Cyprus Deal Lowers Stocks (Bloomberg)
Investor optimism fell in the aftermath of Cypriot banks reaching a deal, causing U.S. stocks to fall for the day. “We’re in an environment where in both North America and Europe we have some serious policy decisions that have to take place,” Ron Florance, the Scottsdale, Arizona-based managing director of investment strategy at Wells Fargo Private Bank, said. “When a policy misstep is bad it’s real bad, and the discussions last week were really bad decisions. That’s been resolved, but it always puts people on edge.”
Cyprus Deal Hurts Russian Investors (CNBC)
Although Cyprus’ bank deal hits Russian investors hard, Michael Sarris, Cyprus’ finance minister, says the relationship between the two countries will not be damaged. “I think the Russians were understandably disappointed with this turn of events. They have had a long, successful and happy history and association and this has come partly as a shock despite the fact that many of these things had been rumored,” he said.
Cyprus Deal Detrimental to Euro (Reuters)
Although Cyprus reached a deal and initially caused optimism and growth in the euro, fears about the region’s future quickly settled in and lowered the continent’s currency against both the dollar and the yen. “Fear of a deposit tax could spark a capital move out of peripheral Europe into German banks or the United States. That’s the real contagion risk from Cyprus,” said Brian Daingerfield, currency strategist at Royal Bank of Scotland in Stamford, Connecticut.