Global

IMF Sees Rising Risks For Emerging Markets’ Corporate Debt. Years of cheap credit have inflated corporate and sovereign debt in emerging markets that now find themselves at greater risk of capital flight if global interest rates rise further, the International Monetary Fund said. While the IMF predicts a smooth withdrawal of monetary stimulus by the Federal Reserve, a “bumpy exit” is possible, Jose Vinals, the head of the IMF’s capital markets department, said in prepared remarks. The result could be a faster-than-anticipated increase in interest rates, widening credit spreads and greater financial volatility, he said. “Emerging markets are especially vulnerable to a tightening in the external financial environment, after a prolonged period of capital inflows, easy access to international markets, and low interest rates,” Vinals said in remarks accompanying the release of the IMF’s Global Financial Stability Report. (Bloomberg)

Asia

Japan, Fresh From Australia Pact, Says US Trade Talks Difficult. Japan, fresh from clinching a trade deal with Australia, said on Tuesday it hoped for a similar result in negotiations with the United States and also for a broad regional trade pact, but said the talks would be difficult. Japan and the United States are pushing for a two-way trade deal, a crucial part of a broad U.S.-led Trans-Pacific Partnership (TPP), before U.S. President Barack Obama arrives in Japan this month. U.S. Trade Representative Michael Froman will hold talks with Japanese Economy Minister Akira Amari on Wednesday, although a senior U.S. lawmaker said there was little chance of a breakthrough as long as the White House did not have fast-track authority to guarantee a quick passage through Congress. The United States wants Japan to open its rice, beef and pork, dairy and sugar sectors - politically powerful sectors that Abe has vowed to defend. Japan wants a timetable on U.S. promises to drop tariffs of 2.5 % on imports of passenger cars and 25 % on light trucks. (Reuters)

USA

Wholesale Stock Accumulation Slows, To Hit Growth. U.S. wholesale inventories rose at a slower pace in February, strengthening views that restocking will weigh on economic growth in the first quarter. The Commerce Department said on Wednesday wholesale inventories increased 0.5 % after advancing 0.8 % in January. The increase in wholesale stocks in February was in line with economists' expectations. Businesses accumulated too much stock in the second half of last year and are placing fewer orders with manufacturers while they work through the pile of unsold goods. That, together with severe weather, the expiration of long-term unemployment benefits and food stamps cuts, is expected to weigh on firstquarter GDP growth. (Reuters)

Federal Reserve Plays Down Own Forecasts For Rate Rise. The Federal Reserve played down forecasts by some of its own policy makers that interest rates might rise faster than they previously predicted. “Several participants noted that the increase in the median projection overstated the shift in the projections,” according to minutes of the March 18-19 meeting of the Federal Open Market Committee released today. Some expressed concern the rate forecasts “could be misconstrued as indicating a move by the committee to a less accommodative reaction function.” (Bloomberg)

Europe

UK Goods Trade Deficit Narrows To £9.1bn In February. The UK's goods trade deficit with the rest of the world narrowed in February by more than expected, helped by a fall in imports, official data has shown. The Office for National Statistics (ONS) said the trade deficit shrank to £9.1bn from £9.4bn in January. Economists had expected a deficit of £9.2bn. Imports fell 2.2% to £32.6bn in February, helping to offset a 1.6% fall in exports to £23.5bn - the lowest level of exports since November 2010. (BBC)

British Retailers Cut Prices At Fastest Pace Since 2006. British retailers slashed prices in March at the fastest rate since 2006, industry figures showed on Wednesday, a reflection of the squeeze in consumers' incomes that has persisted even as the economy recovers. The British Retail Consortium said shop prices in early March were 1.7 % lower than at the same time in 2013, the biggest annual decline in any month since the series began in December 2006. That was the 11^th consecutive month of falling prices. (Reuters)

Greece Returns To Debt Markets With Five-Year Bond. Greece is to sell five-year bonds in the country's first long-term debt sale since its international bailout started four years ago. The news came as thousands of striking Greeks marched on parliament to protest against job and spending cuts. "The Hellenic Republic announces today it has mandated international banks for an imminent five-year benchmark bond issue," the finance ministry said. The bond would be priced in "the immediate future", it said. (BBC)

Russia’s First-Quarter Capital Outflows Largest Since Late 2008. Russian capital outflows in the first quarter were the largest since the last three months of 2008 when the collapse of Lehman Brothers Holdings Inc. triggered the biggest credit squeeze since the Great Depression. Net outflows totaled $50.6 billion, more than double the $17.8 billion that left in the previous quarter, the central bank in Moscow said in a statement on its website today. In the final quarter of 2008,capital outflows were $132.1 billion. Outflows for the whole of last year reached $59.6 billion. (Bloomberg)

Currencies

Dollar Extends Loss Vs. Euro After FOMC Minutes. The dollar fell further against the euro Wednesday after minutes from the Federal Reserve’s March meeting detailed risks that could keep interest rates depressed even after the first rate hike. The euro increased to $1.3856 from $1.3797 on Tuesday, getting a boost after the minutes. The ICE dollar index, a gauge of the greenback’s strength against six rivals, declined to 79.514 from 79.759. The dollar rose to ¥101.98 from ¥101.79 late Tuesday. The pound gained, moving to $1.6793 from $1.6749, while the Australian dollar moved up to 93.86 U.S. cents from 93.60 U.S. cents. (Market Watch)

Commodities

U.S. Crude Oil Up On Spike In Gas Demand, Technical Trade. U.S. crude rose more than $1 on Wednesday, driven by a technical rally and unexpectedly high gasoline demand, while tensions between Russia and the West underpinned Brent crude prices. U.S. oil rose as much as $1.21 to a session high of $103.77 a barrel. The contract settled $1.04 higher at $103.60 per barrel. Brent crude settled 31 cents higher at $107.98 a barrel. (Reuters)

Gold Turns Higher After Fed Minutes Ease Rate Hike Fears. Gold rose on Wednesday, boosted by a weaker dollar and the release of Federal Reserve minutes that eased concerns the central bank was set to hike interest rates soon after it ended its massive monetary stimulus later this year. Spot gold was up 0.3 % at $1,312.26 an ounce by 2:37 p.m. Among other precious metals, silver was down 0.4 % at $19.92 an ounce, while platinum rose 0.4 % to $1,439.49 an ounce and palladium gained 0.4 % to $772.57 an ounce. (Reuters)