News: 2014-03-29

By Edward Harrison On Mar 29, 2014

Europe

Euro Zone Edges Closer to Deflation – WSJ.com

“Spanish consumer prices unexpectedly fell from a year ago and German inflation edged below 1%, suggesting the euro zone is edging closer to a period of extremely low inflation or even broad-based price declines known as deflation.”

Bundesbank, PBOC Sign Deal to Settle Renminbi Payments in Frankfurt – WSJ.com

ekathimerini.com | Greek bank deposits drop for a second month in February

A return to capital markets for Greek banks but no return to domestic lending | Macropolis

Spain’s recession longer than thought, but close to ending | Reuters

“Gross domestic product contracted 0.1 percent in the second quarter from a quarter earlier, the National Statistics Institute (INE) said, in line with forecasts and a preliminary reading.
But in the third and fourth quarters it should stabilize or grow by up to 0.2 percent, Economy Secretary Fernando Jimenez Latorre said following the data, enabling it to meet an official end-of-year target of a 1.3 percent contraction.”

Spanish, Italian Bond Yields Drop to Records – Bloomberg

The Irish Economy – Yields on Irish government bonds

European Bonds Advance, Led by Portugal, Amid Deflation Concern – Bloomberg

Surge in consumer confidence lifts euro zone economic sentiment | Reuters

German economy minister says no alternative to Russian gas | Reuters

North America

PwC is sued for $1 billion over MF Global collapse | Reuters

Fed’s George wants end to zero rates, does not say when | Reuters

Interest rates and inflation: Zero forever | The Economist

“The rich world’s central banks are behaving with a dangerous complacency. Low and falling inflation will retard ongoing recoveries. Perhaps more important, this path forward leaves the rich world with virtually no cushion against future shocks.”

Monetary Policy And Secular Stagnation | House of Debt

“What we are witnessing is the limit of what monetary policy alone can do. Sometimes there is a tendency to assume that the Fed can “target” any inflation rate it wishes, or that it can target the overall price level – the so-called nominal GDP targeting. The evidence suggests that the Fed may not be so omnipotent.”

Fed feels backlash over stress tests – FT.com

Jimmy Carter says he would consider pardoning Edward Snowden

“Russia has “the right to use selective protective measures against Ukraine if it creates a free trade zone with a third government, or for example with the European Union,” a Russian economy ministry spokesman said in response to a question from Reuters, citing the terms of a 2011 agreement. He gave no details of what the measures might entail.”

EU can cope with Russian retaliation, says trade official – FT.com

BBC News – UK GDP growth estimate for 2013 revised down to 1.7%