Eur/usd - page 64
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Italy minister resigns amid abuse of power, corruption probes
Italy's Agriculture Minister resigned Sunday amid allegations of abuse of power over the appointment of staff in the public healthcare system and in the wake of an investigation into the management of European Union funds for agriculture.
"I am resigning as minister. I cannot remain part of a government which has not defended my honour," Nunzia De Girolamo said on Twitter.
De Girolamo was accused this month of exerting improper influence over the choice of healthcare managers in the city of Benevento in the Campania region, following revelations in the media of phone-tapped conversations in 2012.
She is the second minister to step down from Prime Minister Enrico Letta's shaky coalition government.
On Saturday, allegations of malpractice emerged against her ministry after Italy's financial police confirmed they carried out an on-site search this week as part of an investigation into the distribution of EU funds, Italian media reported.
Investigators are looking into discrepancies in the distribution of some 8.9 billion euros ($12.18 billion) for agricultural investment which were given to Italy from 2007 to 2013, according to the Repubblica daily.
De Girolamo, who is not currently under investigation, said in a statement Saturday that the police probe centered on a period before she took office.
While the EU determined where part of the funds were invested, the ministry was tasked with distributing the remaining capital through the AGEA coordinating company, which the government holds a 51 percent stake in, media reports said.
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erman business mood brightens for third month
Business sentiment in Germany improved for a third month in a row in January, data showed on Monday, signaling that Europe's largest economy is on track to see stronger growth in 2014. The Ifo Business Climate Index rose to 110.6 in January, up from 109.5 in December, climbing to the highest level since July 2011 and beating analyst expectations of 110.04. Assessments of the current business situation in Germany also improved and rose to the strongest level since June 2012 at 112.4.
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Remember The "European Recovery"?
As all eyes are focused on US earnings and asset-gatherers cherry-pick beats and ignore the bellwether misses, we thought a gentle reminder of the other seemingly unbreakable 'meme' of the moment - that of Europe's recovery - was in order. The following chart, presented with little comment of schadenfreude, should clear up any doubts about whether Europe's economy is on the up... or down...
So, earnings growth expectations have collapsed from an inordinately hope-strewn +9% at the start of December to 0%(i.e. no growth whatsoever) last week...
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Bundesbank calls for capital levy to avert government bankruptcies
Germany's Bundesbank said on Monday that countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help.
The Bundesbank's tough stance comes after years of euro zone crisis that saw five government bailouts. There have also bond market interventions by the European Central Bank in, for example, Italy where households' average net wealth is higher than in Germany.
"(A capital levy) corresponds to the principle of national responsibility, according to which tax payers are responsible for their government's obligations before solidarity of other states is required," the Bundesbank said in its monthly report.
It warned that such a levy carried significant risks and its implementation would not be easy, adding it should only be considered in absolute exceptional cases, for example to avert a looming sovereign insolvency.
The International Monetary Fund discussed the option in a report in October and said that reducing debt ratios to end-2007 levels for a sample of 15 euro area countries, a tax rate of about 10 percent on households with positive net wealth would be required.
The German Institute for Economic Research calculated in 2012 that in Germany a 10-percent levy on a tax base derived from a personal allowance of 250,000 euros would add up to around 230 billion euros. It did not give a figure for crisis countries due to lack of sufficient data.
Greece has been granted bailout funds of 240 billion euros from the euro area, its national central banks and IMF to protect it from a chaotic default and possible exit from the euro zone. Not all funds have been paid out yet.
In Germany, however, the Bundesbank said it would not support an implementation of a recurrent wealth tax, saying it would harm growth.
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Euro Area Economic Outlook Continues To Brighten: Conference Board
Eurozone's leading indicator increased for the seventh successive month, signaling continued improvement in the region's economic outlook, survey data released by the Conference Board revealed Tuesday.
The leading economic index advanced 0.6 percent sequentially to 109.9 in December, after recording a similar gain in November. The index has now increased for the seventh month in a row.
Meanwhile, the coincident economic index, a measure of the current situation, dropped 0.1 percent month-on-month to 101.1 in December. This followed a 0.3 percent rise in November and a 0.1 percent decline in October.
During the six months ended December, the leading index recorded a 4.3 percent gain, and the coincident index edged up 0.1 percent.
"Sentiment among businesses and consumers keeps improving as confidence in the recovery is picking up," Bert Colijn, economist for Europe at the Conference Board, said.
"However, even though the first half of 2014 looks promising, the lack of strong investment, high unemployment and low wage growth implies that the rate of economic growth will remain modest."
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Spain Retail Sales Fall For Second Time In Three Months
Spanish retail sales dropped for the second time in three months in December, the statistical office INE said Wednesday.
Retail sales dropped 1 percent year-on-year in December, reversing the 1.8 percent fall in November. On a monthly basis, retail sales dropped 3.5 percent after rising 1.9 percent a month ago.
In the whole year of 2013, retail sales declined 3.9 percent from 2012, it said.
Sale of food products fell 2.5 percent, while non-food product sales rose 0.4 percent in December from the previous year.
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German Consumer Morale Highest Since 2007
German consumer confidence is set to sustain the improvement in February as consumers remain upbeat about the economy and future income, amid strengthening labor market conditions.
The forward-looking consumer confidence index rose strongly to 8.2 points from an upwardly revised 7.7 points in January, results of a survey by the market research group GfK said Wednesday.
The latest figure is the highest since August 2007. Economists had expected the score to remain unchanged at January's original reading of 7.6.
"Germans consider the domestic economy to be clearly on the upturn at present," GfK said.
The economy is estimated to have grown by 0.25 percent in the fourth quarter of 2013. Bundesbank forecasts growth to rise to 1.7 percent in 2014 and to 2 percent in 2015.
The economic expectations measure jumped to 35.3 from 23.3. The indicator posted its fifth consecutive increase and hit the highest level since July 2011.
According to expert estimates, robust private consumption and investments from companies will significantly contribute to economic development this year. In addition, the low interest rate will kick start investment.
Moreover, activity is further shored up by improved export prospects because of global recovery.
In the wake of rather optimistic economic outlook, the income expectations index rose to a 13-year high of 46.2 points in January from 39.5 in December. The rising economic optimism boosted income prospects.
A stable employment situation with improving scope for increases in employees' income amid a very moderate inflation strengthened the purchasing power of consumers.
Rising economic and income expectations also had a positive impact on willingness-to-buy in January. The willingness-to-buy index climbed to 50 from 46.1, marking the highest level since late 2006.
Saving money has seemingly become still less appealing for consumers recently. Traditional investment options currently pay barely any interest.
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Spanish recovery picks up pace as GDP rises 0.3%
Spain's economic recovery picked up the pace in the fourth quarter, as expected, posting its second quarterly positive reading after a two-year recession, the country's statistics institute INE said Thursday.
Spain's gross domestic product rose 0.3% in the fourth quarter from the third, INE said, in its preliminary GDP estimate for the quarter. This is in line with a previous estimate by the country's central bank, and statements made by Finance Minister Luis de Guindos.
GDP contracted 0.1% in the fourth quarter from the same period of 2012, INE said, with a better contribution from internal demand offset by a smaller contribution from the export sector.
For the whole of 2013, the Spanish economy--the euro zone's fourth-largest--contracted 1.2%, INE added.
The quarterly reading compares with meager 0.1% growth in the third quarter from the second, and a 1.1% contraction in the third quarter from the same quarter of 2012.
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Dollar Strengthens Versus Euro as Spending Rises After Fed Taper
The dollar strengthened a fifth day versus the euro as U.S. consumer spending rose the most in three years a day after the Federal Reserve scaled back bond purchases that weaken the greenback and support global asset prices.
Hungary’s forint dropped as emerging-market peers the South Africa rand and Brazil real rebounded from a week-long rout. The 18-nation shared currency fell as German inflation unexpectedly stayed unchanged in January, signaling subdued price pressure in the euro-area’s largest economy.
“The selloff in emerging markets is encouraging money to divest into developed markets, where the dollar is a beneficiary of that,” Brian Daingerfield, a Stamford, Connecticut-based currency strategist at Royal Bank of Scotland Group Plc, said in a phone interview. “What’s going on in EM is certainly the larger driver of foreign exchange markets right now.”
The dollar strengthened 0.8 percent to $1.3551 per euro at 3:42 p.m. New York time to extend its longest rally since Nov. 1. The U.S. currency gained 0.4 percent to 102.72 yen, while the euro slipped 0.4 percent to 139.21 yen.
The Bloomberg Dollar Spot Index, which monitors the greenback against 10 major counterparts, rose 0.4 percent to 1,030.60 after touching 1,025.05 yesterday, the lowest level since Jan. 14.
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German Retail Sales Fall Unexpectedly In December
German retail turnover declined unexpectedly during Christmas season, provisional results from the Federal Statistical Office showed Friday.
Retail turnover fell 2.5 percent in real terms from a month ago, reversing November's 0.9 percent rise. Sales were expected to increase by 0.2 percent.
Similarly, retail sales, on a yearly basis, slipped 2.4 percent in December, in contrast to the 1.1 percent growth posted in November and 1.9 percent rise expected by economists.
Turnover in retail trade in the whole year 2013 was 0.1 percent larger than in the prior year, the same rate as seen in 2012.
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