China’s exports shrink by 15%: trade surplus at 13-month lowMore than 8/10 business executives want UK to stay in EUTalks between Athens and creditors expected to get underway 5.45pm BST Greece could default if it does not reach agreement with its creditors by the end of the month, the Financial Times is reporting:Greece is preparing to take the dramatic step of declaring a debt default unless it can reach a deal with its international creditors by the end of April, according to people briefed on the radical leftist government’s thinking.The government, which is rapidly running out of funds to pay public sector salaries and state pensions, has decided to withhold €2.5bn of payments due to the International Monetary Fund in May and June if no agreement is struck, they said.Greek eurozone default creeps closer. 1 May begins a long bank holiday weekend… http://t.co/gF2cTYmndu 5.33pm BST With weak Chinese export data and continuing uncertainty over Greece, not to mention the latest European Central Bank meeting later this week, investors started the week in fairly cautious mood. There was little in the way of corporate news to influence the mood, prompting a rather mixed day. The closing scores showed: 4.06pm BST Back with the UK election, and Lord Ashcroft’s latest poll shows the two main parties neck and neck:Tories 33% Labour 33% LibDems 9% Ukip 13% Greens 6% Ashcroft poll latest http://t.co/eUigv9rqwd 3.49pm BST Stock markets are having a mixed day of it. The FTSE 100 is down around 26 points or 0.37%, with the index weakened by the mining sector in the wake of China’s disappointing export figures.But European markets are generally edging higher ahead of this week’s European Central Bank meeting, with France’s Cac, Italy’s FTSE MIB and Spain’s Ibex up between 0.4% and 1%. Germany’s Dax is an exception, dipping 0.27%. 3.29pm BST ECB president Mario Draghi is likely to flag up an improving eurozone economy and the success of its quantitiative easing programme on Thursday after the bank’s latest policy meeting. But worries about Greece remain the unsettling backdrop for the meeting, with another deadline looming for the cash-strapped country. Reuters reports:European Central Bank policymakers gathering on Wednesday will examine possible further emergency funding for Greece’s banks as they take stock of a wider economic picture showing early signs of improvement.With falling prices in the eurozone beginning to stabilize, ECB President Mario Draghi will be able to claim an early success for the quantitative easing scheme -- money printing to buy chiefly government bonds -- launched by the bank in March. April’s press conference is unlikely to throw up any major policy changes and President Draghi will probably once again talk up the success of QE and the ECB’s other unconventional policies implemented over the past year. Although the minutes revealed that some Governing Council members consider the longer-term forecasts to be too pessimistic, GDP growth in the first quarter looks set to exceed the ECB’s own forecast.No surprises from #ECB on Thursday - early tapering not on agenda despite good growth figs http://t.co/4kyDdu6e5V pic.twitter.com/h1Vkjm5NJK 3.02pm BST Time for a mid afternoon summary 2.53pm BST After a Guardian/ICM poll showed the Conservative party six points ahead of Labour, the pound has gained 0.2% against the dollar. 2.47pm BST And...Bit of a surprise: Tories 39% Labour 33% LibDem 8% Ukip 7% Greens 7%. ICM poll http://t.co/tTABgvZAXi 2.40pm BST Should the west write off Ukraine’s debts? The conventional answer is yes - and Ukraine’s western creditors have duly promised a $40bn assistance programme.This includes a $17.5bn bailout from the International Monetary Fund and up to $20bn in write-offs on previous loans.The new government has been left in charge of a country crippled by both war and corruption, with external debts of $72.9bn at the beginning of this year. The finance ministry in Kiev – and the IMF – believe at least $20bn of this should be written off – because, after all, those responsible are no longer in power.But why would creditors, many of whom are ordinary investors, be willing to do this? Why are they not asking whose debt is being forgiven - is it a new, free nation whose citizens have sacrificed dearly for their pro-European views? Or is it the former elite who are spending their retirement far from Kiev, wealthy and happy?In Moscow, people are as interested in getting their money back as they are in Washington or Brussels – and in some cases they are in a better position to do so. The Kiev club could base its stance on the findings of the tribunal and could offer to drop its claims against the Ukraine government in return for transferring them to the former officials, politicians and oligarchs responsible. When so much money is at stake, it’s likely that the culprits will be brought to justice more efficiently than if the search is left solely to Interpol. 2.01pm BST Breaking news: the World Bank has cut its GDP forecast for Sub-Saharan Africa to 4% from 4.5% for 2015 because of falling commodity prices. 1.51pm BST What is happening to oil prices?After sinking like a stone and losing half their value in less than a year, oil prices have been creeping up again (a little).The market is choosing not to focus on the ample supply we have at the moment. 1.37pm BST You know things must be rocky over Greece’s eurozone bailout when this snap makes its way to the newswires.13.34 Greek govt official dismisses speculation of early elections, says Athens seeking deal with creditors. 1.12pm BST The heiress of the Nina Ricci perfume fortune has been found guilty of tax fraud following a trial based on the leaked lists of people using HSBC’s bank in Switzerland.Arlette Ricci, the 73-year old granddaughter of Nina Ricci, was sentenced to three years in jail, with one year suspended, and ordered to pay a fine of €1m (£720,000). 12.06pm BST The average jobless rate in rich countries has declined slightly, although high youth unemployment persists in the eurozone.The 34 countries that make up the Organisation for Economic Co-operation and Development saw unemployment fall by 0.1 percentage points to 7% in February, according to data that has just been released. 11.34am BST As news arrives of the death of Günter Grass, it is worth remembering that one of the writer’s last works was an angry rebuke to Europe for its treatment of Greece.In a poem entitled “Europe’s Disgrace” Grass described Greece as a “poverty-doomed country” that was “barely tolerated”. You’ll waste away mindlessly without the country, whose mind invented you, Europe. 11.07am BST Labour have a better chance of forming a government than the Conservatives, according to Deutsche Bank.George Buckley, Deutsche Bank’s lead economist, follows the lead of pollsters in an updated note on the elections and financial markets. “The polls continue to point to a hung Parliament when the dust settles after 7 May.”Consider first a Labour-led government – based on current polling there looks to be more chance of this given the willingness of the SNP to lend its support and the more natural left-leaning ideology of the Liberal Democrats. Unlike the current coalition, where the Liberal Democrats acted as a brake on some of the Conservatives’ more right-wing policies, the SNP could encourage Labour to move further to the left in government. The result would be increased taxes (mansion tax, top rate income tax, abolition of the ‘non-domicile’ regime), less austerity and likely a slower reduction in the deficit. One consequence could be higher short- and longer-term interest rates as markets reassess the UK’s willingness to accumulate sovereign debt, and the Bank of England responds to higher near-term growth thanks to stronger government spending.But, will this be seen by the markets as any worse than the possible consequences of a Conservative-led government? In particular, the promise of an EU referendum by 2017 – assuming the Conservatives can convince their governmental partners to include this in a coalition agreement – could have negative consequences for both investment and sterling. After all, the UK is the second most important destination in the world for inward investment after the US. Whatever the result of the referendum itself, its announcement would mean two years of uncertainty over whether the UK remains in the single market. This would undoubtedly present a serious test of the resilience of foreign direct investment, and would likely depress the currency as a result. 10.40am BST Evidence of tentative green shoots in Italy, as rising factory production boosts hopes of recovery. 10.14am BST The rouble has reversed earlier gains and slipped against the dollar on Monday, bringing a halt to the remarkable recovery of last week.The Russian currency has gone from being one of the worst performers, to the fastest-recovering, having gained 17% this year. The money flowing in shows confidence that the ceasefire in Ukraine will prevent any further ratcheting of US.-led sanctions against Russia. It’s likely to send the rouble rallying as much as 16 percent to 45 per dollar in the coming weeks, according Alfa Bank, the nation’s second-largest private lender. Not everyone’s rushing back. Peter Wilson, a seniorportfolio manager at Wells Fargo Asset Management in London,says Russia is an “unstable” investment. 9.50am BST FinMin Varoufakis book (talking-to-my-daughter-about-the-economy) on sale at Athens Airport #Greece pic.twitter.com/68pYtm9KwF 9.40am BST Valdis Dombrovskis’ interview on the upcoming talks with Greece is now available to view on Bloomberg. Twitter highlights 8.44The talks are apparently “very complicated”, following a weekend of claim and counter-claim.Since outright debt forgiveness is politically impossible, the next best solution would be forGreece to pay off its expensive IMF loans early, redeem bonds held by the European Central Bank and extend the maturity of loans from eurozone governments to secure lower interest rates for years to come.“This step would save Greece’s budget billions of euros, while reforming the Troika arrangement, eliminating the IMF’s and the ECB’s financial exposure to Greece,” said Jacob Funk Kirkegaard, senior fellow at the Peterson Institute for International Economics, who advocates such an arrangement. 9.10am BST Remember the campaign the get women on bank notes?“The United States needs to show the world that we, too, recognise and value the contributions of women,” says Susan Ades Stone, executive director of the campaign group Women On 20s.Our money says something about us and what we represent as a society. So if we’re all about gender equality and diversity and inclusion, let’s walk the walk.” 8.44am BST If it is Monday (or any other day ending in ‘y’) it must be time for more talks about Greece’s EU bailout.E Kathimerini reports that technical talks between Greece and its lenders are expected to get underway in Brussels and Athens today, to prepare the ground for a finance ministers meeting on 24 April.Kathimerini understands that the deliberations will resume after discussions during Wednesday’s Euro Working Group ended with an agreement that Athens should have a comprehensive proposal to make within six working days. The reform proposals will have to cover fiscal, pension, labor and privatization issues, according to creditors.#EU Dombrovskis says there cld be more progress on #Greece, working on scenario w Greece staying in #euro, willing to work w Greek govt ~BBG.@markbartontv Dombrovskis says Greece deal - a lot of time wasted initially - picking up speed now! No Secret negociations some unhelpful 8.28am BST The main European markets are all slightly down this morning, following weaker-than-expected trade data from China. 8.21am BST Another week; another survey of business attitudes to the EU.This one shows that more than 8 in 10 business leaders in Europe want the UK to stay in the EU, while around three quarters thought a British exit would damage the British economy.Of 437 business leaders surveyed across 32 countries, 76% said a British exit would hurt the UK economy, while 56% said it would damage their own business.Mikal Hallstrup, founder of Designit, a Danish technology firm, said a Brexit could influence how Europe was viewed internationally. “You can trade across borders so UK exit wouldn’t lead to other countries leaving . . . but it would be like a grey cloud following us — like a football team when one person is sent off.” 8.02am BST Hot on the heels of Monday’s disappointing Chinese trade figures, the World Bank has warned that the slowdown in China will hit countries across the Asia-Pacific.Developing East Asian economies, such as Indonesia and Malaysia, will grow more slowly than previously thought, while rich countries, such as Australia will see falling demand for commodities such as iron ore.The slowdown in China reflects efforts by policy makers to address vulnerabilities in the financial system and make growth more sustainable, the bank said. Growth in the rest of developing East Asia will climb half a percentage point to 5.1 percent as the drop in energy costs spurs demand in Southeast Asia, [the World Bank] said in the report, released Monday.“The region will still account for one-third of global growth, twice the combined contribution of all other developing regions,” Axel van Trotsenburg, the World Bank’s vice president for the area, said in a statement. Cheaper oil will give governments room to “push fiscal reforms that will raise revenues and reorient public spending toward infrastructure and other productive uses.” 7.45am BST Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and the business world.The week begins with some surprisingly bad trade data from China, heightening concern about the slowdown in the world’s second-largest economy.It’s a very bad number that was much worse than expectations.It leads to warning flags both on global demand and China’s competitiveness. Continue reading...
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