Fundamental Analysis

EUR

“The situation is getting more problematic for Greece day by day”

- Michael Meister, the deputy floor leader and finance spokesman in parliament for Chancellor Angela Merkel’s party

Greece leaders gathered on Wednesday to agree on a reform deal in return for a 130 billion euro bailout from the European Union and the International Monetary Fund.

“The situation is getting more problematic for Greece day by day,” said Michael Meister, the deputy floor leader and finance spokesman in parliament for Chancellor Angela Merkel’s party.

“A day wasted in failing to tackle Greece’s administrative, budget and competitive problems is a bad day.” Greeks need to reform “not for Brussels, Berlin or the IMF, but for their own sake.”

The country may have only several days left to find funds for its bond payment and avert “outright default,” said Thomas Mayer, chief economist at Deutsche Bank.

“If they don’t have the money in the account at the time the payment is due, then they really default,” Mayer said in interview on Wednesday. “Time is of the essence. I think we have maybe one, maybe two, maybe three more days but that’s it.”

USD

“Be 100 percent in equities”

- Laurence D. Fink, chief executive officer of BlackRock Inc.

U.S. stocks closed positive on Wednesday while investors awaited the outcome of negotiations between Greece and the troika.

The Standard & Poor's 500 added 0.22%, or 2.72 points, to 1,349.96. The Dow Jones Industrial Average gained 0.04%, by 5.75 points, to 12,883.95. The Nasdaq Composite Index soared 0.41%, or 11.78 points, to 2,915.86.

“Be 100 percent in equities,” Laurence D. Fink, chief executive officer of BlackRock Inc., the world’s largest money manager, said in an interview on Wednesday.

“I don’t have a view that the world is going to fall apart, so you need to take on more risk. You need to overcome all this noise and there are great values in equities.”

GBP

“Further falls in the official rate of inflation, which are expected during the coming months, should be a boost to customers' budgets”

- Stephen Robertson, Director General at British Retail Consortium

U.K. shop price inflation fell to 1.4% in January from 1.7% in December, the British Retail Consortium announced on Wednesday. Food inflation declined to 3.7 per cent from 4.2 per cent in December. Non-flood inflation eased to zero from 0.3 per cent in the last month of 2011.

“Further falls in the official rate of inflation, which are expected during the coming months, should be a boost to customers' budgets and, crucially, should help to improve consumer confidence,” said Stephen Robertson, Director General at British Retail Consortium.

“For there to be any significant improvement in retailers' fortunes in the coming year it's essential that people feel better about their personal finances and become more willing to spend.”

U.K. stocks closed lower on Wednesday. The benchmark FTSE 100 index shed 0.24%, or 14.33 points, to 5,875.93. The FTSE All-Share Index declined 0.24%, or 7.42 points, to 3,034.15.

CHF

“Investors are betting Greece will conclude a deal”

- Jakup Petur Baerentsen, a chief equity adviser at Nordea Private Bank

Swiss unemployment remained unchanged in January, said the Swiss State Secretariat for Economic Affairs on Wednesday. Jobless rate was at 3.1 per cent, the same as in December.

Swiss stocks closed slightly lower on Tuesday. The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies, declined 0.03%, or 1.73 points, to 6,155.86. The broader Swiss Performance Index lost 0.03%, or 1.42 points, to 5,583.65.

“Investors are betting Greece will conclude a deal, that’s what’s pushing stocks higher,” said Jakup Petur Baerentsen, a chief equity adviser at Nordea Private Bank in Copenhagen. “Patience will last till the end of this week.”

The Federal Statistical Office is to announce change in month-on-month consumer prices on Friday. Prices declined 0.2 per cent in December and by the same amount in November.

JPY

“It is hard to consider that Japan will become a deficit in current account in medium term”

- Tatsushi Shikano, a senior economist at Mitsubishi UFJ Morgan Stanley Securities

Japan’s current account surplus shrank sharply in 2011 to its smallest value in 15 years, as exports weakened, being disrupted by the March earthquake and the Thai floods and energy imports soared after shutdown of nuclear plants.

“It is hard to consider that Japan will become a deficit in current account in medium term,” said Tatsushi Shikano, a senior economist at Mitsubishi UFJ Morgan Stanley Securities in Japan.

“But there is a risk if a yen sharply appreciates and the nation loses global competitiveness, the timing to become deficit country may come sooner than expected.”

The Nikkei 225 rose 1.1%, or 98.07 points, to 9,015.59, while the broader Topix advanced 1.24%, or 9.57, to 782.34.