Up on deck this week is the European Central Bank, set to meet on May 2, and being picked by bond market touts for a 0.25% interest rate cut at that meeting in reaction to numbers yesterday showing that economic activity continues to contract though out the EuroZone—even in Germany.
The Purchasing Managers Index released in China over night fell to a two-month low of 50.5 in April from 51.6 in March. Economists had expected a much smaller drop to 51.5 in April. That The reinforced fears that the Chinese economy might be slowing.
Frightening reading from Eurostat, the European Union’s keeper of economic statistics, this morning. The 2012 budget deficit for Spain hit 10.6% of GDP. That was even slightly worse than the deficit for Greece. Ireland came in with a budget deficit of 7.6% of GDP, followed by Portugal at 6.4%, the U.K. at 6.3%, Cyprus at 6.3%, France at 4.8%, and Italy at 3%.
In March the troika of the European Union, the European Central Bank, and the International Monetary Fund that has to approve each round of funding in the Greek rescue program left Athens before giving its OK. The troika is due to begin meeting with the Greek government on Thursday and the stakes are higher this time
Unemployment data from Eurostat, the European Union’s statistics office, argue that the EuroZone debt crisis isn’t going away anytime soon no matter how the details are rearranged. Unemployment in the EuroZone climbed to a record 12% in February. That’s up from 10.9% in February 2012. In the wider European Union, the unemployment rate climbed to 10.9% from 10.2% in February 2012.
Asian stocks—and U.S. market so far this morning—are up because to far-away investors the Cyprus story is that euro chaos has been prevented for another day. For Europeans and Cypriots, however, the deal is an invitation to future pain
News released yesterday, March 21, that EuroZone economies contracted at a faster rate in March than in February got largely overlooked. But, it is far more important to the next stage in the euro debt crisis than what happens in Cyprus in the next few days.
The European Central Bank has given Cyprus an ultimatum: Come up with a plan that can secure approval from the EuroZone countries and the International Monetary Fund by Monday or the central bank will cut off emergency funds to Cypriot banks
