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Stories Report on Business is following today :
Markets still wary on Greece
The euphoria over the Greece support package is fading fast, signalling there's no easy road ahead for both its embattled government and the larger euro zone. The euro rose today and then quickly slipped again after Greece sold €1.56-billion of 6- and 12-month Treasury bills. The sale was met with strong demand after a weekend commitment by the 16 countries that share the euro to backstop Greece to the tune of €30-billion if needed. But the yields were far higher than earlier issues as investors demanded a hefty return that the country can ill afford.
"The result confirms that the package which was put in place on Sunday has enabled Greece to fund itself in the near- term," David Owen, chief European financial economist at Jefferies International Ltd. in London, told Bloomberg News. "But the longer-term fundamental issues in terms of where we go from here haven't changed. Greece has to put its finances in order against the backdrop of an economy that currently is shrinking."
Added Audrey Childe-Freeman, currency analyst at Brown Brothers Harriman, in an interview with Reuters: "The higher yield confirmed the high risk premium demanded for Greek assets and that has put the euro bears in a stronger position."
Still, noted Scotia Capital economists Derek Holt and Karen Cordes Woods, "the yields are hundreds of basis points above where they were earlier in the year, but the enormous spread between the bid and offer amounts for an offering that itself was expanded from initial plans reflects an enormous confidence boost from the weekend support package offered to the country. There are no guarantees on such aid offers, but the message we've been driving home throughout the Greek debt crisis is that the euro zone will band together."
Related: IMF'S Greek bailout plan signals new world disorder
Canadian exports defy high dollar
Canadian exports pushed ahead in February - in both price and volume - continuing to defy the strong dollar. Exports of industrial goods and materials drove overall exports up by 2.8 per cent, Statistics Canada said today, boosting the country's trade surplus to $1.4-billion from $754-million in January. Imports also rose, but just by 1 per cent, and import prices dipped by 0.2 per cent. "This represented the fifth increase in export volumes and prices in six months," the federal statistics gathering agency said. "... Import volumes have been trending upward since April 2009, whereas prices have generally declined during the same period."
The rebound in exports after the collapse in global trade during the recession is key to Canada's recovery, particularly given the rise in the Canadian dollar , which affects export-sensitive industries. Today's report "suggests that the Canadian external sector continues to defy the drag coming from the very strong Canadian dollar, though we suspect that over the coming months the weight of the strong dollar may begin to wear on exports," said TD Securities senior Canada macro strategist Millan Mulraine. Read the story
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Oil over $80 could threaten recovery
The International Energy Agency warns today that current oil prices threaten the global economic recovery amid fears that crude markets are overheating. Oil has hovered at about $85 (U.S.) a barrel and, the arm of the OECD says in its monthly report, sustained prices over the $80 level are a worry.
"Ultimately, things might turn messy for producers if $80-100 (per barrel) is merely seen as the new $60-80 (per barrel), stunting economic recovery while prompting resurgent non-oil and non-OPEC supply investment," the IEA said, according to The Associated Press. It added that consumer subsidies and tighter credit conditions in countries such as China and India "could stall OECD economic recovery or render it more oil-less than we currently envisage." Read the story
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China reiterates it will stick to policy guns
China's president told the United States again today, in blunt fashion, that it would follow its own path to currency reform, regardless of pressure from other countries. Markets still expect, however, that Beijing will allow the yuan, or renminbi, to soon appreciate. According to remarks released by Chinese officials, Mr. Hu told President Barack Obama that "detailed measures for reform would be considered in the context of the world's economic situation, its development and changes as well as China's economic conditions. It won't be advanced by any foreign pressure."
Scotia Capital currency strategist Sacha Tihanyi noted the timeliness of the meeting given that China has just posted a rare monthly trade deficit, which he said gave the Chinese leader the ammunition to reiterate Beijing's line. "This does nothing to ease the greatly building speculation in the market, however, that the Chinese will begin to allow the renminbi to once again appreciate within the coming months," he said. "A Chinese appreciation is good for China and good for the global economy in the long run, given that it would contribute towards eliminating an artificially large trade surplus that has in the past had an impact on global financial conditions." Read the story
Twitter to unveil ad model
Twitter is poised to roll out a new business model today that would see the hugely popular microblogging service draw advertising revenue, reports say. Twitter has so far been slow to make money from its tremendous growth since it launched three years ago, The New York Times reported, and today's move will illustrate just how the service will monetize that. Ads that Twitter labels "promoted tweets" will appear when users search keywords purchased by advertisers to link to ads. Down the road, the newspaper said, it will show "promoted posts" in the stream of postings. Best Buy, Virgin America and Starbucks plan to run advertising, The Times said. "When people are searching on Starbucks, what we really want to show them is that something is happening at Starbucks right now, and promoted tweets will give us a chance to do that," Chris Bruzzo, vice-president of brand, content and online at Starbucks, told the newspaper. Read the story
From today's Report on Business
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Reports of TV's death greatly exaggerated