German firms increasingly worried about weak euro

Germany’s DIHK Chambers of Commerce said yesterday that while the weak euro would initially boost Europe’s largest economy by enabling exporters to offer their goods abroad for less, firms were increasingly concerned about the exchange rate.

“The strong exchange-rate fluctuations in recent months are making it difficult to develop long-term plans and increasing the cost of the hedging transactions they need to do,” the DIHK said.

Most firms in Germany have to import goods and these have become noticeably more expensive due to the weak euro, it said.

A DIHK survey earlier this year found that almost a fifth of German companies see the weak euro as a business risk, compared with 11% of firms in a poll in October.

While firms now pay around a third less for oil than they did six months ago, the weak euro exchange rate is counteracting some of those gains given that oil is priced in US dollars, the DIHK said.

“A weak exchange rate should not create the impression of greater competitiveness. A weak currency generally goes with a weaker economy,” it said.

“The devaluation of the euro is therefore also a sign that investors have more confidence in other countries’ dynamism, especially in the US.”

The DIHK also said there was a risk of competitive devaluation after several central banks around the world reduced their key interest rates and so stopped their currencies from appreciating more strongly. “That shows that competitive devaluation that seeks to boost your own export industry doesn’t achieve anything because other countries can always follow suit,” it said.

Reuters

Euro-Area Manufacturing Growth Revised Higher on German Boost

(Bloomberg) — Euro-area manufacturing expanded faster than initially estimated last month, helped by growth in Spain and Italy and a stronger performance in Germany, the region’s largest economy.

Markit Economics said its Purchasing Managers Index rose to 52.2 from 51 in February. That was the highest in 10 months and exceeded a preliminary reading of 51.9. It’s also well above the 50 level that divides expansion from contraction.

More from Bloomberg.com: Ted Cruz Attempts to Parlay Obstructionism Into Campaign Asset

Economic momentum within the 19-country region is gaining pace as the Frankfurt-based European Central Bank buys bonds to revive growth and inflation, and a weaker euro aids exporters. Markit’s report also highlighted divergences within the bloc, with Germany posting the fastest growth in almost a year, while France, Greece and Austria saw manufacturing contract.

“The euro-zone economy is reviving after last year’s slowdown,” said Chris Williamson, chief economist at Markit in London. “This is still a fledgling recovery, however, and the overall rate of expansion remains only modest.”

More from Bloomberg.com: Iran Nuclear Talks Resume With Lavrov Saying Deal at Hand

In Germany, the manufacturing index rose to 52.8 in March from 51.1 in February, higher than the 52.4 initially reported. Italy’s advanced to 53.3 from 51.9, exceeding the 52.1 median forecast of economists. The French gauge rose to 48.8 from 47.6, remaining below the key 50 mark. Spain’s index was at 54.3 and Ireland’s at 56.8.

The PMI report also showed that new orders at euro-region factories rose the fastest in 11 months in March. Employment increased the most since 2011.

That follows positive sentiment reports in the past week, including a fifth consecutive monthly increase for the Ifo business confidence index. A report on Monday showed euro-area economic sentiment rose to the highest level in more than 3 1/2 years, adding to signs that the fragile recovery is stabilizing.

More from Bloomberg.com: Yellen Fails to Entice Gold Bugs as ETPs Lose $ 1.5 Billion

To contact the reporter on this story: Catherine Bosley in Zurich at [email protected]

To contact the editor responsible for this story: Fergal O’Brien at [email protected]

More from Bloomberg.com

  • Nigeria Faces Transition as Buhari Wins Presidency
  • Greek Deposit Outflows Said to Slow to 3 Billion Euros
  • S&P 500 Futures Decline, Indicating Equities to Fall Second Day

Euro down on Greece uncertainty, rate outlook drives dollar up

imageLONDON: The euro fell on Monday, hurt by uncertainty over whether Greece and its creditors will be able to strike a deal that will help Athens secure funding before it runs out of money by April 20.

Talks continued through the weekend and Athens sounded upbeat, but its lenders said compiling a list of reforms could take several more days. Fitch cut Greece’s credit rating to ‘CCC’ from ‘B’ on Friday.

The dollar rose after Federal Reserve chair Janet Yellen underscored the view that the Fed is likely to start raising interest rates gradually later this year.

The dollar rose 0.5 percent to 119.78 yen, while the euro fell 0.6 percent to $ 1.0830 as it pulls away from a 12-year trough of $ 1.0457.

“Even though euro short positions are at record highs, given the Greek uncertainty and the bias for more monetary injection by the European Central Bank, the path for least resistance is a lower euro/dollar,” said Jeremy Stretch, head of currency strategy at CIBC World Markets.

“Unless the euro drops below $ 1.0770 we could see ranged trading, but with the Fed still looking to raise rates, we could see conditions later this week that are more helpful for overall dollar strength.”

The euro got little help from data that showed consumer prices in Germany picking up. Prices are set to rise in March after falling in the first two months of this year, but inflation is still likely to remain low.

“It is a lot more complicated than just looking at Germany. Yes, we need to see higher inflation in Germany, which would help a price adjustment, but at best better German data is just going to halt the euro decline rather than reverse it,” said Simon Smith, chief economist at FxPro.

For the dollar, U.S. jobs data on Friday will be the key event this week. A robust report could see investors position for tighter monetary policy sooner rather than later.

In a speech on Friday, Yellen outlined the case for a ‘gradualist approach’ to rate hikes, mirroring comments after the FOMC meeting on March 18. She signalled the Fed is likely to start raising rates later this year but said policy tightening could “speed up, slow down, pause, or even reverse course” depending on developments in the economy.

“The jobs numbers are going to be important, but I don’t think they will be the deciding factor determining when the Fed does eventually put rates up,” Smith said.

Copyright Reuters, 2015

Euro Heads for Fourth Quarterly Drop

(Bloomberg) — The euro is set for the biggest quarterly slide versus the dollar since its inception and options trading indicates there’s more weakness to come.

In addition to a Federal Reserve that’s on track to raise interest rates, Europe’s 19-nation currency is being hobbled by the European Central Bank’s monetary stimulus and Greece’s struggle to secure bailout funds and avert a default. The euro slid on Tuesday even as a report showed Germany’s unemployment rate fell to a record.

The shared currency weakened against all but two of its 16 major peers this year as the ECB started its unprecedented 1.1 trillion-euro ($ 1.2 trillion) debt-purchase program. Across the Atlantic, output data may be understating the health of the American economy and employment numbers are a more reliable indicator, Fed Vice Chairman Stanley Fischer said at a conference on Monday.

More from Bloomberg.com: Margin Call From Eurex Said to Trigger DuessHyp Collapse

“The market is ignoring the improving fundamentals in the euro zone and focusing more on the policy divergence, with the expansion of the ECB’s balance sheet being an ongoing negative,” said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London. “The Greek situation continues to cause consternation,”

The euro fell 1 percent to $ 1.0729 as of 10:58 a.m. in London, after sliding 0.5 percent on Monday and losing 11 percent this year. It shed 1 percent to 128.76 yen, pushing its drop since Dec. 31 to 11 percent, the most since September 2011.

More from Bloomberg.com: JPMorgan Says European Equity Rally Is `Well Supported’

German Jobs

Joblessness in Germany, Europe’s largest economy, fell to 6.4 percent in March from 6.5 percent last month, according to a Tuesday report. That was the latest in a set of data signaling business and investor confidence is recovering in the euro area amid plunging energy prices and a weaker currency.

The recovery signs haven’t stopped options traders from becoming more bearish on the euro.

They’re paying a 2.29 percentage-point premium for three-month options to sell the euro against the dollar over contracts for purchases, the most since Feb. 23 based on closing prices. That’s up from a 2015 low of 1.19 percentage point reached on Jan. 12, 25-delta risk-reversal rates show.

More from Bloomberg.com: Sweden Faces Calls to Pare Deductions as Mortgage Bill Grows

Greek Prime Minister Alexis Tsipras, who came to power in January on a platform of ending austerity, was locked in negotiations with creditors over the terms of the country’s 240 billion-euro bailout.

He sought consensus in parliament for his efforts after proposals to reform the nation’s finances failed to satisfy his European partners. The standoff has left Greece dependent upon ECB loans and at risk of an exit from the euro.

To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at [email protected]

To contact the editors responsible for this story: Paul Dobson at [email protected] Paul Armstrong

More from Bloomberg.com

  • Euro Traders Foresee More Weakness After Record Quarterly Slide
  • Italian Jobless Rate Rises in Setback for Renzi’s Government
  • Europe Stocks Are Little Changed, Heading for Quarterly Advance

FOREX-Euro down on Greece uncertainty, rate outlook drives dollar up

* Dollar up 0.6 percent against yen and euro

* Euro weighed down by uncertainty over Greece

* Yellen’s message on gradual tightening provides no fresh impetus (Updates prices, quotes)

By Ahmed Aboulenein

LONDON, March 30 (Reuters) – The euro fell on Monday, hurt by uncertainty over whether Greece and its creditors will be able to strike a deal that will help Athens secure funding before it runs out of money by April 20.

Talks continued through the weekend and Athens sounded upbeat, but its lenders said compiling a list of reforms could take several more days. Fitch cut Greece’s credit rating to ‘CCC’ from ‘B’ on Friday.

The dollar rose after Federal Reserve chair Janet Yellen underscored the view that the Fed is likely to start raising interest rates gradually later this year.

The dollar rose 0.5 percent to 119.78 yen, while the euro fell 0.6 percent to $ 1.0830 as it pulls away from a 12-year trough of $ 1.0457.

“Even though euro short positions are at record highs, given the Greek uncertainty and the bias for more monetary injection by the European Central Bank, the path for least resistance is a lower euro/dollar,” said Jeremy Stretch, head of currency strategy at CIBC World Markets.

“Unless the euro drops below $ 1.0770 we could see ranged trading, but with the Fed still looking to raise rates, we could see conditions later this week that are more helpful for overall dollar strength.”

The euro got little help from data that showed consumer prices in Germany picking up. Prices are set to rise in March after falling in the first two months of this year, but inflation is still likely to remain low.

“It is a lot more complicated than just looking at Germany. Yes, we need to see higher inflation in Germany, which would help a price adjustment, but at best better German data is just going to halt the euro decline rather than reverse it,” said Simon Smith, chief economist at FxPro.

For the dollar, U.S. jobs data on Friday will be the key event this week. A robust report could see investors position for tighter monetary policy sooner rather than later.

In a speech on Friday, Yellen outlined the case for a ‘gradualist approach’ to rate hikes, mirroring comments after the FOMC meeting on March 18. She signalled the Fed is likely to start raising rates later this year but said policy tightening could “speed up, slow down, pause, or even reverse course” depending on developments in the economy.

“The jobs numbers are going to be important, but I don’t think they will be the deciding factor determining when the Fed does eventually put rates up,” Smith said.

(Additional reporting by Anirban Nag; Editing by Larry King)

Euro Rises As German Private Sector Activity Hits 8-Month High

The euro strengthened against most major currencies in the early European session on Tuesday, after data showed that Germany’s private sector expanded at the strongest pace in eight months in March.

Data from Markit Economics showed that Germany’s composite Purchasing Managers’ Index rose to 55.3 from 53.8 in February. The growth has stretched to 23 months and the latest rate of expansion was the most marked since July last year.

The PMI for the service sector rose more-than-expected to a six-month high of 55.3 in March from 54.7 in February. The expected score was 55.

The manufacturing PMI came in at 52.4 versus 51.1 in February. The score was above the expected level of 51.5.

The currency showed little reaction to the Eurozone PMI data, that came after German PMI data.

Data from Markit Economics also showed that Eurozone private sector grew at the fastest pace in almost four years in March. The flash composite PMI rose more-than-expected to 54.1 in March from 53.3 in February. The index rose for the fourth consecutive month to reach the highest since May 2011. The reading stayed above the forecast of 53.6.

At 53.3, the average PMI reading for the first quarter was the highest since the second quarter of last year.

The services PMI came in at 54.3 in March, a 46-month high. Economists had forecast the index to rise to 53.9 from 53.7 in February.

Investors are also waiting for progress in Greece’s debt negotiations as Greek Prime Minister Alexis Tsipras meets leaders of Germany’s opposition Left and Green parties later today.

German chancellor Angela Merkel, who held face to face talks with Tsipras for the first time on Monday, said that Greece’s reform proposals would be evaluated by the finance ministers of the euro zone, rather than by Berlin alone.

In the early European session today, the euro rose to more than a 4-week high of 0.7351 against the pound, from an early low of 0.7302. If the euro extends its uptrend, it is likely to find resistance around the 0.76 area.

Against the U.S. and the Canadian dollars, the euro advanced to 6-day highs of 1.0999 and 1.3738 from early lows of 1.0903 and 1.3668, respectively. The euro is likely to find resistance around 1.15 against the greenback and 1.40 against the loonie.

Moving away from early lows of 130.48 against the yen and 1.4246 against the NZ dollar, the euro rose to a 6-day high of 131.40 and a 4-day high of 1.4353, respectively. The euro may test resistance near 136.02 against the yen and 1.49 against the kiwi.

The euro edged up to 1.3952 against the Australian dollar, from an early low of 1.3859. On the upside, 1.42 is seen as the next resistance level for the euro.

Looking ahead, U.S. CPI and new home sales for February, house price index for January and Markit’s manufacturing PMI for March are due in the New York session.

At 5:05 am ET, European Central Bank Vice President Vitor Constancio takes part in a panel discussion titled “The Future of International Monetary Policy and its Impact on Global Economic Recovery” at the International Financial Services Forum, in London. Subsequently, U.S. Federal Reserve Bank of St. Louis President James Bullard is also expected to participate in this panel discussion after an hour.

by RTT Staff Writer

For comments and feedback: [email protected]

Business News

BMW anybody? Carmakers to gain most from weak euro

European carmakers (STOXX: .SXAP) and chemical (STOXX: .SX4P) and tourism companies stand to benefit most from the weakening euro, according to Moody’s, while the airline sector looks set to be worst hit.

The credit ratings provider said the falling euro (Exchange: EUR=) would be “positive for companies that have the majority of their cost bases in the euro area with significant sales to regions outside it.”

These included German premium auto manufacturers such as BMW (XETRA: BMW-DE), Daimler (XETRA: DAI-DE) and Volkswagen (XETRA: VOW3-DE), which export a large share of their production to external markets including the U.S.

Germany companies were also seen as the major beneficiaries in the chemicals sector, with Moody’s naming K&S (XETRA: SDF-DE) and Lanxess (XETRA: LXS-DE) as those most likely to gain, given that potash and synthetic rubber are “typically U.S. dollar markets.”

Moody’s added that the hotels and tourism sector would also receive a boost, due to increased demand as euro area destinations became cheaper for travelers from overseas.

Read More Weak euro boosts region’s business growth

Since the start of last year, the euro has fallen by around 12.5 percent again U.K. sterling (Exchange: EURGBP=) to £0.73 on Wednesday. It has slipped 19 percent against the U.S. dollar to $ 1.11.

On Wednesday, Moody’s said it had lowered its forecast for the euro-dollar exchange rate to 1.10 through 2015 and 1.13 in 2016, adding that it did not expect any major recovery in the single currency before 2017.

“In general, a weaker euro boosts the price competitiveness of euro area exports, which account for about 25 percent of Europe’s gross domestic product,” the ratings agency said in a research note.

“However, a lower euro exchange rate will raise import prices and increase the cost of inputs that are denominated in currencies other than the euro.”

Moody’s said the low euro would prove “mildly negative” for non-food retailers, while airlines would suffer the most.

“While demand for flights to Europe might increase, driven by the rising popularity of euro area destinations, most of this rising demand will be captured by non-European airlines,” it said.

“In addition, flying from Europe to other continents will become less attractive. Furthermore, the positive effect of falling oil prices will be partially offset by the weakening euro, as global oil prices (Intercontinental Exchange Europe: @LCO.1) are quoted in U.S. dollars making fuel purchases more expensive for European airlines.”

In a February research note, Goldman Sachs Asset Management said the weak euro could boost revenues for many of the region’s companies.

“With 54 percent of aggregate corporate revenues being generated outside of Europe, we look for a weakening euro to benefit the competitiveness and profitability of many European companies through a more competitive export business and higher profits when converting overseas profits back into the local euro currency,” the bank said.

More From CNBC

  • CNBC.com News Page
  • CNBC.com Blogs Page
  • CNBC.com Earnings Central

Business Grows in Euro-Area Top Four Economies as Recovery Firms

(Bloomberg) — Business activity expanded in each of the euro area’s four largest economies for the first time in almost a year, signaling that a fragile recovery is slowly becoming more sustained.

A Purchasing Managers Index for the manufacturing and services industries across the region rose to a seven-month high of 53.3 in February from 52.6 the previous month, London-based Markit Economics said Wednesday. Similar gauges for Germany, France, Italy and Spain were all above the 50-point mark that divides expansion from contraction. The last time that happened was in April 2014.

More from Bloomberg.com: The Real Meaning of India’s Rate Cut

Growth in the 19-nation euro economy is set to accelerate this year from a 0.3 percent expansion in the fourth quarter, benefiting from lower oil prices, a weaker euro and the European Central Bank’s 1.1 trillion-euro ($ 1.2 trillion) quantitative-easing plan. A stronger-than anticipated decline in unemployment and a less-than-forecast drop in consumer prices are contributing to improved prospects.

“The outlook has brightened for all countries,” said Chris Williamson, chief economist at Markit. “There were clear signs of the euro-zone economy reviving in February, with stronger inflows of new business and rising business confidence suggesting growth should continue to pick up in March.”

More from Bloomberg.com: India’s Sensex Drops With Rupee as Investors Bet Gains Overdone

Economists in Bloomberg’s monthly poll forecast the euro-area economy will expand 0.3 percent in each of the first two quarters of 2015, and 0.4 percent in the following three-month periods through the third quarter of 2016, for annual growth of 1.2 percent this year and 1.6 percent next year.

First Quarter

First-quarter expansions in the region’s largest economies will range from 0.1 percent in Italy to 0.2 percent in France, 0.3 percent in Germany and 0.7 percent in Spain, Markit predicts on the basis of its survey data.

More from Bloomberg.com: Russian Opposition Despairs After Nemtsov as Putin Era Stays

“With employment rising at the strongest rate for 3 1/2 years, unemployment should fall further from the 11.2 percent rate seen in January,” said Markit’s Williamson. “An easing in the rate at which companies cut their prices meanwhile also suggests that consumer-price deflation will continue to moderate.”

A gauge for the performance of euro-area services rose to 53.7 last month from 52.7, according to the release. On Monday, Markit reported that a similar index for manufacturing stood at 51, unchanged from January.

To contact the reporter on this story: Alessandro Speciale in Frankfurt at [email protected]

To contact the editors responsible for this story: Fergal O’Brien at fobri[email protected]; Jana Randow, Paul Gordon

More from Bloomberg.com

  • U.K. Defeats ECB in Clash Over City of London Clearinghouses
  • U.K. Stocks Fall for 4th Day on Suprise Drop in Services Growth
  • Draghi Split From Yellen Drives Treasury Premium to 25-Year High

German Economy Gets Boost From Consumers and Exports

(Bloomberg) — Germany restored its position as Europe’s economic powerhouse last quarter as domestic spending surged and trade contributed to growth.

Gross domestic product in the region’s largest economy expanded 0.7 percent in the three months through December, the Federal Statistics Office said today, confirming a Feb. 13 estimate. Private consumption climbed 0.8 percent, capital investment rose 1.2 percent and exports jumped 1.3 percent.

“Powerful trickle-down effects from a lower oil price and a weaker euro exchange rate continued to lift the German economy,” said Andreas Rees, an economist at UniCredit SpA in Munich. “It is hard not to be reasonably optimistic in Germany these days.”

More from Bloomberg.com: Most Emerging Stocks Rise as TSMC Leads Technology Shares Higher

Plunging energy costs have been described by Bundesbank President Jens Weidmann as a mini-stimulus that puts more money in consumers’ pockets. The decline has also contributed to a negative inflation rate in Germany and the euro area that prompted the European Central Bank to announce quantitative easing, weakening the euro and making German exports more competitive.

Private consumption added 0.4 percentage point to GDP last quarter and net trade added 0.2 percentage point. Capital investment added 0.2 percentage point, driven entirely by construction. Inventories subtracted 0.2 percentage point.

More from Bloomberg.com: Greece Must Revisit Funding Talks in June: Parker

ECB Stimulus

The Bundesbank said last month that the German economy has overcome the “weak phase” it hit early last year as lower oil prices and higher salaries bolster consumption. Real wages increased 1.6 percent in 2014, the most since data collection started in 2008.

Germany’s economic resurgence contrasts with France, which barely grew in the three months through December, and Italy, which stagnated after two consecutive quarters of contraction. The Spanish economy, the euro area’s fourth-largest, expanded at the fastest pace in seven years in the fourth quarter, with GDP rising 0.7 percent.

More from Bloomberg.com: Hong Kong Stocks Fall as HSBC Slumps Most in 18 Months on Profit

The euro-area economy expanded 0.3 percent in the October-December period. While the region is still recovering from its longest-ever recession, growth prospects are clouded by Greece, where a newly elected anti-austerity government is struggling to strike a financing deal with its European counterparts that would prevent a default.

In addition, ECB President Mario Draghi has warned of the risk of a deflationary spiral of falling consumer prices and households postponing spending in the currency bloc. To avert that scenario, he unveiled a 1.1 trillion-euro ($ 1.3 trillion) bond-buying program last month.

The risks for the region’s economy “remain on the downside, but should have diminished,” Draghi said at a Jan. 22 press conference after the announcement.

To contact the reporter on this story: Stefan Riecher in Frankfurt at [email protected]

To contact the editors responsible for this story: Fergal O’Brien at [email protected] Jana Randow, Paul Gordon

More from Bloomberg.com

  • Failed-Trade Fix Seen Adding Billions to EU Funding Costs
  • Catalan Independence Push Opens Divisions in Mas’s Party
  • Gulliver’s Swiss Account Via Panama Puzzles Tax Experts

Euro Weakens Before Greek Talks; Oil Retreats for Week

(Bloomberg) — The euro weakened, U.S. equity-index futures fell and Treasuries rose with German bunds as creditors ramped up pressure on Greece amid talks on further funding. Oil headed for its first weekly loss in a month as U.S. supplies reached a record.

Europe’s shared currency declined 0.8 percent to $ 1.1283 at 8:23 a.m. in New York. The Stoxx Europe 600 Index slipped 0.1 percent and Standard & Poor’s 500 Index futures dropped 0.3 percent. Deere & Co. retreated after cutting its profit forecast. Greek stocks declined while bonds pared gains. Treasuries gained, sending the 10-year yield four basis points lower to 2.08 percent. Germany’s rate slid to 0.34 percent. Oil in New York headed for a 2.1 percent drop this week.

More from Bloomberg.com: Euro Falls Before Greece Debt Talks as Economic Data Disappoints

Germany and its allies are ready to let Greece leave the euro unless Greece accepts the conditions required to extend his country’s financial support, according to Malta’s Finance Minister Edward Scicluna. Reports today showed French manufacturing weakened and Germany’s missed estimates even as a gauge of euro-area factory output and services strengthened this month.

“Although many in the market may have hoped for a final deal to be reached, there’s still a lot of uncertainty about the debt talks,” said Roberto Mialich, a senior foreign-exchange strategist at UniCredit SpA in Milan. “We see the PMI data as disappointing and perhaps that offered some last minute opportunity to square books ahead of the Eurogroup summit. That weighed on the euro.”

More from Bloomberg.com: U.S. Stock-Index Futures Fall From Record Levels on Greek Talks

Emergency talks between euro-region finance ministers at agreeing an extension of Greece’s aid program were set to resume in Brussels Friday as the country seeks a deal to prevent defaulting on obligations as early as next month. By bowing to German demands, Prime Minister Alexis Tsipras risks a domestic backlash from voters and party members whom he’s promised an end to austerity.

The 19-nation shared euro fell versus all but one of its 16 major counterparts, declining most against the Australian and New Zealand dollars. It slid 0.7 percent against the yen.

Pound Drops

Britain’s pound dropped 0.4 percent to $ 1.5358 after retail sales fell more in January than analysts estimated.

The Stoxx 600 is heading for a third weekly gain, the longest streak since the start of December. Greece’s ASE index added 1.7 percent, trimming this week’s loss to 2.5 percent, while the yield on the nation’s 10-year government bonds fell 18 basis points to 9.75 percent.

More from Bloomberg.com: The Numbers Don’t Lie: Women Make More Effective Legislators Than Men

European stocks were whipsawed Thursday, gaining after the European Commission said Greece’s request for an extension of loan facilities could pave the way for compromise.

Stocks then pared gains on news Germany had rejected the plan, before rising again as a German official, who asked not to be identified because the talks are private, said his government regarded a Greek proposal as a basis for negotiations.

Credit-default swaps insuring $ 10 million of Greek government debt for five years were little changed at $ 4.2 million upfront and $ 100,000 annually, signaling a 70 percent probability of default, according to CMA.

Gemalto NV, the largest maker of mobile-phone cards, tumbled 7.2 percent after Intercept reported a hacking into its network to steal encryption keys for mobile communication.

Deere, the largest manufacturer of agricultural machinery, fell 1.9 percent in early New York trading.

Emerging Markets

The MSCI Emerging Markets Index dropped 0.3 percent, heading for its first weekly decline this month. Markets from South Korea to Hong Kong and Malaysia were closed for Lunar New Year holidays Friday. India’s S&P BSE Sensex fell for the first time in eight days, slipping 0.8 percent.

Russia’s ruble weakened 0.3 percent, trimming this week’s advance to 2.2 percent. The currency has climbed 9.9 percent in Micex trading this month, heading for its best month since records began in 2003. The dollar-denominated RTS index was little changed, leaving it 24 percent higher this month, the most worldwide.

The ruble’s rally is vulnerable because it depends on a Ukraine cease-fire and Brent oil staying at about $ 60 a barrel, according to Credit Suisse Group AG to Sweden’s SEB AB. Brent was little changed at $ 60.33.

Pro-Russian separatists attacked Ukrainian positions 49 times in 24 hours, using artillery and focusing on the Donetsk area at night, the Security and Defense Council said on its Facebook page on Friday in Kiev. The rebels continued shelling government forces near the Sea of Azov port city of Mariupol, army spokesman Anatoliy Stelmakh said. Ukrainian troops also took fire near the village of Pisky, in the outskirts of the city of Donetsk.

Oil Falls

West Texas Intermediate crude was little changed at $ 51.16 a barrel after sliding more than 4 percent the previous two days. The U.S. benchmark is heading for its first decline since losing 6.4 percent in the week to Jan. 23. Brent is down 1.9 percent for the week.

U.S. crude inventories rose by 7.7 million barrels to 425.6 million through Feb. 13, the Energy Information Administration said Thursday. The amount is the highest level in weekly records compiled by the EIA since August 1982. Analysts surveyed by Bloomberg had predicted a median increase of 3 million barrels.

Gold traded at $ 1,203.04 an ounce in the spot market. The precious metal, often viewed as a store of value and haven investment, has lost 2.2 percent this week, on track for its fourth straight weekly loss and the longest retreat since September 2013.

Nickel for delivery in three months on the London Metal Exchange dropped 0.4 percent to $ 13,930 a ton after closing at a one-year low Thursday. Supply exceeded demand by 12,700 metric tons in December, almost double the previous month, the International Nickel Study Group said Friday.

To contact the reporters on this story: Nick Gentle in Hong Kong at [email protected]; Stephen Kirkland in London at [email protected]

To contact the editors responsible for this story: Stephen Kirkland at [email protected]; Stuart Wallace at [email protected] Stuart Wallace

More from Bloomberg.com

  • Are Millennials’ Finally Moving Out of Parents Homes?
  • Europe Stocks Are Little Changed as Ministers to Discuss Greece
  • Will Customers Ever Get Any Respect?