Rolling economic and financial news, as Athens stumps up another €580m in loan repayments to the IMF and the German stock market hits a record high.Lunchtime summary: Greece clears another debt hurdleVaroufakis denies giving Germany the fingerGerman media angry DAX hits another record high 5.26pm GMT A strengthening euro as the dollar weakened help support stock markets, as did another dip in the oil price on oversupply fears. Ahead of the US Federal Reserve’s latest meeting, the US currency slipped back as weak economic data suggested an interest rate rise may not be imminent. Investors were also buoyed by comments from the Chinese government that it would act to support the country’s economy, while in the UK retailers benefited from hopes of a reduction in business rates. Germany’s Dax moved through 12,000 for the first time to close at a new record high, the beneficiary of the first week of the European Central Bank’s quantitative easing programme. The final scores showed: 4.31pm GMT The Greek government has just issued a statement confirming that the German chancellor Angela Merkel has indeed invited her Greek counterpart to Berlin, reports Helena Smith. “Mrs Angela Merkel requested a telephone rendezvous with the Greek prime minister which took place at 16:30,” the statement said. “During their telephone conversation the German chancellor issued an invitation to Mr Alexis Tsipras to visit Berlin and the German chancellor on Monday 23 March. The prime minister responded positively to the invitation.”This is not the first time that the German chancellor has attempted to calm spirits by contacting her Greek counterpart personally. Regular readers will recall that she telephoned Tsipras during last month’s dramatic negotiations in Brussels to extend the debt-stricken country’s EU-IMF-sponsored bailout until June. 4.14pm GMT On the ECB quantitative easing Jasper Lawler, market analyst at CMC Markets said:The European Central Bank reported that in its first week it has bought €9.8bn in public sector assets. Were government bonds to be all the ECB was buying, that’s only be 16% of the monthly €60bn total where 25% would be needed to be on target. However the €60bn is inclusive of other asset purchases including covered bonds and asset-backed securities which will make up the difference. €9.8bn is not quite as aggressive as some might have hoped in the first week but the ECB is still testing the waters and this total should creep up in the coming months. 4.04pm GMT Now this looks interesting. German chancellor Angela Merkel has invited Greek prime minister Alexis Tsipras to visit Berlin on March 23, next Monday, Reuters is reporting, citing a Greek government official.Given the conflicting views expressed by politicians from the two countries, it will be intriguing to see how this pans out. 3.30pm GMT Oil prices continue to slide on fears of oversupply, with US crude falling to $43.18 a barrel, its lowest level since March 2009.Brent crude is currently down 3.3% at $52.82, on rising global inventories and the prospect of more exports from Iran if an agreement is reached during nuclear talks this week. 3.16pm GMT More details on the ECB purchases. As part of its plan to buy sovereign bonds to lift inflation and put pressure on the euro, it intends to buy €60bn a month until September 2016. The €9.751bn figure represents the first week’s purchases, and the ECB also gave updates on its other programmes so far. It said its covered bond purchase programme totalled £56.947bn as of March 13, while its asset backed securities programme had reached €3.754bn.CBSPP3, ABSPP and PSPP cum. settled purchases as at 13/03/2015: 56,947 mln, 3,754 mln & 9,751 mln respectively. Website update to follow.€2.8 bn to € 3bn per day will be required by the ECB to get to that €60 bn per month figure 3.02pm GMT The European Central Bank has announced it spend €9.751bn on bonds in the first week of its quantitative easing programme which started last Monday. 3.00pm GMT The continuing worries about Greece and its possible exit from the eurozone, given the apparent differences in Athens and Berlin, has seen the country’s short term bond yields rise again.Greece’s three year bond yields have climbed above 20% for the first time since the middle of February, up 1% to 20.26%. 2.33pm GMT US markets are on the rise and the dollar is weakening against the euro after some weak US data.Industrial production slipped 0.2% in February, the third monthly fall in a row, with car production down 3%. Economists had expected a 0.1% increase in industrial production, following a revised 0.3% decline in January (compared to the previous estimate of 0.2%).The drop in builder confidence is largely attributable to supply chain issues, such as lot and labour shortages as well as tight underwriting standards. These obstacles notwithstanding, we are expecting solid gains in the housing market this year, buoyed by sustained job growth, low mortgage interest rates and pent-up demand.Feb to drop 'patient' but Jun hike doubtful: Like retail sales, US manufacturing output fell for 3rd successive months (not seen since 2009) 2.13pm GMT Heads-up: the European Central Bank will publish some details of its new QE programme shortly:As a reminder the #ECB will announce how much they spent on QE last week in 35 mins at 1445GMT, although no breakdown by country 2.11pm GMT Klaus Regling, who runs Europe’s bailout fund, has just warned that everyone involved in the Greek debt crisis must strive to avoid Greece crashing out of the eurozone by accident.Efi Koutsokosta of Euronews is tweeting the details:#Regling:It's a common responsibility of the greek gov, the institutions and the eurozone finance ministers to avoid a #Grexident @ESM_Press#Regling: €group stated if additional fin assistance is needed for #Greece & conditions in place €group would favourably look @ request #ESM 2.05pm GMT Time for a brief recap.Greece has cleared another funding hurdle, by repaying a €580m loan tranche to the International Monetary Fund this morning.Greece meets deadline, pays third part of its loan to the IMF, a senior finance ministry official tells Dow Jones.ARD's #Jauch show editors say Varoufakis 2013 Zagreb video is 'genuine' http://t.co/I7V94lToST /via @tagesschauWe continue to pursue the political goal - and there are no differences there between the finance ministry and the chancellor on this - to keep Greece in the euro zone and the German government has worked towards that since the start of the crisis and this work is continuing.”“It’s a two-pronged war: We’re being worn down economically and psychologically. It’s deliberate.” 1.54pm GMT Technical officials from the Brussels Group (don’t call them the Troika!) have been spotted in Athens in recent days, Helena adds. But rather than being regularly snapped on the streets, officials representing Greece’s creditors have generally been sighted in “subterranean garages”. 1.40pm GMT New York has followed Europe’s lead, with shares rising in the first few minutes of trading on Wall Street:U.S. stocks open higher; Dow jumps 115 points http://t.co/E2pePfgZGd 1.29pm GMT Greece’s biggest union, ADEDY, has fired a warning shot across the cash-strapped government’s bows saying it must “respect” the country’s social security funds. The warning comes amid escalating fears that the funds could soon be raided to prevent delays in payment of pensions and civil servants’ salaries later this month. “The government must respect its pre-election promises. The damage that the funds have suffered in the past is precisely because of the criminal choices of previous governments, [choices] that are incalculable and have lead the funds to their dramatic situation today.” 12.46pm GMT Greek officials are accusing Germany of “psychological warfare” as relations between the two countries become ever more strained, reports our correspondent in Athens Helena Smith. “It’s a two-pronged war: We’re being worn down economically and psychologically. It’s deliberate.” “It’s like a psychological war and Schauble is poisoning the relationship between the two countries through that. The German government is out to get us and some really want to push us out of the Eurozone.”“My fear is that as the situation gradually worsens, support for the euro will drop. Now it is around 70% but in a couple of months’ time, when things are much tougher, we could be seeing a situation of 50—50 support for the currency.” 12.25pm GMT Spreadex financial analyst Connor Campbell reckons Germany’s stock market will climb further into record territory, thanks to Mario Draghi:“As the steroid injection of ECB QE continues to swell the DAX, as well as the other euro zone indices, investors remain enthralled with the region and seem committed to continuing its upswing.” 11.58am GMT Germany’s stock market has now surged by 138 points today, or 1.2%, to a new lifetime high of 12,040 points.The benefits of the ECB’s QE policy continue to drive European equities higher with the DAX leading the way.Germany continues to spearhead the move higher for the rest of the eurozone having broken through the 12,000 level less than a month after moving above 11,000. As cheerful as the average German might be about the DAX this propensity for optimism does not stretch towards the Greeks. 11.29am GMT Thanks to Reuters, here’s what German government spokesman Steffen Seibert told a press conference in Berlin today: “We continue to pursue the political goal - and there are no differences there between the finance ministry and the chancellor on this - to keep Greece in the euro zone and the German government has worked towards that since the start of the crisis and this work is continuing.” 11.10am GMT German government spokesman Steffen Seibert has just told reporters that Angela Merkel and the finance ministry have a “shared goal” of keeping Greece in the eurozone.GERMAN POLITICAL GOAL REMAINS GREECE IN EURO, SEIBERT SAYS 10.46am GMT The Greek government has handed over the €580m due to the International Monetary Fund today, according to Bloomberg.#Greece made repayment owed to #IMF: Finance Ministry OfficialAthens will be hoping that discussions can advance next week because the government is running short of money. It is hoping for either an early disbursement of some of the 7.2 billion euros in remaining bailout loans or an increase in the 15-billion-euro limit on T-bills that the state can issue. 10.29am GMT Several other German media outlets are also up in arms about Fingergate - with Die Speigel, Die Welt and Zeit all running articles about the video clip, and Varoufakis’s denial.Uproar in #Germany over #Varoufakis ‘middle finger’ gesture - VIDEO #Greece- http://t.co/GzqnG2BKP6 pic.twitter.com/1i546Q2JN4 10.19am GMT German newspaper Bild is gripped by Yanis Varoufakis’s middle finger (so to speak).The tabloid is querying Varoufakis’s claim last night that the footage showing him giving Germany the finger in 2013 was faked (see 8.12am post). 9.25am GMT A government source has stated that Greece will pay EUR 580mln tranche of its IMF loan due today (@RANsquawk) 9.22am GMT Greece has insisted that it will make today’s loan repayment to the International Monetary Fund today.A government source told Reuters this morning that:“It’s in the pipeline. The payment of 580 million euros will go out later today.” 9.14am GMT The Greek stock market has fallen 1% this morning, defying the upward trend in other European markets.In other news, Greece's stock market is down again this am, -19% since FEB 24th when mainstream called it fixed 9.08am GMT The head of the International Monetary Fund has urged Greece to press on with structural reforms.“Looking ahead, something better may yet come on the back of low oil prices and interest rates. Still, there are significant risks to this fragile global recovery.” 8.56am GMT Update.... Germany’s DAX just ploughed through the 12,000 mark for the first time ever.Germany's benchmark index Dax just hits fresh record high above 12k for first time on #ECB's QE. pic.twitter.com/2JXl8oLYKS 8.54am GMT Relations between Greece and Germany have not been improved by last week’s demand for war reparations.“The way the Greeks have been behaving has been impossible. Now they’re making their own demands with these reparations,” said Dorli Schneider, an interpreter waiting for a train at Munich’s central station. “Greece should pay back what they owe. We can’t forever give them more money.”Cabdriver Jens Mueller says he’s had it with the Greek government and he doesn’t want Germany to send any more of his tax money to be squandered in Athens.“They’ve got a lot of hubris and arrogance, being in the situation they’re in and making all these demands,” said Mueller, 49, waiting for fares near the Brandenburg Gate. “Maybe it’s better for Greece to just leave the euro.” 8.39am GMT Germany’s main stock index has hit a new record high, as European stock markets make a cautiously optimistic start to the week.The DAX jumped by 0.6% to 11977 points, while the FTSE 100 and French CAC are both up around 0.3%.How the Bundesbank must be seething with rage as the DAX soars by over 20% so far in 2015 as the punters believe that exports and earnings from overseas operations represent a new Klondike! 8.12am GMT Relations between Athens and Berlin over its debt crisis remain rather tense, as was illustrated by a news programme on Germany’s ARD last night.Greek finance minister Yanis Varoufakis appeared on the show (by videolink), and urged the audience that Germany should to more to assist Greece.My message to the viewers this evening is very simple: help us to grow, so that we can pay the money back.“Small, insignificant problems of liquidity should not divide Europe,”The #Varoufakis denial of the finger video is much stronger than I realised https://t.co/pzG3n6xnoN He made a boo-boo here H/T @spyridakis_kThis screengrab from the German tv show tonight pretty much sums up German/Greek situation pic.twitter.com/PEPcaAkVjFVaroufakis claims 2013 Zagreb video is faked. German journos will go after this video now. I think Yanis just got in trouble. #Jauch 7.57am GMT Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Greece is set to make its next repayment to the International Monetary Fund Monday, further depleting cash reserves that risk running out this month unless a deal is reached with European partners.Greece will deposit about 588 million euros ($617 million) with the IMF, as scheduled, according to a Finance Ministry spokesman, who declined to be named in line with policy. As other repayments come due this week, the government said on March 14 it had a plan to “enhance its liquidity” and won’t have problems paying wages or pensions.This meeting will see the Fed update its economic and financial forecasts (summary of economic projections); and will also bring the dot plot analysis. These will be released along with the statement and the key here is whether the updated forecasts will give the Fed room to adjust its language regarding rates lift-off. Hawkish members such as Mr Bullard have suggested the Fed should remove the ‘patient’ reference at the March meeting. Continue reading...
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