US Q4 growth unrevised at 2.2%, disappointing forecastsGreece denies Varoufakis is planning to resignEurozone debt in ‘danger zone’, Germany’s Weidmannn warnsBrent crude falls 2.5% as fears over Yemen subsidePound rises as Carney says next move in rates is upBoE’s Broadbent: UK deflation risk low 5.47pm GMT With its preponderance of mining companies the UK market has lost ground as commodity prices fell back. But although the German and French stock exchanges ended the day higher, it was not enough to prevent their first weekly falls since January. A combination of concerns has unsettled investors, including Middle East tension, the uncertainty over Greece’s finances and continuing speculation about a US rate rise despite signs of weakness in the country’s economy. The final scores in Europe showed: 5.29pm GMT Meanwhile Greece will be able to make pension and civil servants’ salary payments due at the end of the month, the deputy finance minister for expenditure has told the Financial Times. Dimitris Mardas said:Whatever needs to be paid will be paid on time — that means wages, pensions and the subsidy to IKA (Greece’s biggest health and social security fund).However, Mr Mardas could not give any assurances about a separate €450m payment to the International Monetary Fund due on April 9, which is overseen by a separate department within the ministry. #Greece's dep finance min tells @FT he'll be able to pay end-March wage/pension bill. No assurances on IMF payment http://t.co/KgvXauZTSe 5.11pm GMT Back with Greece, and it appears the brinkmanship continues:The Greek Government has raised the stakes: #Greece to stop payments if reforms are rejected, MNI reports citing official. 5.03pm GMT S&P said:Although its economic prospects remain uncertain, Cyprus’ budgetary consolidation has proceeded faster than we anticipated, contributing to a substantial decline in the government debt-to-GDP ratio from 2014, by our estimate.We now forecast average net general government debt over 2015-2017 for Cyprus at 91.8% of GDP, compared with 103.4% of GDP previously. 4.42pm GMT And here’s something positive:S&P ups #Cyprus outlook to positive from stable, affirms rating at B+. 4.37pm GMT Despite the discussions set to begin over Greek reforms, that has not stopped talk that the country might have to introduce capital controls:Greece Press talking about capital controls in Greece (Liberation) of capital controls either tonight, or April 10thThe source of the Greece captial control rumour is Jean Quatremer - Brussels correspondent at Liberation.fr 4.18pm GMT The European Central Bank considers Greek banks to be solvent, according to the head of its supervisory arm Daniele Nouy, Reuters is reporting. 4.17pm GMT Greek reform list is ready, SYRIZA parliamentary spokesman Nikos Filis tells @dpa. Apparently it includes 18 proposals. #Greece 3.43pm GMT And more details on the reforms themselves from Reuters:Greece’s government has included measures to boost state revenues by €3bn this year as part of a list of reforms it is sending European creditors in the hope of unlocking aid, a government official said on Friday.The official said Athens’s EU and IMF creditors, known as the Brussels group, will start discussing the list of Athens’s proposed reforms on Saturday.#Greece's reform list estimates 2015 GDP growth at 1.4% above BBG weighted avg of 0.96%. pic.twitter.com/ftGRPN5oY0 3.41pm GMT Meanwhile here is Reuter’s take on the next steps for Greece now the reform list has been sent:Greece and the institutions representing its official creditors will start discussions on a list of economic reforms submitted by Athens on Friday evening, a euro zone official said.Asked to confirm that Athens had sent a list with reform proposals to representatives of the European Central Bank, the International Monetary Fund, the European Commission and the euro zone bailout fund ESM, the official said:Greece Sees 2015 GDP +1.4% Vs +2.5% EU Estimate -Govt Official 3.33pm GMT And here’s a response to the rumours of Yanis Varoufakis’s resignation as Greek finance minister (see earlier) from the man himself:Every time the negotiations heat up, some new rumour of my resignation, demise etc. springs up. Somewhat amusing... 3.26pm GMT 3.25pm GMT Seems Greece has now sent the list of reforms, and here are some Reuters snaps on the contents: 3.11pm GMT Greece is set to send its long awaited list of reforms to its eurozone and IMF lenders later today.The list needs to be approved before Athens is given a new tranche of aid to avert a financial crisis. It is expected to include measures to improve investor sentiment, boost tax revenues and judicial reform, according to Reuters, but there is little further detail yet.We support the people that have lost a lot as a result of the crisis and we are prepared, if things do not go well, for a clash...They [our partners] must know that we are prepared for a falling out, otherwise you don’t negotiate. 2.14pm GMT The University of Michigan’s consumer sentiment index picked was revised up for March to 93 in March from an earlier 91.2.Economists were forecasting a smaller improvement to 92. The harsh winter weather and the small rebound in gas prices caused some slippage in consumer confidence since the start of the year. Importantly, most of the recent variation was among lower income households, whose budgets are more sensitive to higher utility costs and disruptions in work hours. Households with incomes in the middle and top thirds of the distribution, in contrast, recorded gains in confidence in the March survey. Expanding job opportunities as well as more favorable wage gains have meant that consumer spending will rebound during the balance of the year. 2.03pm GMT Breaking: US consumer sentiment beats expectations 1.58pm GMT Oil prices have fallen further...Brent crude is down more than a cent or 2.5% at $57.72 a barrel. 1.49pm GMT The Wall Street Journal is reporting that workers at the European Central Bank are suffering from stress because of understaffing.Almost 5% of workers who responded to a staff survey “have reported having suicidal thoughts and/or hurting themselves,” according to a letter sent by the IPSO union to the 19 national central bank governors on the ECB’s governing council, and seen by the WSJ. The union that represents workers at the European Central Bank has said that acute understaffing at the institution is leading to employee burnout.In a letter to the 19 national central bank governors on the ECB’s governing council and seen by The Wall Street Journal, the IPSO union claims that nearly one-third of the central bank’s staff is “at risk of burnout.”Did you know the ECB had a trade union? It's getting upset about worker burnout. Read more here, by yours truly: http://t.co/TCyni5VvtK 1.38pm GMT US stock markets have opened roughly flat. 1.24pm GMT Wolfgang Schäuble, Germany’s finance minister, has been speaking at the Bundesbank conference in Frankfurt.In my view, expansionary monetary policy and high leverage are not the solution but the main causes of the financial and debt crises of recent years. 12.53pm GMT US Commerce Department figures showing annual growth of 2.2% in the fourth quarter of 2014 confirm a slowdown compared with the third quarter, when GDP increased by 5%.The department said in a statement: The deceleration in real GDP growth in the fourth quarter primarily reflected an upturn in imports, a downturn in federal government spending, a deceleration in nonresidential fixed investment, and a larger decrease in private inventory investment that were partly offset by accelerations in PCE [personal consumption expenditures] and in state and local government spending. $USDJPY drops to 119.00 on weak US GDP http://t.co/EEIM4wj8x5 12.31pm GMT Breaking: US annual growth for the fourth quarter has been left unrevised at 2.2%, disappointing expectations of an upward revision to 2.4%. 12.20pm GMT Revised figures for US fourth-quarter growth will be published at 12.30 UK time. Economists polled by Reuters expect annual growth to be revised up to 2.4% from a previous estimate, driven higher by consumer spending. 11.53am GMT Germany has no details yet about the latest plans for Greek reforms, a spokeswoman for the German finance ministry said.Marianne Kothe:We have had no concrete information presented to us. 11.26am GMT Reuters has filed a fuller report on the earlier speculation that Yanis Varoufakis is planning to quit the Greek government (which has been denied by officials)Greece’s outspoken Finance Minister Yanis Varoufakis is not planning to resign, two Greek government officials said on Friday, denying a report in Germany’s Bild newspaper.“None of this is true, it’s far from reality,” one of the officials told Reuters. 11.15am GMT Austrian Finance Minister Hans Joerg Schelling has said eurozone finances ministers are struggling to have faith in Greece amid chaotic decision-making.He told reporters in Vienna:We have a crisis of confidence with Greece. Something is decided every day and on the next day it doesn’t apply any more.You can easily calculate this: it brings nothing. [The Greek problem] will occupy us for some time. I don’t know what will emerge. 10.39am GMT A Greek government official has denied reports that finance minister Yanis Varoufakis is planning to resign. An official told Reuters:None of this is true, it’s far from reality.Greek govt denies speculation on #Varoufakis' resignation 10.28am GMT Twitter rumour: Greece’s finance minister Yanis Varoufakis is considering resignation.Bild reports #varoufakis pondering resignation - feels like Oskar "champagne socialist" Lafontaine all over again http://t.co/9fFDW00VWUNot clear how credible rumours of #Varoufakis resigning are, Bild quotes unnamed Greek govt insider saying "matter of time" & "done deal" 9.56am GMT The briefest of comments from Mark Carney on interest rates has pushed the pound up against the dollar.The pound rose to $1.4860 from around $1.4818 after the Bank of England’s governor said the next move in rates would be up.$GBPUSD moving up & further away from $1.48 on those Carney comments.#Carney says next move in rates is likely up. Saying the obvious but pours cold water on MPC attempts to convince rate cut possible #GBPCarney reiterates next interest rate move is up 9.47am GMT It seems BoE's Haldane hasn't convinced Broadbent of the argument for cutting either. No support from any of the 5 MPC spkrs this week.For full write-up of Broadbent's speech on low deflation risk to UK, see here http://t.co/nE2CWpdIYd @Reuters 9.45am GMT Back in Frankfurt, the Bank of England’s governor Mark Carney, is reinforcing the point that UK households should prepare for a rise in interest rates (despite Andy Haldane’s comments).The next move in interest rates is likely up. 9.41am GMT Ben Broadbent, deputy governor of the Bank of England and a member of its interest-rate setting Monetary Policy Committee, has waded into the UK deflation debate.Real interest rates still need to be low. Our inflation target is 2% not zero: what makes the current position “good” is not low inflation per se but the fact that, in this particular instance, it’s been caused by something (a drop in oil prices) that improves real incomes.Even though the direct effect of that decline will drop out of the annual comparison later this year and in early 2016, there’s a risk that, by depressing wage growth, sub-target inflation could persist for longer than we expect. 9.18am GMT With his international hat on, as chairman of the Financial Stability Board, Carney is speaking about the quest to end “too big to fail” among global banks. Progress is being made.It’s imperative that we finish this off this year. 9.13am GMT Mark Carney’s panel has started.That’s why we have used macro prudential tools as an insurance policy to limit that. 8.59am GMT While we’re waiting for Mark Carney’s panel to start in Frankfurt, an update from the UK’s housing market.The annual rate of house price growth slowed for a seventh month in March, to 5.1%. That - according to the Nationwide index - compares with a recent peak of 11.8% in June 2014. 8.50am GMT Following a sell-off in European markets on Thursday, and a 0.95% fall in the Nikkei overnight, investors are a little more upbeat this morning.The FTSE 100 is down slightly, 0.1% lower at 6,888.62, but markets are up elsewhere. 8.38am GMT Mark Carney, Bank of England governor, will be speaking on a panel at the Bundesbank conference from around 8.45am (UK time). The live feed is here and we will be following it. 8.26am GMT Over in Frankfurt, the head of Germany’s central bank and a member of the European Central Bank’s governing council, has been warning on unsustainable debt levels in the eurozone.In the euro area we are already in the danger zone - at least with regard to public debt standing at 91% and corporate debt at 105%. Household debt currently stands at 62%.Sovereign debt needs to be backed by capital, and exposure to a single sovereign must be capped, just as is the case for any private debtor. 8.00am GMT Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Oil prices are falling again after the absence of fresh developments in Yemen eased fears of a broader conflict in the Middle East.The spike in oil prices caused by the Saudi military incursions into Yemen, has all the hallmarks of a classic knee jerk market reaction to a new flashpoint. We saw similar spikes last year with Ukraine, Libya and ISIS pushing into Iraq before markets settled back down again, and it is likely that these concerns about Yemen could follow a similar pattern, as long as there is no significant disruption through the straits between the Gulf of Aden and the Red Sea. Continue reading...
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