- Italy Rates Rise in Auction Amid Vote Concern, Fitch Downgrade. Italian borrowing costs rose today in the first auction since Fitch Ratings downgraded the nation, saying inconclusive elections threatened its ability to respond to the fourth recession since 2001. The Rome-based Treasury auctioned 7.75 billion euros ($10.1 billion) of one-year bills today at 1.28 percent, the highest since December and up from 1.094 percent at an auction of similar maturity debt Feb. 12. Attracted by higher rates, investors bid for 1.50 times the amount offered, up from 1.38 times last month. Today’s sale was probably helped by 8.69 billion euros in bill redemptions this week.
- Bundesbank Almost Doubles Risk Provisions on ECB Measures. Germany’s Bundesbank almost doubled its risk provisions in 2012, citing increased potential for losses stemming from the European Central Bank’s monetary policy. The Frankfurt-based central bank increased provisions for general risks by 6.7 billion euros ($8.7 billion) to 14.4 billion euros, it said in an e-mailed statement today when releasing its 2012 annual report.
- U.K. Industrial Output Unexpectedly Falls on Oil, Gas. U.K. industrial production unexpectedly fell in January as factory output slumped, fueling concerns that Britain may slip into a triple-dip recession. Production dropped 1.2 percent from December, when it jumped 1.1 percent, the Office for National Statistics said today in London. The median forecast in a Bloomberg News survey of 29 economists was for a 0.1 percent increase. Manufacturing declined 1.5 percent. The pound fell.
- Banks’ Debt Addiction Said to Face Scrutiny at Basel Group. A planned international limit on bank indebtedness will be on the agenda of every meeting of the Basel Committee on Banking Supervision this year as regulators seek to wean lenders off their addiction to debt, according to three people familiar with the talks. Regulators are preparing to fight lenders over the details of the so-called leverage ratio as they seek to toughen rules on the minimum amount of capital they must use to back their investments. The Basel group, which brings together supervisors from 27 nations, will meet in the Swiss city tomorrow, according to the people, who asked not to be identified because the meetings are confidential.
- Junk Bond Puts Jump on Record-Low Yield. (video)
- Beijing’s Rising Rents Squeeze Newcomers Barred From Home Buying. Beijing’s strictest-in-the-nation property curbs are forcing up rents for about 7.7 million residents originally from outside of the city who are blocked from buying a home. The Chinese capital requires new arrivals to wait five years before purchasing a house, while cities including Shanghai permit ownership after one year of residency. Beijing introduced restrictions on non-locals in 2011, followed by about 40 other cities, part of a three-year, largely unsuccessful campaign by the central government to contain the growth of property prices.
- China Aluminum Output at Record in January on Capacity Additions. Aluminum production in China, the biggest producer and user, climbed to a record in January on capacity additions, data from the National Bureau of Statistics showed today. Production was 1.78 million metric tons in January, according to Bloomberg calculations based on the data. The figure exceeded the previous record of 1.75 million tons in August, said Zhang Chenguang, an analyst at SMM Information & Technology Co. The bureau doesn’t release January output data alone and may revise previous data without disclosure.
- GOP Budget Establishes Contrast With Democrats. Republican budget standard-bearer Paul Ryan on Tuesday offered his party's most provocative fiscal framework in years, calling for Medicare and Medicaid overhauls and new limits on defense spending not previously endorsed by party leaders.
- North Korea Ratchets Up Tension. North Korea moved to further stoke tensions with South Korea, as state media reported that Kim Jong Eun instructed his military to be ready to deal "deadly strikes" while visiting an artillery unit near the Yellow Sea border that has been the scene of several clashes between the nations.
- OPEC: U.S. Shale Oil to Cut Into Demand. The Organization of the Petroleum Exporting Countries cut its forecast of demand for its oil this year, citing growing production from U.S. shale deposits. If the scaled-back forecast proves correct, OPEC could be on track to have its lowest share of the global oil market in more than 10 years. OPEC's move comes as industry experts increasingly question whether the producers' group, which has had a decisive influence on the oil market since the 1970s, can maintain its position amid a boom in U.S. oil production resulting from shale- rock drilling technology.
Fox News:
- Amid rising tensions, China says it will send a survey team to disputed islands held by Japan. A Chinese official says Beijing plans eventually to land a survey team on uninhabited islands at the heart of an increasingly dangerous territorial dispute with Japan. It was China's clearest expression yet of an intention to set foot on the islands, adding to the sharpening rhetoric between the two sides over the islands, which are controlled by Japan but also claimed by China.
- Small Business Confidence Edges Up Slightly in February. Small-business owners' confidence improved a bit in February, but entrepreneurs still aren't feeling a surge of optimism — or hiring. That's the finding of a monthly survey by the National Federation of Independent Business. The group said Tuesday that its small-business optimism index edged up 1.9 points to 90.8 points from 88.9 points in January. "While the Fortune 500 are enjoying record high earnings, Main Street earnings remain depressed," said NFIB chief economist Bill Dunkelberg in a prepared statement. "Far more firms report sales down quarter over quarter than up." "Until owners' forecast for the economy improves substantially, there will be little boost to hiring and spending from the small business half of the economy," he said.
- 'Dr. Copper' Has Raised Doubts About Recovery. Both the stock market rally and economic recovery are missing what historically has been a key element - a house call from "Dr. Copper."
- El-Erian: Fed Now Facing One of Its Toughest Jobs Ever. (video) "This exit going to be one of the most challenging issues facing any central bank," he said.
- Watch Out! Reversal of the 'Great Rotation' Coming : Study. Talk of a "great rotation" out of bonds and into equities is misleading according to investment strategy group Lombard Odier, which argues that 2013 could see the reverse happen.
Business Insider:
Reuters:
- Euro woes not over, says crisis-wary Bundesbank. A wary German central bank said on Tuesday it had set aside billions more euros against what it deems risky European Central Bank moves, and criticized France directly for "floundering" in its reform drives. Presenting Bundesbank 2012 results, Jens Weidmann, the bank's chief, said the euro zone crisis, which has eased as a result of ECB funding promises, was not over. He urged governments to tackle the roots of their troubles with reforms. Weidmann, a member of the ECB's Governing Council, opposed the bank's yet-to-be-used bond-buy plan agreed last September and believes euro zone governments must shape up their economies to exit the crisis rather than looking to the ECB for help. "The crisis that we are facing is a crisis of confidence, and this confidence cannot be gained if we postpone the tackling of the root causes of the crisis," he told Reuters in a television interview. Stressing that "the crisis is not over despite the recent calm on financial markets," Weidmann earlier told a news conference there was uncertainty about the reform course in France, Italy and Cyprus. "The reform course in France seems to have floundered, in Italy it has been brought into question by the elections and in Cyprus (which is struggling to get a bailout) the situation is especially unclear."
- SEC asked Goldman(GS) to disclose more about illiquid assets-filings. Goldman Sachs Group Inc began disclosing more information about the way it values illiquid assets after staff from the U.S. Securities and Exchange Commission pressured the bank to do so, according to documents released on Tuesday.
- Wal-Mart(WMT) CFO says still seeing effect of delayed tax refunds. Wal-Mart Stores Inc's U.S. customers are still contending with delays in getting their tax refunds this year, with volume running about a third lower than normal, the discount chain's finance chief said on Tuesday.
- China's Suntech(STP) to close its only US solar panel plant. China-based Suntech Power Holdings Co Ltd said it would close its only solar panel-making plant in the United States to cut costs, two years after opening the facility that never reached full production. Shares of the company, struggling to cover a convertible bond due this Friday, fell 9 percent to $1.05, their lowest in more than two months.
- U.S. Jan steel exports fall on year on low international demand. January steel exports from the United States fell by 14.6 percent from the same month last year due to a decline in international steel demand, an industry body said on Tuesday. "Steel exports declined to all regions in the year-to-year comparison as international economic conditions and steel-related demand sagged," said David Phelps, president of the steel trade association American Institute for International Steel. "We are concerned about the direction of the international marketplace at this point."
- Brazil says subsalt oil finds could triple total reserves. Brazil's giant subsalt oil and gas region could yield 35 billion barrels of recoverable oil equivalent, more than double Brazil's existing reserves, an energy ministry representative said on Tuesday.
- UK on track for triple dip - NIESR. Britain is on track for a triple dip recession, one of the nation’s leading forecasters has signalled, as new figures on the UK’s manufacturing industry dealt a blow to recovery hopes and sent sterling crashing to a fresh two-and-a-half year low.
- Consumer price inflation accelerates to 11% in February. India's annual consumer price inflation (CPI) accelerated to 10.91 percent in February from the previous month, government data showed on Tuesday. Consumer prices rose an annual 10.79 percent in January. India's retail inflation is the highest among the BRICS group of emerging economies - Brazil, Russia, China, and South Africa. Food prices for consumers rose 13.73 percent in February from 13.36 percent in January.
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