Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: Euro gains on Greek buyback

While you were sleeping: Euro gains as Greece offers to buy back bonds

Dec. 4 (BusinessDesk) – The euro rose to a six-week high against the dollar after Greece offered to buy back 10 billion euros of bonds in what’s seen as a sign of progress in tackling its debt mountain.

As talks in Washington aimed at averting the fiscal cliff appear stalled, a chink of light has flowed into markets from Europe.

The euro traded recently at $1.3065 from $1.3006 in late New York trading on Friday. The Dollar Index, which tracks the greenback against six major currencies, fell to 79.819, the lowest since late October.

Greece’s Public Debt Management Agency is offering a maximum purchase price of 34.1 percent for bonds maturing from 2023 to 2042, higher than expected. Greek bonds rose on the news, pushing the 10-year yield below 15 percent for the first time since March. The February 2023 bond price is at 39.31 percent of face value, according to Bloomberg.

The buyback will be via a swap into six- month bills from the European Financial Stability Facility, which last week had its provisional debt rating cut to (P)Aa1 from (P)Aaa with a negative outlook by Moody’s Investors Service. It is part of plans to reduce Greece’s debt to 124 percent of gross domestic product by 2020.

The buyback was one of the conditions of the financial aid approved by euro zone finance ministers and the International Monetary Fund last week and comes as German Chancellor Angela Merkel appears to be softening her stance on conditions for a bailout, saying her country may accept a write-off of Greek debt.

“If Greece one day can rely once again on its own revenue, without having to borrow, then we’ll have to look at this situation and make an evaluation,” Merkel said in an interview with Germany’s Bild newspaper.

Equity markets were generally higher in Europe though they pared gains after an unexpectedly weak US manufacturing report. The Stoxx Europe 600 Index rose 0.1 percent, Germany’s DAX 30 climbed 0.4 percent and France’s CAC 40 rose 0.3 percent.

“If Greece can manage the buyback and get a new tranche of aid, then the Greece problem will be out of the way until the end of 2013,” Philippe Gijsels, head of fixed-income research at BNP Paribas Fortis in Brussels, told Bloomberg.

Manufacturing in the U.S. unexpectedly contracted last month. The Institute for Supply Management’s factory index fell to a three-year low of 49.5 in November from 51.7 in October, surprising economists who had expected manufacturing to expand. Manufacturing in the euro zone was also weaker, shrinking for a 16th straight month for a reading of 46.2.

Stocks on Wall Street weakened after the manufacturing data. The Dow Jones Industrial Average was recently 0.3 percent lower, with manufacturers such as DuPont and General Electric leading the decline. The Standard & Poor’s 500 Index was down 0.1 percent.

Adding to America’s economic woes, Fitch Ratings said warned that the US$607 billion of tax increases and federal spending cuts that kick in on Jan. 1 are the biggest threat to the credit rating of US states in 2013.

"The risk that the fiscal cliff presents to the overall economy is the biggest concern for state credit, as state revenue systems quickly reflect changing economic conditions," Fitch managing director Laura Porter said in a statement yesterday.

U.S. Treasury Secretary Timothy Geithner told CNN’s State of the Union that Republicans will “own the responsibility for the damage” to the US economy if they don’t cede ground and agree to tax hikes for the wealthiest Americans.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news