Today's Headlines

Bloomberg: 

• Cyprus Protesters Scuffle With Police as Anastasiades Seeks Deal. Cypriot police scuffled with protesters, including employees of Cyprus Popular Bank Pcl, outside Parliament as President Nicos Anastasiades maneuvered at home and in Russia to stave off financial collapse. As the Cabinet met in the capital, Nicosia, to discuss a proposed “investment solidarity fund,” state-run CYBC television reported that Cyprus Popular, the country’s second largest, would be shut down. The Central Bank of Cyprus denied that the bank is closing, according to central bank spokesperson Aliki Stylianou’s comment on CYBC. The European Central Bank turned up the pressure on Anastasiades and euro-area finance ministers to deliver a rescue package, saying it may cut off emergency funds to Cypriot banks after March 25 unless a plan is in place “that would ensure the solvency of the concerned banks.” The finance ministers hold a teleconference tonight.
• Euro-Area Manufacturing, Services Shrank More Than Forecast. Euro-area services and manufacturing output contracted more than economists estimated in March, adding to signs the currency bloc’s economy is struggling to emerge from a recession. A composite index based on a survey of purchasing managers in both industries fell to 46.5 from 47.9 in February, London- based Markit Economics said today. Economists had forecast a reading of 48.2, according to the median of 23 estimates in a Bloomberg survey. A reading below 50 indicates contraction. The data “indicate that the euro-zone economy has remained stuck in recession in the first quarter,” said Martin Van Vliet, senior euro-area economist at ING Groep NV in Amsterdam. “With fiscal austerity, tight credit and high unemployment set to keep most peripheral economies in recession, the path back to growth will likely be slow and bumpy. Moreover, if the situation surrounding Cyprus spirals out of control the onset of recovery might well be delayed.” The euro-area economy has contracted for five straight quarters and is forecast to shrink 0.1 percent in the first three months of 2013.
• German Manufacturing Output Surprisingly Contracted in March. German manufacturing output surprisingly contracted in March. A German index based on a survey of purchasing managers in the manufacturing industry declined to 48.9 this month from 50.3 in February, while a services gauge fell to 51.6 from 54.7, London-based Markit Economics said in an e-mailed report today. A reading below 50 indicates contraction. Economists had forecast a reading of 50.5 for the manufacturing index and 55.0 for the services gauge, according to the median estimates in Bloomberg News surveys.
• Grillo Euro-Skeptic Party Seeks Mandate for Italy Government. Beppe Grillo asked Italian President Giorgio Napolitano to give his party a mandate to form a government as his deputies shunned an alliance with rivals and restated their euro-skeptic views. “The Five Star Movement asked for a full mandate to present its government agenda in parliament,” Roberta Lombardi, the party’s chief whip in the lower house of parliament, said today after she, Grillo and an ally from the Senate met with Napolitano in the presidential palace in Rome. Grillo, 64, is pushing ahead with his campaign promise to wrest political power from established parties and re-evaluate positions, like euro membership, that previously enjoyed near universal support in Parliament. His resistance to compromise hurts rival Pier Luigi Bersani, who was counting on some support from Five Star to claim the premiership, and boosts Silvio Berlusconi’s push for influence over the next government.
• European Stocks Drop on German Manufacturing Report. European (SXXP) stocks dropped by the most in three weeks as a report showed German manufacturing unexpectedly contracted this month, while Cyprus’s President worked on a new plan to obtain a bailout from the euro area. Lanxess AG fell the most in 17 months after predicting lower first-quarter earnings before interest, taxes, depreciation and amortization than in the previous year. SAP AG, the biggest maker of business-management software, dropped 2.1 percent. Brenntag AG climbed by the most since December after the chemical distributor reported full-year results that beat analysts’ estimates. The Stoxx 600 retreated 0.7 percent to 294.47 at the close in London.
• Commodity Producers Decline on Earnings Concern: China Overnight. Chinese stocks fell for the third time this week in New York as PetroChina Co. (PTR)’s lower-than- estimated 2012 earnings stoked concern other commodity producers may also report disappointing results. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese stocks in the U.S. dropped 0.5 percent to 91.89 as of 12:34 p.m.
• China Copper Imports Drop to Lowest in 19 Months as Exports Gain. Imports of refined copper by China, the biggest user, declined in February to the lowest level in 19 months, while exports rose for a sixth month. Inbound shipments were 214,949 metric tons last month, the lowest since July 2011, data from the General Administration of Customs showed today. Exports expanded to 38,569 tons, the highest since May, from 26,213 tons in January, data compiled by Bloomberg showed. 
• Oil Falls as German Manufacturing Output Contracts. Oil dropped as German manufacturing output unexpectedly contracted in March, signaling the euro-zone debt crisis is slowing growth in the region’s biggest economy. Futures fell as much as 1.8 percent after a purchasing managers’ index for Germany’s manufacturing slipped to 48.9 this month.
• Median Household Debts Rise as Percentage Owing Shrinks. The percentage of U.S. households in debt shrank over a decade, even while the median amount owed shot to $70,000, the Census Bureau reported today. Almost three-quarters of American households reported holding some form of debt in 2000. Eleven years later, the share had fallen to 69 percent in the wake of the worst economic downturn since the Great Depression, the first drop in median household debt in more than a decade. The Census Bureau report underscores the fragile nature of the U.S. economy and household income, which has remained stagnant for a generation. Even after the 2008 financial crisis, median secured debt, which includes real estate and auto loans, rose to $91,000 in 2011, a 30.5 percent increase from the median $69,749 amount owed in 2000.
• Initial Jobless Claims in U.S. Rise Less Than Forecast. Applications for jobless benefits increased by 2,000 to 336,000 in the week ended March 16, Labor Department figures showed today. Economists projected 340,000 claims, according to the median estimate in a Bloomberg survey.

CNBC: 

• Cypriot Banks Face Winding-Up If No Levy Agreed: EU Official. The European Union gave Cyprus till Monday to raise the billions of euros it needs to secure an international bailout or face a collapse of its financial system that could push it out of the euro currency zone. In stark twin warnings on Thursday, the European Central Bank said it would cut off liquidity to Cypriot banks and a senior EU official made clear to Reuters that the bloc was ready to see the bankrupt island banished from the euro in the belief it could then contain damage to the wider European economy.

Zero Hedge: 

• S&P500 Profit Margins Tumble To Q1 2010 Levels. (graph)
• Philly Fed Posts Modest Increase, Average Hours Worked Tumble. (graph)
• Pictures From A Cyprus ATM Line. 
• The Great 'Global' Un-Recovery. (graph) 
• The Cyp-Riots Begin - Live Stream.

Business Insider: 

• REPORT: Major Cyprus Bank Has Only A Few Hours Of Liquidity Left, And Is Limiting Cash Withdrawals. 
• The Cypriot Government's Latest Scheme To Avert Disaster Is Already Falling Apart.

Reuters:

• China "extremely concerned" about U.S.-Japan island talk. Japan and the United States have started talks on military plans in case of armed conflict over a group of East China Sea Islets claimed by Tokyo and Beijing, Japanese media said on Thursday, prompting China to complain of "outside pressure." The Pentagon confirmed talks were being held on Thursday and Friday between Shigeru Iwasaki, head of the Japanese Self-Defence Forces' joint staff, and Samuel Locklear, commander of U.S. forces in the Asia-Pacific, but said they were meant to discuss "the overall security environment in the Asia-Pacific region." "China is extremely concerned by these reports ... The Chinese government has the determination and ability to maintain the nation's territorial sovereignty," Chinese Foreign Ministry spokesman Hong Lei said. "No outside pressure will affect the resolve and determination of the Chinese government and people to maintain territorial sovereignty."

  MNI:

• France March Services PMI 41.9. France March Manufacturing PMI 43.9.

Telegraph: 

• Cyprus bail-out: live. Eurozone ministers openly discussed Cyprus leaving the euro in an emergency call on Wednesday, as alarm over the bailout crisis escalates.

Handelsblatt:

• The German government sees little leeway to grant concessions to Cyprus if the country does not participate in its own bailout to the extent demanded. A softening of the EU's stance on austerity risks undermining confidence among bondholders already dented by the banking crisis in Cyprus.

Ansa:

• Italy's Napolitano Won't Give Mandate Without Majority. Ansa cites Northern League's Giacomo Stucchi as saying after govt-making talks with Italian President Napolitano. Italian press say Napolitano may appoint someone else as PM should Democratic Party leader Bersani no have enough support.

Expansion:

• Spain Deposit Tax May Raise Up to EU3 Billion. A tax of .1% to .2% of bank deposits may raise from EU1.5b to EU3b, citing bank of Spain data. Budget Minister Cristobal Montoro said yesterday the tax was designed to "impose order" on Spain's banking system after regional governments sought to raise revenue from deposits.

People's Daily:

• Chinese, Iranian FMs meet on bilateral ties. Chinese Foreign Minister Yang Jiechi met in Beijing Monday with his Iranian counterpart Ali Akbar Salehi, exchanging views on the Iranian nuclear issue and the situation in west Asia and north Africa. During the meeting, Yang praised the smooth development of bilateral relations in recent years. This year marks the 40th anniversary of the establishment of China-Iran diplomatic ties, said Yang, adding China will work with Iran to push forward the development of bilateral relations. Salehi said Iran attaches great importance to developing ties with China and is willing to take the opportunity of the 40th anniversary to further expand bilateral friendly cooperation.