*from www.bloomberg.com, Mar. 25, 2013 (To view original article click here.)
Take Away #1: Stocks slid, erasing early gains, amid concern that Cyprus’ bank restructuring plan will pave the way for losses on deposits in other European nations.
Key Facts and Figures:
- The euro weakened against 15 of 16 major peers.
- Italian and Spanish bonds erased gains.
- The S&P 500 Index was down 0.6% at 1,547.23 as of 1:20 p.m. in New York after climbing as high as 1,564.91, within one point of its 2007 record close.
- The Stoxx Europe 600 Index lost 0.3% after rising as much as 1%.
- Italy’s 10-year bond yield jumped 10 points.
- Ten-year Treasury rates fell three points to 1.90%.
- Commodities erased gains.
Take Away #2: Reuters reported Dutch Finance Minister Jeroen Dijsselbloem said the Cyprus deal should be viewed as a template.
Key Facts and Figures:
- Dijsselbloem said nations with large banking industries must look to restructure and reduce their overall size.
- Cyprus agreed to the outlines of an aid deal that imposes losses.
Take Away #3: Cypriot President Nicos Anastasiades agreed to shut the country’s second-largest bank.
Key Facts and Figures:
- The decision came under pressure from the German-led bloc in a nighttime negotiating melodrama that threatened to rekindle the debt crisis.
- “There were no optimal solutions available, only hard choices,” said European Union Economic and Monetary Affairs Commissioner Olli Rehn.
Take Away #4: The euro also weakened as Cypriot lawmaker Nicholas Papadopoulos said leaving the common currency must be considered after the bailout deal.
Key Facts and Figures:
- The euro erased an earlier gain against the dollar, triggered after the provisional agreement was struck.
- Cyprus is now the fifth country to get a rescue since the debt crisis broke out in Greece in 2009.
- The shared currency fell 0.7% against the dollar last week, the most since the five days ended March 1.
- The euro tumbled 1.5% versus the yen, the most since the week ended Feb. 8.
- The euro weakened 1.2% to $1.2836 after reaching $1.3048, the strongest level since March 15.
Take Away #5: European banks fell and the DAX Index slip along with European bonds.
Key Facts and Figures:
- European banks in the Stoxx 600 erased earlier gains to slump 1.9% as a group to the lowest level of the year.
- Intesa Sanpaolo SpA and Societe Generale SA lost more than 6% to lead losses.
- The DAX Index slipped 0.5%.
- German advisors cut the nation’s 2013 economic growth forecast to 0.3%, from its previous estimate of 0.8% citing “the sharp decline” of GDP in the fourth-quarter of 2012.
- Meyer Burger Technology AG fell 5% on a new share-sale plan.
- Vodafone Group Plc (VOD) added 2% after a report said the carrier may sell its stake in Verizon Communications Inc. for $135 billion.
- Italian bonds fell for the first time in four days.
- Earlier gains sent the price of the 5.5% securities maturing in November 2022 up as much as 0.66, or 6.60 euros per 1,000-euro face amount to 108.755.
- The rate on Germany’s 10-year bunds, declined five basis points to 1.33%.
- U.K. and Dutch rates also dropped, while Portugal’s increased.
Take Away #6: The link between risk and reward in stocks is breaking down as emerging markets post the worst quarter since 2008 and lag behind shares of developed economies by the most in 15 years.
Key Facts and Figures:
- China’s yuan strengthened beyond 6.21 per dollar for the first time in 19 years after the central bank raised the currency’s reference rate.
- The Indian rupee rose to 54.1800 per dollar after the government removed sub-limits governing foreign investment in the nation’s bonds.
- Overall caps of $25 billion for sovereign debt and $51 billion for corporate notes were left unchanged.
- The MSCI Emerging Markets Index added 0.6%, rebounding from its lowest level of the year, as Malaysian and South Korean stocks led gains.
Take Away #7: Copper slips, Oil rises ad Natural gas declines, while the S&P GSCI gauge of 24 commodities was little changed, reversing a gain of 1.1%.
Key Facts and Figures:
- Oil rose 0.4% to $94.11 a barrel in New York.
- Natural gas for April delivery erased a gain of as much as 1.8%.
- Copper slipped 0.6% to $3.4465 a pound in New York.
- Speculation that China’s government will take steps to tame inflation added to concerns that global growth will slow, curbing metals demand.
- Hedge funds are making the biggest bet against copper on record as global inventories expand to a nine-year high.
- Concern that Europe’s debt crisis will spread spurred the biggest gain in gold bets since 2008.
- Speculators raised net-short positions in U.S. copper futures and options by 53% to 25,719 contracts in the week ended March 19.
- A jump in bullish bets on corn, gold, and natural gas boosted overall holdings across 18 raw materials for a second consecutive week.
*To view original article from www.bloomberg.com click here.