Italy´s Prime Minister Mario Monti warned that Spain could reignite the European debt crisis as euro-area ministers this week prepare a deal to strengthen the region´s financial firewall.
Monti pointed to Spain´s struggle to control its finances ahead of a finance ministers meeting in Copenhagen starting on March 30, where officials will seek agreement to raise a 500 billion-euro ($664 billion) ceiling on bailout funding.
“It doesn´t take much to recreate risks of contagion,” Monti said during the weekend at a conference in Cernobbio, Italy. Days after his Cabinet approved a bill to overhaul Italy´s labor laws, Monti praised Spain´s efforts to loosen work regulations while advising it to focus on cutting the national budget. Spain “hasn´t paid enough attention to its public accounts,” he said.
German business sentiment may hold at seven-month high as economy recovers
German business confidence probably held at a seven-month high in March, suggesting Europe´s largest economy will return to growth even as the sovereign debt crisis curbs euro-area demand for its exports.
The Ifo institute´s business climate index, based on a survey of 7,000 executives, stayed at February´s reading of 109.6, according to the median forecast of 44 economists in a Bloomberg News survey. Ifo releases the report at 10 a.m. in Munich today.
German manufacturing output unexpectedly contracted this month as governments and households reduced spending across the euro region, Germany´s largest export market.
“Overall the economy is in good shape,” said Christian Schulz, an economist at Berenberg Bank in London. A decline in the Ifo index, which has posted four straight monthly gains, would “just mean Germany´s recovery is taking a breather after a couple of pretty spectacular months,” he said.
Bats CEO Ratterman blaming code in IPO stirs concern on market complexity
The software error that derailed the initial public offering of Bats Global Markets Inc., where 11 percent of all U.S. stock trading occurs, rattled investors concerned about the growing complexity of financial markets. Joe wRatterman, the chief executive officer, canceled the March 23 IPO after a computer malfunction kept Bats from trading on its own platform and forced a halt in Apple Inc., the world´s biggest company by market value.
Transactions in Apple and trades for more than million Bats shares were later canceled. While engineers at the third-largest U.S. exchange owner reacted in seconds to restore order, the failed debut highlighted concerns about electronic exchanges at a time when regulation of financial markets is increasing after the worst crisis since the Great Depression.
Oil drops from highest close in two days on signals fuel demand may weaken
Oil dropped from the highest close in two days in New York on speculation that fuel demand may falter as China´s economy slows and Europe struggles to tame its debt crisis. Futures slid as much as 0.4 percent after gaining 1.4 percent on March 23. BYD Co., the Chinese carmaker partly owned by Warren Buffett´s Berkshire Hathaway Inc., forecast profit may fall as much as 95 percent.
“If you look at demand growth, not only in the OECD countries but also Chinawhere we´re seeing a slowdown, global oil demand is relatively weak at the moment,” Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co. said in a Bloomberg Television interview today. “While we´ve still got uncertainty around Iran I think oil prices will remain high but if things revert back to fundamentals, really there´s probably about a 20 percent drop from here.” Oil for May delivery slipped as much as 44 cents to $106.43 a barrel in electronic trading on the New York Mercantile Exchange and was at $106..52 to $106.87 on March 23, the highest close since March 21. Prices are up 7.9 percent so far this year after advancing 25 percent last quarter.
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