NEWS,21.03.2013

US auto sales could rise 8% in March

US auto sales in March are expected to rise 8 percent and the annual sales pace should top 15 million for the fifth straight month as consumers shake off worries about the economy, according to research firms J.D. Power and Associates and LMC Automotive.Sales of new cars and trucks in March are expected to rise to 1 465 100 vehicles, while the annual sales pace is forecast to hit 15.3 million vehicles, J.D. Power and LMC said in a joint report released on Thursday. Since November, the annual rate has ranged from 15.3 million to 15.5 million. Auto sales are an early indicator each month of economic health. The industry has so far proven stronger than the overall US economy as the record high age of cars and trucks on the road has reached more than 11 years, and easier availability of credit have pushed consumers into the market. "We expect the economic environment to improve throughout 2013, as the likelihood of a dark cloud slowing the recovery pace diminishes," LMC senior vice president Jeff Schuster said in a statement. "Consumers do not appear phased by headwinds from Washington, as growth in auto sales are outperforming earlier expectations.”The US auto sector is scheduled to report March sales results on April 2. In February, sales rose nearly 4 percent, delivering a better-than-expected performance on strength in the US housing market. Many executives and analysts have forecast 2013 US industry sales to finish in the 15 million to 15.5 million range.J.D. Power and LMC said the average retail transaction price in March rose 3% from last year to $28 504 per vehicle.

Cyprus sets up investment fund

Cyprus politicians Thursday agreed to set up an investment fund as part of a Plan B to secure a bailout deal with eurozone lenders, while ruling out a tax on bank deposits that sank an earlier deal."Following a proposal by (President Nicos Anastasiades), there was a consensus reached and a unanimous decision was taken for the setting up of an Investment Solidarity Fund," government spokesman Christos Stylianides said in a statement.Other political leaders emerging from a crisis meeting with Anastasiades to hammer out a revised bailout plan said the subject of a "haircut" on bank deposits had been ruled out completely. Stylianides said the proposal for the fund was being processed by government lawyers, while Averof Neophytou, acting leader of the ruling Disy party, said that if it is ready, "certainly it will be before (parliament) this afternoon". Parliament was to meet at 14:00 GMT for its weekly scheduled meeting."I want to believe we will find a solution to avoid bankruptcy of this country and we will manage this," Neophytou said. European Party leader Demetris Syllouris told reporters after the meeting that "a haircut is not even on the margins", while parliamentary speaker Yiannakis Omirou said, "The haircut was not discussed, it was not on the table."No details were released of how the fund would be constituted but media had earlier reported it would comprise proceeds from the nationalisation of state and private provident funds and from bonds issued against future natural gas revenues.Phileleftheros newspaper said this would raise around €3.5bn of the €5.8bn Cyprus is required to amass to secure the eurozone bailout. It was not immediately clear how the remaining funds would be raised.Cyprus is seeking ways to secure funding for its banks after lawmakers on Tuesday flatly rejected a highly unpopular measure that would have slapped a one-time levy of up to 9.9% on bank deposits as a condition for an EU-led €10bn loan.The €5.8bn the proposal would have raised was crucial to Nicosia getting the full rescue. With that now in doubt, Cyprus must find other ways to raise cash to repay its debts.The revised plan was hastily drawn up after Finance Minister Michalis Sarris failed to make any progress in Moscow talks to secure aid, as a tough-bargaining Russia sought lucrative assets in exchange for more help.

Eurozone in reverse, China speeds up

The eurozone's economic downturn deepened this month, even before Cyprus' bailout troubles, but China's factories took a completely different path and moved up a gear, business surveys showed on Thursday.Figures due later from the United States are expected to show a pick up by factories in the world's largest economy.The eurozone survey results will add to the headache of policymakers battling to revive the currency bloc's fortunes and now to deal with the potential default of one of its members.Most responses were received before Cyprus's parliament rejected a bailout deal that including an unprecedented levy on all bank deposits leaving the country perilously close to financial collapse.Data also showed leading economy Germany with signs of fatigue. French businesses turned in their worst performance in four years, probably plunging the eurozone's second-biggest economy into a recession."The sharp decline in the flash composite PMI in March pours cold water on hopes of an imminent end to the eurozone recession," said Martin van Vliet, economist at ING."If the situation surrounding Cyprus spirals out of control the onset of recovery might well be delayed."Markit's Flash Eurozone Composite Purchasing Managers' Index (PMI), which makes up around 85 percent of the final reading and is seen as a reliable economic growth indicator for the bloc, fell to 46.5 in March from February's 47.9.That was lower than all forecasts in a Reuters poll of 23 economists and far short of median expectations for a small rise to 48.2. The index has been below the 50 mark that separates growth from contraction for all but one of the past 19 months.The positive news came from China, where factories increased their pace after a holiday dip, pointing towards solid but not spectacular first-quarter growth in the world's second-largest economy.The HSBC China 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.The pullback in February had raised concerns in financial markets that China's recovery was losing steam. Indeed, official data earlier in March suggested the economy had started 2013 with only tepid growth after a burst in the fourth quarter.But the latest data should allay some of those fears."Current readings ... seem to us to be consistent with GDP (gross domestic product) growth close to 8 percent year-on-year," wrote Dariusz Kowalczyk of Credit Agricole-CIB in Hong Kong.Survey compiler Markit, which released the preliminary data and will issue final figures at the start of April, said the picture could be even worse by then."Events that hit business confidence can have a very rapid effect on the data and so there is good reason to believe that responses we collect this week will on average be more negative," said Chris Williamson, Markit's chief economist.Having already contracted since the second quarter of last year, Markit said the latest PMI data suggested the eurozone economy would shrink 0.3 percent in the current quarter.That is worse than the 0.1 percent contraction predicted in a Reuters poll taken last week that also forecast negligible growth next quarter and only then because of German strength.Germany's composite PMI fell in March, although it held above 50 for the fourth month, suggesting some strength in Europe's largest economy. But France's sank to a four-year low.Some of the factory activity in the eurozone was generated by running down order books and incoming new business for services firms dropped at the fastest pace since October, suggesting next month's PMI will also be weak."The only bright spots are in the backwards looking indicators, like employment, holding up a bit better than expected. But the worry is these surveys were collected before the bad news on Cyprus really hit, so you have to wonder what impact that will have on business sentiment," Williamson said.

Obama: Israel at a crossroads

US President Barack Obama warned on Thursday that Israel was at a "crossroads" and should choose peace with Palestinians because it was necessary for its own ultimate security and was morally just.Obama argued that though the Palestinian issue had receded as Israelis felt safer in their own homes, it was necessary to solve the decades-old dispute so the Jewish state could fulfil its destiny."Today, Israel is at a crossroads," Obama said in a major speech, adding that although Israelis felt safer under Iron Dome missile defences and barriers to thwart suicide bombers, "peace is the only path to true security".Obama made his most explicit case yet for Israelis to re-engage in peace talks which foundered two-and-a-half years ago in the speech at a Jerusalem convention centre that formed the centrepiece of his three-day visit to Israel.The president said he realised that many Israelis did not share his views and that many observers were sceptical at the prospect of another US-sponsored peace drive, but said: "I want you to know that I speak to you as a friend who is deeply concerned and committed to your future."First, peace is necessary. Indeed, it is the only path to true security," Obama said, hours after returning from a five-hour visit to see Palestinian leaders in the West Bank."Second, peace is just," Obama said, again seeking to show he understood the reticence of Israelis who believed Palestinian leaders had missed "historic opportunities".Finally, he concluded: "Peace is possible," but acknowledged "there will always be a reason to avoid risk and there's a cost for failure."Negotiations will be necessary, but there is little secret about where they must lead - two states for two peoples."There will be many voices that say this change is not possible," Obama said in the speech, which was in some ways a bookend to his historic 2009 address to the Muslim world in Cairo."But remember this: Israel is the most powerful country in this region. Israel has the unshakeable support of the most powerful country in the world."Obama also used the speech to seek to bolster a sense of security among Israelis, and to touch on regional turmoil raging around the Jewish state.He demanded that foreign governments blacklist Hezbollah as a "terrorist organisation", slamming the Shi'ite Lebanese militia for attacks on Israelis."Every country that values justice should call Hezbollah what it truly is - a terrorist organisation," Obama said, in remarks aimed at the EU which has declined to put the group on a blacklist of terrorist movements. Obama also issued a new call for Syrian President Bashar Assad to leave power amid a bloody uprising that has claimed 100 000 lives."America will also insist that the Syrian people have the right to be freed from the grip of a dictator who would rather kill his own people than relinquish power," he said.Obama has angered critics who say his rhetoric is not enough on Syria and dispute his insistence that arming rebels battling Assad could make the problem even worse.The US leader issued a fresh warning to Iran, saying a nuclear-armed Islamic Republic would be a danger to the entire world, as he sought to convince Israelis he takes seriously Tehran's threat to the Jewish state.Obama said he favoured a diplomatic resolution to the nuclear dispute but warned Iran's time was not unlimited: "I have made the position of the United States of America clear: Iran must not get a nuclear weapon. This is not a danger that can be contained."

Obama, Netanyahu show solidarity on Iran

Seeking a fresh start to a strained relationship, President Barack Obama and Israeli Prime Minister Benjamin Netanyahu on Wednesday demonstrated solidarity on the key issues that have stirred tensions between them. The US president vowed he would do "what is necessary" to prevent Iran from obtaining a nuclear weapon, while Netanyahu reaffirmed that his newly formed government seeks a two-state solution to Israel's decades-long dispute with the Palestinians.Obama, in Israel for the first time in his presidency, also pledged to investigate reports that Syria had used chemical weapons for the first time in its two-year civil war. And he sternly warned Syrian leader Bashar Assad that use of such weapons would be a "game-changer," one that could potentially draw the US military into the conflict for the first time."The Assad regime must understand that they will be held accountable for the use of chemical weapons or their transfer to terrorists," Obama said, standing alongside Netanyahu at a nighttime news conference.Expectations were low for a breakthrough during Obama's visit on any of the major issues roiling the region. Instead, the president was focused on reassuring anxious Israelis that he is committed to their security, and on resetting his rocky relationship with Netanyahu.The two leaders have been at odds over Israeli settlements and Iran's disputed nuclear programs, and Netanyahu famously lectured Obama in front of the media in the Oval Office on Israel's right to defend himself.Compared with past encounters, there was a noticeable lack of uneasiness Wednesday, the first time the two leaders have met publicly after both survived elections that will leave them stuck with each other for the foreseeable future. They traded jokes throughout a day of side-by-side appearances. And they repeatedly referred to each other by their first names, Obama calling his Israeli counterpart by his nickname, "Bibi".On Iran in particular, the two leaders sought to show they were united in their desire to prevent the Islamic republic from developing what Obama called "the world's worst weapons."Although preventing Iran from developing a nuclear weapon is a priority of both countries, Netanyahu and Obama have differed on precisely how to achieve that goal. Israel repeatedly has threatened to take military action should Iran appear to be on the verge of obtaining a bomb, while the US has pushed for more time to allow diplomacy and economic penalties to run their course.Obama said he continues to prefer a diplomatic solution and sees time to achieve it. Whether that works, he said, will depend on whether Iran's leaders "seize that opportunity".

Iran threatens Israel retaliation

Iran will "annihilate" the Israeli cities of Tel Aviv and Haifa if it comes under attack by the Jewish state, supreme leader Ayatollah Ali Khamenei warned on Thursday."Every now and then the leaders of the Zionist regime threaten Iran with a military attack," Khamenei said in a live televised speech from the north-eastern holy city of Mashhad, referring to Israel."They should know that if they commit such a blunder, the Islamic republic will annihilate Tel Aviv and Haifa," he said.Iran is said to possess ballistic missiles capable of reaching Israel. It also has close relations with Israel's foes in the region, including Lebanon's Hezbollah and Palestinian militants in the Islamist-ruled Gaza Strip.Khamenei spoke with little sign of an easing in Tehran's position in its confrontation with the West over its disputed nuclear programme of uranium enrichment.Israel, widely believed to be the Middle East's sole but undeclared nuclear power, suspects that Tehran is seeking atomic arms, a fear shared by the US and Western powers, and has not ruled out a military strike.Washington has also refused to rule out the military option, but insists it prefers a diplomatic solution to the nuclear stand-off.US President Barack Obama in Israel on Wednesday accepted that the Jewish state would not cede its right to confront Iran's nuclear threat to the US.

Venezuela cuts off talks with US

Venezuela said Wednesday it has suspended a "channel of communications" with Washington as it ratchets up tension ahead of elections to replace the late president Hugo Chavez.Foreign Minister Elias Jaua said the move was a response to "interventionist statements" by US assistant secretary of state Roberta Jacobson, who called for "open, fair and transparent" elections on 14 April."This channel of communication is suspended at this time, deferred until there is a clear message on what type of relationship the United States wants with Venezuela," Jaua said. "It makes no sense to continue wasting time," he added.Venezuela's acting President Nicolas Maduro is running against opposition leader Henrique Capriles, who lost to Chavez in October elections and is regarded as facing an uphill battle against Maduro as well. Chavez, who dominated Venezuela during his 14 years of power, died of cancer on 5 March after a long illness that unsettled the political landscape. Maduro said in January that he had had contacts with Washington in late 2012 through the Venezuelan ambassador at the Organization of American States, which he said were authorized by Chavez.