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March 2013

Prospects Daily: The Philippines receives investment grade rating, Euro Area confidence slips, Vietnam Q1 growth slows.

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Financial Markets…The euro slumped on Wednesday against the dollar, sliding to a fresh four-month low of $1.2793 in early trading, as concerns over the Italy’s political situation and the ramifications of the Cypriot bailout prompted renewed worries over the prospects of the wider euro-zone. The 17-nation currency also fell versus the yen, falling 1.1% to 120.14.

Prospects Daily: Consumer confidence eases in the US, Russia’s financial markets retreat on Cyprus bailout, Turkey and Vietnam cut policy rates

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Financial Markets… Japanese government bonds rallied today, sending 10- and 20-year yields to near decade lows of 0.525% and 1.41% respectively, after the nations’ central bank signaled increased purchases of long-term maturity bonds. The 30-year bond yield fell as well, touching a 2 1/2-year low of 1.545%.

Prospects Daily: Global equities and oil rally, Cyprus bailout agreed…Colombia’s growth accelerates

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Financial Markets…Global equities and oil rallied on Monday, while safe-haven assets including U.S. Treasuries and gold fell as a deal on bailout of Cyprus eased investor’s risk aversion. The Stoxx Europe 600 Index and MSCI Asia Pacific Index gained 0.6% and 0.9%, respectively, while the S&P 500 climbed closed to its highest level in morning trade. The rally in investor’s risk appetite also pushed oil prices higher, with WTI for May settlement gained 1.7% to $95.31. In contrast, U.S.

Prospects Daily: Cyprus fails to secure assistance from Russia, Germany business confidence falls, Brazil’s current account deficit outpaces FDI

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Financial Markets… The euro rose and European shares pared some of losses after Cyprus agreed to spin off the Greek units of Cypriot banks, raising hopes that the nation is moving closer to an agreement to stave off financial meltdown. The 17-nation currency climbed 0.4% versus the dollar to $1.2956, while the European currency rose 0.3% against the yen to 122.73. European stocks were little changed with the benchmark Stoxx 600 index sliding 0.1%, headed for a weekly loss of 1.1%.

Prospects Daily: ECB gives Monday deadline to Cyprus, Flash PMIs signal intensification in Eurozone downturn, US data show economy improving

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Financial Markets…European financial markets fell today after poor economic data from the euro-zone and lingering uncertainty over the Cypriot crisis fueled renewed concerns over the region’s economic outlook. The benchmark Stoxx 600 stock index slid 0.5%, dropping for the 4th time in five days, but the gauge has still gained 5.5% thus far this year. The euro retreated 0.2% against the dollar to $1.2913, after touching a 4-month low of $1.2844 on Tuesday, while the 17-nation currency dropped 0.9% versus the yen to 123.02.

Prospects Daily: Cyprus rejects EU bail-out package, Portugal debt auction unaffected by Cyprus crisis, Russia retail sales slow

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Financial MarketsEuropean shares and the euro bounced back on Wednesday as Cyprus sought alternative to the EU’s bailout plan that was rejected by the nation’s parliament on Tuesday. The benchmark Stoxx Europe 600 Index gained 0.5% after sliding 1% in the previous three days, while the 17-nation currency advanced 0.5% to $1.2946 in morning trade, recovering from yesterday’s four month low of $1.28435. But investors remain concerned about the Cypriot situation.

Prospects Daily: Euro weakens on Cyprus bailout plan, US consumer and homebuilder confidence weakens, Russia’s IP contracts further

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Financial Markets…European financial markets tumbled on Monday, with the benchmark stocks indices in all of the 18 Western European markets sliding, the euro weakening the most in 14 months versus the dollar, and borrowing costs for Italy and Spain jumping, after a proposed bailout plan for Cyprus that will tax bank deposits prompted investor jitters. Bank shares were especially hit hard after Moody’s Investors Service warned that the Cyprus bank levy will have negative implications for the ratings of the region’s other lenders.

Prospects Weekly: Global industrial activity continues to strengthen, Accelerating activity in the US, Equity markets have almost regained record levels in the US

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Global industrial activity continues to strengthen after its slump in the second half of 2012. The incipient recovery has been led by developing countries, in particular in the East Asia region, but also reflects a gradual improvement in high income countries.

Prospects Daily: US initial jobless claims at 5 year low, Greece jobless rate at record high, Brazil’s retail sales pick up

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Financial Markets… Greece’s troika of international lenders—the International Monetary Fund, the European Commission, and the European Central Bank—have interrupted a quarterly review of Athens’ compliance with its bailout program on Wednesday, delaying disbursement of a €2.8 billion of aid loans for the country due this month. Officials from the troika said “significant progress has been made but a few issues remain outstanding” and they will return in April to complete the review.

Prospects Daily: Italian borrowing costs rise, Euro Area IP contraction eases, South Africa’s retail sales slow

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Financial Markets… Italy’s borrowing costs increased in its first bond auction since a credit rating cut by Fitch Rating last week, underlining investor concerns over the country’s current political uncertainty. The Italian Treasury sold €3.32 billion of 3-year note at an average yield of 2.48%, up from 2.3% in the February auction, and €2 billion of 15-year bonds at 4.9% compared with 4.805% at the January sale. The Treasury also auctioned €1.67 billion of 4- and 5-year floating rate bonds.

Prospects Weekly: Global trade rebounded solidly in Q4 2012, Industrial commodity prices have declined in recent weeks, Capital flows remained strong in February

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Consistent with a gradually strengthening global economy, global trade rebounded solidly in Q4 2012 from its slump in Q3 2012. Recently released new export orders sentiment data suggest that the expansion in global trade will likely continue, however the pace of expansion could decelerate by Q2.

Prospects Daily: Thailand stocks rise on rating upgrade, French manufacturing shrinks further, Indian exports improve

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Financial Markets…The dollar continued to strengthen versus the yen, hitting a 3½-year high of 96.55 in early Monday trading, as recent strong economic data added to signs that the U.S. economy is gaining momentum. The greenback has appreciated 10.9% against the Japanese currency thus far this year.

Prospects Daily: Thailand’s sovereign credit rating raised, US unemployment drops, Brazil inflation picks up

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Financial Markets… U.S. Treasuries slid further on Friday, pushing the benchmark 10-year note yields to an 11-month high of 2.08% in morning trade, after stronger-than-expected U.S. jobs data. U.S government securities have been weak after upbeat incoming economic data fueled investor optimism about the growth outlook.

Prospects Daily: Jamaica sovereign debt rating lowered, German factory orders weaken, Greece unemployment falls, Brazil’s industrial production accelerates

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Financial Markets…European shares pared some their recent gains and the euro gained versus the dollar after the European Central Bank and the Bank of England left their key interest rates unchanged. The benchmark Stoxx Europe 600 Index gained less than 0.1% in afternoon trading after the gauge climbed to the highest level since June 2008 this week. Meanwhile, the 17-nation currency inched up 0.9% yesterday after hitting a three-month low.

World Bank published latest commodity prices: March 2013

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In February 2013, energy prices rose by 2.2% while non-energy prices fell by 0.3%. Food prices are down by 0.9%, beverages declined by 3.1%, raw materials eased by 2.1%, metals rose by 1.0% and fertilizers eased by 0.5%. The US dollar depreciated 0.8% against the euro while appreciating 0.7% against a broad index of currencies. 

Prospects Daily: Portuguese and Irish bonds advance, British services PMI improves, Developing country service PMIs soften

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Financial Markets… Perceived credit risk of U.S. corporate bonds has eased significantly since last September, with the benchmark Markit CDX North America Investment Grade index sliding 83 basis points on Tuesday (intraday, lowest level in more than five months) as investor confidence improved amid positive growth outlook.

Prospects Daily: Italian bonds slide, Eurozone producer price inflation slows, Turkey’s inflation eases

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Financial Markets… Italian government bonds weakened for a second day, with the benchmark 10-year yields approaching last week’s three month high of 4.96%, amid lack of progress in talks to form a new government. The loss was limited as the European Central Bank bond purchasing program prevented a sharper sell-off.