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• Trichet says main policy rates not at their lowest level and could “diminish further”; reiterates Bank's inflation goals have not changed • BoE's Blanchflower says a massive boost of jobs for the youth in next month's Budget critical in avoiding “permanent scars” on British society • PBC's governor proposes replacing the US dollar as the international reserve currency with a new global system controlled by the IMF • Trade volumes expected to fall 9% this year, the strongest contraction since WWII, WTO says • Moody's downgrades GE to Aa2 from AAA; warns that GE Capital may report a loss in 2009 • President Obama urges G20 leaders to take quick measures to stimulate global growth • Japan extends ban on short selling of stocks till end of July • NZ Finance Minister says the economy probably contracted around 2% in 2008 • South Korean government announces $13bn in extra spending to boost the economy
EUROPE
Trichet hinted interest rates could be cut further in the eurozone as “main policy rates are not at their lowest level”. He said that the bank's actions in the past few months have been “very bold” and its inflation goals have not changed.
Outgoing BoE member David Blanchflower said a massive boost for jobs, targeted at the young, is needed in next month's Budget to avoid inflicting “permanent scars” on British society. A stimulus of 90bn pounds would “be a good starting point for discussion”, he said.
http://www.ft.com/cms/s/0/d1c2a6b6-17da-11de-8c9d-0000779fd2ac.html?nclick_check=1
The International Organization of Securities Commissions has proposed a set of common principles to help create a more consistent international approach to short selling, including a reporting regime to give markets timely information. Iosco added that short selling was a “beneficial feature of a well run market” and had not exacerbated the market turmoil in 2008.
http://www.ft.com/cms/s/0/9d2eb19c-17c6-11de-8c9d-0000779fd2ac.html
Barclays plans to double its investment banking staff in Japan from its current strength of about 40 over the next two years, Bloomberg reported.
US
People's Bank of China's governor has proposed replacing the US dollar as the international reserve currency with a new global system controlled by the IMF. He said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run”.
http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html?nclick_check=1
Trade volumes will fall 9% this year, the strongest contraction since WWII, as demand collapses in the biggest economic downturn in decades, the WTO said. The forecast is much steeper than the 2.8% fall forecast by the IMF in January.
Moody's stripped GE of its triple-A rating which it had held for 42 years. GE's rating has been cut to Aa2 primarily because of the increased risks associated with GE Capital. The rating agency further warned that GE Capital's large portfolio of real estate and consumer loans could tip the unit into the red in 2009.
http://www.ft.com/cms/s/0/233680e8-1804-11de-8c9d-0000779fd2ac.html
President Obama has urged fellow G20 leaders to agree on immediate action to boost the global economy at the London summit next month, according to German newspaper Die Welt. He said that quick measures to stimulate growth were essential for a secure recovery.
Goldman Sachs is working on a bid for iShares, Barclays' asset management business. Other bidders thought to be interested include Bain Capital, Vanguard and a consortium led by Hellman & Freidman. The valuation of the business could be as high as $6.5bn.
http://www.ft.com/cms/s/0/bc6ff444-17e4-11de-8c9d-0000779fd2ac.html?nclick_check=1
A survey of hedge fund investors by Deutsche Bank has revealed that a third of them expect withdrawals of more than $200bn this year, which is greater than the net $155bn is taken out last year. Only a fourth of the investors expect net inflows into the industry.
http://www.ft.com/cms/s/0/f075ecf0-17d8-11de-8c9d-0000779fd2ac.html
Goldman Sachs is considering selling part of its 4.9% stake in Industrial and Commercial Bank of China, a move that could raise more than $1bn, WSJ reported. Any transaction though would have to wait until late April, when a lockup on half the stake is set to expire.
http://online.wsj.com/article/SB123783664899116789.html
Moody's has downgraded 496 tranches, representing an aggregate balance of $15.5bn, of US commercial mortgage backed securities on large loans and single-borrower transactions rated from 1997 to 2008.
http://online.wsj.com/article/SB123782258785015105.html
GM, Chrysler and Ford may get 10,000 United Auto Workers union members to accept buyouts after the elimination this year of benefits related to job security and unemployment pay.
New York Attorney General Andrew Cuomo said that 15 of the top 20 bonus recipients at AIG had agreed to return their bonuses in full, amounting to more than $50mn. He added that he expected to recover about $80mn of the $165mn of bonuses paid out this year.
http://www.ft.com/cms/s/0/01500150-1801-11de-8c9d-0000779fd2ac.html
President Obama filled key Treasury posts by appointing Neal S. Wolin as Secretary Geithner's number two and former White House aide Lael Brainard for the top international job. The only key unfilled post now remaining is the office of domestic finance who is the administrations ambassador to Wall Street.
http://www.ft.com/cms/s/0/e6cc5096-1813-11de-8c9d-0000779fd2ac.html
JAPAN
Japanese finance minister Yosano said the government would extend its ban on naked short-selling of stocks till the end of July. The government also extended rules on company share buybacks till July.
Minutes of the February BoJ meeting showed that many of the board members said the bank should extend special corporate funding measures to ease corporate funding towards the end of the fiscal year.
AUSTRALIA & NEWZEALAND
New Zealand's finance minister said the economy probably contracted around 2% in 2008. He added that the balance of payments deficit for 2008 was of the order of 9% of GDP.
ASIA
South Korea said it would spend nearly $13bn extra to shield its economy from an almost certain recession. The finance ministry has forecast that the additional spending should add 1.5pps to growth.
Saudi Arabia has established a new company named Hassana Investment Company, to oversee the investment of the assets of the largest state run pension fund. The fund will also lead the development of real estate, commercial and services projects and be able to sell those projects.
http://www.ft.com/cms/s/0/a32e45e0-17f2-11de-8c9d-0000779fd2ac.html
The Korea Chamber of Commerce and Industry's retail business survey index for Q2 rose to 75 from 73 in the previous quarter- its first rise in six quarters.
Weaker than expected sales has prompted Toyota to revise down planned production in Japan in May, local newspaper Asahi reported.
South Korea's first planned global sovereign bond offering in three years will likely hit the market next month at the earliest, Reuters reported. The country plans to sell up to $6bn in global bonds this year.
Temasek, Singapore's state-backed investment fund, has offered the beleaguered hedge fund industry a rare show of support by pledging to commit more money to the sector this year. A senior manager of the fund said there would be more allocation to hedge funds because they provide greater downside protection relative to equities.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/5038663/Temasek-offers-hedge-funds-hope.html
Events (GMT):
FRA 07:45 Consumer Spending (Feb) -0.9%(-0.5%)
FRA 07:50 Business Confidence Indicator (Mar) 68
FRA 07:50 Own-Company Production Outlook (Mar)
FRA 07:50 Production Outlook Indicator(Mar) -77
FRA 08:00 PMI Manufacturing (Mar P)
FRA 08:00 PMI services (Mar P)
DEU 08:30 PMI Manufacturing (Mar A)
DEU 08:30 PMI Services (Mar A)
SWE 08:30 PPI (Feb)
EMU 09:00 Current account (Jan)
EMU 09:00 PMI Manufacturing (Mar A) 33.5
EMU 09:00 PMI services (Mar A) 39.5
GBR 09:30 BBA home loans (Feb)
GBR 09:30 CPI (Feb)
GBR 09:30 Core CPI (Feb)
BEL 14:00 BNB Business Confidence level (Mar) -32
USA 14:00 House Price Index (Jan)
USA 14:00 Richmond Fed Manufacturing index (Mar)
USA 21:00 ABC Consumer Confidence
JPN 23:50 Adjusted Merchandise Trade balance (Feb)
JPN 23:50 Total Merchandise Trade balance (Feb)