Markets mostly shrugged off the implications of a plan to impose a levy on depositors in banks in Cyprus. The STOXX Europe 600 Index fell just 0.2 percent on Monday while the S&P 500 Index fell 0.6 percent.
The lack of panic by investors probably did not surprise the folks at Global Macro Monitor, who had written on Monday that “we seriously doubt Cyprus’ $20 billion economy is going to derail the fundamentals that have been driving the U.S. stock market”.
Indeed, Citigroup chief economist Willem Buiter, who had in the past often criticised official measures to resolve Europe's debt crisis, even described the Cypriot bank creditor bail-in as “a net positive for the euro area”.
Among economic reports on Monday, there were some housing data from the US and China.
In the US, the National Association of Home Builders/Wells Fargo index of builder confidence fell by 2 points to 44 this month, the second consecutive decline. “In addition to tight credit and below-price appraisals, homebuilding is beginning to suffer growth pains as the infrastructure that supports it tries to re-establish itself,” David Crowe, chief economist at the builders association, said in a statement.
Moving in the opposite direction, new home prices in China rose 2.1 percent in February from a year ago. This followed an increase of 0.8 percent in January. Home prices rose month-on-month in 66 of 70 major cities monitored by the government, up from 53 in January.
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