Asian Stocks Advance on U.S. Housing, South Korea Ouput (Bloomberg)
Asian stocks rose, with the regional benchmark index heading for its first advance in four days, after U.S. home prices increased and South Korea’s industrial production expanded. Canon Inc. (7751), a Japanese camera maker that gets 27 percent of its sales in the Americas, gained 1.5 percent. Fuji Heavy Industries Ltd. (7270) surged 6.3 percent after the maker of Subaru cars raised its profit forecast. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company by market value, added 0.9 percent in Sydney after crude and metals prices increased. The MSCI Asia Pacific Index (MXAP) added 0.5 percent to 121.69 as of 9:49 a.m. in Tokyo before the open of markets in China and Hong Kong. The regional benchmark advanced 11 percent from this year’s low on June 4 through yesterday as stimulus measures in the U.S., Japan and China boosted sentiment amid a global economic slowdown and Europe’s debt crisis.
“We have had a range of economic data, particularly from the U.S. and China, that have proved to be positive indicators,” said Angus Gluskie, managing director at White Funds Management in Sydney, which oversees more than $350 million. “The underlying economic data is improving and supportive of future earnings as long as nothing else goes wrong.” Futures on the Standard & Poor’s 500 Index added 0.2 percent in New York. U.S. equity markets may reopen today after the longest weather-related shutdown in more than a century. Trading will resume after the New York Stock Exchange was spared by Hurricane Sandy as it swept through the city yesterday. In the U.S., the S&P/Case-Shiller index of property values in 20 cities rose 2 percent from August 2011, the biggest year- to-year gain since July 2010, after rising 1.2 percent in the year to July, the group said yesterday in New York.
Japanese Stocks Halt Three-Day Fall on U.S. Homes, BOJ (Bloomberg)
Japanese shares gained, with the Nikkei 225 Stock Average (NKY) snapping a three-day decline, as U.S. home prices rose the most in two years and the bank of Japan and the country’s government signaled stronger resolve to tackle the stronger yen and deflation. Canon Inc. (7751), a Japanese camera maker that gets 27 percent of its sales in the Americas, gained 1.3 percent. Fuji Heavy Industries Ltd. jumped 5.6 percent after the maker of Subaru cars raised its profit forecast. NSK Ltd. had the second-biggest drop in the Nikkei 225 after slashing full-year earnings forecasts. The Nikkei 225 Stock Average rose 0.7 percent to 8,907.18 as of 9:27 a.m. in Tokyo. The broader Topix (TPX) Index climbed 0.6 percent to 737.79, with more than two shares advancing for each that fell. Stocks fell yesterday in the last 15 minutes of trading after the Bank of Japan announced its first back-to-back monthly stimulus expansion since 2003.
“The U.S. housing market is clearly recovering,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The joint statement from the government and the BOJ on stimulus measures helps convince investors that they are determined to overcome deflation and raises expectations they will continue to take aggressive steps to ease policy.” The Topix rose 2 percent through yesterday from Sept. 6 after the European Central Bank started a global wave of monetary policy easing to boost growth, with the U.S. Federal Reserve and the Bank of Japan following suit. Shares on the stock gauge traded at 0.9 times book value, compared with 2.2 for the Standard & Poor’s 500 Index and 1.5 for the Europe Stoxx 600 Index.
NYSE Expects Normal Open Tomorrow After Storm (Bloomberg)
U.S. equity markets will reopen tomorrow after the longest weather-related shutdown in more than a century, resuming after the New York Stock Exchange was spared by Hurricane Sandy as it swept through New York yesterday. The decision was announced in statements by NYSE Euronext, Nasdaq OMX Group Inc. (NDAQ) and Bats Global Markets Inc. The NYSE’s headquarters are running on backup power and will keep using it if necessary all week, Larry Leibowitz, the chief operating officer, said in a phone interview. Fixed-income trading, halted at noon yesterday, will also reopen, under a recommendation by the Securities Industry and Financial Markets Association.
U.S. exchanges are in the second day of a suspension called to safeguard workers as Sandy barreled north, halting public transit and forcing evacuations in New York City. NYSE Euronext’s building on Wall Street is near areas of Manhattan that were deluged when the storm propelled a 13-foot sea surge. Arthur Levitt, the former chairman of the Securities and Exchange Commission, said the NYSE needed a better backup plan. “We’ve got people there at the floor, which was not compromised by the flooding,” Duncan Niederauer, chief executive officer of NYSE Euronext, said today in an interview on Bloomberg Television with Matt Miller. “We’re spending the day testing connectivity with clients, many of whom are operating from their own contingency sites. So first and foremost, we’re going to deal with them.”
Recap Stock Index Market Report (CME)
The December S&P 500 registered a new low for the decline in overnight trading action but managed to close in positive territory. Early support for equities came from strong performances from BP, UBS and Deutsche Bank during the early European trade. Q3 Earnings this morning from Ford surpassed street expectations and showed record high profit margins. This sent its shares up more than 1.0% in European action and was seen offering support to the US indices. US Home Price Data earlier this morning came in ahead of estimates, and that seemed to offer an added level of support.
European Stocks Climb as BP, Deutsche Bank Top Estimates (Bloomberg)
European stocks rose the most in two weeks as companies from BP Plc (BP/) to Deutsche Bank AG (DBK) reported earnings that topped estimates and U.S. house prices climbed. Hurricane Sandy closed New York markets for a second day. BP, Europe’s second-biggest oil company, and Deutsche Bank, Germany’s largest lender, advanced more than 4 percent. UBS (UBSN) AG, Switzerland’s biggest bank, jumped to a 15-month high after raising a profitability goal. Danske Bank (DANSKE) A/S tumbled 9.4 percent on plans to sell new shares. The Stoxx Europe 600 Index (SXXP) advanced 0.9 percent to 271.76 at the close of trading, extending this month’s gain to 1.2 percent. The gauge has rallied 16 percent from this year’s low on June 4 as European Central Bank policy makers agreed on an unlimited asset-purchase program and the Federal Reserve announced a third round of quantitative easing.
“Once again, we’re seeing good resilience of European companies,” said Jacques Porta, who helps manage $627 million at Ofi Patrimoine in Paris. “Expectations were so negative that there haven’t been many bad surprises.” Per-share profit has topped analysts’ forecasts at 53 percent of the Stoxx 600 companies that have reported results since Oct. 9, according to data compiled by Bloomberg. The S&P/Case-Shiller index of property values in 20 U.S. cities rose 2 percent in August from a year earlier, the biggest gain since July 2010, after rising 1.2 percent in July. The median forecast of 25 economists in a Bloomberg survey projected a 1.9 percent gain.
Emerging Stocks Risen First Day Three; India Shares Fall (Bloomberg)
Emerging-market stocks rose for the first time in three days as consumer discretionary shares rebounded from a six-week low. India’s benchmark equity gauge tumbled the most in three weeks after the central bank refrained from cutting interest rates. Grupa Lotos SA (LTS), Poland’s second-largest oil refiner, climbed to the highest level in more than a year after profit beat analysts’ estimates. State Bank of India Ltd. sank the most in almost three months. OAO Gazprom, Russia’s biggest natural gas exporter, dropped to a three-month low after the board approved a 25 percent spending increase this year.
The MSCI Emerging Markets Index gained 0.3 percent to 993.09 in New York. Copper rose in New York for the first time in nine sessions on the prospects for demand to strengthen in China. Bank of America Merrill Lynch raised its forecast for the country’s economic growth to 7.7 percent from 7.6 percent this year. India refrained from cutting borrowing costs today to fight price pressures, while Hungary lowered its main interest rate for a third month as concern about economic growth outweighed inflation. “The absence of bad news is good news,” Aurelija Augulyte, an emerging-markets strategist at Nordea Bank AB in Copenhagen, said by e-mail. “The markets are at the turn toward risk-off, but not there yet.” The MSCI Emerging Markets Index (MXEF) has lost 1 percent this month, headed for its worst month since May. Equity trading volumes in some Asian markets were lower than average as Hurricane Sandy shuttered U.S. stock markets for a second day and sent floodwaters gushing into New York City.
U.S. Stock Trading Shut for Second Day, Joining Bonds (Bloomberg)
For the first time in more than a century, weather has stopped U.S. equity trading for two straight days as Hurricane Sandy swept across New York City. NYSE Euronext (NYX) will this morning test a back-up plan in case its headquarters or trading floor are unable to open tomorrow. Stock trading was canceled for a second day, joining bond markets, as 90-mile-per-hour winds and surging seas paralyzed America’s financial capital. The first shutdown for consecutive days due to weather since 1888 was announced by NYSE Euronext after consultations with other exchanges. The Securities Industry and Financial Markets Association earlier recommended a full market close in dollar-denominated fixed-income securities after they shut at noon New York time yesterday.
Hurricane Sandy, the Atlantic’s Ocean’s biggest-ever tropical storm, slammed into southern New Jersey and churned north over land. The storm, 900 miles wide, produced life- threatening surges in a region with 60 million residents and caused what may add up to billions of dollars of damage. At least 316,500 customers were without power, and thousands of securities industry employees stayed home as Sandy threatened to flood lower Manhattan, home to much of the borough’s electrical infrastructure. “It’s an unprecedented event coordinated with an unprecedented storm,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said in a telephone interview yesterday. His firm oversees $250 billion in assets. “The response from the exchanges and regulators in terms of the closing of the market was certainly appropriate and remains appropriate for the exchanges to be closed tomorrow as well.”
Dollar Drops as Safety Bid Eases Before Chinese PMI Data (Bloomberg)
The U.S. dollar weakened versus most of its 16 major peers on speculation reports tomorrow will show improvement in Chinese manufacturing, brightening the global economic outlook and damping demand for haven assets. The greenback remained lower after dropping yesterday against the yen as Asian stocks rose and as U.S. capital markets prepared to reopen today after Atlantic storm Sandy swept through New York. Demand for the euro was tempered before data that may show unemployment in Europe climbed to a record last month, adding to signs the debt crisis is hurting growth. “We should start to see now further evidence that we’ve had a bottom on the growth profile, and we should see an improvement in PMI,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., referring to China’s economy and the nation’s manufacturing index. “It would probably be a negative for the U.S. dollar.”
The dollar bought 79.62 yen as of 9:29 a.m. in Tokyo after falling 0.2 percent yesterday. It fetched $1.2960 per euro following a 0.4 percent decline in New York, the biggest drop since Oct. 17. Europe’s shared currency was little changed at 103.20 yen after rising 0.2 percent to 103.18 yesterday. The dollar has strengthened 2.1 percent against its Japanese counterpart this month. It has declined 0.8 percent versus the euro since Sept. 30. The MSCI Asia Pacific Index (MXAP) of shares climbed 0.4 percent.
Aussie Dollar Remains Higher Before China Manufacturing Reports (Bloomberg)
Australia’s dollar remained higher before reports tomorrow that may show improvement in China’s manufacturing, brightening the export outlook for the South Pacific nation. The New Zealand dollar gained against all of its 16 major peers after data showing the nation’s home-building approvals rose in September to the highest level in more than four years. Australia is also set to release data on building permits today. The so-called Aussie and kiwi were also supported as gains in European shares and U.S. stock-index futures boosted demand for higher-yielding currencies. “Investors are expecting better figures from China, lending some support to the Aussie,” said Junichi Ishikawa, an analyst at IG Markets Securities Ltd. in Tokyo. “Gains in stocks tend to be a plus for the South Pacific currencies.” The Australian dollar bought $1.0367 as of 10:58 a.m. in Sydney from $1.0365 yesterday, when it gained 0.3 percent. The New Zealand dollar strengthened 0.2 percent to 82.20 U.S. cents.
A gauge of manufacturing based on a survey of purchasing managers in China, the world’s second-biggest economy, is predicted to increase to 50.2 in October from 49.8 in September, according a Bloomberg News poll of economists. The data will be published tomorrow.
Dollar Weakens While Canadian Shares Gain After Storm (Bloomberg)
The dollar fell the most in almost two weeks amid speculation damage from superstorm Sandy will be less severe than anticipated. Canadian stocks advanced and oil rose from the lowest level in almost four months. The dollar weakened 0.4 percent to $1.2960 per euro at 4 p.m. in New York and slid against nine of its 16 major counterparts. Canadian shares increased 0.5 percent, while Brazilian equities rallied 0.9 percent. The Stoxx Europe (SXXP) 600 Index climbed 0.9 percent. Oil rose 0.2 percent, paring an earlier gain of as much as 0.8 percent. S&P 500 futures expiring in December added 0.2 percent from Friday’s close as of 6:29 p.m. New York time, ahead of the reopening of equity markets.
“The numbers have yet to be established in terms of what that’s going to cost to clean up,” Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto, said in a phone interview. “Whether it’s disruptive any more than the last two days will be seen. It’s lightened liquidity in all markets, and even shut some down. There’s much less liquidity in the overall financial markets when New York is closed.” Sandy, now termed a post-tropical cyclone, came ashore in southern New Jersey at 8 p.m. New York time yesterday and drove floodwaters to life-threatening levels in a region with 60 million residents. U.S. equity markets were shut for a second day today, with the New York Stock Exchange saying it plans to open tomorrow. The Securities Industry and Financial Markets Association also recommended that trading resume tomorrow of U.S. dollar-denominated fixed-income securities.
Sandy Moves West Trailing Devastation, Deaths in the East (Bloomberg)
Superstorm Sandy churned west across Pennsylvania today, leaving the East Coast to the task of recovering from its trail of floods, death and destruction. The storm caused at least 40 U.S. deaths, according to the Associated Press, including 18 in New York City that Mayor Michael Bloomberg reported. Many government offices and U.S. stock markets, which shut for a second day, planned to open tomorrow, with the exception of New Jersey. Damage will total billions of dollars and mass transit, New York’s lifeblood, won’t be restored for days. “It’s fair to say the path of destruction that she left in her wake is going to be felt for quite some time,” the mayor said at a press briefing today. “Make no mistake about it, this was a devastating storm, maybe the worst that we have ever experienced.” He said he expects the number of deaths to go up as more information comes in.
While President Barack Obama announced plans to see storm damage in New Jersey tomorrow, Bloomberg said he asked the president not to come to New York. “We’d love to have him, but we have lots of things to do,” the mayor said. From Washington to Boston, officials of state and local governments, transit systems and businesses joined homeowners in assessing damage and arranging for recovery. Flooded runways and other damage to New York’s main airports mean they may not be able to open until Nov. 1, according to AMR Corp. (AAMRQ)’s American Airlines and US Airways Group Inc.
Labor Department Plans to Publish U.S. Jobs Report on Time (Bloomberg)
The Labor Department is striving to issue its monthly report on employment in the U.S. in three days as scheduled, a spokesman said today. “The employees at the Bureau of Labor Statistics are working hard to ensure the timely release of employment data on Friday, November 2,” Carl A. Fillichio, the department’s senior adviser for communications and public affairs, said in an e- mailed response to a Bloomberg inquiry. The report on October employment is due at 8:30 a.m. in Washington on Nov. 2. The jobs report, the last before the election, may help sway voters trying to decide between giving President Barack Obama another four years in office or to change course with Republican challenger Mitt Romney. The Obama administration has pointed to 24 straight months of job growth as evidence the economy is improving, while the Romney campaign has said progress is too slow.
Payrolls probably rose by 125,000 workers in October, and the jobless rate increased to 7.9 percent from a three-year low of 7.8 percent reached in September, according to the median forecast of economists surveyed by Bloomberg. The data won’t be affected by Hurricane Sandy because the surveys of employers and households were conducted in the middle of the month, before the storm struck. Federal government agencies in Washington were closed for a second day today in the wake of Sandy, the Atlantic’s largest- ever tropical storm. Federal agencies will reopen tomorrow, according to a statement on the website of the U.S. Office of Personnel Management.
Hurricane Sandy May Slow Economy as Workers Stay at Home (Bloomberg)
Hurricane Sandy may slow the world’s largest economy by keeping millions of U.S. employees from work and shoppers from stores in one of the nation’s most populated and productive regions. The storm may cut economic output by $25 billion in the fourth quarter, according to Gregory Daco, a U.S. economist at IHS Global Insight in Lexington, Massachusetts. He said that could reduce the fourth quarter pace of growth to between 1 percent and 1.5 percent, from the firm’s earlier estimate of 1.6 percent. Sandy lashed a region with 60 million people -- about as many as Italy -- that accounts for about a quarter of the $13.6 trillion U.S. economy, estimates Eric Lascelles, the Toronto- based chief economist at RBC Global Asset Management Inc. It forced the closures of U.S. financial markets, halted air and rail service and idled workers for the federal and state governments from Virginia to Massachusetts.
“If people aren’t going to Broadway shows and restaurants and hotels all those businesses that rely on people spending money are going to take a hit for sure,” said Stephen Bronars, a senior economist at Welch Consulting in Washington and an adjunct professor at Georgetown University. “People are still going to go out and buy a car or other durable goods they need, they’re just not going to do it this week. There will be winners and losers.”
S. Korea Output Rises for First Time in Four Months on Carmakers (Bloomberg)
South Korea’s industrial production rose for the first time in four months as stronger sales of cars and electronics helped offset the effects of a cooling global economy. Output rose 0.8 percent last month from August when it dropped a revised 0.9 percent, Statistics Korea said today. The median estimate of 11 economists in a Bloomberg News survey was for a 1.5 percent rise. Production rose 0.7 percent from a year earlier. “Demand both overseas and at home is still weak but it seems the worst has passed, with exports to major markets declining at a much slower pace,” said Lee Sung Kwon, an economist at Shinhan Investment Corp. in Seoul. “Things should improve sooner or later.”
Hyundai Motor Co. (005380), South Korea’s largest carmaker, and Samsung Electronics Co. (005930), the biggest maker of mobile phones, reported profit that beat analysts’ estimates in the third quarter. The resilience of exporters highlights the prospect for the economy to rebound after expanding at the slowest pace in three years in the three months through September. The won appreciated 0.4 percent to 1,091.50 per dollar yesterday in Seoul, according to data compiled by Bloomberg. The Kospi Index rose 0.4 percent.
Korea Best in Asia on Investor Confidence in Economy (Bloomberg)
Kang Man Soon wept on the day 15 years ago that she gave her gold wedding ring to the government, joining the millions who donated heirlooms to boost South Korea’s reserves during the Asian financial crisis. “We just couldn’t let the country go bankrupt after all the sacrifices and hard work to save it from Japanese colonial rule and civil war,” said Kang, whose husband fulfilled a promise to replace the gold band by giving her a one-carat diamond ring this year for her 60th birthday. “The economy is much bigger and stronger now and our cars and products and pop songs are famous around the world.”
Since the 1997-1998 slump, South Korea has ridden economic crises better than most advanced economies. The stock market has risen fivefold, led by Samsung Electronics Co. (005930), which now makes almost a quarter of the world’s mobile phones, and Hyundai Motor Co. (005380) and its affiliate Kia Motors Corp. (000270) are the most profitable of the six biggest global automakers. With growth this year set to beat Asia’s other wealthy nations, the three biggest credit rating companies upgraded South Korea’s debt, citing the ability to weather shocks better than its peers. “It’s this expensive lesson we learned that made us prepare so well for the next crisis,” said Kwon Dae Young, who was in charge of injecting foreign capital into banks at the finance ministry in 1997. “Korean companies now have much healthier balance sheets and the government is backed up well with a solid amount of foreign exchange reserves.”
BOJ Claims Front-Runner Rank in Innovation as Stocks Decline (Bloomberg)
The Bank of Japan’s first back-to- back monthly stimulus expansion since 2003, and the unveiling of an unlimited program to support bank loans, proved insufficient to reverse the yen’s strength and stoke the stock market. The skepticism that met the BOJ’s announcement yesterday underscores Governor Masaaki Shirakawa’s struggle to lift the world’s third-largest economy out of two decades of deflation. While he touted the bank as a front-runner in innovation, the central bank’s challenge is that corporate demand for credit is limited, said Junko Nishioka, chief economist at RBS Securities Japan Ltd. and a former BOJ official. Japan’s benchmark Nikkei 225 Stock Average slid 1 percent after the BOJ boosted its asset-purchase program by 11 trillion yen ($138 billion) and announced the facility to underwrite banks’ loans. The yen closed in Tokyo about 5 percent from a postwar high against the dollar and 26 percent stronger than what Nissan Motor Co. Chairman Carlos Ghosn said was a “neutral” value.
“Japanese companies are cutting capital spending as exports are weakening and domestic demand is shrinking -- in this environment, it’s hard to think lending will increase,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management in Tokyo. “They wanted to show that they were doing something” with yesterday’s decision, he said. Economy Minister Seiji Maehara attended his second BOJ meeting yesterday, highlighting political pressure for action from the central bank. The joint statement he issued with Shirakawa after the meeting was the first of its type, Maehara said. It said that the government “strongly expects” powerful easing until deflation is overcome.
Argentina’s Rating Cut to B- by S&P on U.S. Court Ruling (Bloomberg)
Argentina’s credit rating was cut one level by Standard & Poor’s, which cited a U.S. court ruling that prevents the country from honoring its debt without also paying holders of its defaulted bonds. S&P lowered the country’s rating to B-, six levels below investment grade and in line with that of Jamaica, Pakistan and Belarus, from B, according to an e-mailed statement today. “The downgrade of Argentina’s unsolicited rating reflects our opinion that the government may face increasing risks in the management of its debt after the U.S. appeals court ruling,” S&P said in the statement. “The decision may effectively increase Argentina’s liabilities and the government’s debt service.”
The U.S. Court of Appeals said Oct. 26 that Argentina can’t make payments on restructured sovereign debt while refusing to pay holders of its defaulted notes because doing so would discriminate against bondholders. The decision may help creditors including hedge fund Elliott Management Corp. collect $1.4 billion on defaulted debt. The perceived risk Argentina will renege on creditors is now the highest of any government in the world on speculation the nation will opt to cease all dollar debt payments rather than settle with the holdouts. The cost to insure Argentine debt against default soared as much as 576 basis points, or 5.76 percentage points, to 1,534 basis points after the ruling. It fell 37 basis points today to 1,496. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements. A basis point equals $1,000 annually on a contract protecting $10 million of debt.
U.K. October Consumer Sentiment Falls to Six-Month Low, GfK Says (Bloomberg)
U.K. consumer confidence fell to a six-month low in October as Britons become more pessimistic about their finances and spending, GfK NOP Ltd. said. An index of sentiment declined to minus 30 from minus 28 in September, the London-based research group said in an e-mailed report today. A gauge of how consumers see their personal financial situation over the next year dropped 5 points to minus 13, also the lowest in six months. Britain exited a recession in the third quarter as gross domestic product surged the most in five years. Still, the Confederation of British Industry said yesterday that while its retail sales index rose to a four-month high in October, “uncertainty over the global economic outlook could dent consumer confidence, hitting prospects for the retail sector.”
“While the Olympics are thought to have boosted GDP in the last quarter, the late summer boost in consumer sentiment has now faded,” said Nick Moon, managing director of social research at GfK. “The fragility of the recovery is underlined by the fact that people are more worried about their own financial situation over the next 12 months. This certainly doesn’t suggest there will be a spending boom on the back of the official emergence from recession.” A measure of Britons’ outlook for the economy over the next 12 months fell 2 points to minus 29 in October, GfK said. A gauge of the climate for making major purchases decreased 2 points to minus 33. GfK interviewed 2,004 people between Oct. 5 and Oct. 14.
Bank of England Governor Mervyn King said earlier this month that cooling inflation over the past year has “somewhat” eased the squeeze on consumers. Still, policy makers have said the inflation outlook remains uncertain as energy costs increase. Officials will decide on Nov. 8 whether to extend so- called quantitative easing after they complete their latest round of bond purchases next month.
Spain Narrows Central Government Budget Deficit to 4.39% (Bloomberg)
Spain’s central government budget deficit narrowed in September as a sales-tax increase buoyed government revenue, boosting Prime Minister Mariano Rajoy’s campaign to resist asking for a sovereign bailout. The central government’s deficit was 4.39 percent of gross domestic product in the nine months through September, compared with 4.77 percent in the eight months through August. Value- added tax receipts surged 11.9 percent in September from a year earlier as an increase came into effect, Deputy Budget Minister Marta Fernandez Curras told reporters in Madrid late yesterday. “All these developments and read-outs allow us to be optimistic about reaching our budget objectives,” Curras said. “The central government deficit is under control.”
Even as the government says the central government’s balance is within target, Rajoy is struggling to control regional spending and a swelling social-security shortfall. The prime minister, seeking to deliver on his European commitment of limiting the overall public sector deficit to 6.3 percent of GDP this year, is facing mounting pressure to trigger the European Central Bank’s bond-buying program by signing up to a European rescue package.
