licence. The guidance
concludes a best (P50) estimate of 6.1 TCF of gas initially in
place. Previous guidance was also for 1-5 TCF of contingent
(recoverable) resources (Davy: 3.6 TCF).
In Italy, management is focused on drilling the onshore
Rovasenda prospect (270 mmbbl prospect, PCI:47.5%) in 2012. We think
a farm-out of some of Petroceltic's interest in this prospect is
very possible before the commencement of drilling. Petroceltic does
not expect to drill to the offshore Elsa-2 appraisal well in the in
next 12 months.
Acquisition opportunities, both at a corporate and asset
level, continue to be assessed while cash at the end of March 2011
Davy View: The results contain no catalyst for changing our
30.7p per share group valuation. The key event for the stock,
rightly or wrongly, remains the approval and announcement of a
farm-out transaction for some of Petroceltic's equity in its licence
in Algeria. Guidance regarding timing is that a formal response from
the relevant Algerian authorities on the proposed farm-out
transaction is expected in the near future."
Greek Finance Minister George Papaconstantinou spoke to CNBC in Ambrosetti about his country's debt crisis:
MSCI Asia Pacific Index rose rose 0.6% to a three-week high on Monday.
Japan's Nikkei 225 rose 0.11%; China's markets were closed Monday;
Australia's S&P/ASX 200 Index gained 0.51% and the Bombay Stock Exchange's Sensex
index climbed 1.17% in Mumbai.
BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index
averaged 59% lower in 2009 than a year earlier.
Thursday, July 15, 2010, the index fell for the 35th straight session, by 9
points, or 0.537%, to 1,700 points,
On Friday July16th, the BDI rose 20
points or 1.12% to 1,700 to break the 35-session losing streak.
Friday last week, the BDI slipped 10 points or 0.65% at 1,520.
The Financial Times reported
earlier in January, that Australia’s flooding and fears of ship oversupply has
pushed down a gauge of the cost of hiring ships to carry coal, iron ore and
other dry bulk by nearly half since October to the lowest level since the
aftermath of the financial crisis. The Baltic Dry index, the widely watched
measure of dry bulk charter rates, fell to 1,453, nearly half the 2,784 peak
reached on October 27, 2010.
margin between the US benchmark WTI (West Texas Intermediate) used on the New
York Mercantile Exchange and Brent is almost $11.
said in early February that a surge in oil inventories in Cushing, Oklahoma,
where WTI is delivered into America’s pipeline system, has depressed the value
of the benchmark against other yardsticks. The
International Energy Agency said on Thursday that with “few relief valves” to
cut the stock overhang in Cushing, the price dislocation “may persist for months
[or years] to come”.