Friday, March 06, 2015

Today's Headlines

  • Greece Gears Up for Euro-Area Talks as Cash Crunch Looms. Greece’s creditors are assessing proposals including hiring non-professional inspectors to clamp down on tax evasion as the government attempts to unlock bailout funds necessary to keep the country afloat. Prime Minister Alexis Tsipras’s administration sent a set of commitments Friday to Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings of his euro-area counterparts, in the hope that the policy proposals will pave the way for the disbursement of aid.
  • Greek Loan Payout Hinges on Review of Reforms, EU Says. The institutions overseeing the Greek bailout program will need to scrutinize the probable impact of the government’s latest reform proposals before the country can receive another loan payout, a senior EU official said. The European Commission, the European Central Bank and the International Monetary Fund -- together formerly known as the troika -- must assess the overall balance of the measures proposed by the government in Athens and this will not happen before euro-area finance ministers meet in Brussels on March 9.  
  • Putin Cuts His Salary 10% as Russian Living Standards Decline. Russian President Vladimir Putin cut his salary, and that of his prime minister and other government employees, by 10 percent as the economy slides into the first recession in five years, eroding citizens’ living standards. Putin, 62, ordered the wage reductions from May 1 to the end of the year, according to decrees posted Friday on the government website. Putin increased his and Prime Minister Dmitry Medvedev’s salaries by 165 percent in April last year. The president declared income of 3.7 million rubles ($60,000) in 2013, and Medvedev 4.3 million rubles. 
  • Putin Takes a Pay Cut as Approval Rating Rises to 85%. (video)
  • China Said to Slash Senior Executive Pay at Top Banks, SOEs. China cut pay for top executives at its biggest banks and some other state-owned companies as part of efforts to combat inequality, said people with knowledge of the matter. Senior managers at the nation’s five largest lenders -- all of which are government-controlled -- had their total compensation for this year cut to no more than about 600,000 yuan ($95,800), said the people, who asked not to be named discussing private information. Industrial & Commercial Bank of China Ltd. Chairman Jiang Jianqing earned about 2 million yuan in 2013.
  • Dollar Climbs Most Since 2011 as Job Gains Fuel Fed Speculation. The dollar rallied the most in more than three years after a report showing strength in the U.S. labor market bolstered the case for the Federal Reserve to raise interest rates as global peers embrace monetary stimulus. The greenback rose against most major counterparts as U.S. employers added more jobs than forecast and the unemployment rate fell to the lowest since 2008. Traders boosted wagers on a rate rise by September. While the Fed has said it will be “patient” on increasing borrowing costs, Chair Janet Yellen said last week timing will depend on economic data. 
  • Emerging Currencies Weaken, Stocks Decline on U.S. Rate Concern. Emerging-market currencies weakened for a seventh day and stocks slid as a bigger-than-forecast increase in U.S. payrolls stoked speculation the Federal Reserve will raise interest rates sooner, damping demand for riskier assets. A gauge tracking 20 developing-country currencies slid 0.7 percent to a record low as Brazil’s real dropped 1.8 percent to the lowest level since 2004 and peers in South Africa and Mexico lost at least 1.6 percent. Emerging-market stocks headed for a three-week low.
  • European Stocks Little Changed as Investors Weigh U.S. Jobs Data. European stocks were little changed at a seven-year high as investors considered whether a strengthening U.S. economy will bring forward a rate-increase decision. The Stoxx Europe 600 Index rose 0.1 percent to 394.18 at the close of trading. The benchmark gauge jumped as much as 0.7 percent after data showed U.S. payrolls rose more than estimated in February, before paring gains.
  • Oil Rigs Get Slammed for the 13th Week. (video) The number of U.S. oil rigs out drilling new wells fell for the 13th straight week as the U.S. sinks deeper in a glut of excess oil. Drillers idled 64 oil rigs (excluding gas rigs), dropping the number to 922, Baker Hughes reported on Friday. The rig count is down 43 percent since October, an unprecedented retreat. The median forecast from a Bloomberg survey of 20 #RigCountGuesses on Twitter was for a decline of 20 rigs.
Wall Street Journal:
  • Fed should not be too patient on rate hikes, Williams says. Federal Reserve policymakers should not wait too long to raise interest rates, a top U.S. central banker said on Thursday, because doing so could mean "drastically" overshooting on inflation and forcing the Fed to hike rates dramatically. "I think that by mid-year it will be the time to have a serious discussion about starting to raise rates," San Francisco Fed chief John Williams said.
Business Insider:
  • Oil falls as dollar spikes on US jobs data and rate hike fears. Oil fell on Friday as the dollar surged on bets of a near-term rate hike from strong U.S. jobs growth, offsetting an early run up in crude prices on worries about Libyan and Iraq supplies. A stronger dollar makes oil, quoted and traded in the greenback, costlier for holders of the euro and other currencies. The dollar rocketed to 11-/12 year highs against a basket of currencies after the U.S. government reported the U.S. jobless rate fell to 6-1/2 year lows. Benchmark Brent oil was down 44 cents at $60.04 a barrel by 11:00 a.m. EST (1600 GMT). U.S. light crude fell 71 cents at $50.05.

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