- Body Language Reflects Chill as Kerry and Lavrov Discuss Ukraine. U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov, unsmiling and standing stiffly, let their body language speak for them before heading into private talks Monday in Geneva. Afterward, they showed there was little to smile about.
- How Much More Economic Pain Can Vladimir Putin Take? It looks like the one-two punch of sanctions and cheap oil are about to wreck Russia.
- Greece May Need Third Rescue, EU’s Dombrovskis Says. Greece could need a third bailout deal when its current program expires in June because markets may still not be prepared to lend to its government, even with a euro-area credit line, European Commission Vice President Valdis Dombrovskis said. Prime Minister Alexis Tsipras, elected in January, said Friday his government won’t need another bailout. Greece has received pledges of 240 billion euros ($269 billion) in aid from its two rescue packages, and Tsipras’s government must meet creditor demands to tap remaining funds.
- Record Home Sales in Sydney Add to Bubble Fear. Sydneysiders wanting to sell their homes have never had it easier. The proportion of successful house auctions in Australia's largest city was above 80% at the weekend for the fourth week in a row. That is the longest stretch on record and highlights the potential consequences of a projected interest-rate cut. Governor Glenn Stevens's effort to revive business investment with cheap finance is adding fuel to the country's biggest property market. Home sellers may get a further boost, with 18 of 29 economists forecasting a 25-basis-point cash rate reduction on Tuesday.
- Bill Gross Says Currency War Risks Slowing Global Growth. Bill Gross said a global race to devalue currencies in an “undeclared” war risks slowing growth instead of stimulating it. Central bank policies have pushed interest rates below zero in Europe, and countries including China and Japan appear to be devaluing their currencies, he wrote in an investment outlook for Janus Capital Group Inc., where he runs the $1.5 billion Global Unconstrained Bond Fund. While such moves make debt burdens more tolerable and exports cheaper, they are bound to hurt the global economy as a whole, he wrote. “Common sense would argue the global economy cannot devalue against itself,” Gross wrote. “Either the strong dollar weakens the world’s current growth locomotive (the U.S.) or else their near in unison devaluation effort fails to lead to the desired results.”
- Emerging Currencies Decline to One-Week Low After China Rate Cut. Emerging-market currencies fell for a third day after a Chinese interest-rate cut pushed the yuan to a 2012 low and the ruble and Brazilian real led declines in developing Europe and Latin America. The yuan slid to as low as 6.274 against the dollar after rates were reduced for the second time in three months. The ruble dropped 0.9 percent. The real weakened 1.4 percent. South Africa’s rand sank to a one-week low after weaker-than-predicted manufacturing data followed a report last week showing a trade deficit. Developing-nation equities fell for a second day.
- Europe Stocks Fall From Highest Since 2007 as Energy Shares Drop. European stocks declined from their highest level in more than seven years as energy companies slid. The Stoxx Europe 600 Index retreated 0.2 percent to 391.29 at the close of trading, paring earlier losses of as much as 0.7 percent.
- Corporate-Bond Market Poses Systemic Risk, SEC’s Gallagher Says. A lack of liquidity in corporate-bond markets could pose a “systemic risk” to the economy when interest rates rise, U.S. Securities and Exchange Commission member Daniel Gallagher said. Gallagher, a Republican, warned that the Financial Stability Oversight Council, a group of U.S. regulators that monitors emerging systemic risks, hasn’t paid enough attention to the $7.3 trillion corporate-bond market, which has ballooned over the past seven years amid low interest rates. He made the remarks Monday at a banking conference in Washington.
- Mission Accomplished: Nasdaq 5000. (graph)
- ISM Manufacturing Tumbles To 13-Month Lows, Employment Slumps, Construction Spending Plunges. (graph)
- US Savings Rate Surges To Highest Since 2012 As Consumers Save "Gas Tax Cut" Instead Of Spending. (graph)
Telegraph:
- French factory decline even worse than Greece. New orders dry up and overseas demand falls, as output contracts in France at an even faster rate than in troubled Greece.
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