Here is what you need to know.
Greece is preparing default options. A FT report states, “Greece is preparing to take the dramatic step of declaring a debt default unless it can reach a deal with its international creditors by the end of April, according to people briefed on the radical leftist government’s thinking.” The report continues, “The government, which is rapidly running out of funds to pay public sector salaries and state pensions, has decided to withhold €2.5bn of payments due to the International Monetary Fund in May and June if no agreement is struck, they said.” Greece’s 3-year yield is higher by 81 basis points at 21.75%.
European government interest rates are at all-time lows. Germany’s 10-year yield hit 0.133% and France’s 10-year yield fell to 0.406% as money moved into the safety of core European debt. The German yield curve has negative yields out to 8 years while the France yield curve is below zero out to five years.
JPMorgan Chase earnings topped estimates. The investment bank announced adjusted earnings of $US1.61 per share, outpacing the $US1.41 that was expected by analysts. Revenues also beat, coming in at $US24.8 billion, versus the $US24.5 billion that was anticipated. The company said it expects to raise its dividend by 10% in the second quarter.
China’s new loans jumped. Bank loans in China rose to 1.18 trillion yuan ($US189.87 billion) in March, outpacing the 1.03 trillion yuan that was expected. The ramp up in lending activities comes as the People’s Bank of China attempts to jumpstart a slowing Chinese economy. China’s yuan rose 0.1% to 6.2117 per dollar.
Great Britain has no inflation. Britain’s Consumer Price Index held at 0.0% year-over-year, as expected. The BBC notes, “The figure was the lowest rate of Consumer Prices Index (CPI) inflation since estimates of the measure began in the late 1980s.” Inflation remains well below the Bank of England’s 2% target. The British pound is down 0.2% at 1.4650.
BlackRock is raising money in euros. The company has decided to follow the likes of Berkshire Hathaway and Coca-Cola, among others, in offering euro-denominated debt to take advantage of the ultra-low borrowing costs in Europe. According to Bloomberg, “Average yields on investment-grade bonds in the single currency are at a five-week low of 0.87%,” and hold just above the record low 0.85% set on March 10.
Amazon and HarperCollins have reached a publishing agreement. The multi-year deal covers both print and digital copies and allows HarperCollins to set prices. The publisher would receive incentives for keeping prices low. Financial terms were not disclosed.
Toyota is building an auto plant in Mexico. The plant will be built in Guanajuato, and cost an estimated $US1 billion. According to Reuters, it will produce 200,000 cars per year and employ about 2,400 workers.
Global stock markets are mixed. India’s Sensex (+0.6%) paced the gains in Asia while Hong Kong’s Hang Seng (-1.6%) was a notable laggard. Meanwhile, Italy’s MIB (-1%) leads markets lower in Europe.
US economic data is moderate. Producer Price Index and retail sales are due out at 8:30 a.m. ET while business inventories will be released at 10 a.m. ET. The US 10-year yield is lower by 2 basis points at 1.91%.
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