Frontrunning: March 30

  • Greek PM does not rule out new bailout package (Reuters)
  • Euro zone agrees temporary boost to rescue capacity (Reuters)
  • Madrid Commits to Reforms Despite Strike (FT)
  • China PBOC: To Keep Reasonable Social Financing, Prudent Monetary Policy In 2012 (WSJ)
  • Germany Launches Strategy to Counter ECB Largesse (Telegraph)
  • Iran Sanctions Fuel 'Junk for Oil' Barter With China, India (Bloomberg)
  • BRICS Nations Threaten IMF Funding (FT)
  • Bernanke Optimistic on Long-Term Economic Growth (AP)
  • Osborne plans spending test for Labour (FT)

Overnight Media summary via Rtrs



Investment banks face the prospect of another disappointing year as companies put off dealmaking, depressing fees for the first quarter of 2012 to their lowest level for three years.


The Financial Services Authority is threatening regulatory action against several investment banks after it discovered shortfalls in their anti-bribery controls.


British finance minister George Osborne will challenge Labour to match a detailed coalition programme of cuts stretching into the middle of the next parliament in an attempt to "finish the job" of eliminating the structural budget deficit by 2017.


Investors in U.S. initial public offerings are showing greater appetite for companies with high levels of debt, which could lead to more private equity-owned companies being floated.


Apple and its major supplier Foxconn have agreed to make improvements in working conditions in Chinese factories after an audit by the independent Fair Labor Association uncovered multiple abuses.


Sales of BlackBerry smartphones fell dramatically in the latest quarter, with the resignation of Jim Balsillie, the company's former co-chief executive and major shareholder, from the board of Research In Motion underscoring the crisis at the device maker.


The U.S. candidate to head the World Bank, Jim Yong Kim, lacks the "appropriate development credentials" to do the job properly, one of his chief rivals for the position said in an interview with the Financial Times.


Commodity hedge funds are sitting on disappointing returns for the first quarter in spite of one of the biggest monthly rallies in crude oil in years and falling market volatility.


The Co-operative Group gave the strongest signal yet that its talks to buy 630 branches from Lloyds Banking Group could unravel after it warned there were still significant regulatory hurdles to overcome.


* Federal authorities are struggling to crack down on what they describe as a widespread scheme that has already likely defrauded the Internal Revenue Service of billions of dollars using the stolen identities of Puerto Rican citizens.

* U.S. companies with junk credit ratings are piling into the debt markets at a record pace, seizing on some of the lowest borrowing costs in history and strong demand from investors craving higher returns.

* The first outside audit of Apple's supply chain found excessive working hours and health and safety issues at its largest manufacturer, Hon Hai.

* A series of recent developments in India have increased the perception that the country has a risky business environment where policies suddenly can turn hostile.

* Google, undaunted by a short-lived attempt to sell a smartphone on its own, is now pushing into Apple's iPad market by selling tablets directly to consumers through an online store.

* BATS Global Markets Inc is considering suspending its efforts to recruit corporate listings after a software glitch last Friday derailed the exchange operator's IPO, people familiar with the matter said.

* Best Buy Co, which once out-muscled rivals with stores as big as 58,000 square feet, is moving away from the "big box" business model that it long used to crush competitors in consumer-electronics retailing.


* A breach of computers belonging to companies in Japan and India and to Tibetan activists has been linked to a former graduate student at a Chinese university - putting a face on the persistent espionage by Chinese hackers against foreign companies and groups.

* At a time of plunging DVD sales and an up-and-down box office, Hollywood is doubling back on past hits in search of profits. Often the remakes feature familiar stars playing iconic roles, like Bruce Willis, 57, who is preparing for yet another "Die Hard" film, his fifth.

* Responding to a critical investigation of its factories, the manufacturing giant Foxconn has pledged to sharply curtail working hours and significantly increase wages inside Chinese plants making electronic products for Apple and others. The move could improve working conditions across China.

* Despite a tumultuous 2011, fees helped hedge fund managers at larger hedge firms make $14.4 billion.

* Moody's Investors Service, one of the two big ratings agencies, has said it will decide in mid-May whether to lower its ratings for 17 global financial companies. Morgan Stanley , which was hit hard in the financial crisis, appears to be the most vulnerable. Moody's is threatening to cut the bank's ratings by three notches, to a level that would be well below the rating of a rival like JPMorgan Chase.

* A plan to impose a tax on hot take-away food while lowering income taxes on millionaires brings back memories of other unpopular measures imposed by the government.

* Jim Flaherty, the finance minister of Canada, pronounced a death sentence on the country's penny during his budget speech on Thursday.

The government estimated that every penny costs it about 1.6 cents to produce. Eliminating the penny's production will reduce the government's costs by about 11 million Canadian dollars a year.

* Representatives of advertising companies, Internet sites and technology companies told a House subcommittee on Thursday that they thought Internet privacy policies, including Do Not Track options, should be created through an "open and transparent" process, as two government agencies have recommended.

* Two candidates from developing nations are challenging the American nominee, a move that reflects the fast-growing clout of emerging economies.

For the first time, the World Bank is considering more than one candidate for its five-year presidency - a change that reflects the fast-growing clout of emerging economies, even as it raises questions over whether that change is coming quickly enough.

* An advisory panel of the Food and Drug Administration said obesity drugs should get extra testing to ensure against heart attacks and strokes.



- With his first majority budget, Stephen Harper has laid bare his vision for the future Canada: Government will be smaller and less intrusive, individuals will take more responsibility for their own retirement and business will return to driving the economy.

- The federal government will eliminate 19,200 public service jobs by 2015, including 600 executive positions, according to the budget tabled on Thursday.

- In the effort to trim expenses at home, Ottawa is making deep cuts to the amount it spends to project Canada onto the world stage, slashing budgets for aid and diplomacy.

Reports in the business section:

- Research In Motion launched a "comprehensive review" as the beleaguered smartphone giant missed earnings estimates for the fifth straight quarter, cut senior executive positions and announced the resignation of former co-CEO Jim Balsillie from the board of directors.

- Canadian shoppers will have more freedom to take advantage of lower prices across the border, as Ottawa quadruples the limit on how much they can buy on a one-day U.S. trip without having to pay duties or taxes.


- Canadians under the age of 54 will be forced to wait longer to qualify for their Old Age Security pensions, Finance Minister Jim Flaherty announced Thursday.

The controversial shift means that starting in 2023, the age of eligibility for OAS benefits will gradually increase to 67 from 65.

- The Canadian Broadcasting Corporation's annual funding from the federal government will be cut by $115 million over the next three years, a blow that could lead to job losses or programming cuts at Canada's public broadcaster.

Reports in the business section:

- The federal budget took aim at Canada Mortgage and Housing Corp, that controls about 75 percent of the mortgage default insurance market. CMHC is backstopped by the federal government but is coming close to breaching its mandated limit of $600 billion because of the red-hot housing market and so-called portfolio insurance for the banks.

- Critics are urging the federal government to consider reforms after looking this week into whether Air Canada violated the terms of its privatization nearly a quarter of a century ago.

European Economic Update

  • UK GfK Consumer Confidence Survey -31 – lower than expected. Consensus -29. Previous -29.
  • Germany Retail Sales -1.1% m/m 1.7% y/y – lower than expected. Consensus 1.1% m/m 0.1% y/y. Previous -1.6% m/m 1.6% y/y. Revised -1.2% m/m1.7% y/y.
  • France Producer Prices 0.8% m/m 4.3% y/y – higher than expected.. Consensus 0.4% m/m 4.0% y/y. Previous 0.6% m/m 4.2% y/y. Revised 0.7% m/m 4.3% y/y.
  • France Consumer Spending 3.0% m/m 0.5% y/y – higher than expected. Consensus 0.2% m/m -2.5% y/y. Previous -0.4% m/m -2.2% y/y.
  • Norway PMI 59.7. Previous 56.9. Revised 56.7.
  • Norway Retail Sales 1.1% m/m 7.4% y/y – higher than expected. Consensus -0.2% m/m 2.7% y/y. Previous 0.9% m/m 6.7% y/y.
  • Spain Retail Sales -3.4% y/y. Previous -4.8% y/y. Previous -4.6% y/y.
  • Spain Current Account (Euros) -5.7B. Previous -3.6B.
  • Switzerland KOF Swiss Leading Indicator 0.08 – higher than expected. Consensus 0.07. Previous -0.12. Revised -0.11.
  • Euro-Zone CPI Estimate 2.6% - higher than expected. Consensus 2.5%. Previous 2.7%.
  • Greece Retail Sales -8.5% y/y. Previous -11.0% y/y.
  • Italy CPI – EU Harmonised 2.5% m/m 3.8% y/y – higher than expected. Consensus 2.0% m/m 3.3% y/y. Previous 0.2% m/m 3.4% y/y.