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The Overnight Express: North American Edition

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Stimulus Packages to Remain Until Recoveries Have Coalesced

Fri, Sep 25 2009, 13:05 GMT
by Erik Franco

The Overnight Express

The following is a summary of the main economic events from the Asia-Pacific and European sessions:

• RTRS: G-20 policy makers will continue stimulus measures until sustained recoveries are in place and they have coordinated their exit strategies; they promise to work together to battle industry excesses.

• BBC: White House statement says G-20 will supplant the G8 to become the permanent council for economic cooperation; meeting in the Pennsylvanian city is allegedly close to sealing a pact to improve global coordination of member nations’ economic policies.

• Speaking in Pittsburgh, U.S. Treasury chief Geithner says the G-20 have reached an agreement on the “basic outline” of a plan to limit executive compensation by the end of the year; adds that the States will battle to preserve the greenback’s position in the international financial system.

• WSJ: U.S. Treasury is looking into ways to keep some emergency funding in reserve, in case it doesn’t extend the TARP into 2010; the program is set to expire on Dec. 31, 2009.

• WSJ op-ed: Fed’s Warsh (voter) writes that the Fed’s extraordinary actions are only half-over, with the need to exit still lying ahead; says, “If policy is not implemented with skill and force and some sense of proportionality, the success of the overall endeavor could suffer.”

• WSJ: China’s Geely Holding Group is the leading contender to buy Ford’s Volvo operations.

• Goldman Sachs hikes global oil demand forecasts for this year and 2010, noting that Chinese oil demand has returned to pre-recessionary levels; predicts that NYMEX crude will reach $85 per barrel in 2009 and $90 next year.

• WSJ: Barclays is in talks to purchase some of Citigroup’s American credit card operations and parts of its Portuguese retail banking business; both deals could be announced as early as next week.

• Speaking in Pittsburgh, BOC Governor Carney says he’s concerned when a country’s currency deviates from fundamentals; declines, however, to comment on the Canadian dollar.

• SNB's Jordan will tell an audience in Luxembourg on Friday that the central bank remains committed to fighting the Swiss franc’s rise versus the euro.

• ECB’s Mersch tells reporters in Frankfurt that the central bank will act to withdraw stimulus measures when the time is right; says it’s now a good time to discuss exit strategies.

• German GfK consumer confidence rises to 4.3 in October from 3.8 the month prior.

• Euro zone M3 money supply increases 2.5% year-over-year in August, slower than forecasts for a 2.7% gain and following the prior 3.0% increase.

• Kiwi trade deficit expands to NZ$725 million in August, more than the expected rise to NZ$329 million from NZ$163 million in July; imports increase to NZ$3.47 billion from the revised NZ$3.35 billion read the previous month; exports fall to NZ$2.74 billion from NZ$3.18 billion in July.

• BOJ minutes (Aug. 10-11 meeting) express concern that, despite the improving credit situation, smaller companies are experiencing borrowing difficulties; stating, “Many members noted that the improvement in funding conditions of large firms was significant, but that of small firms and firms with low credit ratings remained limited.”

• ING agrees to sell 51% of its stake in ING New Zealand and ING Australia to joint-venture partner ANZ Group for €1.1 billion ($1.6 billion); says the move is part of its wider restructuring plan.

• After Japan Airlines requests a fourth bailout from Tokyo, Japanese Transportation Ministry draws up plans to help the carrier restructure.

• Nikkei: Nissan says it will move production of its Infiniti SUV from the States to a plant near Tokyo from 2010.

• Hewlett-Packard CEO Hurd says that 2010 fiscal year earnings will exceed those of 2009, and indeed overarch the growth rate of other IT companies; adds that the firm’s “best days are ahead of it, not behind it”.

• BBC: NY Grand Jury charges Afghan-born American Najibullah Zazi with planning to bomb his adopted country with "one or more weapons of mass destruction".

Published on  Fri, Sep 25 2009, 13:08 GMT