Group Economics
Daily Insight
Macro & Financial Markets Research Aline Schuiling & Maritza Cabezas
Greek talks moving forward
+ 31 20 343 5606
13 May 2015
Eurogroup more positive on progress in negotiations with Greece … … but gaps still need to be bridged, while Greece is running out of money US small business more optimistic, suggesting that economic activity will firm after a weak first quarter
Progress in negotiations with Greece … The Eurogroup issued a statement about Greece yesterday,
Greece’s economy hit by uncertainty
which probably was not as positive as the Greek government
% qoq
had hoped, but still struck an optimistic note. According to the
level
4
120
been achieved so far”, while acknowledging that “the
2
110
reorganization and streamlining of working procedures has
0
statement the Eurogroup “ welcomed the progress that has
made an acceleration possible, and has contributed to a more substantial discussion”. However, “ more time and effort are needed to bridge the gaps on the remaining open issues” . Eurogroup head Dijsselbloem added that the negotiations were “more efficient, more positive, more constructive”, while “faster progress” was being made. Still, he reiterated that a
100 90
-2
80
-4
70
-6
60 06
08 GDP (lhs)
10
12
14
Economic sentiment (rhs)
comprehensive deal is necessary before any disbursements can take place.
Source: Bloomberg
… financial resources are drying up
US small business rises
The Eurogroup statement probably was also not positive
Yesterday’s NFIB small business optimism index, based on a
enough for the ECB to raise the cap on the amount of T-bills
sample of 10,799 small business owners, signaled more
that Greece is allowed to issue, for which Athens was hoping.
positive sentiment. The overall index increased to 96.9 in April
In the meantime, the Greek government is running out of cash
from 95.2. Its components were broadly positive. Earnings
quickly. It met its obligations to the IMF yesterday, and paid
trends rose, while hiring plans edged up. The net percent of
EUR 750 million that was due, though it had to use funds from
firms planning to raise compensation increased slightly as well.
its emergency IMF holding account to do this. According to
This is positive for wage growth prospects. Other indicators
finance minister Varoufakis the liquidity issue had become
such as plans to increase capital outlays also increased, while
“terribly urgent”, referring to a time period of “the next couple of
they were a bit more cautious when asked about future sales.
weeks”. The official deadline of the current bailout extension is
This survey is consistent with economic activity firming.
the end of June, but we have serious doubts about whether the country could wait that long for financial aid. Several payments
US job openings decline in March
to the IMF are due in June (total around EUR 1.5bn).
Job openings in the US fell slightly in March after reaching a 14-year high the previous month. This data is consistent with
Deal still likely
March’s nonfarm payrolls report that showed a job market
Our base case remains that Greece and the EU will reach an
cooling down, mainly as a result of a harsh winter. The decline
agreement eventually. All parties involved have continuously
in jobs openings was 150K, reaching 5 million . This resulted in
repeated that the starting point of the negotiations is that
a job openings rate of 3.4%, down from 3.5% the previous
Greece will remain a member of the eurozone, and Greece’s
month. The number of positions waiting to be filled decreased
prime minister Alexis Tsipras seems committed to reaching a
mainly in the health care and social assistance. Elsewhere in
deal. Meanwhile, according to press reports, Mr Dijsselbloem
the report, the total quit rate, a measure of labour market
suggested that Europe could consider disbursing the financial
confidence increased one-tenth to 2%. We expect the labour
support in proportions, as the Greek government passes
market to improve at a faster pace than in the first quarter,
pieces of economic legislation.
which should keep the Fed on track for a September rate hike.
2
Greek talks moving forward – 30 April 2015
Financial markets Currency markets
Close
Change 1 day
Change 5 days
Change YTD
EUR/USD USD/JPY
1.1231
0.1605
-1.0223
119.78
-0.0751
0.2679
-7.1665 0.0000
AUD/USD
0.8004
0.3511
0.4392
-2.0917
USD/CHF
0.9281
-0.1184
1.3099
-6.6580
NZD/USD
0.7415
0.7062
-1.0938
-4.8993
GBP/USD
1.5682
0.0702
2.8598
0.6741
USD/SGD
1.3328
-0.1498
0.7103
0.5507
USD/CAD
Bond markets
1.1999
Close
-0.1664
Change 1 day
-0.4067
Change 5 days
3.2527
Change YTD
2-year German Govt Bond yield
-0.1980
0.0070
0.0240
10-year German Govt Bond yield
0.6750
0.0650
0.1590
-0.1000 0.1340
Yield curve Germany
0.8730
0.0580
0.1350
0.2340
2-year US Treasury Bond yield
0.5961
0.0000
-0.0390
-0.0684
10-year US Treasury Bond yield
2.2507
0.0018
0.0076
0.0795
Yield curve US
1.6546
0.0018
0.0466
0.1479
US 2-year sw ap rates
0.8711
-0.0027
-0.0304
-0.0232
US 10-year sw ap rates
2.3202
-0.0004
-0.0046
0.0341
US sw ap curve
1.4491
0.0023
0.0258
0.0573
EU 2-year sw ap rates
0.1100
-0.0030
0.0090
-0.0650
EU 10-year sw ap rates
0.9400
-0.0150
0.0310
0.1280
EU sw ap curve
0.8300
-0.0120
0.0220
0.1930
-0.0090
0.0000
-0.0010
-0.0870
0.2766
-0.0033
-0.0032
0.0210
JPMorgan EMBI Plus Sovereign S
366.8100
8.1400
-1.4600
-20.6300
Equity markets
Close
Euribor 3 Month ACT/360 ICE LIBOR USD 3 Month
Change 1 day % Change 5 days %Change YTD%
Nikkei 225
19,556
-0.35
0.12
12.06
Hang Seng Index
27,407
-1.12
-1.26
16.11
Hang Seng China Enterprises Index
13,973
-1.48
-0.74
16.59
Australian Stock Exchange S&P/ASX 200 Index
5,675
0.00
-0.31
4.87
Singapore Straits Times Index
3,442
-0.82
-0.83
2.29
Euro Stoxx 50 Index
3,573
-1.42
0.75
13.56
S&P 500 Index
2,099
-0.29
0.46
1.95
MSCI World Daily Total Return Gross USD
812
-0.27
0.51
5.77
AEX Index
489
-0.77
1.32
15.20
14
0.07
-3.14
-27.81
Chicago Board Options Exchange Volatility Index
Commodity markets Reuters/Jefferies CRB Total Return
Close
Change 1 day % Change 5 days %Change YTD%
232
1.24
0.11
0.50
1,193
-0.05
0.09
0.71
Generic first NYMEX Crude Light future
61
0.71
0.41
14.85
Generic first Brent Crude Oil future
67
0.46
-0.89
17.16
6,440
1.18
-0.62
2.22
479
0.63
3.29
-18.74
Gold spot USD/Oz
LME Copper 3 Months Rolling Forw ard Generic first Wheat future Chicago Board of Trade Source: Bloomberg
3
Greek talks moving forward – 30 April 2015
Day
Date
Time
Country
Key Economic Indicators and Events
Period
Latest outcome
Consensus
Saturday
09/05/2015
03:30:00
CN
CPI - % yoy
Apr
1.5
1.6
Monday Monday
11/05/2015 11/05/2015
13:00:00 13:00:00
GB GB
Policy rate - % BoE size of asset purchase programme - GBP bn
May 11 May
0.5 375.0
0.5
Tuesday Tuesday Tuesday
12/05/2015 12/05/2015 12/05/2015
14:00:00 15:00:00 16:00:00
IN US US
CPI - % yoy NFIB small business optimisme - index US Job Openings by Industry
Apr Apr Mar
4.9 96.9 4994
Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday
13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015 13/05/2015
07:30:00 07:30:00 07:30:00 07:30:00 08:00:00 08:00:00 09:30:00 10:30:00 10:30:00 11:00:00 11:00:00 14:30:00 16:00:00
CN CN CN CN CN CN FR DE DE NL GB GB EC EC US US
M2 money growth - % yoy Aggregate financing - CNY bn New loans - CNY bn Fixed investments - % yoy Industrial production - % yoy Retail sales - % yoy GDP - % qoq CPI - % yoy GDP - %qoq GDP - % qoq Claimant count unemployment rate - % Change in claimant count - thousands Industrial production - % mom GDP - % qoq Retail sales - % mom Business inventories - % mom
Apr Apr Apr Apr Apr Apr 1Q P Apr F 1Q P 1Q P Apr Apr Mar 1Q A Apr Mar
11.6 1181.6 1180 13.5 5.6 10.2 0.1 0.4 0.7 0.8 2.3 -20.7 1.1 0.3 0.9 0.3
Thursday Thursday Thursday
14/05/2015 14/05/2015 14/05/2015
08:30:00 14:30:00 14:30:00
IN US US
Wholesale price index - % yoy Prod. prices index - % mom Prod. prices index excl food and energy - % mom
Apr Apr Apr
-2.3 0.2 0.2
Friday Friday Friday Friday
15/05/2015 15/05/2015 15/05/2015 15/05/2015
14:30:00 15:15:00
US US KR RU
Empire State PMI - Manuf. general business conditions - index May Industrial production - % mom Apr Policy rate - % May 15 1Q A GDP - % yoy
-1.2 -0.6 1.75 0.4
12.1 1300.0 860 13.5 5.8 10.4 0.4 0.4 0.6
0.1 0.5
ABN AMRO
0.4 0.6 0.7
-0.4 0.6 0.3
-2.3
-1.0
-2.5
-3.0
Source: Bloomberg, Reuters, ABN AMRO Group Economics (we provide own forecasts only for selected k ey variables and events)
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