Thursday, April 30, 2015

Reuters News - U.S. economy stumbles in first quarter as weather, low energy prices weigh

(Reuters) - U.S. economic growth nearly stalled in the first quarter as harsh weather dampened consumer spending and energy companies struggling with low prices slashed spending.
Gross domestic product expanded at an only 0.2 percent annual rate, the Commerce Department said on Wednesday. That was a big step down from the fourth quarter's 2.2 percent pace and marked the weakest reading in a year.
A strong dollar and a now-resolved labor dispute at normally busy West Coast ports also slammed growth, the government said.
While there are signs the economy is pulling out of the soft patch, the lack of a vigorous growth rebound has convinced investors the U.S. Federal Reserve will wait until late this year to start hiking interest rates.
The recovery is the slowest on record and the economy has yet to experience annual growth in excess of 2.5 percent.
"The U.S. economy has yet to demonstrate the self-sustaining resilience that the Fed wants to see before raising interest rates," said Diane Swonk, chief economist at Mesirow Financial in Chicago. "A June liftoff is now off the table, our forecast for a September move holds but even that has become tenuous."
Fed officials at the end of their two-day policy meeting on Wednesday acknowledged the softer growth, but shrugged it off as "in part reflecting transitory factors."
The dollar hit a nine-week low against a basket of currencies. Prices for U.S. Treasury debt fell in line with a global bond sell-off, sparked by a poorly received five-year German bond auction. U.S. stocks were trading lower.
Economists had expected the economy to expand at a 1.0 percent rate. The sharp growth slowdown is probably not a true reflection of the economy's health, given the role of temporary factors such as the weather and the ports dispute.
"The extent and depth of the weakness in today's GDP report, sets the U.S. up for another disappointing though somewhat better GDP report in the second quarter. We are not ready to throw in the towel for the year," said Scott Anderson, chief economist at Bank of the West in San Francisco.
The economy has had a jerky recovery from the 2007-2009 financial crisis, with the first quarter marking only the latest setback. The government did not quantify the impact of the weather, the strong dollar, lower energy prices and the ports disruptions on growth last quarter.
Economists, however, estimate unusually cold weather in February chopped off as much as half a percentage point, with the port disruptions shaving off a further 0.3 percentage point.
The weather impact was evident in weakness in consumer spending. Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, slowed to a 1.9 percent rate. That was the slowest in a year and followed a brisk 4.4 percent pace in the fourth quarter.
The sharp moderation in consumer spending came even though households enjoyed huge savings from a big drop in gasoline prices. Consumers boosted their savings to $727.8 billion from $603.4 billion in the fourth quarter, which should provide a tailwind for future consumer spending.
Construction also took a hit, while lower energy prices, which have cut into domestic oil production, undermined business investment.
Spending on nonresidential structures, which includes oil exploration and well drilling, tumbled at a 23.1 percent rate. That was the fastest pace of decline in four years and the first contraction since the first quarter of 2013.
The decline was driven by mining exploration, shafts and wells investment, which plunged at a 48.7 percent pace.
Nonresidential structures lopped off 0.75 percentage point from growth.
Schlumberger (SLB.N), the world's No. 1 oil-field services provider, has slashed its capital spending plans for this year by about $500 million to $2.5 billion, while competitor Halliburton (HAL.N) cut its by about 15 percent to $2.8 billion.
Economists believe the bulk of the spending cuts were front-loaded into the first quarter, and they expect they will present less of a drag on growth in the April-June quarter.
"The weakness in business investment in response to the oil price shock may be transitory, but we continue to have doubts that the next leg of faster investment will kick in if GDP growth, especially consumer demand, does not improve significantly," said Dana Peterson, an economist at Citigroup in New York.
The dollar, which gained 4.5 percent against the currencies of the United States' main trade partners in the first quarter, weighed on trade, as did the West Coast ports dispute. Trade subtracted 1.25 percentage points from first-quarter growth.
There was a surprise increase in inventory accumulation, which added 0.74 percentage point to GDP growth.
Inventories increased $110.3 billion, the largest gain since the third quarter of 2010 and one that suggests inventories will weigh on growth in the second quarter.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Wednesday, April 29, 2015

Bloomberg News - Strong Franc Brings Bonanza to Swiss Shoppers Seeking Bargains

Fourteen weeks after the Swiss National Bank abolished its cap on the franc, shoppers are cashing in.
"I collect rare comics and often order them online as they are hard to find in stores," Raphael Gut, a 40-year-old web designer, said as he left a post office in central Zurich. "When the euro plunged, I was able to bid more in the auction for a piece I wanted for a long time."
Gut and his fellow consumers are reaping the benefits of a 15 percent jump in the Swiss currency against the euro this year that has added to the appeal of shopping in neighboring Austria, Germany, France and Italy, where prices are significantly lower. That's undermining domestic demand, one of the main pillars of Swiss output in recent years.
Retail sales declined the most in more than a decade in February, and the pace of economic growth this year is set to be half of what it was in 2014. Data on Wednesday showed that while in March the UBS Consumption Indicator recovered further from a two-year low, "a continued decline in retailer sentiment has cast a shadow on the outlook for private consumption." The KOF Leading Indicator on Thursday is expected to stay near the weakest level since 2011.
The central bank's Jan. 15 decision to give up its ceiling on the franc of 1.20 per euro means Swiss consumer prices are falling, as the stronger currency keeps down the cost of imports but makes exports less competitive. The SNB foresees prices falling 1.1 percent in 2015, with the annual inflation rate not turning positive again until 2017.
"Switzerland is a small, open economy and the shock of the franc's appreciation won't fully be offset," said David Marmet, an economist at Zuercher Kantonalbank in Zurich. Still, "domestic demand will benefit from cheaper imports," he said.
Anecdotal evidence indicates the Swiss have taken advantage of their new spending power and are scooping up wares across the border.
"After the euro dropped I went for two big shopping sprees'' in the German town of Konstanz, said Sabrina Rohr, 22, who works in retail in Switzerland. "I've never done that before."
Customs office data in Loerrach, on the German border to Switzerland, shows that the number of  export forms, which allow shoppers to reclaim value-added tax on goods they're bringing back into Switzerland, increased 27 percent in the first quarter from a year earlier.

Online shopping appears to be getting a boost too. The Swiss post office has seen the number of packages from abroad rise 10 percent this year, according to Oliver Flueeler, a spokesman for Die Schweizerische Post AG. To meet demand, the company may increase capacity, he said.
To discourage patrons from shopping elsewhere, local businesses in Switzerland are adjusting pricing. Signs announcing exchange-rate discounts hang prominently in several storefronts in central Zurich.
"Purchasing power is gaining" because of the strong currency, said Roland Klaeger, an economist at Raiffeisen Schweiz in Zurich. "It won't be that consumption can totally offset the export weakness," he said. "But immigration and low interest rates are also a demand support."
As for insurance company employee Vera Moser, 24, the better exchange rate means she's traveling more, including an impromptu visit to friends in Berlin.
"When it comes to bigger sums like holidays one can actually benefit from the strong franc," she said. "I think I wouldn't have booked a flight so spontaneously if it were more expensive."
Even so, not everyone is participating in the shopping bonanza. With companies, particularly in the manufacturing sector, seeing their profit margin eroded due to the stronger currency and extending employee's working hours to compensate, some in Switzerland are specifically trying to support domestic producers.

"I hardly ever buy stuff online," said Judith Egloff, a 56-year-old biologist. "Given the current market conditions for local stores, it's even more important to buy directly from them."

Tuesday, April 28, 2015

BBC News - China overtakes France in vineyards

Workers tend to grape vineyards near Fresno,California, USA,
China has become the second-largest wine-growing area in the world after Spain, pushing France into third place.
The International Organisation of Vine and Wine (IOVW) said China now had 799,000 hectares (1.97 million acres) of land devoted to wine growing,
That compared with 1.02 million hectares for the biggest wine-growing area of Spain.
But France remained the biggest producer of wine, producing 46.7 million hectolitres (mhl).
France also made the most from selling wine abroad, raking in more than €7.7bn.
The United States remains the biggest consumer of wine as at 30.7mhl - 13% of all global wine produced last year - followed by France and Italy.
Global wine consumption overall fell in 2014 by 2.4mhl to 240mhl.
China has rapidly emerged as a major player in viniculture, accounting for 11% of the territory given over to vineyards last year, up from 4% in 2000.
The biggest importers of wine were Germany, the UK and the US with total global trade valued at €26bn, the IOVW added.

Friday, April 24, 2015

Reuters News - Asian central banks to ease further, but effects may be muted: Reuters poll

A Chinese national flag flutters outside the headquarters of the People's Bank of China, the Chinese central bank, in Beijing, April 3, 2014. REUTERS/Petar Kujundzic
(Reuters) - Emerging Asian central banks are expected to cut interest rates again in the coming months, but economists polled by Reuters are doubtful the moves will significantly boost growth or inflation.
The findings echo results from earlier this week in Reuters surveys of more than 250 economists in Europe and North America who also expect more easing.
But the polls there showed only modest upgrades to growth estimates and a still depressed outlook on inflation.[ECILT/WRAP]
Twenty-seven central banks around the world have eased monetary policy in some manner or other so far this year.
The Reuters surveys across Asia, which bring the total number of forecasters polled above 300 globally this week, found nearly all central banks in the region, with a few exceptions such as New Zealand and South Korea, were set to ease policy again.
The People's Bank of China will probably loosen policy most in the region and is expected to cut both of its two key interest rates by end-June and lower banks' reserve requirement ratio again soon afterward. [ECILT/CN]
The PBOC cut its benchmark lending rate by 25 basis points last month, followed by an aggressive one-percentage-point cut in banks' reserve requirement ratio over the weekend.
The Reserve Bank of India, which has already cut rates twice outside regular meetings since January, will probably do so once more ahead of its June meeting and lower its benchmark repo rate again before the end of this year. [ECILT/IN]
"There is growing realization that demand-supportive and anti-deflationary measures need to be undertaken expeditiously, preferably in the first (half) of the year," wrote Michael Spencer, Asia Pacific research head at Deutsche Bank.
But whether those steps will work remain in doubt.
Median estimates for growth and inflation across all emerging Asian economies, and even Japan, have been downgraded from a survey three months ago.
That suggests further stimulus will probably not work as well as policymakers and investors hope.
"In China, we maintain our view that there are rising risks of a mini-hard landing in 2015, as policy easing has not happened as quickly and aggressively as we had expected," Spencer added in the note.
China's gross domestic product is expected to expand at a steady 7 percent in the next four quarters, unchanged from where it is currently and implying growth will stay stuck at a six-year low for a long time.
A mix of poor factory activity, rapidly cooling inflation, a weak property market and uneven export demand has buffeted China's economy.
Beijing has been pumping trillions of yuan into the banking system to re-engineer its economy, shifting to one led by consumption rather than exports and investment. But weak loan demand has dented those efforts.
Tokyo has had an even tougher battle. The Bank of Japan has been conducting some form of quantitative easing since the late 1990s with a short interruption, but on the whole that has done little to boost growth or lift inflation. [ECILT/JP]
Economists surveyed expect Australia and South Korea to report slightly slower growth this year and next compared with the January poll.
India's economy is predicted to grow 7.4 percent this fiscal year and 7.8 percent next, but even that is based on expectations for two more rate cuts from the RBI this year.
The International Monetary Fund expects India's growth rates to be the fastest for any economy in the world.
Inflation is forecast to cool this year throughout Asia, notably in Australia and New Zealand as economists expect inflation rates of less than 2 percent.
Disinflation fears have crept in globally since the turn of the year after a slump of more than 50 percent in oil prices started cutting inflation in economies that import oil.
Although inflation is expected to be weak even in the United States, economists see the Federal Reserve raising interest rates this year. But those rate hikes are expected to be more gradual compared with forecasts in previous polls. [ECILT/US]
(For other stories from the global poll see)

(Polling by Shaloo Shrivastava and Sarmista Sen in Bengaluru and bureaus across Asia; Editing by Jacqueline Wong)

Thursday, April 23, 2015

Bloomberg News - Greece Buys Six Weeks’ Space With Transfer of City Funds

Greek officials expect an order that local governments transfer funds to the central bank will keep the country afloat until the end of May as European policy makers turn up the heat on Prime Minister Alexis Tsipras.
Municipalities’ reserves are estimated at about 1.5 billion euros ($1.6 billion), according to a person familiar with the matter, who spoke on condition of anonymity. Officials in Athens ruled out also seizing pension funds and the cash reserves of state companies because there wasn’t a need and the move would unnecessarily fuel anxiety, the person said.
With bailout talks stalled, access to cash is becoming increasingly critical. Resistance at the European Central Bank to further aiding the country’s stricken lenders is growing and the ECB is studying measures to rein in emergency funding for Greek banks, people with knowledge of the discussions said.
“A bigger effort by the Greek side is needed so that we can close the topic in the interest of both sides,” European Commission President Jean-Claude Juncker said in Vienna. “The intensity of the talks has increased in the past 4-5 days but not to the extent that they are ripe enough to come to a quick conclusion.”
Tsipras may meet with German Chancellor Angela Merkel on the sidelines of a European Union summit in Brussels on April 23, a Greek government official said Tuesday.

Extraordinary Meeting

Although a final accord is unlikely at a meeting of euro-area finance ministers in Latvia on Friday, another extraordinary meeting could be called at the end of April if needed.
“The sooner they come up with some kind of an agreement the better, but so far Europe has never missed the opportunity to miss an opportunity,” Standard Chartered Bank Global Chief Economist Marios Maratheftis said in a Bloomberg TV interview.
Since Tsipras assumed office in January, Greece has been using up its cash reserves to meet its obligations.
Greek lenders are mostly locked out of regular ECB cash tenders and instead have access to about 74 billion euros of emergency liquidity assistance from their own central bank -- an amount that has been reviewed weekly by the ECB.
Greek bank bonds, including those of National Bank of Greece SA fell to records. National Bank’s 750 million euros of 4.375 percent bonds due April 2019 fell 0.8 cent on the euro to 54.35 cents, according to data compiled by Bloomberg. Piraeus Bank SA’s 5 percent notes due March 2017 fell for an eighth day to 60.73 cents in the longest losing streak since October, the data show.
Credit-default swaps insuring $10 million of Greek debt for five years rose to $5.5 million in advance and $100,000 annually, according to CMA. That signals an 87 percent probability of default, up from 84 percent yesterday.
The country is facing about 1 billion euros in International Monetary Fund loan repayments in the first two weeks of May and while it hasn’t drawn any funds from its bailout loan since August 2014, the government won’t miss any of those payments, the person said.

Wednesday, April 22, 2015

BBC News - ZEW: Global woes rattle German investors

Trader at the Frankfurt stock exchange
Germany has a robust labour market but there are fears over exports
Investor sentiment in Germany has shown an unexpected fall after rising steadily for the past five months, a closely watched survey has indicated.
The ZEW indicator of economic sentiment showed confidence among German investors fell to 53.3 points this month, from 54.8 in March.
However, analysts said there was no cause for concern.
ZEW president Clemens Fuest said Germany was in "good shape", but the weak global economy could hit exports.
The index was based on the responses of 238 investment analysts between 7 and 20 April.
Economists at the Mannheim-based institute said the investors surveyed expected a "very good situation" to continue for at least the next half-year, adding that German private consumption would strengthen further, but were concerned aboutGreece's debt crisis as a factor in investors' weaker expectations.
The German government plans to raise its growth forecast for the economy, Europe's biggest, to 1.8% this year, up from its current estimate of 1.5%.
Berenberg Bank economist Holger Schmieding said: "Strong tailwinds from a robust labour market, low oil prices and a competitively priced exchange rate, as well as the reform successes in countries such as Spain, are propelling the German economy forward."

Tuesday, April 21, 2015

Bloomberg News - The Mystery of China’s Gold Stash May Soon Be Solved

Photographer: Chris Ratcliffe/Bloomberg

China’s push to challenge U.S. dominance in global trade and finance may involve gold -- a lot of gold.
While the metal is no longer used to back paper money, it remains a big chunk of central bank reserves in the U.S. and Europe. China became the world’s second-largest economy in 2010 and has stepped up efforts to make the yuan a viable competitor to the dollar. That’s led to speculation the government has stockpiled gold as part of a plan to diversify $3.7 trillion in foreign-exchange reserves.
The People’s Bank of China may have tripled holdings of bullion since it last updated them in April 2009, to 3,510 metric tons, says Bloomberg Intelligence, based on trade data, domestic output and China Gold Association figures. A stockpile that big would be second only to the 8,133.5 tons in the U.S.
“If you want to set yourself up as a reserve currency, you may want to have assets on your balance sheet other than other fiat currencies,” Bart Melek, head of commodity strategy at TD Securities, said by phone from Toronto. Gold is “certainly viewed as a viable store of value for an up-and-coming global power,” he said.
China may be preparing to update its disclosed holdings because policy makers arepressing to add the yuan to the International Monetary Fund’s currency basket, known as the Special Drawing Right, which includes the dollar, euro, yen and British pound. The tally may come before the IMF’s meetings on the SDR next month or in October, Nomura Holdings Inc. said in an April 8 report.

Monetary Role

Gold played a central role in the international monetary system until the collapse of the Bretton Woods framework of fixed exchange rates in 1973, according to the IMF. While the role of bullion has diminished since then, the fund still holds 2,814 tons and most central banks have some on their balance sheets. Russia more than tripled its holdings since 2005.
China is the world’s largest gold producer and ranked behind only India among top consumers last year, but the amount of metal its central bank last reported holding in 2009 accounts for just 1 percent of foreign-exchange reserves, which have surged more than fivefold in a decade and are the biggest in the world. Most of that is in dollars.
The IMF estimates the dollar makes up 63 percent of world central bank holdings, while the No. 2 currency, the euro, accounts for 22 percent. Data from the Society for Worldwide Interbank Financial Telecommunication show the U.S. currency was used for 43 percent of global payments in February.

Approved Programs

While China is promoting the yuan internationally, Swift data show the currency was used for only 1.8 percent of international payments in February. Private investors -- both Chinese and non-Chinese -- can move their money in and out of the country only through approved programs and in limited amounts, and changes in the currency’s value are only permitted in limited ranges.
Adding gold and other assets would ease China’s reliance on the dollar, said Nathan Chow, a Hong Kong-based economist at DBS Group Holdings Ltd.
It may bolster the view China has “a currency that’s well backed by a range of different assets,” said Steven Dooley, a Melbourne-based currency strategist at Western Union Business Solutions for Asia-Pacific. “The most-liquid currencies tend to have a wide range of foreign-exchange reserves.”

Market Mystery

With China disclosing so little about its hoard, finding out how much the central bank has in its vaults is of increasing interest to traders. Confirmation of bigger holdings would signal the importance of the metal as a reserve asset and boost market sentiment, TD Securities’ Melek said. At a time when prices are languishing, the buying could give support, said Suki Cooper, director of commodities at Barclays Plc in New York.
Bullion climbed from $882.05 an ounce at the end of 2008 to a record $1,921.17 in 2011 as investors sought safety from currency depreciation and the threat of inflation. Prices plunged 28 percent in 2013 as rallying stocks and a rebounding economy eroded the appeal of the metal, which traded at $1,196.14 on Tuesday.
China may not have expanded holdings by much. The dollar has strengthened since the middle of last year on expectations the Federal Reserve will boost interest rates, making the U.S. currency more attractive than bullion, which generally offers returns only through price gains.
In a rare comment on gold, Yi Gang, the central bank’s deputy governor, said in March 2013 that the country could only invest as much as 2 percent of its foreign-exchange holdings in gold because the market was too small. The press office of the People’s Bank of China in Beijing didn’t respond to a fax seeking comment sent on April 14.

More Scope

“I wouldn’t expect a huge jump in gold holdings,” said Andy Ji, a currency strategist and China economist at Commonwealth Bank of Australia in Singapore.
Ashish Bhatia, the World Gold Council’s director, central banks and public policy, in New York, said there’s a lot of room for China to expand. It’s ideal for central banks to have 4 percent to 10 percent of assets in gold, he said. The PBOC may already hold at least 3,000 tons, said Warren Hogan, chief economist at Australia & New Zealand Banking Group Ltd. in Sydney.
“Gold has always been, through the history of China, a way to project power,” Kenneth Hoffman, a metals and mining analyst at Bloomberg Intelligence, said in an interview on April 9. “They are thinking about how to make the yuan more international, and so this is a possible reason why they are buying so much gold.”

Monday, April 20, 2015

Reuters News - China makes big cut in bank reserve requirement to fight slowdown

(Reuters) - China's central bank on Sunday cut the amount of cash that banks must hold as reserves, the second industry-wide cut in two months, adding more liquidity to the world's second-biggest economy to help spur bank lending and combat slowing growth.
The People's Bank of China (PBOC) lowered the reserve requirement ratio (RRR) for all banks by 100 basis points to 18.5 percent, effective from April 20, the central bank said in a statement on its website
"Though the growth in the first quarter met the official target of around 7 percent for 2015, the slowdown in several areas, including industrial output and retail sales, has caused concern," said a report published by the official Xinhua news service covering the announcement.
The latest cut, the deepest single reduction since the depth of the global crisis in 2008, shows how the central bank is stepping up efforts to ward off a sharp slowdown in theeconomy.
"The size of the cut is more than expected," said Shenwan Hongyuan Securities analyst Chen Kang.
"It's going to release around a trillion yuan (in liquidity) at least."
Weighed down by a property downturn, factory overcapacity and local debt, growth is expected to slow to a quarter-century low of around 7 percent this year from 7.4 percent in 2014, even with expected additional stimulus measures.
However, the last RRR cut was seen as more defensive by some economists, as it served primarily to offset increasing capital outflows that were exerting a drain on the money supply, making it difficult to guide real lending rates down.
Indeed, Chinese bankers have proven resistant to extending more credit, saying they are also under orders to maintain profitability and reduce the amount of bad loans on their books, but their intransigence appears to have frustrated Beijing.
Premier Li Keqiang publicly exhorted banks to lend more to the real economy during a visit to major banks on Friday.
On the corporate side, executives say they are wary of embarking on fresh investments, given weak demand and weakening producer pricing power.
As a result think-tanks and advisers to the government are polarizing into those calling for more stimulus to arrest the slowdown and a rival camp emphasizing structural reforms as the route to sustainable growth.
"The amplitude of the reduction reflects a more aggressive policy signal," said Xie Yaxuan, macroeconomics research director at China Merchants Securities.
"The reduction should help make up for the negative growth of foreign exchange in the first quarter, which created a hole in the monetary base," he said.
The central bank also announced targeted RRR cuts; an additional 100 bps cut for rural credit cooperatives and village banks, as well as a 200 basis point cut for the ChinaAgricultural Development Bank, one of China's major policy lenders.
The PBOC last cut the RRR for all commercial banks by 50 basis points on Feb. 4, the first industry-wide cut since May 2012.
The central bank has also cut interest rates twice since November in a bid to lower borrowing costs and spur demand, but while short-term money rates have come down in recent weeks, long-term lending to the real economy has not shown much sign of reaction.
"Real interest rates are extremely high, and they are also quite high relative to returns," said Arthur Kroeber, head of research at Gavekal Dragonomics.
"RRR has been at twenty percent for a long time, and that has created room for it to go down further."
(This story corrects the spelling of Gavekal Dragonomics in the penultimate paragraph)

(Reporting by Gui Qing Koh, Kevin Yao, Li Zheng and David Stanway; Writing by Pete Sweeney; Editing by Will Waterman)

Friday, April 17, 2015

BBC News - Greece would struggle to find creditors outside Europe, says Schaeuble

Greece would struggle to find creditors outside the EU and IMF, German finance minister Wolfgang Schaeuble has said.
Flags and the Acropolis
He said it would be welcome to try to find investment from Beijing or Moscow, but may have difficulties.
His warning came after fears of a Greek debt default saw its borrowing costs jump 3.5 percentage points to 27%.
Greek Finance Minister Yanis Varoufakis said his government refuses to consider leaving the EU: "Toying with Grexit... is profoundly anti-European."
He also promised to "compromise, compromise, compromise without being compromised" to satisfy current creditors.
Both men were speaking at talks in Washington.
On Wednesday, ratings agency S&P downgraded Greece's credit rating.
Yields also rose on longer-term Greek borrowing, with the 10-year bond yield - the amount investors demand for lending - rising one percentage point to 13%.
Mr Schaeuble said that the Greek government needs to find creditors.
"The Europeans have said, OK, we are ready to do it [lend money] until 2020... If you find someone else, whether it's in Beijing, in Moscow, in Washington DC, or in New York who will lend you money, ok, fine, we would be happy. But it's difficult to find someone who is lending you in this situation amounts [of] €200bn."
He added that Greece must focus on increasing its competitiveness and primary surplus.
Mr Schaeuble was speaking after the Greek government's borrowing costs surged on Thursday.

'Not recommended'

The Financial Times had earlier reported that Greece had made an "informal approach" to the International Monetary Fund to have its bailout repayments delayed, but had been rebuffed.
But the head of the International Monetary Fund (IMF), Christine Lagarde, said at the World Bank spring meeting in Washington: "We have never had an advanced economy asking for payment delays.
"Payment delays are analysed as additional financing granted to that country. Additional financing means additional contribution by the international community - some of which are in much direr situations than the country eventually seeking those delays.
"Payment delays had not been granted by the board of the IMF in the last 30 years and it was eventually granted to a couple of developing countries and that delay was not followed by very productive results.
"It's clearly not a course of action that would actually fit or be recommendable in the current situation."
Greece owes the IMF some €1bn (£720m, $1.06bn) in repayments next month.

Market concerns

Many in the markets think the Greek government will struggle to make those payments if it does not agree an economic reform package with European creditors soon.
Failure to agree a plan with creditors will mean that the country will default, a development that could force the government to put limits on money transfers and even lead the country to leave the euro.
EU spokesman Margaritis Schinas said on Thursday that the EU was "not satisfied with the level of progress made so far" in debt negotiations.
BBC economics editor Robert Peston said if Greece misses a debt payment, that does not necessarily mean it will leave the euro.
"The government could follow the example of Cyprus and impose restrictions on the export of capital from the country, to conserve as much cash as possible in a banking system too close to collapse for comfort," he said.
"And it could create its own IOUs, a sort of parallel domestic currency interchangeable with euros, to pay its employees and trade creditors."
Mr Schaeuble had warned that he did not expect an agreement between Athens and its creditors in the next week.


But Greek Prime Minister Alexis Tsipras on Thursday said he was "firmly optimistic" the Greek government could reach a deal with its creditors.
"Despite the cacophony and erratic leaks and statements in recent days from the other side, I remain firmly optimistic that there will be an agreement by the end of the month," Mr Tsipras said.
According to Mr Tsipras, several points of agreement had been found since talks first started, including on areas such as tax collection, corruption and initiatives to distribute the tax burden on those who have the ability to pay.
But he said the two sides still disagreed on four areas: labour issues, pension reform, an increase in value-added taxes and privatisations, which he referred to as "development of state property".
In a later tweet, he said he was "certain that Europe will choose the path to democracy".