All the latest economic and financial news, including the latest developments around Greece’s bailout talksLatest: Greece orders local authorities to transfer cashSummary: Pressure mountsIMF’s Thomsen: there’s ‘a bit more impetus’Cyprus urges rapid progressCity investors don’t see a deal soon 4.06pm BST Greek tensions may build up through this week, ahead of Friday’s meeting of eurozone finance ministers, says Jasper Lawler of CMC Markets:The unlikelihood of a deal being struck between Greece and its creditors has sent short-term Greek bond yields to new record highs again on Monday.For now Greece’s troubles are contained within Greek markets but once the positive sentiment from Chinese stimulus has worn off, other European markets may follow suit closer to the Eurogroup meeting on Friday. 3.36pm BST This cash call is the latest sign that Greece is running perilously low on funds, without any new bailout funds from its creditors. It must pay 1.7bn euros of public sector wages and pensions at the end of this month, and 200m euros to the IMF at the start of May.“It is more of a question of what barrel they can still scrape to find some money to stave off default.” 3.21pm BST Here’s Bloomberg’s early take:The Greek government issued a decree that forces local governments to transfer all cash balances to the central bank, as a cash crunch worsens and debt to the International Monetary Fund comes due.“Central government entities are obliged to deposit their cash reserves and transfer their term deposit funds to their accounts at the Bank of Greece,” the presidential decree issued Monday said on the government gazette website. The “regulation is submitted due to extremely urgent and unforeseen need 3.16pm BST Some early reaction:OH. #Greece government issues decree forcing local governments to transfer cash to central bank. “Extremely urgent & unforeseen need” cited.#Grexit #Greece , decree forcing local governments to move cash to Central bank, these kind of moves raise more questions , death spiral ? 3.14pm BST Heads-up: Greece’s government has just passed a decree to force local government authorities to place cash reserves at the central bank, according to local reports.Legislative decree forcing general gov't bodies to deposit cash reserves with Bank of Greece published in Government Gazette #Greece.@kev_twine Gov't to use pension funds' assets to pay wages, pensions and the IMF. @Holbornlolz 3.05pm BST New data from the ECB shows that it continued to expand its balance sheet though its new QE programme last week (although the rate slowed slightly).#ECB settles €73.29bn in Public-Sector Bond Buying as of Apr17 up from €61.68bn pic.twitter.com/PqJoe5erSQ 2.54pm BST Wall Street has followed Europe’s lead, rising at the start of trading in New York:Stocks open higher on China stimulus; Dow tops 150 points: http://t.co/pVNyODbQlL pic.twitter.com/BLBh0hP0Ss 2.05pm BST In other news, the boss of Russia’s Gazprom is due to visit Athens tomorrow and meet with prime minister Alexis Tsipras.Over the weekend, Russia denied reports that it would soon sign a gas pipeline deal with Greece which could potentially yield €5bn for the Greek government. So Alexei Miller’s “working visit” will be closely watched....#Gazprom CEO to visit #Greece Tuesday http://t.co/wtSBLDogXf pic.twitter.com/5v9vCvH1st 2.01pm BST Concern over Greece’s negotiations with its creditors continues to swirl through the eurozone today.A series of top politicians and officials have urged Athens to speed up the pace, with fears that the country could default on a debt repayment soon unless There has been a little bit more impetus in the negotiations between the three institutions and the Greek government for several days.”“That’s a good development and gives us reason to hope.”The realist would point out that there is a 90% chance that no decisive breakthrough is achieved, and that Greece and the euro zone experience an intensification of recurrent tensions and political stalemates, either immediately or down the road.More scary spikes from the market. HT @Investingcom #Greece pic.twitter.com/zJgn4uKUlFUltimately, however, it’s unlikely that Finland will veto a third Greek bailout on its own accord (Finns MP may be given permission to abstain in any such vote, for example.) Helsinki will likely following Berlin’s line on the issue. 1.44pm BST Interesting.... Bloomberg columnist David Powell suggests that Greece could struggle on until July 20 without a deal.He’a arguing that the European Central Bank could still provide emergency funding, even if Greece failed to make scheduled repayments to the IMF in May and June:The most important deadline for Greece is July 20. For details, see: {NI ECOCOM } on the BBG terminal. pic.twitter.com/PV65T0OWfb 1.25pm BST Royal Bank at Scotland’s economist team reckons Greeks will be heading back to the polls soon:Greece to have fresh elections by June, "Grexit" still unlikely, says RBS. 1.11pm BST Reuters have now published the full quotes from Ewald Nowotny about how Greece’s exit from the eurozone would be less serious than in 2013: “It (a Greek exit) does not have that impact or potential impact on the euro zone as it would have had ... some two years ago. I really don’t see a contagion in the financial and economic sense.” “Time is running out.” 1.00pm BST Austria’s top central banker has just raised the stakes over Greece, by declaring that a Greek exit from the eurozone wouldn’t be as serious as in the past.Interviewed by CNBC, Ewald Nowotny also warned that a deal this week is unlikely.When a central banker says, as Austrias Ewald Nowotny just did, that contagion from Greece will be *limited*, start looking for old drachmas 12.05pm BST The euro is suffering from Greek uncertainty today. The single currency has fallen 0.7% against the US dollar today to $1.073.It’s down 0.5% against sterling too, at 71.9p -- meaning one pound is now worth €1.391.#Greece matters for the Euro: Common currency drops to $1.0730 as Greek 3yr yields jump. pic.twitter.com/4nl3kNJsTX“The Euro has come back under pressure to start the week amid ominous comments about the festering crisis in Greece.ECB policymaker Christian Noyer said the country may not find collateral for loans and warned that its exit from the Eurozone would be traumatic for the region as well as the world economy at large.” (see earlier post for details) 11.42am BST Greece’s three-year bond is now yielding almost 28% this morning, as its price falls further below its face value:Greek 3yr yields jump by almost 100bps as #Greece and its creditors remained at loggerheads. http://t.co/rA4I0wBgre pic.twitter.com/CS1gLIAkyC 11.38am BST Here’s our Athens correspondent on today’s Golden Dawn trial:The wheels of #greek justice disappoint again as #goldendawn trial takes farcical turn of being adjourned until May 7#GoldenDawn court explains trial adjournment saying lawyer needs to be found for one of 69 accused - despite having had 18 months to do so 11.32am BST The IMF may indeed be hopeful (see opening post). But there’s only a 10% chance of a significant breakthrough over Greece’s debts, according to Mohamed El-Erian, chief economic adviser at Allianz.El-Erian reckons that both sides could hammer out a temporary deal that buys more time, but there’s as much risk of failure, possibly leading to a chaotic exit from the euro.There is a 45 percent chance that a last minute messy compromise allows the muddling-through to continue; a 10 percent chance that a meaningful policy breakthrough will be achieved, and a 45 percent chance that the outcome is a Graccident in which both the Greek government and its European partners lose control of the situation. Under this third scenario, a series of Greek payment defaults, bank runs and the imposition of capital controls would force Greece out of the single currency..@elerianm on the 11 steps that could make a Grexit occur. http://t.co/qVXTFSHLVG 11.16am BST Over in Greece, the trial of scores of Golden Dawn party members began his morning, and was almost immediately adjourned until May 7.Δικη χρυσής αυγής. Διακοπή για τις 7 Μαΐου! #GoldenDawn #jail pic.twitter.com/WyG0Stw9NeJournalists were told that witnesses of Fyssas’s murder were attacked by Golden Dawn supporters as they arrived at Korydallos Prison. Details of the alleged incident were not immediately available but the police was notified.no, this doesn't bode well. https://t.co/iHjT7uhJqD Related: Trial of far-right Golden Dawn leaders due to start in Greece 10.33am BST Cyprus’s finance minister just urged the Greek government and its creditors to make progress “without delay”.Speaking on Bloomberg TV, Harris Georgiades said Greece can avoid the banking crisis and capital controls that gripped Cyprus in 2013, if both sides act quickly.I would hope Greece does not go through a similar situation…. it can definitely be avoided.“If we do not receive feedback on good progress... that will be negative.”Such an outcome would imply we are entering unchartered water, for which no planning can be fully adequate….. and that’s why I’m not even willing to speculate or discuss an outcome which the Greek government itself has ruled out.#Cyprus' FinMin Georgiades in interview w/ Blooomberg TV: No planning could be adequate for any #Grexit. 10.08am BST Turning back to Finland’s general election quickly, and this chart shows how the next government will take control of a country in a significant economic hole:Millionaire businessman wins #Finland, likely to need propping up by vehemently anti-EU group. http://t.co/e9OhbpzDzR pic.twitter.com/XqQc4Phf4Z 9.49am BST The Greek bond selloff is intensifying, pushing yields higher into the danger zone.Greece sweep - its deteriorating : 10-yr 13.09 +19bp 5-yr 19.195 +62½bp 3-yr 27.86½ +111½bp 9.46am BST European investors are shrugging off the Greek crisis, pushing shares up in early trading.The FTSE 100 is up almost 1%, led by mining stocks. That follows the China’s central bank’s decision to ease monetary policy last night. With most of the region seeing signs of bottoming in data, I feel it’s not long before investors focus on the fundamentals and pay less attention to the Greece risk. 9.23am BST A depressing reminder of the social damage suffered since the financial crisis began:Children living in jobless households in euro-area periphery countries doubled 2008-2013 http://t.co/UmmrX0IoJi pic.twitter.com/Ww1imAnnwJ 9.09am BST European commissioner Pierre Moscovici sounded like a man tapping his watch with increasing impatience this morning.He told France’s iTele TV network that:“We really need - now, there is no time to lose - that the Greek government delivers the reforms we’re asking for.” 8.47am BST Greek bonds are weakening this morning, as fears of a default linger over the bond market.This has pushed up the yield on its three, five and 10-year bonds:GREEK YIELDS 10-yr 13.01 +11½ 5 - yr 18.70 +13 3-yr 26.97 +22 8.43am BST Simon Nixon of the WSJ is always worth reading about Greece; today’s column warns that eurozone officials are preparing for a ‘messy’ default.One option is that Greece fails to get a deal with its creditors (quite plausible), runs out of cash (ditto) and then defaults on a debt repayment payment. But that wouldn’t immediately trigger Grexit, as Simon explains:How things play out after [a default] that will depend on who Greece decides to default on and the reaction of bank depositors. If Athens defaults on a government bond or loan, then the ECB will have to raise the price that banks pay to access emergency liquidity from the Bank of Greece, effectively depriving them of access to fresh supplies of euros. If Athens decides instead to default to its own citizens, perhaps by issuing IOUs to pay pensions and salaries, bank customers may start emptying euros from their accounts. Again, banks would quickly run out of collateral for emergency liquidity.If you haven't read about Greek crisis then you should start: this @Simon_Nixon is brilliant, clear and frightening http://t.co/W8RpdUhKkb 8.32am BST Greek banks risk running out of the collateral they need to keep accessing emergency funding from the European Central Bank, the head of the Bank of France has warned.Christian Noyer told Le Figaro that the lifeline being provided by the ECB couldn’t last forever:“At some point, Greek banks are likely to be unable to offer enough collateral to access refinancing even for emergency liquidity.” 8.24am BST There was drama in the north of the eurozone last night, as Finland eurosceptic Finns party surged to second place in the country’s general election.The Finns secured 38 seats, while the opposition Centre party came first with 49. Related: Pro-EU coalition loses in Finland election as Centre party wins 49 seats I believe Finland’s policy towards Greece will change [if he joined the government]. It will change for the better, because it can’t get any worse”.Final results in Finnish elections. Centre Party winners. €sceptic Finns Party beats expectations w/ 2nd most seats pic.twitter.com/2PYSntFImH 8.04am BST Here’s your regular reminder of the debt repayments and wage bills that Greece faces:Barclays: Repayment timeline and other key events for Greece pic.twitter.com/EV6VmQPKrU 8.01am BST Many investors are doubtful that Greece will reach a deal with its creditors in time to avoid a default. With hopes of a deal at this Friday’s Eurogroup meeting now pretty much sunk, City experts are speculating about how much cash the country can find. “Although time is running short, there are clear indications that the Eurogroup meeting in Riga on 24 April might not bring a breakthrough,” said Reinhard Cluse, an economist at the bank UBS.“In the absence of a deal in the next few weeks, the government might not be able to avoid default, which – we fear – would likely raise the risk of ‘Grexit’ [a Greek exit].” Related: Eurozone crisis: Grexit edges closer as markets brace for Athens default 7.51am BST Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.It looks like another strained weak for the eurozone, as negotiations over Greece’s bailout drag on.“There has been a little bit more impetus in the negotiations between the three institutions and the Greek government for several days.” “That’s a good development and gives us reason to hope.”"Talks with Greece have gained momentum but still long way from target - IMF" - http://t.co/9NVu6ry2WG pic.twitter.com/ATyohwQ2R0“We all want Greece to succeed. The answer is in the hands of the Greek government.”ECB’s Draghi Says Urgent That Greece Strikes Deal With Creditors http://t.co/BdnWV54zxE via @business Continue reading...
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