|Wolfgang Schäuble, German finance minister, in cheerful mood at the Ecofin council of EU finance ministers meeting in Brussels today, Feb 18, 2014. |
The Bank of Japan today maintained its expansionary monetary policy and extended special loan programs to help buoy economic growth, signaling its
resolve to keep the positive mood generated by premier Shinzo Abe's reflationary
policies from fading.
The central bank reiterated its upbeat view on the economy, despite recent
signs of slowing growth and suggesting that any additional stimulus will be some
The bank said in
a statement that "Japan's economy has continued to recover moderately, and a
front-loaded increase in demand prior to the consumption tax hike has
recently been observed. Overseas economies -- mainly advanced economies -- are
starting to recover, although a lackluster performance is still seen in part. In
this situation, exports have generally been picking up. Business fixed
investment has been picking up as corporate profits have improved."
"Japan's economy is expected to continue a moderate recovery as a trend, while
it will be affected by the front-loaded increase and subsequent decline in
demand prior to and after the consumption tax hike. The year-on-year rate of
increase in the CPI, excluding the direct effects of the consumption tax hike,
is likely to be around 1¼% for some time."
bank is targeting a 2% annual price rise to
years of deflation.
The Bank of Japan has doubled the size of one facility to ¥7tn ($68bn) and
said banks can now borrow twice as much money at low rates as previously under
the second programme.
The central bank also extended the expiry of both schemes by one year.
The move comes just a day after Japan reported disappointing growth numbers
for the October-to-December quarter.
Its gross domestic product rose by 1% on an annualised basis during the
period, much lower than analyst forecasts of an expansion of close to 2.8%.
The Nikkei 225 closed up 3.13% Tuesday.
says a widening probe of the foreign-exchange market is roiling an
industry already under pressure to reduce costs as computer platforms displace
Electronic dealing, which accounted for 66% of all currency transactions in 2013
and 20% in 2001, will increase to 76% within five years, according to Aite Group
LLC, a Boston-based consulting firm that reviewed Bank for International
Settlements data. About 81% of spot trading -- the buying and selling of
currency for immediate delivery -- will be electronic by 2018, Aite said.
German economic sentiment declined in February 2014
European car sales rise -- second lowest for a January since 2003
"Irish" drugs firm Actavis in talks on $25bn takeover of Forest Laboratories
Irish Corporate Tax 2014: How official spin and distortion works - in short-term
Economic View: Peripheral spread tightening continues; Dermot O'Leary,
chief economist of Goodbody comments -- "There was once a time when
markets would have been parsing every word of finance ministers in their regular
eurogroup meetings. When current political developments in Italy are thrown into
the mix, one would expect markets to be showing at least some element of
concern. The opposite was the case yesterday.
In Italy, the 10-year bond yield fell to 3.6%, its lowest level in eight
years, with the spread over Germany down to below 200bps. Political risks appear
to have been ignored, with investors instead focusing on the removal of the
negative outlook by Moody’s on Friday evening.
We have noted previously that the absence of market pressure can lead to
complacency at a policy level in the euro area. Given the apparent lack of
progress at last night’s eurogroup meeting, this accusation can certainly be
made. For example, political agreement on direct bank recapitalisation by the
ESM was kicked out until March, while outstanding issues remain in relation to
the Single Resolution Fund. The adjustment programme remains on track in Cyprus,
while a Troika mission will return to Greece this week. Statements on both
countries were brief, while there was no mention of Portugal. The statement also
said that the economic situation in the euro area overall is expected to
continue to improve.
Although complacency is warned against in the statement, one has to say that
the lack of market pressure has led to a slowdown in policy implementation,
especially with regard to the backstops ahead of the upcoming stress tests. For
now, the markets don’t seem to care about the risks (OMT, Italian politics, risk
of deflation, Greece), and the peripheral spread tightening continues."
Hibernia REIT Gets off the mark with acquisition of €67m loan portfolio:
Eamonn Hughes of Goodbody comments - - "Hibernia announced yesterday that it has
signed contracts to acquire a portfolio of loans on residential real estate
assets from Ulster Bank for €67m (net of acquisition costs). The total cost is
c.€70m and the company intends to spend c.€20m on development works (should take
c.16-18 months), whilst non-core assets will be sold. We estimate that the
residential component of the transaction equates to c.10% of the potential
investment spend of the REIT (estimated at c.€600m).
There are 17 assets of varying size in the portfolio acquired from Ulster,
mostly located in Dublin, with two assets outside Dublin, neither of which are
material. The largest asset being acquired is 213 partly completed apartments at
Wyckham Point, Dundrum, Dublin 16, with Hibernia set to spend a further €20m to
complete. There are also 89 completed residential units in various locations in
Dublin, office/commercial space of 28,500 sqft and development land of 27 acres.
The deal is the inaugural portfolio acquisition by the company and is likely
to be welcomed by investors, coming just 7-8 weeks after it received its IPO
proceeds. This gets Hibernia up and running and highlights the potential options
for the firm, particularly in off-market deals. The strategy remains focused on
the Dublin office market, but this acquisition offers reasonable upside to the
very strong prospects for the Dublin residential market. Further deals in due
course are likely to be supportive as the market gets line of sight on NAV
growth potential. We are positive on the prospects for continued improving
commercial and residential prices in Dublin in 2014 and 2015."
Conall Mac Coille, chief economist at Davy,
comments - - "European
stock indices were little changed on Monday with US markets closed for the
President’s Day holiday The euro was relatively stable against the dollar at
$1.371, close to its strongest level since the beginning of the year. Today’s
key releases include the German ZEW investor sentiment survey, which is expected
to show another rise in confidence in February. Perhaps due to weather
conditions, the drop in the headline ISM manufacturing survey to 51.3 in January
led investors to question the durability of the US recovery. So, today’s Empire
manufacturing survey will be closely watched for any hints that the headline ISM
will bounce back in February.
Last week saw the Bank of England complete its U-turn from its forward guidance
policy linking future interest rate rises to a unemployment rate threshold of
7%. Wednesday’s Inflation Report appeared to provide a new form of guidance with
Governor Mark Carney asserting that spare capacity in the UK economy remains and
when the time comes for rate rises they will be gradual and limited. However,
the MPC did not tie itself to any explicit precondition, in place of the 7%
unemployment rate, to be achieved before raising rates. Moreover, on Thursday,
Chief Economist Spencer Dale indicated that the market curve for policy rates
was plausible. The market is currently pricing in a full 25bps rise to 0.75% by
March 2015, and to 1.25% by December 2015."
Monday was Presidents’ Day in the US — a federal holiday — and US stock
and bond markets were closed.
US benchmark updates
Asia Pacific Index rose 0.9% Tuesday.
Japan's Nikkei 225 rose 3.13%; China's
Shanghai Composite fell 0.77%; South Korea's
KOSPI added 0.03%; Australia's S&P/ASX 200 advanced 0.18% and in Mumbai, the Bombay
Stock Exchange the S&P BSE India Sensex Index rose 0.83%.
In Europe, the Dow
Jones Stoxx Europe 600 is down
0.11% in early afternoon trade Tuesday.
“The ZEW report from Germany
disappointed this morning,” Arnaud Scarpaci, a Paris-based fund manager at
Montaigne Capital, which manages about $271m, said in an interview today,
according to Bloomberg. “I have been overweight in Europe this year and now am
inclined to reduce my exposure.”
In Dublin, the
ISEQ is down 0.41%
CRH is of 0.80%.
Irish Share Prices
AIB Daily Report
Bank of Ireland Daily Report
The euro is
trading at $1.3725 and at £0.8225.
For live currency updates, check the
right-hand column of the Finfacts
The US dollar
fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
Dry Index, a
measure of shipping costs for dry commodities, hit
an all-time high of 11,771 on May 21, 2008. From
that time it reversed and on the 5th of December, 2008 it hit a low of 663 - -
close to a 1986 low.
July 15, 2010, the index fell for the 35th straight session, by 9 points, or
3.11%, to 1,619 points, Bloomberg
On Monday in
BDI closed up 24 points or 2.17% to 1,130.
rose by 220% in 2013 to 2,237.
Global rebalancing — the tanker
Crude oil for March 2014 delivery is trading on the Chicago
York Mercantile Exchange (CME/Nymex) at
$101.16 up 86 cents from Friday's close (markets were closed Monday). In London, Brent for
April 2014 delivery
is trading on the International
Commodities Exchange at $109.42. The
North Sea benchmark accounts for two-thirds of the global market.
Finfacts, July, 15, 2013: US
West Texas Intermediate oil benchmark jumps in July -
- margin between WTI and Brent falls.
The spot price of an oz of gold is trading on the CME
in Chicago at $1,315.00 down
$4.0 from Friday's closing (markets were closed Monday) - - the
gold price fell 28% in 2013, the biggest annual plunge since 1981.
Gold had hit a
record high of $1,921.15 a troy ounce on Sept 06, 2011.
out our subscription service, Finfacts
at a low annual charge of €25