Here’s what you need to know.
We have an agreement on Ukraine. “The leaders of Germany, France, Russia, and Ukraine have agreed on a deal to end fighting in eastern Ukraine, participants at the summit talks said Thursday,” Reuters reported. “The deal reached after all-night negotiations in the Belarussian capital Minsk included a cease-fire that would come into effect on Sunday, followed by the withdrawal of heavy weapons.”
Nothing official came out of Wednesday’s tense Eurogroup meeting. Greece and its eurozone partners are still at odds on how to handle Athens’ finances after a bailout deal expires this month, with sources offering conflicting versions of the eventual outcome of a Eurogroup finance ministers’ meeting on Wednesday. Two official sources told Reuters that, while there was no deal yet, a common statement was being drafted that could leave it open for Greece to extend its current financing.
But Greece’s finance minister says the country will “absolutely not” leave the euro. Greek Finance Minister Yanis Varoufakis, asked on arrival at his first meeting of the Euro Group if Athens might leave the euro zone, replied “absolutely not”.
The Bank of England warns about deflation. The UK’s new quarterly report on economic conditions from the Bank of England can be summed up in two words: dovish and deflation. They’re saying UK inflation is more likely than not to turn negative in a few months time, and that no interest hike is on the horizon. They specifically expect the inflation right to slide to 0% in Q2 and Q3 with a month or two of deflation some time during the summer.
Sweden cuts rates. “The Swedish Riksbank unleashed unprecedented stimulus with a negative interest rate and quantitative easing in a race to stem a deflationary spiral blamed by some economists on premature policy tightening,” Bloomberg reported. “The Riksbank lowered its repo rate to minus 0.10 per cent from zero. A cut had been predicted by six of the 18 economists surveyed by Bloomberg, while the remainder forecast no change.”
Australian unemployment jumped and the Aussie dollar plunged. Australia lost 12,200 jobs in January and the unemployment rate jumped to 6.4%. The market was expecting a slight increase of 5,000 jobs and an increase in the unemployment rate to 6.2%. That surprise sent the Australian dollar bellow 0.77 US dollars.
Markets are surging. Greece’s ASE index is up a whopping 4.6%. France’s CAC 40 is up 0.9%, Germany’s DAX is up 1.5%, And Spain’s IBEX is up 1.8%. Japan’s Nikkei climbed 1.85% and Hong Kong’s Hang Seng jumped 0.4%.
Tesla announces a stunning net loss. The electric carmaker reported an adjusted net loss of $US0.13 per share in Q4. Analysts were looking for a $US0.32 per share profit. Revenue of $US1.1 billion was a bit lower than the $US1.2 billion expected. Tesla delivered 9,834 vehicles during the quarter, which was lower than the 11,200 expected. The stock is tumbling in premarket trading.
Pilots are walking out at Lufthansa. Pilots at Lufthansa’s budget airline, Germanwings, started a two-day strike on Thursday as German pilots’ union Vereinigung Cockpit (VC) seeks to put pressure on management in a long-running row over pay and conditions.
US retail sales coming. At 8:30 a.m. ET, we’ll get the US retail sales report. Economists estimate sales fell 0.5% in January due largely to falling energy prices. Excluding autos and gas, core sales are estimated to have increased by 0.4%. “Retail gasoline prices continued their slide in January and the money saved at the pump should help boost spending in other categories, in particular, discretionary spending categories,” Nomura economists said. “Continued improvement in consumer sentiment in recent months suggests that the underlying trend in sales should be robust. Therefore, we believe there is some upside risk to our January forecast and we would not be surprised if December’s low number is revised up.”