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John Roberts, Supreme Court chief justice, administers the oath of office to President Barack Obama during the official swearing-in ceremony in the Blue Room of the White House on Inauguration Day, Sunday, Jan. 20, 2013. First Lady Michelle Obama, holding the Robinson family Bible, along with daughters Malia and Sasha, stand with the president. A public swearing in will be held at 12:00 noon Eastern Time, Monday.
Eurozone finance ministers will meet in Brussels Monday to begin talks on how
to channel rescue funds directly to banks. Policy makers are likely to clash
over how and when the €500bn European Stability Mechanism (ESM) can bypass governments
and what to do with legacy debt. An assessment of Spain, Cyprus and Greece is
also expected to feature.
Economic View: European finance ministers to meet on bank debt:
Tennent of Goodbody comments - - "Today will give the Irish Minister for
Finance, Michael Noonan, his first opportunity of the year to push for a deal on
Ireland’s legacy bank debt with both the euro group and the wider EU group of
finance ministers scheduled to meet. Top of the agenda is breaking the
detrimental link between sovereigns and banks which has driven the euro area
debt crisis. Conflicting views on how this can be achieved have so far delayed
any decisions in this regard with the politicians of the creditor countries
reluctant to take any steps that would further burden their taxpayers.
This is particularly true of the German Chancellor, Angela Merkel, whose
party lost a state election over the weekend and is facing federal elections in
Germany later this year. The divide is highlighted by the recent mixed messages
being expressed in relation to Ireland's bid for a deal on its banking debt,
with the French finance minister, Pierre Moscovici, expressing his support for a
deal over the weekend and the Finnish Prime Minister, Jyrki Katainen, reported
in this morning’s Irish Times as opposing it. Debate on this issue is likely to
be contentious and it is unlikely that any agreement will be reached this week.
Expectations about a deal for Ireland in relation to its legacy bank debt have
risen since Chancellor Merkel reiterated her support last October. However, most
of the efforts so far have been concentrated on bilateral discussions with the
ECB on restructuring the promissory note. Legal issues around the financing of
governments have meant that these negotiations have been slow but recent
comments from government officials suggest that a deal is in sight. Negotiations
in relation to the debt incurred by the State on behalf of the remaining banks
are just beginning."
Justin Doyle, Investec Bank Ireland, said today:
"This week gets underway with the first Eurogroup and ECOFIN Finance
Ministers meetings of the year. However the meeting is likely to be missing
the now familiar need for each Eurogroup meeting to tackle a thorny
financing issue on Greece, to keep Euro crisis strains in check;
Greece has now been tied over with aid cash which should keep things
quiet, at least through to the next review. Cyprus is still pressing for aid
cash, but with work still to do, it may still be a couple more months before
an aid package is agreed;
The key data releases of the Euro area week come in the shape of the
‘flash’ PMIs for the Euro area, Germany and France on Thursday; we hold
little hope of a sudden resurgence in the zone’s macro performance, with the
Euro area ‘composite’ PMI having now floundered in contractionary territory
for 10 months, albeit with some signs of an upturn last month;
All eyes will be on the Bank of Japan’s (BoJ) 21-22 January meeting. The
new Prime Minister, Shinzō Abe, has been aggressively trying to shore up the
Japanese economy and weaken the yen since he took office on 26 December. So
far, the authorities have announced a ¥10.3 trillion fiscal spending
package, the largest since 2008. They are now pushing for more aggressive
central bank policy, with their sights set on next week’s BoJ meeting."
US consumer confidence data point to softening recovery in Q1:
Conall Mac Coille, chief economist of Davy, comments - - "Stock indices were little changed on Friday (January 18th), with the Euro Stoxx
50 down 0.3% and the S&P500 up 0.3%. US markets are closed today for the Martin
Luther King holiday. The key macroeconomic data release on Friday was the
Michigan measure of US consumer confidence. The survey reading fell to its
lowest level since December 2011, indicating the toll on sentiment from the 2%
payroll tax rise in January. The $100bn rise in payroll taxes is expected to
reduce US consumption in Q1 by around 1%.
The weaker January Michigan confidence survey may be the first sign of some
softening in the pace of the US economic recovery in Q1. That said, new highs in
housing starts (954,000 in December) and lows in initial jobless claims (335,000
in the week to January 12th) suggest that the recovery in private sector demand
may be becoming self-sustaining.
Overnight, the Rightmove measure of UK housing market 'asking' prices showed a
0.2% month-on-month rise in January. This means the annual growth of the
Rightmove measure of prices has accelerated from 1.4% year-on-year in December
to 2.4% in January. Support for UK house prices may be coming from the Bank of
England's Funding for Lending Scheme, expected to boost mortgage lending and
demand in Q1."
US markets are closed for the
Martin Luther King federal holiday and the public inauguration of the president
will also be held today.
The MSCI Asia Pacific Index fell 0.2% Monday, with Japan’s
Nikkei 225 Stock Average tumbling 1.5% as the Bank of Japan began a two-day
composite index rose 0.48%; South Korea's Kospi
fell 0.05%; Australia's S&P/ASX 200 added 0.13%; in Mumbai, the Bombay Stock
Exchange's Sensex 30 gained 0.21%.
In Europe, the
Dow Jones Stoxx Europe 600 is up 0.20% in morning trading Monday.
reports that for the
first year since the futures were created, Brent crude is poised to overtake
West Texas Intermediate (WTI) oil as the world’s most-traded commodity.
in Brent jumped 14% to average 567,000 contracts in the year to November 20
compared with all of 2011, while WTI fell 17% to 575,000, according to data from
the ICE Futures Europe exchange in London and New York Mercantile Exchange
compiled by Bloomberg. The number of Brent futures changing hands has exceeded
those for WTI every month from April through October,
the longest streak since at least 1995.
Brent, produced in the
North Sea, is gaining favour among traders because of its role as the benchmark
for energy prices from Saudi Arabia to Russia. Prices have climbed 34% in the
past two years, reflecting everything from war in Libya to the embargo on Iran.
WTI, the main grade in the US, has risen 9% as the nation, which prohibits crude
exports, has struggled to clear a glut at Cushing, Oklahoma, the delivery point
for Nymex futures.