Germany’s top central banker cooled speculation that the European Central Bank (ECB) will extend its role as European leaders pressed their case that a new fiscal accord will deliver the region from its two-year-old debt crisis.
Bundesbank President Jens Weidmann told the Frankfurter Allgemeine Sonntagszeitung newspaper that while the new accord represents “progress,” the onus is on governments rather than the Frankfurt-based ECB to resolve the crisis with financial backing.
German Finance Minister Wolfgang Schaeuble said that euro-area policymakers will now focus on implementing Friday’s accord to strengthen budget rules as quickly as possible.
The Franco-German-led agreement, which provides tighter budget rules and an additional 200 billion euros (US$266 billion) to the euro war chest, is part of an effort to reassure investors that European leaders can master the crisis. ECB President Mario Draghi lauded the accord, stoking hopes among investors that the central bank might step up bond purchases.
“The mandate for redistributing taxpayer money among member states clearly does not lie in monetary policy,” Weidmann said in the newspaper interview published on Sunday. “Financing of sovereign debt through central banks is and remains forbidden by treaty.”
European stocks and the euro dropped yesterday, with the single currency down 0.55 percent at US$1.3313 as of 9:25am in Berlin. German 10-year bonds rose and two-year yields approached a euro-era record low, while Italy’s 10-year yield was up 20 basis points to 6.53 percent and similar maturity Spanish debt rose 14 basis points to 5.86 percent.
US 30-year yields fell two basis points to 3.09 percent at 8:14am London time, according to Bloomberg Bond Trader prices. The 3.125 percent security due in November 2041 rose 10/32, or US$3.13 per US$1,000 face amount, to 100 20/32. The rate added eight basis points, or 0.08 percentage points, last week.
Ten-year yields were little changed at 2.05 percent, versus the record low of 1.67 percent set on Sept. 23.
“Until you see a concrete resolution in Europe, this will remain a low-yield environment,” said Chungkeun Oh, a fixed-income trader in Seoul at Industrial Bank of Korea, South Korea’s largest lender to small and medium-sized companies.
The accord is “insufficient,” Mohamed El-Erian, Pacific Investment Management Co’s co-chief investment officer along with Bill Gross, said in an interview with French newspaper Les Echos.
After the EU summit, German Chancellor Angela Merkel said the accord set the region on a path to a “lastingly stable euro,” and “the breakthrough to a stable union has been achieved.”
The single currency will be “more robust” after the acute stage of the crisis subsides, Finnish Prime Minister Jyrki Katainen told YLE Radio Suomi on Sunday.
The accord opens the way for the ECB to intensify its role in the crisis, Irish Deputy Prime Minister Eamon Gilmore said in an interview with Dublin-based broadcaster RTE on Sunday. The ECB has signaled “that it would strengthen its role and enhance its role following the conclusion of an agreement,” Gilmore said.
“The ECB will have to gear up its purchases should market tension increase; there is simply no other option available,” Thomas Costerg, an economist at Standard Chartered Bank in London, wrote in e-mailed response to a Bloomberg News query.
European leaders have given themselves until March to complete the language for the new rulebook and plan to set up the region’s permanent rescue fund, the European Stability Mechanism (ESM), next year, a year earlier than planned. They also aim to reassess plans to cap the overall lending of the ESM at 500 billion euros.
“We need to work on making this happen quickly, because we have to regain the lost trust of the financial markets and investors across the globe,” Schaeuble said in an interview on Germany’s ARD television on late Sunday. “We can’t lean back.”
Retiring ECB executive board member Juergen Stark said EU and euro-area institutions needed to take a “quantum leap” forward to overcome the crisis. In an interview with Germany’s Sueddeutsche Zeitung published on Sunday, Stark called for a panel of experts to review budgets in the euro area, which could form the “nucleus for a future European finance ministry.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day