Euro-Zone vs. Greater China…

The euro zone's economic downturn deepened this month, even before Cyprus' bailout troubles, but China's factories took a completely different path and moved up.

The euro zone survey results will add to more obstacles for policymakers in Euro area to revive the common currency (Euro) and now to deal with the potential default of one of its members.

Data also showed leading economy Germany with signs of fatigue where the German economy release its report yesterday to show that the Manufacturing PMI indicator has dropped to 48.9. The PMI indicator, It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.

On the other hand, French businesses turned in their worst performance in four years, probably plunging the euro zone's second-biggest economy into a recession.

Moving to the Greater China, China showed positive signs during the last period, where factories increased their pace after the previous drop, pointing towards solid but not spectacular first-quarter growth in the world's second-largest economy

The Chinese PMI for March revived to 51.7 in March from 50.4 in February, but remained below a two-year high of 52.3 reached at the beginning of the year.

Microsoft vs Google vs Apple

The world’s leading tech companies are advancing at an incredible rate, with new operating system platforms, great new devices, gadgets and new cloud services that connect everything together.

Microsoft:

Microsoft provides its new operating system that calls Windows 8 operating system - greatly redesigned for touch screen is entering the mobile device business on a huge door. Its first ever owned tablet is on the way, amazing Windows 8 based Smartphone’s like Nokia Lumia launched, the Xbox great innovations, revitalized & richer app store… New MS Office coming early 2013.

Google

Google finally has the hardware that can support its cloud domination. With amazing new versions of Android OS running the world’s best Smartphone’s & Tab’s such as Samsung Galaxy S3 & Note 2, Samsung Note 10.1 & Nexus 7, its overrunning Apple’s inventory at a very fast rate. Google estimated that its app store has a growth rate of one billion app downloads per month! Impressive.

Apple

2012 has been a great year for Apple. Ipad is still the leading tablet, Macbook Air still the slickest laptop and OSX the most refined computer operating system. IPhone might’ve fallen from the top spot for a while, but we are just witnessing a major come back with Iphone 5 and iOS6. Most recent reports say that in 2013 Apple will introduce its first TV.

Egyptian Factories' Crisis and its negative Impact on the EGP

We are here is describing the awful conditions that the Egyptian factories are currently suffering, for instance Abu al-Makarim factory, which was once busy with staff carrying Egyptian carpets for export, are now rust-encrusted and totally closed after worker strikes and financial problems forced the plant to go out of business eight months ago.

This deserted facility in Madinat Elsadat, near Cairo, is one of thousands that have fallen victim to the Economical instability of the Egyptian revolution.

On the other hand, the remaining factories are suffering by power cuts, strikes, insecurity, and difficulty securing loans in credit markets where they are squeezed out by an indebted government.

The plight of Egypt's industrialists points to the wide range of ways which the economic environment has deteriorated in the two years since Hosni Mubarak was toppled.

As a result for the political conflict, the foreign investments have shrunk and foreign currency reserves have slid to critically low levels as President Mohamed Mursi's Muslim Brotherhood prepares for parliamentary elections starting in late April.

At Madinat Elsadat, 75 of the 525 factories that once operated in the complex have shut down since the revolution, according to a report by the Centre for Trade Union & Worker Services. Up to half of the factories are struggling.

Also, the report estimates over 4,500 factories have shut since the revolution, swelling by hundreds of thousands the ranks of unemployed in a nation where two-fifths of the people live on or around the poverty line. The unemployment rate reached 13%, according to official data, but analysts believe the actual rate is much higher.

The Abu al-Makarim Group, which had employed more than 4,000 workers at seven factories, had been struggling even before the uprising against Mubarak erupted in January 2011. The wave of industrial action that ensued was the final nail in its coffin.

The risks of doing business are heightened by a security vacuum which the police have been unwilling or unable to fill since Mubarak's rule ended.

In Madinat Elsadat, set up in the 1980s to shift population out of Cairo, police are few and far between. Gangs intercept shipments and steal goods on their way out of the industrial area.

Some investors closed up and left because of the lack of security and stability, and for some business owners, the security risks come from their own employees and according to their announcements There is no control over workers anymore. They were under a lot of pressure before the revolution so when everything became so loose, they became people who do not want to be controlled, asking for their rights.Workers demanding better salaries barricaded the gates of their cement factory with concrete blocks during one recent burst of industrial action.

Some Hints about Obama's Plan To Fix America

President Barack Obama continues to tout his plans to increase federal investment in the nation's ailing infrastructure, a $50 billion initiative that the White House claims will spur job creation and economic growth.

What remains unclear, however, is how the Obama administration plans to pay for this and other infrastructure initiatives that the President outlined in his State of the Union speech last month.

In a speech to the National Governors Association Monday, the President fleshed out additional details of the plan, announcing that his administration will create "regional teams" that will assist states in implementing infrastructure projects.

Market concern in Italy Renewed

The concerns Over Europe’s debt crisis renewed and triggered by Italy’s inconclusive election as recession-scarred voters repudiated budget rigor and established former comedian Beppe Grillo as a political force.

In the four-way race, pre-election favorite Pier Luigi Bersani won the lower house by less than a half a point. Silvio Berlusconi, the former premier fighting a tax-fraud conviction and charges of paying a minor for sex, called for a recount and won a blocking minority in the Senate. In its first national contest, Grillo’s group got more than 25 percent support.

“The political situation across Europe is effectively a race between austerity and reforms on the one hand and the rise of populist movements on the other,” said Alberto Gallo, head of European macro credit research at Royal Bank of Scotland Group Plc. “Austerity is painful, and if reforms are not implemented in time, you run the risk of social unrest and populism. It hasn’t happened so far in Greece, it hasn’t happened in Portugal or Spain, but we are very close in Italy.”

Berlusconi and Grillo, the candidates running to reverse the austerity implemented by incumbent Premier Mario Monti to contain the region’s financial crisis, scored about 55 percent of the popular vote. The euro fell to a six-week low, Italian bonds declined and U.S. Treasury notes rose as the results trickled in. 

Egyptian Stock Market Losses 5.4 billion Egy Pounds Last Week

Indices of The Egyptian Exchange (EGX) ended this week’s trading on a down note. Benchmark index EGX30 fell 1.55% or 89 points to shut below the 5650 level at 5626.92 points.

Similarly, EGX70 went down 2.6% or 12.91 points to 476.48 pts. The broader EGX100 pulled back 2% or 16.72 points to 807.37 points.

Market capitalization shed around EGP 5.4 billion to reach EGP 381 billion, compared with EGP 386.4 billion last week.

Companies In U.S.A. Plan To Increase Capital Spending…

U.S. companies’ capital spending plans are holding up, and mostly exceeding Wall Street forecasts, in the face of policy concerns created by arguments in Washington over the fiscal cliff, the debt ceiling and now automatic spending cuts.

Their willingness to spend on new offices, plants and machinery, as well as a pickup in deal making, shows that they are starting to dig into the massive amounts of cash that has been collecting more dust than interest on their balance sheets. That could prove a welcome counterpunch to a softer outlook for spending by consumers and government.

Meanwhile, not all the money will be spent on new projects, of course. And the spending plans announced so far are only slightly above last year's average. But they comfortably exceed the expectations of analysts, whose capex forecasts fell this year.

Market Close….

The euro hit a six-week low against the dollar on Friday, heading for a third straight week of losses, after the European Central Bank said banks will repay less than half the expected amount of loans and on uncertainty about Italy's election. On the week, the Common Currency fell 1.3% versus the US dollar.

Meanwhile, some strategists said they expect the euro to grind lower ahead of the outcome of Italian elections, which is not expected until next week. But they added the currency should find support around $1.3040, near the Jan. 10 low of $1.3037.

The yen dropped against the dollar and euro, with many investors forecasting further weakness as the Bank of Japan looked set to ease monetary policy further to fight deflation.

The dollar gained momentum after minutes of the U.S. Federal Reserve's latest meeting, released on Wednesday, fueled speculation the Fed may start to tighten monetary policy earlier than expected.

On the other hand, the Australian dollar regained ground after hitting a four-month low of $1.0221 against a broadly stronger U.S. currency on Thursday. It was last up 0.7 percent at $1.0318

UK, CHINA CENTRAL BANKS TO DISCUSS CURRENCY SWAP LINE

Britain said on Friday it hopes to set up a currency swap line with China soon to help finance trade, a move that will enhance London's drive to become a leading offshore center for Yuan trade.

China, in an effort to internationalize the yuan and eventually make it a world reserve currency, has already agreed swap lines with more than 15 other countries, mostly emerging markets.

The Bank of England said on Friday it would work with China's central bank to sign a final agreement shortly on a reciprocal three-year yuan-sterling swap, building on its statement last month that it was ready "in principle" to adopt the swap line.

Britain, always anxious to bolster London's status as Europe's biggest financial center, launched an offshore yuan currency and bond market to great fanfare last year.

A swap deal would cement its role as the leading center in the Group of Seven industrialised nations for offshore trade in the yuan - also known as the renminbi - helping it to see off potential rival yuan centers such as Frankfurt, Paris and New York, market watchers say.

Figures from global transaction services organisation SWIFT show that Britain is the leading center for offshore yuan trade outside Asia and has made far more progress in getting companies to invoice in yuan than the United States, for example.

By comparison, the yuan bond market in Hong Kong, the biggest offshore center for yuan trade, grew to around 350 billion yuan ($55.7 billion) in a little over two years from 2010, according to Thomson Reuters data.

The yuan is not freely convertible but China plans to make it basically convertible as early as 2015 and eventually put it on a par with the U.S. dollar.

The Bank of England said the swap arrangement would be used to finance trade and direct investment between the two countries and to support domestic financial stability if needed.

Egypt's agreement with [the IMF] is the key engine to get the economy out of this crisis.

The loan isn't nearly enough to mend Egypt's depleting foreign cash reserves or fix its budget deficit, but policymakers hope that the IMF's blessing of its economic reform plan will encourage foreign investors and governments to contribute additional cash and aid. "Reaching an agreement with the IMF is a positive signal that the Egyptian economy is able to heal," said Mr. Arabi during a presentation of economic indicators during the first half of Egypt's 2012/2013 fiscal year.
Economic growth in Egypt slowed to 2.2% in the second quarter of the current fiscal year that ends in June, said Mr. Arabi. Policymakers are targeting growth above 3% during the second half of the fiscal year, he said, which would require investments of EGP250 billion ($37.1 billion) this year. Egypt has attracted EGP112 billion ($16.6 billion) in investments so far this year, he added. 

The U.S. Federal Reserve will keep its loose monetary policy stance for a long while

American Policy Makers will keep its loose monetary policy stance for a long while despite increasing signs of concern among policymakers about the potential costs of asset buying, a top Fed official said.

"Fed policy is very easy and it's going to stay easy for a long time, I think," James Bullard, St. Louis Fed president, said in an interview with CNBC television.

Bullard said Fed policy has actually become more aggressive because outright purchases of Treasuries are more powerful than a previously existing maturity expansion program that did not involve balance sheet expansion.

He argued the economy could grow as much as 3 percent this year now that some of the key risks to the global economy, like the fiscal cliff or the prospect of a euro zone break-up, had receded.

Money Markets, Euro dropped After ECB Loan Repayment

Money market rates and the euro fell on Friday after the European Central Bank announced banks would make 62.8 billion euros worth of early repayments of three-year banking sector loans.

The repayment came in below the 130 billion euro Reuters poll consensus and means the level of surplus liquidity in the banking system, currently keeping interbank lending rates low, was likely to drain slower than expected.

Egypt is in desperate need for cash

The Egyptian government has almost finished its economic reform plan and will present it to International Monetary Fund representatives as soon as next week, said a government minister, in a long-delayed bid to secure a much needed $4.8 billion loan.
Ashraf Al Arabi, Egypt's minister of planning and international cooperation, told reporters on Thursday that the government will invite the IMF "within days" to discuss details of the loan and that he was "optimistic" that the advance could be secured.
Egyptian policymakers and investors say Egypt is in desperate need of the cash to avert an impending liquidity crisis and to patch a gaping budget deficit. 

Euro zone budget gap to fall despite recession, Spain to miss targets

Most euro zone countries will reduce their budget deficits this year even though the recession in the single currency area is likely to continue but some, like Spain, will badly miss agreed targets, European Commission forecasts showed on Friday.

France and Portugal will also miss their debt targets, the EU's executive said. All three countries have already indicated as much and will now hope for more leeway from Brussels.

The European Union executive said the euro zone economy would shrink 0.3 percent in 2013 after a 0.6 percent recession last year, but the aggregated budget deficit will fall to 2.8 percent of GDP from 3.5 percent. The euro slipped on the back of the forecasts. 

The euro zone is consolidating its public finances to regain market trust after excessive government spending, real-estate bubbles and lack of competitiveness triggered a sovereign debt crisis that sent the euro zone into recession.

Under EU budget rules, sharpened at the peak of the crisis in late 2011, euro zone countries can face fines if they fail to take action to meet deficit reduction targets set by EU finance ministers.

Progress has been uneven among the 17 countries sharing the euro. The main laggard was Spain, which badly missed the 6.3 percent of GDP deficit target for 2012 with a result of 10.2 percent. Even money the government spent on recapitalizing banks, the 2012 deficit is still well above target at 7.0 percent of GDP.

Jobless & The Outlook For This Period in Euro-Zone

Joblessness in the euro zone is set to peak at 12.2 percent, or more than 19 million people, in 2013, the Commission said, and both private and public consumption will not make any contribution to improving output, instead dragging on the economy.

The outlook raises the prospect of further interest rate cuts by the ECB to jump-start the economy by reducing the cost of lending for companies and families, although with banks reluctant to lend, any impact may be muted.

EURO ZONE ECONOMY TO SHRINK AGAIN IN 2013

The euro zone will not return to growth until 2014, the European Commission said on Friday, reversing its prediction for an end to recession this year and blaming a lack of bank lending and record joblessness for delaying the recovery.

The 17-nation bloc's economy, which generates nearly a fifth of global output, will shrink 0.3 percent in 2013, the Commission said, meaning the euro zone will remain in its second recession since 2009 for a year longer than originally foreseen.

The Commission, the EU executive, late last year forecast 0.1 percent growth in the euro zone's economy for 2012, but now says tight lending conditions for companies and households, job cuts and frozen investment have delayed an expected recovery.

The Commission sees the euro zone economy growing 1.4 percent in 2014, with a figure of -0.6 percent for 2012.

"The improved financial market situation contrasts with the absence of credit growth and the weakness of the near-term outlook for economic activity," said Marco Buti, the commission's director-general for economic and monetary affairs. "The labour market... is a serious concern," he said, in a preamble to the Commission's latest forecasts.

The European Central Bank's promise last year to do what it takes to defend its common currency has removed the risk of a break-up of the euro zone, and member countries' borrowing costs have come down from unsustainable levels.

German business morale jumps at fastest pace in over 2 years

German business morale surged at its fastest pace in over two years in February, pushing higher for a fourth consecutive month and pointing to a solid recovery in Europe's largest economy after a dismal end to 2012.

The Munich-based Ifo think tank said on Friday its business climate index, based on a monthly survey of some 7,000 firms, rose to 107.4 in February, up from a revised 104.3 in January.

That was the biggest one-month rise since July 2010 and beat even the highest estimate of 106.2 in a Reuters poll of 41 economists, which had a median forecast of 105.0. The euro and European shares rose after the data, while German bond futures fell. 

Germany's economy shrank by 0.6 percent in the fourth quarter, succumbing to a sharp fall in demand from its euro zone trading partners, but economists expect the gloom to be short-lived and do not see Germany slipping into a recession, defined as two quarters of contraction.

"German economic confidence surveys seem to be showing more signs of economic spring, but the economy is still struggling with a massive millstone round its neck, the rest of the beleaguered euro zone economy," said David Brown of New View Economics.

Stock markets falls in the US ... !!!

Global stock markets have fallen after some members of the US central bank suggested its stimulus measures may be increasing the "risks of future economic and financial imbalances".

The comments came in minutes of the Federal Reserve's last meeting, where the Fed said it had left its monthly $85bn bond-buying plan in place.
US markets fell further on Thursday after recording their biggest drop so far this year on Wednesday.
European markets all closed down.

Gold up as data boosts Fed stimulus after drop

Gold rose nearly 1 percent on Thursday as lackluster U.S. economic data boosted hopes that the Federal Reserve will maintain its monetary stimulus, allaying fears that the U.S. central bank may stop buying assets soon.

Thursday's economic reports from claims for jobless aid to factory activity and consumer prices pointed to a still tepid recovery, supporting the argument that the Fed should continue its buying of $85 million in bonds per month to stimulate growth.

An increasingly divided Fed on whether it should halt its stimulus program, evidenced by the minutes of the Fed Open Market Committee (FOMC) meeting in January, weighed heavily on gold's inflation-hedge appeal.

Signs of an improving U.S. economy have diminished gold's traditional status as a safe haven against economic uncertainty. The price of gold has dropped almost 10 percent from a high above $1,700 an ounce in early December.

Aussie To Get More Increases

The so-called Aussie advanced versus all of its 16 major counterparts as Stevens said borrowing costs are “at the appropriate level right now” in testimony to a parliamentary committee. The South Pacific currency pared a sixth-straight weekly loss, its longest losing streak since 2006.

EGYPT DEFICIT COULD INCREASE TO 10 PCT OF GDP

Egypt's budget deficit could swell to 180 billion Egyptian pounds ($26.74 billion), or 10 percent of gross domestic product, in the 12 months to the end of June, Planning Minister Ashraf al-Araby said on Thursday.

Government finances have been put under additional strain by an 8 percent fall in the Egyptian pound's value against the U.S. dollar since the start of the year. The state spends heavily on subsidizing fuel and food, much of it imported. ($1 = 6.7326 Egyptian pounds)

Unemployment Rates In Euro Zone

The number of people unemployed as a percentage of the labor force as measured by Eurostat. Higher unemployment can reduce government revenues from payroll taxes. Rising unemployment can also encourage political instability.

Country	Percentage	As of
Greece	27.0%	Nov 30
Spain	26.1%	Dec 31
Portugal	16.5%	Dec 31
Ireland	14.7%	Dec 31
Italy	11.2%	Dec 31
France	10.6%	Dec 31
UK	7.7%	Nov 30
Belgium	7.5%	Dec 31
Netherlands	5.8%	Dec 31
Germany	5.3%	Dec 31

US Stocks Dropped

U.S. stocks fell the most in three months and a key gauge of market volatility spiked on Wednesday after minutes from the U.S. Federal Reserve's most recent meeting suggested the central bank may slow or stop buying bonds sooner than expected.

The minutes from the Fed's January meeting showed many officials voiced concern last month over potential costs of more asset purchases, suggesting that the program, known as QE, may slow before the pickup in hiring it was intended to deliver.

FED MINUTES

Federal Reserve officials think the central bank might have to slow or stop buying bonds before seeing the pickup in hiring the program is designed to deliver, according to minutes of the central bank's policy meeting last month.

The Fed opted in January to keep buying bonds at an $85 billion monthly pace until the labor market outlook improved substantially, but the minutes on Wednesday showed anxiety over the strategy's risks - news that sent stocks sharply lower.

The S&P 500  .SPX suffered its steepest daily percentage decline since mid-November as investors mulled divisions between Fed doves, who want do as much as possible to spur growth, versus colleagues who see merit in a more cautious approach.

The U.S. economy braked sharply in the final quarter of 2012, but investors expect it will rebound this year and Fed officials voiced confidence last month that, despite a pause, "the economy remained on a moderate growth path."

The dollar rose after the minutes were released, gold prices hit their lowest level since July and Treasury debt prices advanced, helped by the weaker tone in Wall Street stocks.

"The minutes ... portray a Fed whose thinking on the conduct of monetary policy is constantly evolving and shows a committee that is far less unified than at any other time in the past few years," Millan Mulraine at TD Securities wrote in a client note.

The minutes said "many" officials voiced concern over the potential costs of further asset purchases, but the hawkish tone of the policymakers who actually said the policy might need to be scaled back was balanced somewhat by a warning about the dangers of ending the bond-buying program prematurely.

"Several others argued that the potential costs of reducing or ending asset purchases too soon were also significant," the Fed said.

In addition, some analysts pointed out that the minutes of the central bank's previous meeting in December said several officials thought bond purchases might need to slow or halt well before year end. In their view, the absence of a calendar reference in the latest minutes arguably made them more dovish.

The evidence of deep internal divisions will heighten investor interest in Fed Chairman Ben Bernanke's biannual testimony on monetary policy to two congressional committees next week.

LOOKING FOR NEW TOOLS

In a policy shift late last year, the Fed committed to keeping interest rates near zero until the unemployment rate drops to 6.5 percent, as long as inflation is not forecast to go above 2.5 percent over a one- to two-year horizon.

One policymaker suggested the central bank could lower the unemployment guidepost to 6 percent to provide additional stimulus to the economy.

A number of the officials on the 19-strong committee also floated another suggestion - that the Fed hold on to the bonds it has bought for longer than currently planned to deliver more monetary stimulus, either to supplement or replace the bond purchases.

The Fed has more than tripled the size of its balance sheet since 2008 to around $3 trillion through purchases of bonds designed to hold down the cost of long-term borrowing and spur a stronger recovery.

The Fed has said it will reduce the size of its balance sheet when the time comes to tighten monetary policy. The central bank will use its March meeting to review the language it has used in its post-meeting statements pertaining to the possible costs of unconventional policy, the minutes said.

European Stock Market Dropped By Fed Hint Of Stimulus Cut

European markets opened lower on Thursday after U.S. Federal Reserve minutes suggested the central bank may stop printing the money that has helped to drive the recent rally in equities sooner than expected.

SPAIN GOVERNMENT WANTS GROWTH, WITHOUT LETTING UP ON AUSTERITY

Prime Minister Mariano Rajoy pledged on Wednesday to pull Spain out of its painful recession without relaxing his drive to cut the country's high public deficit.

He struck a difficult balance that may please neither voters, who are fed up with austerity, not Spain's European partners, who did not get from him the new reform agenda they have been seeking.

In his first state-of-the-nation speech since taking office in December 2011, Rajoy said the deficit had dropped below 7 percent of gross domestic product last year, still above the European Union's short-term target.

He also announced new incentives for employers to hire young people - youth unemployment is 56 percent - and cut taxes for small- and medium-sized companies. 

At the same time, he told parliament he would remain strict on deficit cutting while implementing tough reforms to the labor market, financial system and public finances.

But he fell short of meeting demands from the EU and European Central Bank to lay out an ambitious legislative plan of further structural reforms to the economy.

Rather than beginning his speech to parliament with a list of accomplishments, Rajoy went straight to the heart of the country's deep economic crisis, recognizing the human suffering caused by a 26 percent unemployment rate.

Gold falls to its lowest level in six months

Gold fell to its lowest level in six months on Wednesday, with improved investor appetite for high-risk assets before the minutes of the meeting announced for the Federal Open Market Committee later on Wednesday.

The signs prompted an improved outlook for the global economy stocks to their highest levels in several years this week reduced the attractiveness of gold as a safe investment haven.

The price of gold dipped in online transactions to $ 1581.26 an ounce by the time of 1537 GMT. Traders say the yellow metal candidate to further losses after falling for strong technical support level at $ 1,600.

Buying foreign bonds will be pointless for the Japanese Economy ….. !!!

Japan's Prime Minister Shinzo Abe announced that buying more foreign bonds will be unnecessary after the new BoJ's Chief takes control of the Central Bank, which might be an attempt to weaken the yen.

Avoiding foreign bond purchases would limit tension with Group of 20 nations that pledged this week to refrain from targeting exchange rates for competitive purposes. The yen is swinging as investors assess the limits of the economic campaign dubbed ‘Abenomics,’ with the prime minister preparing to choose a new BOJ governor next week.

On the other hand, the JPY mounted by 0.3% to reach 93.26 against the USD after earlier falling as much as 0.3%. 

The nomination of the new BoJ Governor was delayed by the Government by a week

Japanese  government has delayed nominating a Bank of Japan governor for a whole week, as there are talks of friction between the prime minister and the finance minister regarding who will take charge of the central bank and also will be able of taking bold action to revive and boost the Japanese economy.

As,  to take these bold actions the Prime Minister Shinzo Abe has demanded a candidate willing to carry out radical policies to pick up Japan out of years of deflation, also this candidate will have to take some aggressive actions.

On the other hand, a sources close to the selection declared that the Finance Minister Taro Aso and others in Abe's ruling party are looking for a more moderate candidate, as Some of the government officials are worried that a governor with some aggressive actions who will be promoting radical policies could upset financial markets.