Thread: Economic Depression Is The New Success - Ready! Set! Bank Run! Cyprus - Iceland

Economic Depression Is The New Success


Submitted by Reggie Middleton on 03/26/2013 11:41 -0400

The Irish Times AP reports on the latest failure of Cyprus banks to reopen:

The announcement to keep the banks shut last night by the Central Bank of Cyprus came hours after it said all banks except the country's two largest lenders, Laiki and Bank of Cyprus, would open today.

Banks have been closed since March 16th to avert a run on deposits as the country's politicians struggled to come up with a plan that would raise enough funds to qualify for an international bailout.

Reference The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs! It won't work.

An initial plan that would seize up to 10 per cent of people's bank accounts had spooked depositors and was soundly rejected by MPs.
All except the country's two largest lenders had been due to open today after the country clinched an 11th-hour deal with euro zone and the IMF to provide Cyprus with a bailout.

Without that deal, the country's banks would have collapsed, dragging down the economy and potentially pushing it out of the euro zone.

But last night the Central Bank of Cyprus said that "for the smooth functioning of the entire banking system, the finance minister has decided, after a recommendation by the governor of the Central Bank, that all banks remain shut up to and including Wednesday".

ATMs have been functioning, but many run quickly out of cash, and a daily withdrawal limit of €100 was imposed on the two largest lenders, Bank of Cyprus and Laiki.

These are the capital controls I clearly warned of last year that are not supposed to be legal.

Under the deal reached in the early hours of yesterday morning in Brussels, Cyprus agreed to slash its oversized banking sector and inflict hefty losses on large depositors in troubled banks to secure the €10 billion bailout.

The new plan allows for the bulk of the funds to be raised by forcing losses on accounts of more than €100,000 in Laiki and Bank of Cyprus, with the remainder coming from tax increases and privatisations.

People and businesses with more than €100,000 in their accounts at Laiki face significant losses. The bank will be dissolved immediately into a bad bank containing its uninsured deposits and toxic assets, with the guaranteed deposits being transferred to the nation's biggest lender, Bank of Cyprus.

Deposits at Bank of Cyprus above €100,000 will be frozen until it becomes clear whether or to what extent they will also be forced to take losses. Those funds will eventually be converted into bank shares.

It is not yet clear how severe the losses would be to Laiki's large bank deposit holders, but the euro finance ministers noted the restructure expected to yield €4.2 billion overall. Analysts have estimated investors might lose up to 40 per cent of their money.

Speaking about the marathon negotiations in Brussels that resulted in the deal, Cyprus' president Nicos Anastasiades said "the hours were difficult, at some moments dramatic. Cyprus found itself a breath away from economic collapse".

The agreement, he said, “is painful, but under the circumstances the best we could have ensured. The danger of Cyprus' bankruptcy is definitively overcome and the tragic consequences for the economy and society are averted”.

Bullocks, Bullshit, and all that other good stuff! As I stated in Mainstream Media Says Cyprus Salvaged By EU Deal, I Say Cyprus Is Sacrificed By Said Deal - Thrown Into Depression, locking up a country's liquidity for an unspecified amount of time, then removing up to 40% of a nations small/medium/large business liquidity (permanently, they're catching haircuts) as well as that of your wealthy depositors, is tantamount to economic genocide! How in the hell do you calculate "The danger of Cyprus' bankruptcy is definitively overcome and the tragic consequences for the economy and society are averted”?

If anything, "The danger of Cyprus' bankruptcy... and the tragic consequences for the economy and society" are just getting started!I find it amazing that the Troika has convinced so many small nations that boiling slowly in a pot of austerity flavored depression is preferable to a quick and clean exit and rebirth. Is belonging to the EU really worth undergoing an extended depression? Iceland gave the finger to the Troika and they're doing better than nearly everybody in the EU! Think about it.

From the BBC: Iceland's 'tenacity' lifts economy out of crisis

Whisper it - Iceland's economy is on its way back. The frozen island on the edge of the Arctic, which had 10 straight quarters of shrinking GDP, is suddenly on a steady run of seven quarters of growth averaging at 2.5% per annum - something that few European countries can boast. Unemployment has fallen to just below 5% and confidence is returning...

Ready! Set! Bank Run!!!

Cyprus contagion raw

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Why Germany Is Unlikely to Write the Check | Zero Hedge

Guest Post: The Good, The Bad, And The Extremely Ugly Of The Cyprus Deal

Submitted by Tyler Durden on 03/26/2013 13:27 -0400

Authored by Yanis Varoufakis, originally posted at YanisVaroufakis.com,

There are some good features of the Cyprus deal and, of course, some bad aspects. However, its repercussions for the Eurozone as a whole are exceptionally ugly and will, I submit, mark a turning point for Europe; a point at which Europe took a nasty turn toward a set of mutually disagreeable outcomes.

> The Good

• Unlike the Eurogroup’s original decision, deposit insurance for accounts up to €100 thousand will be respected. The reversal of the decision to ‘tax’ insured depositors constitutes a last minute restoration of common sense.
• Marfin-Laiki Bank’s bond and shareholders will be wiped out – as they ought to. The original Eurogroup decision to let them off the hook (especially the bond holders) while haircutting depositors (including those whose deposits were guaranteed by the state) would have been an indefensible re-ordering of a failed banking system’s creditors.
• The new deal treats different banks differently, as it ought to. The earlier Eurogroup decision imposed blanket haircuts on all accounts irrespectively of the bank’s bottom line. At least now uninsured deposits will be haircut in proportion to the size of the bank’s black hole, thus restoring a degree of private responsibility on the part of depositors viz. their choice of banker.
• By forcing losses on uninsured depositors and the banks’ bondholders, taxpayers have to bear a smaller burden of the bailout loans; and this is, ceteris paribus, a good thing.

>The bad

• The Memorandum of Understanding has not been written up yet and, thus, the deal is utterly incomplete. In particular, we have no idea what degree and type of austerity will be imposed upon a collapsing social economy. Given the troika’s track record, it is almost certain that yet again they will elect an austerian package bound to crush the weaker Cypriots with ever-increasing verve.
• >The effect of the complete wipe out of the foreign depositors will have a devastating effect not just on the banking sector but also on the hotel and tourist industry. As a Russian commentator noted: “Now that the Russians’ deposits have been all but confiscated, who will stay in the €500 per night five star hotel rooms on the island? Mrs Merkel?” It is highly doubtful that the troika will factor in the deflationary effects of this aspect in their fiscal consolidation and debt sustainability plans.
• >The transfer of €9 billion of ELA money from winding down of Marfin-Laiki to the Bank of Cyprus – it flies in the face of basic banking resolution principles, reflecting the ECB’s Taliban-like defence of what it considers to be its ‘realm’.
• >Capital controls have been touted, even though it is not clear how they will be implemented, creating a second-tier euro: Cypriot euros that are no longer exportable (nb. Imagine Vermont dollars that cannot be taken out of Vermont: a logical travesty within a currency union)

>And the extremely ugly

>Setting aside the Cyprus drama and the tragedy awaiting its people, the repercussions of the past week’s shenanigans for the Eurozone as a whole are exceptionally ugly. As I wrote the other day, in one short week Europe has managed to put in jeopardy the sacrosanct concept of state guaranteed deposit insurance (even if, in the end, they took this threat back), to bring back into question the integrity of the Euro-area and to sacrifice the European Union’s single market principle according to which capital controls are inadmissible.

>However, the ugliest dimension that the new deal has introduced is the effective end of any hopes of a genuine Eurozone-wide banking union. Mr Dijsselbloem, the new Eurogroup head who seems terribly keen to be more amenable to German thinking than his predecessor, Mr Yuncker ever was, said so in no uncertain terms when rejoicing that the Cyprus deal

>paves the ground for new bailout arrangements such that the European Union “…will never need to even consider direct recapitalisation” of failing banks. This constitutes the death knell of both the direct recapitalisation agreement reached last in the EU’s June 2012 summit and, naturally, of any meaningful banking union. The message is thus clear: Each to his or her own! All plans to use the ESM in order to de-couple the banking from the public debt crisis are off the table.

>The combination of (a) the denial of the need to effect public debt consolidation, (b) the derailing of a meaningful banking union and (c) the heavy-handedness with which Cyprus was treated over the past week, spell a new, uglier, state of affairs in Europe. Up to now, supporters of austerity and of the German approach to the Eurozone Crisis in the deficit countries (including France) have argued that we need to go along with Berlin and Frankfurt so as to inspire sufficient confidence in those who control the purse strings (in our willingness to ‘do our homework’) before they can yield to the inevitable eurobonds, to the logic of a banking union, to whatever it takes to bring about greater political and economic union.

>Alas, the Cyprus deal reveals how wrong this view was: Even though peoples throughout the periphery (in Ireland, in Portugal, even in Greece and Italy) have, however grumpily, bowed their heads to severe austerity and the removal of labour protection laws, the powers that be in Berlin and Frankfurt are shifting away from unifying moves, adopting increasingly authoritarian, divisive policies that are pushing the Eurozone in precisely the opposite direction to that dictated by political and economic sustainability.

>In short, while the bailing in of inane Cypriot bankers and risk-taking depositors is to be welcome, I would not be at all surprised if the Cyprus week-long episode does not register in history’s annals as a major turning point; as the moment in history when Europe moved beyond the pale.

Guest Post: The Good, The Bad, And The Extremely Ugly Of The Cyprus Deal | Zero Hedge

The Great British Cash EUxodus Begins

Submitted by Tyler Durden on 03/26/2013 13:53 -0400

UK's deVere advisory group reports, "more and more expats in Spain, Italy, Portugal and Greece are now not unreasonably worried for their deposits in these countries," and are seeing a "surge" in the number of British expats seeking advice about moving funds out of eurozone's most troubled economies. As EUBusiness reports, "Whether the institutions like it and accept it or not, there is a real risk of a major deposit flight from these countries as people feel their accounts could be plundered next." It is hardly surprising obviously (as we noted earlier the bid in German bunds) but we fear this escalation in cash exodus from the periphery will increase the need for a broader EU capital control scheme sooner rather than later.

Via EUBusiness,

Independent financial advisory company deVere Group on Tuesday reported a "surge" in the number of British expats seeking advice about moving funds out of some of the eurozone's most troubled economies following the Cyprus bailout deal.

According to deVere Group chief executive Nigel Green, "more and more expats in Spain, Italy, Portugal and Greece are now not unreasonably worried for their deposits in these countries."

He added: "Over the last week, since the messy deal to bailout Cypriot banks began, our financial advisers in these areas have reported a significant surge in enquiries from expats who are looking to safeguard their funds in other jurisdictions which are perceived to be safer.

"Whether the institutions like it and accept it or not, there is a real risk of a major deposit flight from these countries as people feel their accounts could be plundered next."

Jeroen Dijsselbloem, who heads the Eurogroup of finance ministers, said the costs of bank recapitalisations should not fall on tax payers, but on bondholders, shareholders and, if necessary, uninsured deposit holders.
The Great British Cash EUxodus Begins | Zero Hedge

Russian Withdrawals Quantified As Cyprus Central Bank Set To Expand Emergency Credit By Up To €3 Billion

Submitted by Tyler Durden on 03/26/2013 10:32 -0400

When we reported yesterday that over the past week, the Russian depositors in Cypriot banks had managed to find loopholes through which to pull out billions in supposedly halted deposits (courtesy of bank shutdowns and capital controls) some, accurately, balked: if that were the case the Cyprus Centeral Bank would need a proportionate increase in emergency funding from the ECB (in the form of ELA) to make up for the deposit outflows. Which is why moments ago Welt reported precisely what we had been expecting to read all morning: the Cyprus Central Bank is about to demand even more cash from the ECB to plug the holes left from the stealthy Russian outflows.

• CYPRUS CENTRAL BANK PLANS EXPANDING EMERGENCY CREDIT: WELT
• CYPRUS PLANS EXPANDING EMERGENCY CREDIT BY EU2.5B-EU3B: WELT
• DIE WELT CITES UNIDENTIFIED PERSONS FAMILIAR WITH THE MATTER

Remember: this is just a feeler by the Cyprus Central Bank in direction Frankfurt - the last thing Cyprus wants is to expose just how big the full liquidity hole is resulting from the stealthy Russian deposit outflows. We expect when all is said and done, the full incremental bailout needs to rise in the double digits.

Russian Withdrawals Quantified As Cyprus Central Bank Set To Expand Emergency Credit By Up To €3 Billion | Zero Hedge

Is This The Diabolical "Master Plan" Behind Crushing Europe's Depositors

Submitted by Tyler Durden on 03/26/2013 11:07 -0400

Last week, when we commented on the absolutely idiotic Eurogroup proposal (now voted down and replaced by an equally idiotic "bank resolution" proposal which will see uninsured deposits virtually wiped out) to tax uninsured and insured deposits, we jokingly suggested that this may be merely the latest ploy by the legacy status quo to achieve one simple thing: force depositors across the continent (and soon, world) to pull their money out of a malevolent, hostile banking system and push that money into stocks, or simply to spend it. This would help finally defeat the biggest bogeyman of the centrally-planned reflation attempt in the past 4 years - the absolutely dismal velocity of money which drops every time the G-7 central planners inject liquidity into stocks.

We were joking, because it would be beyond conspiratorial to suggest that a central bank could go as far as wiping out the wealth and savings of an entire nation in order to promote broken monetary policy. It would be outright idiotic and not to mention criminal. Why purposefully endanger depositors, and thus an entire financial system, just to spook them and their money? Or so we thought until we read the following just as "conspiratorial" take from Deutsche Bank's Jim Reid:

Maybe the lesson from all of this is that if you are fortunate enough to have a fair degree of money you might be better off spending it! Maybe that’s the master plan here? Boosting activity by forcing people to use their money rather than deposit it! Indeed I wonder how long it’ll be before an equity strategist suggests that this is bullish as money might now leave deposit accounts and go into equities!

Sarcastic humor or sad, insolvent reality... You decide.

Is This The Diabolical "Master Plan" Behind Crushing Europe's Depositors | Zero Hedge

EUR Fades As Portugal Admits Cyprus Deal "Sets Precedent" - (UPDATE - Denied)

Submitted by Tyler Durden on 03/26/2013 11:31 -0400

• Portugal

UPDATE: Well that didn't take long - The Portuguese Finance minister just denied his earlier comments and added that the Cyprus deal is NOT a template for future actions (EURUSD doesn't believe him).

• *GASPAR SAYS CYPRUS DEAL NOT A `TEMPLATE' FOR OTHER COUNTRIES

The shambles continues in Europe. This morning we saw a plethora of EU officials explaining how the Cyprus 'deal' is a unique, one-of-a-kind debacle helping to talk back #DieselBoom's mis-words, only to have their credibility destroyed by the actual transcript and his actual words. Then we get the fact that a new EU-wide bill on deposit bail-ins is introduced... and now the Portuguese finance minister has added to the dysphoria by explaining that, "the Cyprus deal sets Euro precedent on deposit protection," and we therefore assume on deposit impairment. It seems EURUSD also sees this...



Charts: Bloomberg

EUR Fades As Portugal Admits Cyprus Deal "Sets Precedent" - (UPDATE - Denied) | Zero Hedge

Is Cyprus' Last Remaining Big Bank Set For An Unexpected Liquidation?

Submitted by Tyler Durden on 03/26/2013 09:10 -0400

As part of the weekend's Cyprus parliamentary vote-bypassing "bank resolution", we learned that the second largest Cyprus bank, Laiki, will be liquidated, with the bulk of its good assets rolled into what would remain of the first and only remaining major bank in the island: Bank of Cyprus (whose uninsured depositors would also suffer a haircut, but supposedly a smaller one, less than 30%). Then, in a very surprising move overnight, news hit that the Chairman of this last standing bank, Andreas Artemis, has tendered his resignation.
Why now, when everything is supposedly fixed and when the impression of stability is paramount? Perhaps the reason is that as CNBC's Michelle Caruso-Cabrera reports from Cyprus, there is now an rumor that the "other" bank - Bank of Cyprus - may also be on the verge of liquidation.
While this is unsubstantiated for now, it would make sense in the aftermath of yesterday's confusing announcement of a select bank reopening today, followed hours later by an extension of the bank closure through Thursday (at least, likely longer), but more importantly, following reports that Russian depositors may have already long pulled out their cash from Cyprus, meaning not even full impairments on all uninsured depositors will be enough to cover the capital shortfall, with the only option being impairment of the insured depositors after all... or bank closure.
Keep a close eye on what happens here next because if the only remaining "good" Cypriot bank is shuttered, then the entire European bailout package, cobbled in the last hours of Sunday, goes poof.
From Michelle Caruso-Cabrera:

Bank of Cyprus employees now inside. They are here because of rumors that BofC will be liquidated like Laiki Bank.

Is Cyprus' Last Remaining Big Bank Set For An Unexpected Liquidation? | Zero Hedge

The Global Stagflation-O-Meter Brings Even More Bad News For Cyprus

Submitted by Tyler Durden on 03/26/2013 08:04 -0400

Even more bad news for Cyprus, which now has not only a depression to look forward to but a depressionary stagflation to boot. Bloomberg has ranked countries based on their risk of stagflation based on the following methodology: First, the average real Gross Domestic Product and average Consumer Price Index was calculated for each country from 2012 to 2014. Then the Stagflation Score was determined by multiplying average real GDP by average CPI if the average real GDP was negative or by dividing average real GDP by average CPI if the average real GDP was positive. The lower the score, the greater the risk of stagflation. The winner, or loserat the case may be? Cyprus was found to be most at risk of stagflation with a Stagflation Score of -4.733, followed by Portugal (-2.671), Italy (-2.133), Spain(-1.745) and Greece (-1.366). Switzerland was ranked least at risk with a score of (7.560), followed by China (2.612) and Japan (2.446).



Source: Bloomberg Brief

The Global Stagflation-O-Meter Brings Even More Bad News For Cyprus | Zero Hedge

Overnight Market: "It's All Cypriot To Me"

Submitted by Tyler Durden on 03/26/2013 06:58 -0400

Another session in which the market continues to be "cautiously optimistic" about Europe, but is confused about Cyprus which keeps sending the wrong signals: in the aftermath of the Diesel-Boom fiasco, the announcement that the preciously announced reopening of banks was also subsequently "retracted" and pushed back to at least Thursday, did little to soothe fears that anyone in Europe has any idea what they are doing. Additional confusion comes from the fact that the Chairman of the Bank of Cyprus moments ago submitted his resignation: recall that this is the bank that is supposed to survive, unlike its unluckier Laiki competitor which was made into a sacrificial lamb. This confusion has so far prevented the arrival of the traditional post-Europe open ramp, as the EURUSD is locked in a range below its 200 DMA and it is unclear what if anything can push it higher, despite the Yen increasingly becoming the funding currency of choice.
There have been no macro economic news out of Europe, with China setting the stage and pushing the Shanghai Composite lower once more (-1.25%) after domestic media reported that Chinese banks will start to exercise greater control on the scale of loans to property developers (China Securities Journal). Further to that, the southern Chinese province of Guangdong announced that it will be the first province to implement cooling measures announced recently by the national government including a 20% capital gains tax and higher downpayments for second home buyers. The multi-billion non-reverse repo (liquidity withdrawing) confirms that inflation pressures in China are as strong as ever, and the ongoing open-ended QEasing by the US and soon Japan, will do nothing to help this, or push Chinese stocks higher.
Durable goods orders will be the main data release today in which a rebound in aircraft orders which declined 45.7% in January should be a catalyst for the headline print, although ex-aircraft and defense there may be some disappointment. Also scheduled today are Case-Shiller home prices, consumer confidence and new home sales.
SocGen on the key catalysts in the past 24 hours:
In the end, it turned out to be a fairly routine market response to the Cyprus rescue programme in a way that has characterised more than one bailout and EU summit in the recent past: knee-jerk relief followed by despair over the clumsy agreement and statement between EU policymakers. It was Eurogroup chair Diijsselbloem's comments on the Cyprus bank bail-in being a template for the broader euro region that sent markets scrambling for safety yesterday, with rumours of an Italy downgrade sending the Eurostoxx bank index down to levels last seen four months ago and on-target key technical level of 105.00. The realisation that deposit holders could be hit in a more generic fashion in the event of further bank trouble is causing fresh investor and popular unrest which could bring further disruption to the economic recovery. This will make the outlook even more unpredictable and as Moody's stated yesterday, Cyprus remains at risk of default and this is credit negative for all euro area sovereigns. The events of the last few days will put scrutiny on the 3y LTRO repayments announced every Friday by the ECB.
If correlations between EUR/G10 and periphery debt had temporarily become irrelevant, they jumped back to meaningful levels. The sharp widening in 2y btp/bund (+7.5bp) and bono/bund (+9bp) spreads finally squeezed EUR/USD below the 200d moving average at 1.2880. Without being technically oversold, momentum could carry the pair down to 1.2680 There is no eurozone data to speak of today - French consumer confidence was reported lower at 84 - so the focus will shift to ECB member Nowotny's speech at 10:00CET, who last week iterated that he saw no near-term rate cut. For the US, a small decline in consumer confidence is expected after a terrible Michigan confidence survey and durable goods orders are forecast to have bounced back from the steep 5.2% fall last month.
The full event roundup is as usual from Deutsche's Jim Reid:
One can’t help wondering whether there was a spike in the sales of top-end super king size mattresses late yesterday afternoon in Europe as Dutch Finance Minister and Eurogroup President Dijsselbloem discussed how the Cyprus model, including allowing larger depositors to take the strain, could become a model for future bank bailouts in Europe. He suggested that in the event of banking stresses, shareholders and bondholders will be asked to contribute and, if necessary, uninsured deposit holders. In his interview with the Financial Times and Reuters, Mr Dijsselbloem said he was effectively “pushing back the risks” that sovereigns or EU authorities would be left to shoulder the burden of bank bailouts. He added that the relative market calm in recent months, coupled with the lack of market panic following the decision to force depositors to pay for the bailout of two large Cypriot banks, allowed the eurozone to go after private money more aggressively when banks failed.
The market reaction prompted a clarification statement later where Dijsselbloem said that Cyprus was a “specific case with exceptional challenges” and that bailout programmes do not have models or templates. However by then the earlier message had done the damage with equities and the Euro falling sharply. Indeed the cat has been increasingly let out of the bag over the last week concerning the potential for different ways of resolving future bank/sovereign crisis and these comments yesterday added to the risk than nothing is going to be off the table when it comes to any future issues for the banking sector.
Investors/creditors might also take the view that there seems to be increasing inconsistency about future potential rescues. Is the ESM now redundant? Will policy be made up on the run and maybe modelled on that seen in Cyprus? It’s impossible to know at this stage which isn’t helpful for big depositors or investors in various bank securities. Luckily at the moment markets have been generally calm enough that this doesn’t immediately create problems. However the price action in European banks yesterday demonstrated the fragility that still exists. Banking stocks (-2.1%) were amongst the worst performers on the Stoxx600 (-0.27%) yesterday with Spanish, Italian and French banks bearing the brunt of the selloff. The hardest hit banks included Intesa Sanpaolo (-6.2%), Banco Populare (-5.9%), SocGen (-6.0%), Credit Agricole (-5.8%), Unicredit (-5.8%) and BBVA (-3.6%). It was a similar story in credit markets, with the European senior and subordinated financials indices adding 11bp and 13bp respectively, underperforming other credit indices.
Maybe the lesson from all of this is that if you are fortunate enough to have a fair degree of money you might be better off spending it! Maybe that’s the master plan here? Boosting activity by forcing people to use their money rather than deposit it! Indeed I wonder how long it’ll be before an equity strategist suggests that this is bullish as money might now leave deposit accounts and go into equities!
On a separate but related issue, shares in Spain’s Bankia finished the day down 41% yesterday after details of its recapitalisation plan were released last Friday. To recapitalise Bankia, shares will be written down to a nominal value of EUR0.01, and EUR4.8 billion worth of preferred shares and subordinated debt will be converted into ordinary shares. The Spanish bank recap fund, FROB, will inject EUR10.7 billion in funds.
Spain’s economy minister was keen to point out yesterday that a Cyprus-style bailout could not be extrapolated to any other country (Bloomberg).
Outside of the developments in Europe, Chairman Bernanke spoke at a discussion panel at the London School of Economics yesterday while the NY Fed’s Bill Dudley spoke at the Economic Club of New York. Bernanke commented that the benefits of monetary easing in the advanced economies are not via exchange rates but instead through supporting domestic demand. Bernanke also said he was “skeptical” that interest rate differentials were the “dominant force” behind capital inflows into emerging economies. Dudley’s speech had a relatively dovish tone. His main points were that labor market improvements were slowing; and inflation remained subdued, warranting a continuation of the Fed’s “very accommodative” policy.
Turning briefly to overnight markets, Asian equities are trading with a weaker tone with losses of around half to one percent seen across most markets. The Nikkei is outperforming other regional equities (-0.4%), helped by a 0.2% slide in the yen against USD, after comments from the BoJ governor at the semi-annual parliamentary testimony on monetary policy. Kuroda said that the BoJ could seek to push down yields across the curve by purchasing longer-dated JGBs with maturities of up to 5 years. He also added that next week’s BoJ meeting will debate specific policy steps to achieve inflation targets, making full use of the BoJ’s capabilities.The Shanghai Composite (-1.6%) is again leading losses after domestic media reported that Chinese banks will start to exercise greater control on the scale of loans to property developers (China Securities Journal). Further to that, the southern Chinese province of Guangdong announced that it will be the first province to implement cooling measures announced recently by the national government including a 20% capital gains tax and higher downpayments for second home buyers.
Turning to the day ahead, French consumer confidence is the main data print in Europe. In the US, durable goods orders will be the main data release today with our economists expecting a decent print for February, in part driven by a rebound in aircraft orders which declined 45.7% in January. Also scheduled today are Case-Shiller home prices, consumer confidence and new home sales.

Overnight Market: "It's All Cypriot To Me" | Zero Hedge