- EU Moves Toward Tougher Russia Sanctions as Greece Yields. European Union governments moved toward imposing further economic sanctions on Russia as Greece’s new administration refrained from casting a veto that could leave it isolated in Europe. EU foreign ministers gave the go-ahead to prepare steps that would go beyond last year’s decisions to ban financing for Russian state-owned banks and prohibit the export of advanced energy-exploration technology. The EU will also extend a blacklist of 132 people including Russian politicians and military officers involved in the Ukraine conflict by six months to September, and add more names to the list by Feb. 9. “It does include preparatory work for further punitive measures,” EU foreign policy chief Federica Mogherini told reporters after the 28 national ministers met Thursday in Brussels. “We hope this can help put pressure in particular on Russia to make positive steps.”
- Greek Market Moves Don’t Alter EU Stance, Official Says. (video) Market tension in Greece hasn’t weakened the European Union’s determination that officials in Athens stick to commitments under the nation’s international bailout, said Valdis Dombrovskis, the European Commission’s vice president for the euro. Stocks in Athens fell this week to lows not seen since the worst of the debt crisis, with Greek banks losing more than $10 billion of value within 48 hours of the appointment of an anti-bailout cabinet under new Prime Minister Alexis Tsipras. The markets rebounded Thursday as the government sought to downplay the prospect of a clash with creditors, with the stocks gaining 3 percent and the yield on benchmark 10-year Greek bond falling 21 basis points to 10.12 percent.
- Greek Government’s Signals are ‘Very Mixed,’ ECB’s Jazbec Says. Greece’s new government is sending “very mixed signals” on its aid program and it's too soon to say how the country will be treated in the European Central Bank's bond-buying plan, ECB Governing Council member Bostjan Jazbec said. “Our concerns and hopes are related to how the Greek government will understand the situation and react to it,” he said in an interview in Ljubljana on Thursday. “It’s too early to directly answer questions on when and how the ECB can buy Greek government bonds.” Jazbec’s comments are the most explicit yet from an ECB policy maker on the Greek government’s stance.
- German Inflation Rate Is Negative for First Time Since 2009. Germany’s inflation rate turned negative in January for the first time in more than five years, aggravating a slump in consumer prices in the euro area. Prices in Europe’s largest economy fell 0.5 percent from a year earlier, the Federal Statistics Office in Wiesbaden said today. That’s the lowest rate since September 2009. Economists predicted a drop of 0.2 percent.
- Brazil Says Gain in Fighting Inflation Is Still Insufficient. Brazil’s central bank said progress in taming above-target inflation is insufficient after it bucked the trend of other central banks last week by raising its benchmark rate to the highest in more than three years.
- Nigeria Torn Asunder as Boko Haram Drive Fuels Caliphate Threat. Islamist fighters have declared a caliphate in northeastern Nigeria that’s the size of Belgium. Whether the region becomes autonomous or not, the damage has been done. As Nigeria prepares to hold general elections next month, Boko Haram is expanding a six-year campaign to impose its strict version of Islamic law on a region around Nigeria’s northeast and spilling into neighboring Chad and Cameroon. While it’s failed to capture the Borno’s capital, Maiduguri, the state’s emergency agency said this month that its officials can’t travel to 20 of 27 local government areas in Borno.
- Alibaba(BABA) Revenue Misses Estimates, Shares Tumble 8% in Pre-Market. (video) Alibaba Group Holding Ltd. revenue missed estimates as the e-commerce giant’s push into mobile curbed its advertising sales growth. The shares fell.
- Emerging Stocks Decline Amid Crisis Signs From Russia to Greece. Emerging-market stocks fell the most in three weeks as China intensified its crackdown on speculative trading and a flareup in the Ukraine conflict stoked concern that economies in the region are being pushed into crisis. Citic Securities Co. and Haitong Securities Co. fell in Shanghai as regulators planned a new round of checks into the margin-lending businesses of brokerages. Russia’s ruble weakened for a second day and stocks declined on speculation it will face tougher international sanctions linked to Ukraine. The Ibovespa sank for a second day in Sao Paulo. Greek banks rebounded from a slump driven by the new government’s pledge to end austerity. The MSCI Emerging Markets Index lost 1.4 percent to 971.10 at 11:07 a.m. in New York.
- European Stocks Trim Best Month Since 2009 as Shell Declines. European stocks closed little changed, paring earlier losses, as German inflation data missed forecasts, while U.S. jobless claims fell to a 15-year low. Royal Dutch Shell Plc slid 4.3 percent after reporting that fourth-quarter profit rose less than analysts predicted. Vallourec SA lost 3.8 percent after saying it will write down the value of assets by as much as 1.2 billion euros ($1.35 billion) as lower oil prices force some customers to cut spending. Deutsche Bank AG rose 2.6 percent after posting a surprise quarterly profit. The Stoxx Europe 600 Index fell 0.1 percent to 368.76 at the close of trading, after earlier losing 0.8 percent and rising 0.2 percent.
- Commodity Shipping Rate Falls to 28-Year Low on China Demand. A measure of global shipping costs for commodities fell to a 28-year low as slowing growth in China’s demand exacerbates the effect of a fleet glut. The Baltic Dry Index plunged 5.1 percent to 632 points, the lowest since Aug. 22, 1986, according to data from the Baltic Exchange in London on Thursday. Freight rates for all the vessel types within the measure declined.
- Oil’s Plunge Hurts Houston Office Sales, Calgary Leases. These are early signs that demand is weakening for commercial properties in cities that depend on the energy industry after crude oil prices fell below $50 a barrel, the lowest in five-and-a-half years, from more than $100 in June. Oil companies looking to reduce costs are cutting jobs and choosing to stay put rather than buy or lease new space, said Ross Moore, director of Canada research for CBRE.
- Gold Heads for Biggest Drop Since 2013 as Silver Plummets. On the Comex, gold futures for April delivery lost 2.5 percent to $1,254.80 an ounce at 1:06 p.m. in New York, on pace for the biggest loss since Dec. 19, 2013.
- Wall Street Creating CLOs That May Bypass Rules: Credit Markets. Wall Street has another rule it’s trying to get around: regulations seeking to limit risk-taking by managers of collateralized loan obligations. Leon Black’s Apollo Global Management LLC, Carlyle Group LP and a unit of Credit Suisse Group AG have all taken steps in the past two months to create CLOs now that they may be able to refinance after the rules take effect in December 2016 without having to comply with the new regulations, according to three people with knowledge of the matter. The firms are trying to avoid a requirement to hold a stake in the funds they manage.
- U.S. Homeownership Rate Falls to a 20-Year Low. The U.S. homeownership rate fell to the lowest in more than two decades in the fourth quarter as many would-be buyers stayed on the sidelines, giving the rental market a boost. The share of Americans who own their homes was 64 percent in the fourth quarter, down from 64.4 percent in the previous three months, the Census Bureau said in a report. The rate was at the lowest since the second quarter of 1994, data compiled by Bloomberg show.
- Obama seeking to 'fully reverse' sequester cuts, raise spending caps in budget plan. (video) President Obama will push to "fully reverse" the so-called sequester cuts and significantly raise government spending caps as part of his upcoming budget plan, a proposal likely to anger fiscal conservatives who want to see spending limits in place. The across-the-board cuts, agreed to by both parties, have been in effect since 2013, after lawmakers were unable to produce a more strategic deficit-cutting plan. Members of both parties have problems with the cuts, which indiscriminately affect both domestic and defense programs.
- Next for oil: Mergers, layoffs and 'death spirals'. The oil industry may be getting pinched by falling prices, but the next year could be a busy and lucrative time for private equity firms and restructuring specialists working in energy.
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Reuters:
- Greece could face rating downgrade if troika talks stall - Fitch. Greece could face a rating downgrade if it cannot come to an agreement with its international creditors by the time Fitch next assesses the country in May, said Douglas Renwick, the firm's head of western European sovereigns on Thursday. "If by our next review on the 15th of May there is no progress on these talks or they look to be failing, of course that would be a trigger for a downgrade," said Renwick during a conference call.
- Investors have woken up to Greece's nuclear risk. European and international authorities are facing a revolt from the Greek new prime minister, Alexis Tsipras.
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