Greece's Main Creditors Said to Be Unwilling to Allow Euro Exit. Greece’s major creditors are not ready to let the country drop out
of the euro as long as Prime Minister Alexis Tsipras shows willingness
to meet at least some key demands, according to two people familiar with
the discussions. Chancellor Angela Merkel will go a long way to prevent a Greek exit
from the single currency, though only so far, one of the people said.
Every possibility is being considered in Berlin to pull Greece back from
the brink and keep it in the 19-nation euro, the person said.
Greek Bonds Suffer Worst Week Since Aftermath of Syriza Victory. Greek government bonds were set for their worst week since the
aftermath of Syriza’s election victory as the nation remained locked in
negotiations to secure funding and avoid a default. The yield on 10-year securities climbed to the highest since December
2012 this week, and Spanish and Italian bonds also dropped, as
officials worked to reach an agreement before Greece faces payments of
almost 1 billion euros ($1.1 billion) next month. German 10-year yields
dropped below 0.1 percent for the first time as European Central Bank
President Mario Draghi said Wednesday that the institution’s 1.1
trillion-euro bond-buying program must be implemented in full to work.
Junk-Bond Risk Rises in Europe as Greek Default Concern Mounts. The cost of insuring high-yield corporate debt in Europe is set for
the biggest weekly rise since December as Greece negotiates to avoid
default. The Markit iTraxx Crossover Index of credit-default swaps on
high-yield companies climbed 36 basis points this week to 279 basis
points, the highest since Feb. 20, according to data compiled by
Bloomberg. Contracts insuring $10 million of Greek debt for five years
signal an 79 percent probability of default, CMA data show.
Euro Area’s Repo-Market Crunch Undercuts Draghi’s Insouciance. Mario Draghi’s soothing words on the perceived scarcity of euro-area
bonds have done little to dispel concern that the European Central
Bank’s quantitative easing is snarling up a key part of the debt
market’s plumbing. A glance at the German repurchase market suggests the availability of
bonds as collateral for loans is drying up, according to Subhrajit
Banerjee, a fixed-income strategist at HSBC Holdings Plc in London. The
risk is that this will start a chain-reaction that shrivels liquidity in
the cash-bond market, he wrote in a research report on Thursday.
China Futures Tumble on Trust Curbs, Expansion of Short Selling. Chinese stock-index futures tumbled after regulators clamped down on
the use of shadow financing for equity purchases and increased the
supply of shares available for short sellers. FTSE China A50 Index futures for April delivery fell 6 percent as of
10:47 a.m. in New York, while contracts on the Hang Seng China
Enterprises Index lost 3.3 percent. Regulators banned the margin-trading
businesses of brokerages from using so-called umbrella trusts and
allowed fund managers to lend shares to short sellers, statements on
Friday showed. Investors have used umbrella trusts, which allow for more leverage
than brokerage financing, to ramp up wagers on Chinese stocks after
monetary stimulus sparked a world-beating rally in the nation’s
benchmark equity gauge. The Shanghai Composite, which more than doubled in the past 12 months,
trades for 21.1 times reported earnings, the highest since April 2010
and more than double last year’s low, according to data compiled by Bloomberg. The MSCI Emerging Markets Index is valued at 13.7 times.
Russian Retail Sales Slump for Third Month as Wages Plummet. Russian retail sales slumped for a third month and real wages
plunged the most since 1999, highlighting the discrepancy between
improving markets and the plight of the consumer as the economy enters
its first recession in six years. Wages adjusted for inflation fell 9.3 percent in March from a year
earlier after an upwardly revised 7.4 percent drop a month earlier, the
Federal Statistics Service in Moscow said in a statement Friday. Retail
sales fell 8.7 percent, compared with a revised drop of 7.2 percent in
February. The median estimates of economists surveyed by Bloomberg were
for decreases of 10.3 percent and 8.6 percent.
European Stocks Slide Most Since January Amid Greek Debt Concern. European stocks slid, posting the biggest retreat since they began
rallying in January, as concern over Greek debt was exacerbated by
declines in the U.S. and Asia. The Stoxx Europe 600 Index lost 1.8 percent to 403.69 at the close of
trading, completing the worst week of the year. The Greek ASE Index
slid 3 percent, with the National Bank of Greece SA and Alpha Bank AE
tumbling more than 7 percent, as the country struggles to win more aid
to avoid a default. Germany’s DAX Index plunged 5.5 percent this week,
the most since 2011.
European stocks fell for a second day after reaching a fresh peak Wednesday, taking weekly losses to 2.2 percent.