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from Breakingviews:

Giant fertiliser combo looks tough to cultivate

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A possible $27 billion tie-up between two fertiliser giants could prove hard to cultivate. Norway’s Yara International and Chicago-based CF Industries are talking about merging to create by far the world’s biggest ammonia producer. The two companies boast similar valuations and, together, could harvest significant cost savings. But they say they’re contemplating a merger of equals, and that’s not a deal variety that flourishes easily.

Four years after CF beat Yara to buy Terra Industries, the far larger union would make industrial sense. JPMorgan notes Yara is bigger in western Europe and South America, and in products such as urea and nitrates, while CF’s input costs are much lower thanks to America’s cheap and abundant natural gas.

Meanwhile Liberum reckons annual savings could hit $250 million. Hence the boost to Yara’s market value, which by about 1000 GMT on Tuesday had risen more than $800 million to nearly $14.5 billion.

from MacroScope:

Smoke signals from the Bank of England

Given the silence that attends Bank of England policy meetings which result in no change of course, today’s quarterly inflation report is the main chance to hear the latest thinking. Governor Mark Carney will talk to the media for an hour or so after its release.

The ongoing strength of economic data means the odds of a first interest rate rise this year are narrowing and one could certainly come before May 2015 elections, an unwelcome prospect for the government.

from MacroScope:

Good news for Greece?

Unemployment is sky high, national debt is not far short of double the size of an economy which is still shrinking and its ruling coalition has a wafer-thin majority, yet there are glimmers of hope in Greece.

Having finally struck a deal with the EU and IMF to keep bailout loans flowing, Athens is preparing to dip its toe back into the bond market with a five-year bond for up to 2 billion euros.

from MacroScope:

IMF stumps up for Ukraine

The International Monetary Fund has announced a $14-18 billion bailout of Ukraine with the aim of luring in a total of $27 billion from the international community over the next two years.

Ukrainian officials say they need money to start flowing in April. The U.S., EU and others in the G7 would row in behind an IMF package, helping Ukraine meet its debt obligations and begin the process of rebuilding. In total, Kiev has talked about needing $35 billion over two years so they are pretty close.

from MacroScope:

Marathon banking union talks

Shots were fired at an international team of monitors in Crimea over the weekend, violence flared in Sevastopol as thousands staged rallies and Angela Merkel, who perhaps has the most receptive western ear to Vladimir Putin, rebuked him for supporting a referendum on Ukraine’s southern region joining Russia. But in truth we’re not much further forward or backwards in this crisis.

The West from Barack Obama on down has said the referendum vote next Sunday is illegal under international law but it’s hard to put the genie back in the bottle if Ukraine’s southern region chooses to break away. The best guess – but it is only a guess – is that barring an accidental sparking of hostilities, there is not much percentage in Russia putting its forces in Crimea onto a more aggressive footing in advance of the vote.

from MacroScope:

ECB forecasts to contrast with Britain’s

The European Central Bank holds its last rates meeting of the year with some of the alarm about looming deflation pricked by a pick-up in euro zone inflation last week – though at 0.9 percent it remains way below the ECB’s target of close to two percent.

The spotlight, as always, will be on Mario Draghi but also on the latest staff forecasts. If they inflation staying well under target in 2015 (which is quite likely), expectations of more policy easing will gather steam again.

from Breakingviews:

Bayer can pay more for cancer blockbuster partner

By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Bayer can pay more for Algeta. After a leak, the German pharma and plastics giant has admitted making a 336-crown-a-share, or 1.8 billion euro ($2.4 billion), takeover overture to its Norwegian partner. Shares in the smaller firm promptly rose above Bayer’s proposal. That looks appropriate: this opening gambit is not overly generous. Algeta’s flagship prostate cancer treatment, Xofigo, is promising. And the technology pioneered here could be used to treat other cancers.

from MacroScope:

ECB quandary

Another round of European Central Bank speakers will command attention today with disappearing inflation fuelling talk of further extraordinary policy moves.

Chief economist Peter Praet, who last week raised the prospect of the ECB starting outright asset purchases (QE by another name) if things got too bad, is speaking at Euro Finance Week in Frankfurt along with Vitor Constancio and the Bundesbank’s Andreas Dombret, while Joerg Asmussen makes an appearance in Berlin.

from MacroScope:

UK recovery, can you feel it?

Third quarter UK GDP data are likely to show robust growth – 0.8 percent or more, following 0.7 percent in Q2 – more kudos to a resurgent finance minister George Osborne who only a year ago was buried in brickbats.

We can argue about the austerity versus growth debate ‘til the cows come home – there is still a strong case that if the government hadn’t cut so sharply, growth would have returned earlier and debt would have fallen faster. But the fact that the economy is ticking along nicely 18 months before the next election means Osborne has won the argument politically.

from MacroScope:

Humdrum summit

A two-day EU summit kicks off in Brussels hamstrung by the lack of a German government.

Officials in Berlin say they want to reach a common position on a mechanism for restructuring or winding up failing banks by the end of the year but with an entire policy slate to be thrashed out and the centre-left SPD saying the aim is to form a new German administration with Angela Merkel’s CDU by Christmas, time is very tight.

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