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Eurozone crisis live: Spain gets auction away after Japan pledges $60bn to IMF Eurozone crisis live: Spain gets auction away after Japan pledges $60bn to IMF
(40 minutes later)
5.54pm: Some late news out of Mexico, where Spanish prime minister Mariano Rajoy has weighed in on Argentina's controversial nationalisation of energy company YPF (majority owned by Spain's Repsol).
Rajoy said the move came "without any justification", adding:
I must express my profound unease. It is a negative decision for everyone.
Rajoy was in Mexico to attend the World Economic Forum on Latin America, which opened today. The proposed YPF nationalisation, which already appears to have poisoned relations between the two countries, may take the shine of a conference that is meant to boost trade between the region and the rest of the world.
5.29pm: Here's a round-up of all the good news that helped to fuel today's market rally (and the FTSE 100's 100-point gain):
• Spain's bond auction success. Borrowing costs jumped sharply, but investors were relieved that the Spanish Treasury found buyers for €3.18bn of short-term debt. That's slightly more than its maximum target.
• The IMF's new, more optimistic, growth forecasts. Although the International Monetary Fund warned that the economic recovery remains fragile, the news that it expects stronger economic growth this year and in 2013 was welcomed.
• German economic sentiment jumped unexpectedly. The ZEW index found that most German businesses are confident about the next six months.
• Japan's pledge to the IMF's firewall. Tokyo became the first country outside Europe to heed Christine Lagarde's call for a new global fund to protect the world economy from the ravages of the eurocrisis. It has promised €60bn of new loans.
• Fitch reaffirmed Austria's AAA rating. Credit ratings agency reckoned Austria's outlook is stable, despite the ongoing euro crisis.
It wasn't all wine and roses, though. Here's today's less good news:

• The IMF warned that Italy will miss its deficit reduction targets.
• UK inflation rose, and eurozone inflation failed to fall
4.53pm: Labour's shadow chief secretary to the Treasury, Rachel Reeves MP, has seized on the IMF's warning against too much austerity (as flagged up at (2.14pm).4.53pm: Labour's shadow chief secretary to the Treasury, Rachel Reeves MP, has seized on the IMF's warning against too much austerity (as flagged up at (2.14pm).
Reeves reckons this is another signal to George Osborne to alter his economic plans, saying:Reeves reckons this is another signal to George Osborne to alter his economic plans, saying:
Today's forecasts confirm what has been clear for some time. By raising taxes and cutting spending too far and too fast the Government has hit confidence, squeezed households and choked off the recovery.

Only anaemic growth is forecast for this year, and since the spending review we have had no growth at all. Today's forecast for 2012 merely brings the IMF in line with the deeply disappointing OBR forecasts from the March budget of just 0.8% growth this year.		Today's forecasts confirm what has been clear for some time. By raising taxes and cutting spending too far and too fast the Government has hit confidence, squeezed households and choked off the recovery.

Only anaemic growth is forecast for this year, and since the spending review we have had no growth at all. Today's forecast for 2012 merely brings the IMF in line with the deeply disappointing OBR forecasts from the March budget of just 0.8% growth this year.
The bond markets, though, suggest investors are still happy to hold UK debt. The yield on the 10-year gilt rose slightly today, but at 2.09% is still lower than the French equivalent (3%).The bond markets, though, suggest investors are still happy to hold UK debt. The yield on the 10-year gilt rose slightly today, but at 2.09% is still lower than the French equivalent (3%).
4.37pm: A bullish day in the City has ended with the FTSE 100 closing up 100.67 points at 5766, a 1.78% gain.4.37pm: A bullish day in the City has ended with the FTSE 100 closing up 100.67 points at 5766, a 1.78% gain.
That's its biggest daily rise since 2 April. Banks shares led the rises (Barclays up 5%, Lloyds up 4%), as financial stocks across Europe clawed back some recent losses.That's its biggest daily rise since 2 April. Banks shares led the rises (Barclays up 5%, Lloyds up 4%), as financial stocks across Europe clawed back some recent losses.
Other European markets finished even more strongly. Here's a round-up (some figures are provisional)Other European markets finished even more strongly. Here's a round-up (some figures are provisional)
Germany's DAX closed 2.6% higher
France's CAC closed 2.5% higher
Italy's FTSE MIB closed 3.7% higher
Spain's IBEX closed 2.3% higher
Portugal's PSI 20 closed 1.3% higher		Germany's DAX closed 2.6% higher
France's CAC closed 2.5% higher
Italy's FTSE MIB closed 3.7% higher
Spain's IBEX closed 2.3% higher
Portugal's PSI 20 closed 1.3% higher
Yusuf Heusen, sales trader at IG Index, commented:Yusuf Heusen, sales trader at IG Index, commented:

A set of solid earnings reports has allowed markets to shrug off the eurozone crisis, at least for now.
A set of solid earnings reports has allowed markets to shrug off the eurozone crisis, at least for now.
Big-name American firms like Goldman Sachs, Coca-Cola and Johnson & Johnson have all helped investors to focus on the positive, while stronger German economic sentiment is providing an excuse to forget the worsening situation in Spain.Big-name American firms like Goldman Sachs, Coca-Cola and Johnson & Johnson have all helped investors to focus on the positive, while stronger German economic sentiment is providing an excuse to forget the worsening situation in Spain.
It's been quite a day for good news -- will do a round-up now....It's been quite a day for good news -- will do a round-up now....
4.29pm: The International Monetary Fund has cast significant doubt over Italy's plans to tackle its debt mountain and return to growth.4.29pm: The International Monetary Fund has cast significant doubt over Italy's plans to tackle its debt mountain and return to growth.
The Fund's new Fiscal Monitor report, published half an hour ago, predicted that Mario Monti will only manage to lower Italy's deficit to 2.4% of GDP this year, not the 1.6% target. In 2013, the IMF added, the Italian deficit will be 1.3% of GDP -- not eliminated, as the Italian government is aiming.The Fund's new Fiscal Monitor report, published half an hour ago, predicted that Mario Monti will only manage to lower Italy's deficit to 2.4% of GDP this year, not the 1.6% target. In 2013, the IMF added, the Italian deficit will be 1.3% of GDP -- not eliminated, as the Italian government is aiming.
As Reuters points out:
As Reuters points out:
The forecasts are a blow to Prime Minister Mario Monti, whose popularity is sliding and whose reform efforts are meeting rising criticism and resistance as the country's borrowing costs rise.The forecasts are a blow to Prime Minister Mario Monti, whose popularity is sliding and whose reform efforts are meeting rising criticism and resistance as the country's borrowing costs rise.
4.15pm: Stock markets are rallying strongly now. In London the FTSE 100 just broke through the 100-point gain mark, while in New York the Dow Jones index is up 162 points.4.15pm: Stock markets are rallying strongly now. In London the FTSE 100 just broke through the 100-point gain mark, while in New York the Dow Jones index is up 162 points.
The mood in the City is pretty upbeat, thanks to today's steady flow of good news.The mood in the City is pretty upbeat, thanks to today's steady flow of good news.
3.15pm: The IMF's chief economist, Olivier Blanchard, told reporters in Washington that the Fund does not have a "Plan B" in case a country is forced to leave the eurozone.3.15pm: The IMF's chief economist, Olivier Blanchard, told reporters in Washington that the Fund does not have a "Plan B" in case a country is forced to leave the eurozone.
Blanchard added the IMF was doing "everything possible" to prevent this happening.Blanchard added the IMF was doing "everything possible" to prevent this happening.
Within the new World Economic Outlook, the IMF also says there is scope for "further monetary easing" and recommends that 'unconventional' monetary policy (such as Europe's Long-Term Refinancing Operations, in which the ECB offers unlimited low-cost loans to Europe's banks) should continue.Within the new World Economic Outlook, the IMF also says there is scope for "further monetary easing" and recommends that 'unconventional' monetary policy (such as Europe's Long-Term Refinancing Operations, in which the ECB offers unlimited low-cost loans to Europe's banks) should continue.
That may not go down terribly well in Germany, where opposition to the ECB's recent moves is growing. As energy trader Nicola Duke points out on Twitter, this could set up a clash between of the most powerful players in the eurocrisis – Christine Lagarde and Angela Merkel. Place your bets!That may not go down terribly well in Germany, where opposition to the ECB's recent moves is growing. As energy trader Nicola Duke points out on Twitter, this could set up a clash between of the most powerful players in the eurocrisis – Christine Lagarde and Angela Merkel. Place your bets!
IMF wants more ECB easing. Lagarde Vs Merkel. Faites vos jeux $EURUSDIMF wants more ECB easing. Lagarde Vs Merkel. Faites vos jeux $EURUSD
— Nicola Duke (@NicTrades) April 17, 2012— Nicola Duke (@NicTrades) April 17, 2012
2.44pm: The IMF's World Economic Outlook, released at 2pm BST, contains a warning that a new oil crisis could drive the global economy into a repeat of the Great Depression.2.44pm: The IMF's World Economic Outlook, released at 2pm BST, contains a warning that a new oil crisis could drive the global economy into a repeat of the Great Depression.
In a section called Tail Risks (pages 17 and 18 of the report), it cautions that policy makers have little room for maneuver if several "adverse shocks" struck at the same time.In a section called Tail Risks (pages 17 and 18 of the report), it cautions that policy makers have little room for maneuver if several "adverse shocks" struck at the same time.
For example....For example....
intensified concern about an oil supply shock related to the Islamic Republic of Iran could cause a spike in oil prices that depresses output in the euro area, amplifying adverse feedback loops between the household, sovereign, and banking sectors.intensified concern about an oil supply shock related to the Islamic Republic of Iran could cause a spike in oil prices that depresses output in the euro area, amplifying adverse feedback loops between the household, sovereign, and banking sectors.
In the meantime, the oil price shock could also trigger a reassessment of the sustainability of credit booms and potential growth in emerging Asia, leading to hard landings in these economies. This could, in turn, prompt a collapse
in non-oil commodity prices that would hurt many emerging and developing economies, especially in Latin America and Africa. More generally, a concurrent rise in global risk aversion could lead to a sudden reversal of capital flows to emerging and developing economies.		In the meantime, the oil price shock could also trigger a reassessment of the sustainability of credit booms and potential growth in emerging Asia, leading to hard landings in these economies. This could, in turn, prompt a collapse
in non-oil commodity prices that would hurt many emerging and developing economies, especially in Latin America and Africa. More generally, a concurrent rise in global risk aversion could lead to a sudden reversal of capital flows to emerging and developing economies.
The same "Tail Risks" section also warns that a disorderly default by a eurozone member, followed by their exit from the euro, would create "a full-blown panic in financial markets and depositor flight from several banking systems". It continued:The same "Tail Risks" section also warns that a disorderly default by a eurozone member, followed by their exit from the euro, would create "a full-blown panic in financial markets and depositor flight from several banking systems". It continued:
The financial and real spillovers to other regions, especially emerging Europe, would likely be very large. This could cause major political shocks that could aggravate economic stress to levels well above those after the Lehman collapse.The financial and real spillovers to other regions, especially emerging Europe, would likely be very large. This could cause major political shocks that could aggravate economic stress to levels well above those after the Lehman collapse.
Must stress that these are outlying scenarios, not the IMF's baseline forecast.Must stress that these are outlying scenarios, not the IMF's baseline forecast.
2.26pm: You can read the IMF's latest World Economic Outlook in full here (pdf).2.26pm: You can read the IMF's latest World Economic Outlook in full here (pdf).
2.14pm: "Austerity alone cannot treat the economic malaise in the major advanced economies."2.14pm: "Austerity alone cannot treat the economic malaise in the major advanced economies."
No, that's not UK shadow chancellor Ed Balls talking, or France's Francois Hollande. Or Greece's Antonis Samaras. Or the ghost of John Maynard Keynes. It's the International Monetary Fund today.No, that's not UK shadow chancellor Ed Balls talking, or France's Francois Hollande. Or Greece's Antonis Samaras. Or the ghost of John Maynard Keynes. It's the International Monetary Fund today.
As our economics editor Larry Elliott reports from Washington, the World Economic Outlook (see 2.05pm for more) contains a clear warning to world leaders to avoid crippling their fragile economies with overly aggressive cutbacks.As our economics editor Larry Elliott reports from Washington, the World Economic Outlook (see 2.05pm for more) contains a clear warning to world leaders to avoid crippling their fragile economies with overly aggressive cutbacks.
That may surprise those of you in countries where the IMF have imposed tough cutbacks in return for financial help. But, as Larry explains.....That may surprise those of you in countries where the IMF have imposed tough cutbacks in return for financial help. But, as Larry explains.....
The WEO bears the stamp of the Fund's chief economist, Olivier Blanchard, who was brought in by the former managing director, Dominique Strauss-Kahn, just as Lehman was going belly-up in September 2008. Blanchard is a fan of John Maynard Keynes and it shows: worry first about growth, then the deficit; use aggressive monetary policy to drive down short-term and long-term interest rates; deflation not inflation is a bigger risk; austerity can be self-defeating.The WEO bears the stamp of the Fund's chief economist, Olivier Blanchard, who was brought in by the former managing director, Dominique Strauss-Kahn, just as Lehman was going belly-up in September 2008. Blanchard is a fan of John Maynard Keynes and it shows: worry first about growth, then the deficit; use aggressive monetary policy to drive down short-term and long-term interest rates; deflation not inflation is a bigger risk; austerity can be self-defeating.
Blanchard is, of course, only in charge of one part of the Fund, and it would be naive to imagine that the orthodox thinking that characterised the institution's Washington consensus period has disappeared entirely. It hasn't, and there are some Fund-watchers who say the views of those in charge of the individual country programmes pay scant attention to what Blanchard says when they are deciding the terms on which financial support will be given.Blanchard is, of course, only in charge of one part of the Fund, and it would be naive to imagine that the orthodox thinking that characterised the institution's Washington consensus period has disappeared entirely. It hasn't, and there are some Fund-watchers who say the views of those in charge of the individual country programmes pay scant attention to what Blanchard says when they are deciding the terms on which financial support will be given.
That, though, seems harsh. The Fund got its analysis spectacularly wrong in the years leading up to the crash. It was wedded to neo-liberal economics, slavishly devoted to the idea that de-regulating financial markets was always beneficial, and – as it has itself admitted – riddled with "groupthink". The crisis has led to a change of outlook – and it is a change for the better.That, though, seems harsh. The Fund got its analysis spectacularly wrong in the years leading up to the crash. It was wedded to neo-liberal economics, slavishly devoted to the idea that de-regulating financial markets was always beneficial, and – as it has itself admitted – riddled with "groupthink". The crisis has led to a change of outlook – and it is a change for the better.
More here.More here.
2.05pm: Just in -- the International Monetary Fund has raised its forecasts for world economic growth, but still believes that the eurozone will shrink during 2012.2.05pm: Just in -- the International Monetary Fund has raised its forecasts for world economic growth, but still believes that the eurozone will shrink during 2012.
The IMF's latest World Economic Outlook, just published in Washington, predicted sharp contractions in Spain and Italy this year. It also warned that the risk of an escalating eurozone debt crisis remains, and that the global economic recovery remained fragile.The IMF's latest World Economic Outlook, just published in Washington, predicted sharp contractions in Spain and Italy this year. It also warned that the risk of an escalating eurozone debt crisis remains, and that the global economic recovery remained fragile.
For the global economy, the IMF now expects growth of 3.5% this year (up from 3.3%), and growth of 4.1% in 2013 (up from 3.9%).For the global economy, the IMF now expects growth of 3.5% this year (up from 3.3%), and growth of 4.1% in 2013 (up from 3.9%).
It expects the eurozone to shrink by 0.3% this year, with Italy contracting by 1.9% and Spain by 1.8%.It expects the eurozone to shrink by 0.3% this year, with Italy contracting by 1.9% and Spain by 1.8%.
More details here.More details here.
For the UK, the IMF raised its forecast for GDP growth this year slightly to + 0.8%, and maintained its prediction of 2.0% growth in 2013. As my colleague Larry Elliott reports from Washington, the IMF also gave the Bank of England the green light for another dose of quantitative easing.For the UK, the IMF raised its forecast for GDP growth this year slightly to + 0.8%, and maintained its prediction of 2.0% growth in 2013. As my colleague Larry Elliott reports from Washington, the IMF also gave the Bank of England the green light for another dose of quantitative easing.
1.27pm: European stock markets has put on decent gains so far today, thanks to the stream of generally decent news in the last few hours. Here's the latest scores:1.27pm: European stock markets has put on decent gains so far today, thanks to the stream of generally decent news in the last few hours. Here's the latest scores:
UK FTSE 100: up 52 points, or 0.9%, at 5718
German DAX: up 69 points, or 1.05%, at 6694
French CAC: up 43 points, or 1.35%, at 3248
Spanish IBEX: up 53 points, or 0.74%, at 7263
Italian FTSE MIB: up 353 points, or 2.45%, at 14763.		UK FTSE 100: up 52 points, or 0.9%, at 5718
German DAX: up 69 points, or 1.05%, at 6694
French CAC: up 43 points, or 1.35%, at 3248
Spanish IBEX: up 53 points, or 0.74%, at 7263
Italian FTSE MIB: up 353 points, or 2.45%, at 14763.
Spanish sovereign debt has also continued to strengthen, pushing down the yield on its 10-year bonds down to around 5.9%.Spanish sovereign debt has also continued to strengthen, pushing down the yield on its 10-year bonds down to around 5.9%.
12.41pm: The governor of the Bank of Spain has given his backing to the country's current fiscal plans, telling MPs that this is the only way to maintain market confidence.12.41pm: The governor of the Bank of Spain has given his backing to the country's current fiscal plans, telling MPs that this is the only way to maintain market confidence.
Appearing before a parliamentary committee, Miguel Angel Fernandez Ordonez also warned that Spain will face "financing difficulties for some time". He said:Appearing before a parliamentary committee, Miguel Angel Fernandez Ordonez also warned that Spain will face "financing difficulties for some time". He said:
At this moment, when confidence is absolutely crucial, where Spain has external financing problems, and will have for a long time to come...the reduction of the deficit to give confidence to investors is crucial.At this moment, when confidence is absolutely crucial, where Spain has external financing problems, and will have for a long time to come...the reduction of the deficit to give confidence to investors is crucial.
Good to see the Spanish top central banker on the same page as its prime minister. But as many of you've pointed out below the line, investors and economists aren't simply worried about deficit reduction. They're also worried that the Spanish economy is being driven deeply into recession.Good to see the Spanish top central banker on the same page as its prime minister. But as many of you've pointed out below the line, investors and economists aren't simply worried about deficit reduction. They're also worried that the Spanish economy is being driven deeply into recession.
And indeed, right on cue, here's Andrew Balls* of Pimco warning Bloomberg that he remains "very cautious on Spain".And indeed, right on cue, here's Andrew Balls* of Pimco warning Bloomberg that he remains "very cautious on Spain".
* - yup, brother of Ed* - yup, brother of Ed
11.57am: Argentina's decision to nationalise YPF, majority owned by Spain's Repsol, last night is turning into a major political row.11.57am: Argentina's decision to nationalise YPF, majority owned by Spain's Repsol, last night is turning into a major political row.
Spanish industry minister Jose Manuel Soria pledged this morning to retaliate against Argentina, saying:Spanish industry minister Jose Manuel Soria pledged this morning to retaliate against Argentina, saying:
With this attitude, this hostility from the Argentine authorities, there will be consequences that we'll see over the next few days. They will be in the diplomatic field, the industrial field, and on energy.With this attitude, this hostility from the Argentine authorities, there will be consequences that we'll see over the next few days. They will be in the diplomatic field, the industrial field, and on energy.
EC president Jose Manuel Barroso also weighed in this morning, saying he was "seriously disappointed) by the move, while Repsol itself is demanding $18bn of compensation for its stake in YPF of around $10bn, based on valuing the company at $18bn (corrected).EC president Jose Manuel Barroso also weighed in this morning, saying he was "seriously disappointed) by the move, while Repsol itself is demanding $18bn of compensation for its stake in YPF of around $10bn, based on valuing the company at $18bn (corrected).
Although Spain isn't a member of the G20, the argument could overshadow the meeting of the world's 20 major economies in Washington later this week. It has certainly rattled in Repsol (shares down 6% right now). As Stuart Joyner of Investec commented:Although Spain isn't a member of the G20, the argument could overshadow the meeting of the world's 20 major economies in Washington later this week. It has certainly rattled in Repsol (shares down 6% right now). As Stuart Joyner of Investec commented:
The Argentine Tango is the consummate dance of love, but there was little affection for the country's largest foreign investor in Buenos Aires yesterday.The Argentine Tango is the consummate dance of love, but there was little affection for the country's largest foreign investor in Buenos Aires yesterday.
The Daily Telegraph's Alistair Osborne has also rebuked Argentina's president Cristina Fernández for the decision to seize YPF, warning that the "smash'n'grab" raid could scare off other Western companies.The Daily Telegraph's Alistair Osborne has also rebuked Argentina's president Cristina Fernández for the decision to seize YPF, warning that the "smash'n'grab" raid could scare off other Western companies.
11.45am: Ratings agency Fitch has reaffirmed Austria's AAA rating with a stable outlook, despite the eurozone crisis.11.45am: Ratings agency Fitch has reaffirmed Austria's AAA rating with a stable outlook, despite the eurozone crisis.
Fitch said that Austria had recovered rapidly from the recession of 2008-09, partly thanks to the strong performance of neighbour Germany. But it also warned that the country was "not immune" to systemic risks, adding that only a "sustainable economic recovery across the eurozone" would end of the crisis.Fitch said that Austria had recovered rapidly from the recession of 2008-09, partly thanks to the strong performance of neighbour Germany. But it also warned that the country was "not immune" to systemic risks, adding that only a "sustainable economic recovery across the eurozone" would end of the crisis.
Austria lost its AAA rating with Standard & Poor's in January (on the night when France was also downgraded).Austria lost its AAA rating with Standard & Poor's in January (on the night when France was also downgraded).
11.10am: Conservative MP Douglas Carswell has blasted the Bank of England following the news that UK inflation rose last month.11.10am: Conservative MP Douglas Carswell has blasted the Bank of England following the news that UK inflation rose last month.
In a blogpost titled "The Bank of England has made a mess of monetary policy", Carswell rails against Threadneedle Street's failure to rein inflation in. He points out that MPC member Adam Posen predicted a year ago that CPI would be below 1.5% by this summer:In a blogpost titled "The Bank of England has made a mess of monetary policy", Carswell rails against Threadneedle Street's failure to rein inflation in. He points out that MPC member Adam Posen predicted a year ago that CPI would be below 1.5% by this summer:
When Posen made his forecast, he was quoted in the Guardian as saying that: "If I have made the wrong call .... I would not pursue a second term. They should have somebody who gets it right and not me."When Posen made his forecast, he was quoted in the Guardian as saying that: "If I have made the wrong call .... I would not pursue a second term. They should have somebody who gets it right and not me."
I admire such frankness and Mr Posen's willingness to be held accountable. But why just Posen? The Bank of England should, as Mr Posen says, have people who get it right.I admire such frankness and Mr Posen's willingness to be held accountable. But why just Posen? The Bank of England should, as Mr Posen says, have people who get it right.
...
Since the consequences of their own monetary mismanagement came home to roost, the MPC has overseen a massive monetary stimulus – which has notably failed to produce any growth.		...
Since the consequences of their own monetary mismanagement came home to roost, the MPC has overseen a massive monetary stimulus – which has notably failed to produce any growth.
Quit bashing the investment bankers. When do we get to hold the central bankers to account?Quit bashing the investment bankers. When do we get to hold the central bankers to account?
As I understand it, Posen's fears were based on the fact he was (at the time) a lone voice calling for more quantitative easing. The rest of the MPC eventually agreed with him. And you could argue that high commodity costs have made it very hard for the Bank of England to have much effect on the inflation. And without QE, the UK would probably have posted even less economic growth.As I understand it, Posen's fears were based on the fact he was (at the time) a lone voice calling for more quantitative easing. The rest of the MPC eventually agreed with him. And you could argue that high commodity costs have made it very hard for the Bank of England to have much effect on the inflation. And without QE, the UK would probably have posted even less economic growth.
But Carswell does raise a very interesting issue -- when, if ever, do central bankers pay the price for their mistakes? I"m reminded of Montagu Norman, the governor of the Bank of England before, during, and after the Great Depression. He ended his days as Baron Norman, despite being blamed for some of the mistakes that crashed the world economy (Winston Churchill once privately suggested that the governor should be hanged for his misdeeds).But Carswell does raise a very interesting issue -- when, if ever, do central bankers pay the price for their mistakes? I"m reminded of Montagu Norman, the governor of the Bank of England before, during, and after the Great Depression. He ended his days as Baron Norman, despite being blamed for some of the mistakes that crashed the world economy (Winston Churchill once privately suggested that the governor should be hanged for his misdeeds).
The excellent Lords of Finance has more info on Norman and his fellow central bankers (extract here)The excellent Lords of Finance has more info on Norman and his fellow central bankers (extract here)
UPDATE: This blogpost by Shaun Richards, arguing for democratic reform at the Bank of England, may also be of interest.UPDATE: This blogpost by Shaun Richards, arguing for democratic reform at the Bank of England, may also be of interest.
10.36am: David Tweed of Bloomberg's verdict on the Spanish debt auction (see 9.40am) feels spot-on -- moderately successful, if you're an optimist.10.36am: David Tweed of Bloomberg's verdict on the Spanish debt auction (see 9.40am) feels spot-on -- moderately successful, if you're an optimist.
#Spain maintains market access with bill sale, even with higher yields -- sale moderately successful if you like your glass half full. BBVA#Spain maintains market access with bill sale, even with higher yields -- sale moderately successful if you like your glass half full. BBVA
— David Tweed (@DavidTweed) April 17, 2012— David Tweed (@DavidTweed) April 17, 2012
The bigger test comes on Thursday, at the auction of longer-term Spanish bonds.The bigger test comes on Thursday, at the auction of longer-term Spanish bonds.
10.26am: Another encouraging development -- Greece just successfully sold €1.625bn of three-month bonds at an average yield of 4.2% (compared with 4.25% at the last auction of this kind).10.26am: Another encouraging development -- Greece just successfully sold €1.625bn of three-month bonds at an average yield of 4.2% (compared with 4.25% at the last auction of this kind).
10.13am: The euro has hit a new high for the day against the US dollar ($1.3172) after German business confidence rose unexpectedly.10.13am: The euro has hit a new high for the day against the US dollar ($1.3172) after German business confidence rose unexpectedly.
The ZEW Institute's monthly survey (a closely watched measure of sentiment in the EU's largest economy), rose to 23.4 from 22.3 (defying expectations that it would fall).The ZEW Institute's monthly survey (a closely watched measure of sentiment in the EU's largest economy), rose to 23.4 from 22.3 (defying expectations that it would fall).
The business leaders interviewed by ZEW reckoned that economic conditions had stabilised, with most predicting 'further positive developments' in the next six months. Many were also bracing for higher inflation.The business leaders interviewed by ZEW reckoned that economic conditions had stabilised, with most predicting 'further positive developments' in the next six months. Many were also bracing for higher inflation.
Several downside risks were cited - including the danger of an economic slowdown in Germany's trading partners; elevated oil prices; and the general debt crisis.Several downside risks were cited - including the danger of an economic slowdown in Germany's trading partners; elevated oil prices; and the general debt crisis.
10.01am: Eurozone inflation data has just been released, showing that the consumer prices index was 2.7% in March, up from an initial estimate of 2.6% (so unchanged from February).10.01am: Eurozone inflation data has just been released, showing that the consumer prices index was 2.7% in March, up from an initial estimate of 2.6% (so unchanged from February).
9.52am: In the bond market, Spanish sovereign debt is strengthening in value after this morning's bond auction (see 9.40am for the details). That's pushed the yield on the 10-year bond further below 6%.9.52am: In the bond market, Spanish sovereign debt is strengthening in value after this morning's bond auction (see 9.40am for the details). That's pushed the yield on the 10-year bond further below 6%.
9.40am: The results of Spain's debt auction are out -- borrowing costs have almost doubled, but it has managed to sell slightly more debt than it was aiming for.9.40am: The results of Spain's debt auction are out -- borrowing costs have almost doubled, but it has managed to sell slightly more debt than it was aiming for.
Spain just reported that it sold €2.09bn of 12-month bills at an average yield (the interest rate which investors will receive) of 2.623%, up from 1.418% at the previous auction of this type -- just one month ago.Spain just reported that it sold €2.09bn of 12-month bills at an average yield (the interest rate which investors will receive) of 2.623%, up from 1.418% at the previous auction of this type -- just one month ago.
It also sold €1.09bn of 18-month bonds, at an average rate of 3.11%, up from 1.711% in mid-March.It also sold €1.09bn of 18-month bonds, at an average rate of 3.11%, up from 1.711% in mid-March.
The bid-to-cover ratio (a measure of demand) also rose for both bond types, showing there was plenty of interest in the auction.The bid-to-cover ratio (a measure of demand) also rose for both bond types, showing there was plenty of interest in the auction.
So, technically a successful auction (Spain was aiming to sell between €2bn and €3bn of bonds), but a sign that investors demand much higher returns in return for holding Spanish debt.So, technically a successful auction (Spain was aiming to sell between €2bn and €3bn of bonds), but a sign that investors demand much higher returns in return for holding Spanish debt.
9.32am: The latest UK inflation data is out, and it shows that the rising cost of living accelerated last month.9.32am: The latest UK inflation data is out, and it shows that the rising cost of living accelerated last month.
The consumer prices index (CPI) rose to 3.5% year-on-year in March (from 3.4% last month). The Office for National Statistics said the biggest upward pressure on inflation came from higher food and clothing costs.The consumer prices index (CPI) rose to 3.5% year-on-year in March (from 3.4% last month). The Office for National Statistics said the biggest upward pressure on inflation came from higher food and clothing costs.
The increase in CPI was in line with analyst forcasts, and brings inflation further away from the Bank of England's 2% target.The increase in CPI was in line with analyst forcasts, and brings inflation further away from the Bank of England's 2% target.
The retail prices index came in at 3.6%, down from 3.7% last month.The retail prices index came in at 3.6%, down from 3.7% last month.
9.00am: Nicolas Sarkozy has repeated his call for the European Central Bank to be given more responsibility for economic growth across the eurozone.9.00am: Nicolas Sarkozy has repeated his call for the European Central Bank to be given more responsibility for economic growth across the eurozone.
Speaking on French radio station Inter, president Sarkozy insisted that Europe should disuss the ECB's role -- despite Germany's deep reluctance for such a debate. However, he also argued that such a move could come without EU treaties being renegotiated.Speaking on French radio station Inter, president Sarkozy insisted that Europe should disuss the ECB's role -- despite Germany's deep reluctance for such a debate. However, he also argued that such a move could come without EU treaties being renegotiated.
Here's the key quotes (via Reuters):Here's the key quotes (via Reuters):
It is not possible that the ECB does not participate in suporting growth, like all the central banks in the world... It is wrong to say that just because the ECB is independent, we do not have the right to talk.It is not possible that the ECB does not participate in suporting growth, like all the central banks in the world... It is wrong to say that just because the ECB is independent, we do not have the right to talk.
Sarkozy first called for the ECB's mandate to be changed last weekend. The euro crisis is a key issus in the French presidential election.
The first round of voting takes place this weekend, and the latest polling puts Sarkozy level with Francois Hollande.		Sarkozy first called for the ECB's mandate to be changed last weekend. The euro crisis is a key issus in the French presidential election.
The first round of voting takes place this weekend, and the latest polling puts Sarkozy level with Francois Hollande.
8.46am: In the bond markets, Spanish and Italian debt has strengthened slightly ahead of Spain's bond auction (results due in around an hour).8.46am: In the bond markets, Spanish and Italian debt has strengthened slightly ahead of Spain's bond auction (results due in around an hour).
This has pushed the yield on Spain's 10-year bonds back down below 6% – suggesting traders are a little less nervous about the crisis. That follows reports last night that the Spanish government could take direct control of the finances of at least one of its regions soon.This has pushed the yield on Spain's 10-year bonds back down below 6% – suggesting traders are a little less nervous about the crisis. That follows reports last night that the Spanish government could take direct control of the finances of at least one of its regions soon.
8.22am: As WienVanRock points out in the comments below, there is an irony in Japan providing $60bn in new loans to address the European debt crisis, when it is already deeply indebted itself.8.22am: As WienVanRock points out in the comments below, there is an irony in Japan providing $60bn in new loans to address the European debt crisis, when it is already deeply indebted itself.
At $10trillion and rising, Japan's national debt is already around twice its GDP. And unlike several European countries, it no longer boasts a triple-A credit rating (last August, Moody's cut it to Aa3, the fourth highestr rating).At $10trillion and rising, Japan's national debt is already around twice its GDP. And unlike several European countries, it no longer boasts a triple-A credit rating (last August, Moody's cut it to Aa3, the fourth highestr rating).
With most Japanese debt bought by its own companies and funds, the credit rating isn't a major issue. But the recent rise in the cost of insuring Japanese debt against default suggests some investors are concerned about its long-term prospects.With most Japanese debt bought by its own companies and funds, the credit rating isn't a major issue. But the recent rise in the cost of insuring Japanese debt against default suggests some investors are concerned about its long-term prospects.
As WienVanRock puts it:As WienVanRock puts it:

We are heading from one big financial crisis into another soon enough. Japan is sitting on a pile of trouble just simmering like a mad volcano.
We are heading from one big financial crisis into another soon enough. Japan is sitting on a pile of trouble just simmering like a mad volcano.
8.21am: The Spanish stock market hit a new three-year low at the start of trading, before rebounding.8.21am: The Spanish stock market hit a new three-year low at the start of trading, before rebounding.
The IBEX 35 fell 70 points at the start of the session to 7136, its lowest level since 12 March 2009, but then shifted into positive territory.The IBEX 35 fell 70 points at the start of the session to 7136, its lowest level since 12 March 2009, but then shifted into positive territory.
Shares in Spanish oil and gas company Repsol tumbled by 8%, following the news last night that its Argentinian division, YPF, could be nationalised by the Buenos Aires government.Shares in Spanish oil and gas company Repsol tumbled by 8%, following the news last night that its Argentinian division, YPF, could be nationalised by the Buenos Aires government.
In the City, though, the FTSE 100 is up 8 points at 5673, while the German DAX and French CAC both gained around 0.3%.In the City, though, the FTSE 100 is up 8 points at 5673, while the German DAX and French CAC both gained around 0.3%.
7.59am: Here's today's agenda:7.59am: Here's today's agenda:
• Spain auctions €3bn of 12 and 18 month debt - from 9.30am BST / 10.30am CET
• UK inflation price for March - 9.30am BST
• Eurozone inflation data for March - 10am BST / 11am CET
• German ZEW survey of economic sentiment - 10am BST / 11am CET
• IMF releases latest World Economic Outlook - 2pm BST / 9am EST
• IMF releases latest Fiscal Monitor Report - 4pm BST / 11am EST		• Spain auctions €3bn of 12 and 18 month debt - from 9.30am BST / 10.30am CET
• UK inflation price for March - 9.30am BST
• Eurozone inflation data for March - 10am BST / 11am CET
• German ZEW survey of economic sentiment - 10am BST / 11am CET
• IMF releases latest World Economic Outlook - 2pm BST / 9am EST
• IMF releases latest Fiscal Monitor Report - 4pm BST / 11am EST
7.53am: Japan's move has been welcomed in the financial markets, where the euro is currently trading around the $1.31 mark (having briefly fallen below $1.30 yesterday).7.53am: Japan's move has been welcomed in the financial markets, where the euro is currently trading around the $1.31 mark (having briefly fallen below $1.30 yesterday).
Elisabeth Afseth of Investec says it is clearly good news, and is also encouraged by the suggestion (see 7.36am) that China could follow suit.Elisabeth Afseth of Investec says it is clearly good news, and is also encouraged by the suggestion (see 7.36am) that China could follow suit.
Afseth said:Afseth said:

Japan's early commitment may accelerate other G20 countries decisions, though the US is unlikely to change its mind.

And Europe can do with a stronger firewall. Spanish yields widened again yesterday, the 10 year was 8bps wider and at 6.04% closed above the psychologically important 6% level for the first time in 4 months. The 5 year CDS spread closed at a record high of 510bps.
Japan's early commitment may accelerate other G20 countries decisions, though the US is unlikely to change its mind.

And Europe can do with a stronger firewall. Spanish yields widened again yesterday, the 10 year was 8bps wider and at 6.04% closed above the psychologically important 6% level for the first time in 4 months. The 5 year CDS spread closed at a record high of 510bps.
7.36am: Japanese finance minister Jun Azumi has also hinted that China might provide more support for the IMF. According to Reuters, Azumi told the press conference in Tokyo that he had consulted with Chinese vice premier Wang Qishan yesterday, and found "no gap" between the two countries on IMF funding.7.36am: Japanese finance minister Jun Azumi has also hinted that China might provide more support for the IMF. According to Reuters, Azumi told the press conference in Tokyo that he had consulted with Chinese vice premier Wang Qishan yesterday, and found "no gap" between the two countries on IMF funding.
China is understood to want more influence within the IMF in return for extra funding (under the current quote scheme, China only has 3.81% of total voting power)China is understood to want more influence within the IMF in return for extra funding (under the current quote scheme, China only has 3.81% of total voting power)
7.24am: Christine Lagarde, the IMF's managing director, says she warmly welcomes Japan's promise of $60bn in new loans for its euro crisis firewall (see 7.08am).7.24am: Christine Lagarde, the IMF's managing director, says she warmly welcomes Japan's promise of $60bn in new loans for its euro crisis firewall (see 7.08am).
Lagarde describing the pledge as an "important step forward" that would promote global economic stability, adding:Lagarde describing the pledge as an "important step forward" that would promote global economic stability, adding:
Japan has a longstanding record of helping others, and of supporting the IMF in its core mission of helping to support economic stability in all its member countries. I am grateful for Japan's leadership and strong commitment to multilateralism, and I call on the broader Fund membership to follow Japan's lead.Japan has a longstanding record of helping others, and of supporting the IMF in its core mission of helping to support economic stability in all its member countries. I am grateful for Japan's leadership and strong commitment to multilateralism, and I call on the broader Fund membership to follow Japan's lead.
However, the IMF is still less than half way towards the goal of a $600bn firewall (which Lagarde announced in January). In fact, the only other commitment is the $200bn promised by eurozone states themselves.However, the IMF is still less than half way towards the goal of a $600bn firewall (which Lagarde announced in January). In fact, the only other commitment is the $200bn promised by eurozone states themselves.
It seems unlikely that the IMF will elicit another $340bn of loan pledges today. Indeed, Lagarde has told Italian financial daily Il Sole 24 Ore that it could take several weeks to get final agreement.....It seems unlikely that the IMF will elicit another $340bn of loan pledges today. Indeed, Lagarde has told Italian financial daily Il Sole 24 Ore that it could take several weeks to get final agreement.....
7.08am: Japan's pledge of $60bn of new loans for the International Monetary Fund was announced by finance minister Jun Azumi in Toyko, following a cabinet meeting.7.08am: Japan's pledge of $60bn of new loans for the International Monetary Fund was announced by finance minister Jun Azumi in Toyko, following a cabinet meeting.
Azumi told reporters that he hopes that the move will encourage other countries to follow suit, to avoid Europe's debt crisis causing more harm to the global economy. He said:Azumi told reporters that he hopes that the move will encourage other countries to follow suit, to avoid Europe's debt crisis causing more harm to the global economy. He said:
Following a series of eurozone's policy responses, it is important to strengthen IMF funding and pave the way for ensuring an end to the crisis not only for the eurozone but also for Japan and Asian countries.Following a series of eurozone's policy responses, it is important to strengthen IMF funding and pave the way for ensuring an end to the crisis not only for the eurozone but also for Japan and Asian countries.
Azumi added, though, that it will be "difficult" for the IMF to win enough new commitments this week to hit its target of a $600bn firewall. America is refusing to increase its commitment, while major emerging nations are also proving reluctant.Azumi added, though, that it will be "difficult" for the IMF to win enough new commitments this week to hit its target of a $600bn firewall. America is refusing to increase its commitment, while major emerging nations are also proving reluctant.
Azumi also criticised Europe's failure to make more progress in resolving the crisis, saying:Azumi also criticised Europe's failure to make more progress in resolving the crisis, saying:
I don't think Europe has made enough efforts on their own....I must urge them to beef up their firewall further.I don't think Europe has made enough efforts on their own....I must urge them to beef up their firewall further.
7.00am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis.7.00am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis.
It's a lively start to the day. In the last few hours, Japan has promised to lend $60bn to the International Monetary Fund, to fund a new global firewall to protect the world economy. We'll have full details and reaction to the move shortly.It's a lively start to the day. In the last few hours, Japan has promised to lend $60bn to the International Monetary Fund, to fund a new global firewall to protect the world economy. We'll have full details and reaction to the move shortly.
And a few minutes ago, India's central bank lowered interest rates for the first time in three years. The 50 basis-point cut to the benchmark lending rate to 8.00% is deeper than economists had expected, suggesting the Reserve Bank of India is concerned that economic growth is flagging.And a few minutes ago, India's central bank lowered interest rates for the first time in three years. The 50 basis-point cut to the benchmark lending rate to 8.00% is deeper than economists had expected, suggesting the Reserve Bank of India is concerned that economic growth is flagging.
Spain remains in the spotlight, with a bond auction due this morning. It plans to raise up to €3bn of 12 and 18-month bills – but will it find enough buyers, and at what price?Spain remains in the spotlight, with a bond auction due this morning. It plans to raise up to €3bn of 12 and 18-month bills – but will it find enough buyers, and at what price?
Also coming up -- the latest inflation data for the eurozone and the UK, and the start of the IMF's Spring Meetings in Washington.Also coming up -- the latest inflation data for the eurozone and the UK, and the start of the IMF's Spring Meetings in Washington.