Europe/India

European Finance Ministers want more from Greek creditors. The difference between the two parties seem to be coming down to what interest rate Greece will pay going forward and last night Finance Ministers wanted a lower coupon than creditors were willing to pay. Also, aside from the PSI discussions, officials realize that Greece’s economic reform has been “derailed” according to the Dutch FM and Juncker, the head of the FM’s said “it’s obvious the Greek program is off track.” The question of Greece getting another tranche of money to meet its March bond payment is certainly not assured. Italian bond yields are higher for the 1st day in 7 and French banks are trading down after S&P downgraded the ratings of SocGen and Credit Ag last night. Surprisingly, euro zone manufacturing and services composite index rose to 50.4 from 48.3, the best since Aug led by strength in Germany but New Orders, Backlogs and Employment all fell. In Asia, India unexpectedly cut its bank reserve requirement ratio by 50 bps to 5.5% but left interest rates unchanged and they said “the growth/inflation balance of the monetary policy stance has now shifted to growth.” The Sensex index rose 1.5% to the highest since mid Nov in response.

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