- Spains’ Economy Minister Solbes: CCM did not sufficiently evaluate risks. Spain has enormously healthy banking system. Comments after announcment Bank of Spain to bail-out regional savings bank Caja Catilla La Mancha (CCM)
- UK February mortgage lending £1.507 bln, mortgage approvals 38k. Both more robust than expected
- UK February consumer credit -0.245 bln, versus median +0.4 bln, The biggest repayment ever
- Euro-zone economic sentiment for March 64.6, some way below median forecast of 65.8 and a new record low
- ECB’s Bini Smaghi: Risk aversion is likley to remain elevated for some years
- German Fin Min: We must find a solution to avoid Landesbanks going insolvent.
JPY and USD have remained firm during the European morning, underpinned by heightened risk aversion. The precarious future of the big 3 US automakers (GM’s Wagoner forced out, task force rejecting funding proposals from automakers and Obama spokesman opining that bankruptcy may ultimately be their best chance), and the Spanish bail out of a regional savings bank have weighed on sentiment.
We’ve also had a German Finance Ministry official saying they must find a solution to avoid Landesbanks going insolvent, so there are obviously worries there.
Meanwhile ECB’s Bini Smaghi feels risk aversion is likely to remain elevated for some years.
