Cyprus closes in, on EU bailout U-turn on levy

In Finland, an ally of Germany in disciplining euro zone partners, European affairs minister Alexander Stubb told Reuters he was confident Cyprus would accept EU rescue terms "because there are no other options".
Cyprus is expected to make a dramatic U-turn on Saturday to avert the imminent threat of financial meltdown, having signaled it is willing to tax big savers in its stricken banks to clinch a bailout from the European Union.

The island's partners in the 17-nation euro zone scheduled a meeting for Sunday in Brussels, in a strong sign they believe a solution is near.

 

As hundreds of demonstrators faced off with riot police outside parliament late into Friday night, lawmakers inside voted to nationalize pension funds, pool state assets for a bond issue and peel good assets from bad in stricken banks.

Officials said a deal was imminent to raise 5.8 billion euros demanded by the EU in return for a 10 billion euro ($13.00 billion) lifeline, including some kind of levy on bank deposits, which could be voted on as soon as Saturday.

Without a deal by Monday, the European Central Bank has threatened to cut off cash for Cypriot banks, spelling certain collapse and possible ejection from the euro.
Cyprus moved perilously close to bankruptcy when its parliament threw out the proposed levy on Tuesday, with Cypriots enraged by plans to hit small holdings of ordinary savers as well as large accounts, many held by foreign investors.

In the absence of the bank levy, Nicosia turned to Russia, whose citizens have billions of euros at stake in Cyprus's outsized banking sector. But Finance Minister Michael Sarris returned from Moscow empty-handed. On Friday he said the bank levy was back "on the table".
Party officials told Reuters that discussions were centered on a levy on depositors holding over 100,000 euros, sparing smaller savers. One official said the tax could be limited to big savers at the island's biggest lender, Bank of Cyprus, at a 20 percent rate.

Lawmakers adopted a bill that would pave the way for the government to split its failing lenders into good and bad banks. The measure is likely to target Bank of Cyprus and No. 2 lender Cyprus Popular Bank, also known as Laiki, and would make it easier for the government to safeguard deposits that enjoy a state guarantee of up to 100,000 euros.
"With the process of consolidation, the depositors over 100,000 euros will wait for several years to see how much of their deposits they will collect," said Averof Neophytou, deputy leader of the ruling Democratic Rally party.

"At the same time, this political decision to support this harsh law safeguards 100 percent of the deposits of 361,000 depositors in Laiki Bank," he added, referring to depositors with up to 100,000 euros.

The pace of the unfolding drama has stunned Cypriots, who barely a month ago elected conservative President Nicos Anastasiades on a mandate to secure a bailout.
But lawmakers balked at hitting small savers with the bank levy, a rejection of the kind of strict austerity signed up to by Portugal, Ireland, Greece, Spain and Italy over the last three years of Europe's debt crisis.

Germany warned Cyprus it was "playing with fire". Moody's downgraded its credit rating on deposits in Cypriot banks to Caa3, just two rungs from the bottom on its 11-grade scale of junk debt.
The EU says the only way to find the 5.8 billion euros Cyprus needs to contribute to the bailout of its banks is from the depositors who put money in them.

The tottering banks hold 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros - enormous sums for an island of 1.1 million people which could never sustain such a big financial system on its own. Much of the banks' capital was wiped out by investments in Greece.
Many of the biggest depositors are foreigners, including rich Russians, and European politicians are loathe to spend taxpayers' money on a bailout if the depositors take no losses.

"EDGE OF AN ABYSS"
With banks in Cyprus closed until Tuesday, Cypriots have been besieging bank cash machines all week. Faced with an almost certain run on banks when they reopen, parliament also gave the government the power to impose capital controls.

"Our so-called friends and partners sold us out," said Marios Panayides, 65, a protester at the parliament. "They have completely abandoned us on the edge of an abyss."
Retailers, facing cash-on-delivery demands from suppliers, warned stocks were running low.
"At the moment, supplies will last another two or three days," said Adamos Hadijadamou, head of Cyprus's Association of Supermarkets. "We'll have a problem if this is not resolved by next week."
The Bank of Cyprus urged the government to go back and cut a deal with the EU under which larger deposits over 100,000 euros would be taxed. It was preferable, it said, to a collapse of the system and ejection from the euro which would wipe out assets.
"There must be no further delay," the bank said.

Taking a first step toward financial consolidation, Cyprus arranged on Friday for the takeover of big Greek units of its two biggest banks by a Greek competitor.
EU officials criticize Cyprus for initially insisting any deposit levy should hit even small savers. Cypriot leaders did not want to shift the whole burden to bigger depositors in the apparent hope of saving Cyprus's offshore banking industry.

German Chancellor Angela Merkel told lawmakers that while she wanted to keep Cyprus in the euro zone, it must first recognize it had no future as an offshore financial center, two parliamentarians told Reuters.

Her finance minister, Wolfgang Schaeuble, said that muted reactions to the crisis in financial markets showed the euro zone was able to contain the Cyprus problem.
The Dutch head of the euro zone finance ministers' group, Jeroen Dijsselbloem, said the group wanted to keep Cyprus in the currency union. But when asked, he did not rule out an exit.
"All kinds of scenarios are possible and the scenarios we're focusing on are to come to a joint solution in which Cyprus is saved but in which the banking sector continues in a smaller but healthier form."

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News Source: www.reutuers.com 

G-20 Takes Harder Line on Currencies

Group of 20 finance chiefs sharpened their stance against governments trying to influence exchange rates as they sought to tame speculation of a global currency war without singling out Japan for criticism.
Two days of talks between G-20 finance ministers and central bankers ended in Moscow yesterday with a pledge not to “target our exchange rates for competitive purposes,” according to a statement. That’s stronger than their position three months ago and leaves Japanese officials under pressure to stop publicly giving guidance on their currency’s value.
With the yen near its lowest level against the dollar since 2010, policy makers are attempting to soothe concern that some countries are trying to weaken exchange rates to spur growth through exports. The risk is a 1930s-style spiral of devaluations and protectionism if other countries retaliate to safeguard their own economies.
“Politically-motivated devaluations can’t sustainably improve competitiveness; they don’t solve structural problems and they set off reactions,” Bundesbank President Jens Weidmann said yesterday. “The clear language in the communiqué underlines this unity and will allow the debate in the future to take place with a less excited tone.”
The new commitment is probably aimed at telling the Japanese that while they can stimulate their economy, they shouldn’t point to specific yen levels as desirable, said Chris Turner, head of foreign-exchange strategy at ING Groep NV in London. While the currency may initially climb this week, it will soon resume its slide toward 100 per dollar from 93.50 as the Bank of Japan keeps easing policy, he said.

‘Talking’ Policies

“It makes it harder for the Japanese to talk down the yen, but they will let their policies do the talking,” said Turner.
Japan has faced suspicion it’s trying to depreciate its currency, which lost about 7 percent this year as Prime Minister Shinzo Abe, who took office in December, campaigns for looser monetary policy to end 15 years of deflation.
Japanese officials in Moscow denied driving down their currency, arguing its fall was a byproduct -- not a focus -- of their effort to revive the world’s third-largest economy.
“The Bank of Japan’s measures have been and will remain targeted at achieving a robust economy through stable prices,” Bank of Japan Governor Masaaki Shirakawa said yesterday. The G-20 statement is “absolutely in the same spirit as our monetary policy,” he said. Finance Minister Taro Aso said a stronger Japan would “have a positive impact on the global economy.”

‘No Censure’

That stance won support in Moscow.
“There was no censure of the Japanese attitude, which was considered a policy to develop its economy and not to intentionally devalue,” said Brazilian Finance Minister Guido Mantega, who popularized the term “currency war” in 2010.
“Talk of currency wars is overblown,” said International Monetary Fund Managing Director Christine Lagarde. “People did talk about their currency worries.”
The Japanese defense echoes comments by U.S central bankers, who have run into criticism from emerging market officials such as Mantega for embracing stimulus, which has then undermined the dollar and strengthened other currencies.
In a nod to such complaints, the G-20 members agreed to monitor and minimize any “negative spillovers” and said that monetary policy should always be aimed at domestic needs, according to the statement.

‘Pay Attention’

Developed nations should “pay attention to the effects their monetary policies have on external markets,” Chinese Vice Finance Minister Zhu Guangyao told the state-run Xinhua news service from Moscow.
Federal Reserve Chairman Ben S. Bernanke said Feb. 15 in Moscow that the U.S. has deployed “domestic policy tools to advance domestic objectives,” adding that bolstering the U.S. economy will support world growth.
Unlike their American counterparts, Japanese officials including Abe have commented publicly on their exchange rate’s level, fanning speculation that they welcome its fall and that the yen’s weakness plays a part in their recovery strategy.
Japanese ruling-party lawmaker Kozo Yamamoto, who is close to Abe, said in a Feb. 14 interview it would be “appropriate” for the yen to trade at about 95-100 to the dollar. Deputy Economy Minister Yasutoshi Nishimura said on Jan. 24 that it wouldn’t be a problem if the yen reached 100.
U.S. Treasury Undersecretary Lael Brainard used a speech in Moscow to criticize “loose talk about currencies.”

Profit Shifting

The G-20 also pledged to work together to curb multinational companies’ leeway to shift profits to low-tax countries, endorsing an initiative spearheaded by the U.K, France and Germany.
“We are determined to develop measures to address base erosion and profit shifting, take necessary collective actions and look forward to the comprehensive action plan” the Organization for Economic Cooperation and Development will present in July, the G-20 said.
The Moscow meeting finished after a week of volatility in financial markets that started when the Group of Seven rich nations said on Feb. 12 that its members won’t use policies to “target exchange rates” and would focus on domestic needs. Confusion then broke out as G-7 officials bickered over whether their first joint comment on currencies since 2011 implied irritation with Japan.

‘More Rapidly’

The yen fell on Feb. 15 for the first time in four days as early drafts of the G-20 statement failed to echo the G-7’s vow. Part of the pledge was added following all-night talks in the Russian capital as the club of the largest developed and emerging economies also reiterated they will move “more rapidly” toward market-determined exchange rates and “refrain from competitive devaluation.”
The G-20 also said that while the risks to the world economy have receded, its growth remains too weak and unemployment is too high in many countries. That requires more work to create a stronger monetary and economic union in the euro area, resolve uncertainties surrounding the budgets of the U.S. and Japan and boost domestic demand in economies with large trade surpluses.
Advanced nations accepted the U.S.’s position by not setting new fiscal targets to replace those they agreed on in 2010 and which many of them are on course to miss. They pledged instead to develop “credible medium-term fiscal strategies.”

Japanese officials aren’t alone in accepting a cheaper currency as good for growth.
Bank of England policy maker Martin Weale said in a speech yesterday that although U.K. central bankers don’t “target the exchange rate,” there is reason to tolerate any inflation resulting from the pound’s six-year decline.
Not all G-20 policy makers want a weaker currency. Weidmann said in a Feb. 13 interview that “the exchange rate of the euro is broadly in line with fundamentals” and “you cannot really say that the euro is seriously overvalued.”


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News Source: www.bloomberg.com

Gold Dips Below $1,600 First Time Since Summer As Sell Stops Triggered

Gold fell below $1,600 an ounce Friday for the first time since August as sell stops were activated when prices fell below prior chart support around the previous lows for the year, traders and analysts said.
As of 11:05 a.m. EST, spot gold was $29.70, or 1.8%, lower to $1,605.20 an ounce and has been as weak as $1,598.20. The most-active April futures contract on the Comex division of the New York Mercantile Exchange was down $31.30, or 1.9%, to $1,604.20, bottoming at $1,596.70.
“We reached some long-standing support at $1,625-30,” said Robin Bhar, metals analyst with Societe Generale. “We moved through there, and that set off some more momentum-based selling.”
Afshin Nabavi, head of trading with MKS (Switzerland) SA, also cited technical stop-loss selling around $1,625-30, coupled with the continued absence of potential Chinese buying this week due to Lunar New Year holidays. Further stops were hit around $1,615, he added.
Stops are pre-placed orders automatically activated when certain price points are hit. Traders use them to kick themselves out of trades to either capture a profit or limit losses, or else to open new positions to capitalize on a short-term move.
Sentiment toward gold has been hurt lately by improved optimism about a global economic recovery, Bhar said. As a result, he continued, some market participants have exited gold as a hedge and are instead chasing equities and other commodities.
Both Nabavi and Bhar see potential for gold to bounce next week, however. Participants in China will be back in the markets, plus buying can be expected in India ahead of another wedding season. A World Gold Council report this week listed these as once again the world’s two largest consuming nations in 2012.
“There might be a corrective bounce higher…on some physical buys,” Bhar said.


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News Source: ktco

U.S. Dec. budget deficit $260 million: Treasury

The U.S. government ran a budget deficit of $260 million in December, the Treasury Department reported Friday, bringing the total shortfall for the first quarter of fiscal 2013 to $292 billion.

 Receipts in December were $269.5 billion, while the government spent $269.7 billion in the month. Year to date, the deficit is 9% lower than in the first three months of the prior fiscal year. The U.S. government's fiscal year runs from October to September.

CENTURY FINANCIAL BROKERS

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• CFB provides state-of-the-art online trading software, providing electronic order entry in the most liquid and dynamic market movers world-wide
• Through one window, traders access FX, futures, stocks, CFDs, metals, energies etc.
• As a client you will have access to real-time prices, two-way quotes, charts, news, market commentaries & analysis of all major currencies, metals, commodities, futures, energies etc. and  receive statements of your account on regular basis

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CONTACT

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(050-8774861)
asad@cfb.ae

www.cfb.ae

CENTURY FINANCIAL BROKERS

Dear Investor,

CFB realizes that you have many choices and opportunities in the international financial markets when it comes to seeking, evaluating and selecting a personal and professional broker. Founded in Dubai in1989, CFB is the region’s largest independent brokerage firm in the financial industry. Regardless of how you want to invest and trade the financial markets – CFB can provide you with the tools, resources and services you desire. 

Century Financial Brokers LLC (CFB) is licensed and regulated by the Central Bank of United Arab Emirates and Emirates Securities and Commodities Authority (ESCA). We are also the principal broker & clearing member of Dubai Gold and Commodities Exchange (DGCX).

Margin Trading

Facilitating margin trading in Currencies, Commodities and Metals and more, with a leverage facility of 100% of face value. In the financial markets, you can trade (Buy or Sell) any currency, commodity or metals simply by investing 1% or 2% of the product value.

Products offered by CFB

• Currencies: Euro, British Pound, Swiss Franc, Japanese Yen & over 25 crosses
• Metals:        Gold, Silver, Aluminum, Nickel, Copper, etc.
• Energies:     Crude Oil, Heat Oil, Natural Gas, Gasoline, etc.
• Commodities: Sugar, Wheat, Corn, Coffee, Grains, etc.
• Indices:       Dow Jones, NASDAQ, S&P, FTSE, CRB, etc.
• CFD Stocks: American, European & Asian stocks.

Benefits & Services facilitated by CFB

• 24 hours trading 5 days a week with continuous access from any part of the world.
• An enormous liquid market making it easy to trade most markets.
• Volatile markets offering huge profit opportunities.
• Wide range of trading markets and financial instruments.
• Leverage trading with low capital.
• Recognized instruments for controlling risk exposure.
• The ability to profit from rising or falling markets.
• Leveraged trading with low margin requirements.
• Proper training for trading in FX Markets.

• CFB provides state-of-the-art online trading software, providing electronic order entry in the most liquid and dynamic market movers world-wide
• Through one window, traders access FX, futures, stocks, CFDs, metals, energies etc.
• As a client you will have access to real-time prices, two-way quotes, charts, news, market commentaries & analysis of all major currencies, metals, commodities, futures, energies etc. and  receive statements of your account on regular basis

We request you for a few minutes from your valuable time to give you a brief idea of how our company can help explore the investment opportunities in the global financial markets which can give you amazing returns on your investments. For more details, please visit our website www.cfb.ae

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CONTACT

Asad Khan  (CFB)
(0508774861)
asad@cfb.ae

A Quick Glance at News (20/12/2012)

Talks to avoid a U.S. fiscal crisis stalled on Wednesday as President Barack Obama accused opponents of holding a personal grudge against him while the top Republican negotiator called the president "irrational."

The Bank of Japan delivered its third dose of monetary stimulus in four months on Thursday in a prelude to more aggressive action next year, as it faces intensifying pressure from the country's next leader for stronger efforts to beat deflation.

The yen languished near 20-month lows against its U.S. peer on Thursday, but trading was choppy in thin conditions with yen bears possibly suffering a case of cold feet as the Bank of Japan's policy decision loomed.

The Bank of Japan has already shown its readiness to keep an ultra loose monetary policy but stressing its resolve to ease "unlimitedly" would make a difference, a senior Liberal Democratic Party (LDP) official said on Thursday.

Asian shares retreated from near 17-month highs on Thursday and commodities fell as negotiations to avert a U.S. fiscal crunch turned to personal taunts, putting at risk a timely solution as well as the health of the world's largest economy

U.S. stocks sold off late in the day to close at session lows on Wednesday as talks to avert a year-end fiscal crisis turned sour, even as investors still expect a deal.

Asia’s benchmark equities index has risen about 14 percent this year as central banks from the U.S., Europe, Japan and China took action to spur economic growth

The gauge traded at 14.7 times average estimated earnings compared with 13.8 for the Standard & Poor’s 500 Index and 12.8 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg

Australia’s government said it’s unlikely to deliver a pledged budget surplus this fiscal year as weaker growth and a strong local currency curb tax receipts, a setback for Prime Minister Julia Gillard before an election due in late-2013.

Oil fell from the highest level in two months in New York on speculation its four-day gain was exaggerated as budget negotiations faltered in the U.S., threatening the economy of the world’s biggest crude user.

Australian stocks advanced on Thursday, building on highs not seen since July 2011. The S&P/ASX 200 index edged up 0.1% to 4621.50, with most sectors trading higher.

Gold and Silver Miners Show Strength as Futures Decline

On Tuesday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, dropped $25.30 to settle at $1,695.80 per ounce, while silver (NYSEARCA:SLV) fell 95 cents to close at $32.78.

Both precious metals declined as political rhetoric over the fiscal continues to dominate headlines. In an interview on Bloomberg Television, President Barack Obama said, “We have the potential of getting a deal done.”

 However, he also added, “We’re going to have to see the rates on the top 2 percent go up, and we’re not going to be able to get a deal without it.” The statement shows that both sides of the aisle still have some work to do before reaching an agreement.

Some analysts believe that a failure to prevent the fiscal cliff will send gold prices lower, as everything in the market will selloff in the short-term. However, long-term bullish trends like ultra-low interest rates still remain in place for precious metals. Australia’s central bank cut interest rates by 0.25 percent to 3.0 percent on Tuesday, matching the lowest level on record since 2009.

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) fell about 1.0 percent, while the iShares Silver Trust (NYSEARCA:SLV) declined 2.0 percent. Gold miners (NYSEARCA:GDX) performed better, with Barrick Gold (NYSE:ABX) and Goldcorp (NYSE:GG) both jumping more than 1.0 percent. First Majestic Silver (NYSE:AG) and Silver Wheaton (NYSE:SLW) also climbed higher.

CENTURY FINANCIAL BROKERS Forex

Dear Investor,

CFB realizes that you have many choices and opportunities in the international financial markets when it comes to seeking, evaluating and selecting a personal and professional broker. Founded in Dubai in1989, CFB is the region’s largest independent brokerage firm in the financial industry. Regardless of how you want to invest and trade the financial markets – CFB can provide you with the tools, resources and services you desire. 

Century Financial Brokers LLC (CFB) is licensed and regulated by the Central Bank of United Arab Emirates and Emirates Securities and Commodities Authority (ESCA). We are also the principal broker & clearing member of Dubai Gold and Commodities Exchange (DGCX).

Margin Trading

Facilitating margin trading in Currencies, Commodities and Metals and more, with a leverage facility of 100% of face value. In the financial markets, you can trade (Buy or Sell) any currency, commodity or metals simply by investing 1% or 2% of the product value.

Products offered by CFB

• Currencies: Euro, British Pound, Swiss Franc, Japanese Yen & over 25 crosses
• Metals:        Gold, Silver, Aluminum, Nickel, Copper, etc.
• Energies:     Crude Oil, Heat Oil, Natural Gas, Gasoline, etc.
• Commodities: Sugar, Wheat, Corn, Coffee, Grains, etc.
• Indices:       Dow Jones, NASDAQ, S&P, FTSE, CRB, etc.
• CFD Stocks: American, European & Asian stocks.

Benefits & Services facilitated by CFB

• 24 hours trading 5 days a week with continuous access from any part of the world.
• An enormous liquid market making it easy to trade most markets.
• Volatile markets offering huge profit opportunities.
• Wide range of trading markets and financial instruments.
• Leverage trading with low capital.
• Recognized instruments for controlling risk exposure.
• The ability to profit from rising or falling markets.
• Leveraged trading with low margin requirements.
• Proper training for trading in FX Markets.

• CFB provides state-of-the-art online trading software, providing electronic order entry in the most liquid and dynamic market movers world-wide
• Through one window, traders access FX, futures, stocks, CFDs, metals, energies etc.
• As a client you will have access to real-time prices, two-way quotes, charts, news, market commentaries & analysis of all major currencies, metals, commodities, futures, energies etc. and  receive statements of your account on regular basis

We request you for a few minutes from your valuable time to give you a brief idea of how our company can help explore the investment opportunities in the global financial markets which can give you amazing returns on your investments. For more details, please visit our website www.cfb.ae

Thank you.

CONTACT

Asad Khan  (CFB)
(0508774861)
asad@cfb.ae