Yen continues strengthen across the board

Mon, Sep 28 2009, 02:14 GMT
http://www.fxstreet.com

FXstreet.com (Buenos Aires) – USD/JPY Current Price: 89.00. With Japan Minister of Finance blessing, yen continues strengthen across the board, reaching extreme hourly readings at the 88.20 level, and rebounding to current 89.00 zone, still bearish in bigger time frames.

20 SMA above current price, in both 1 and 4 hours charts, suggest trend remains strong, yet 4 hours indicators approach to extreme readings. “Watch for the pair to regain the 89.60 level to extend upside corrections to the 90.00 area,” said Valeria Bednarik, collaborator at FXstreet.com.

Support levels: 88.60 88.20 87.90. Resistance levels: 89.30 89.60 89.00.

ASIA MARKETS: Japan Exporter Shares Skid As Yen Surges

Mon, Sep 28 2009, 03:21 GMT
http://www.djnewswires.com/eu

ASIA MARKETS: Japan Exporter Shares Skid As Yen Surges

By V. Phani Kumar

Japanese exporters plunged Monday as the yen jumped to an eight-month high against the U.S. dollar, sparking fresh fears that repatriated earnings of automobile and electronics companies could take a hit.

The yen's latest rally came after Japanese finance minister reiterated the government's continued unwillingness to intervene in the currency market.

In early Asian trading, the U.S. dollar fell as low as 88.23 yen, a level it hasn't seen since January 21, according to FactSet Research data. The dollar hit a 13-year low of 87.10 yen that month, according to EBS. More recently, the dollar was buying 89.08 yen, down from 89.61 yen in late New York trading Friday.

The yen also soared against other currencies, with the euro recently changing hands at 129.96 yen, down from 131.70 yen late Friday. The British pound slumped to 140.78 yen from 143.00 yen Friday, and the Australian dollar slid to 76.67 yen from 77.81 yen Friday.

Automakers were hurt the most Monday, with shares of Honda Motor Co. (HMC) slumping 5.3%, Nissan Motor Co. (NSANY) skidding 6.2% and Toyota Motor Corp. (TM) sliding 3.8%.

The steep fall in exporter shares reflected concerns that many of them, which had assumed an exchange rate of 90 yen to 95 yen against the U.S. dollar when they made their annual forecasts, might miss those targets as the stronger yen erodes the value of their overseas earnings.

But some analysts remained positive about automobile makers.

"While Japanese auto stocks have weakened since August, reflecting the impact of yen appreciation to [90 yen to a U.S. dollar], there is growing evidence of U.S.-led earnings recovery," Goldman Sachs analysts Kota Yuzawa and Yuichiro Isayama wrote in a report.

"We see improvement in both U.S. individual consumption and the sales financing environment, which has shackled sales," they wrote, adding that stronger-than-expected production volumes at Toyota were likely to drive analysts' consensus forecasts.

Among other exporters, shares of Nintendo Co. (NTDOY) dropped 3.4% and Toshiba Corp. fell 5.2%.

In wider Asian market action, Japan's Nikkei 225 Average dropped 2.4% to 10,023.99, China's Shanghai Composite rose 0.2%, Hong Kong's Hang Seng Index fell 1.1%, Australia's S&P/ASX 200 slid 1.3% and South Korea's Kospi shed 1.1%.

'Not abnormal'

Japanese Finance Minister Hirohisa Fujii said Monday that recent movements in the U.S. dollar/yen exchange rate are "not abnormal" at this point, suggesting he still isn't worried about the Japanese currency's rise, according to Dow Jones Newswires.

Fujii also reiterated that "foreign exchange dumping" to defend Japanese exporters would be the wrong policy for the government to take, and that artificially influencing foreign exchange rates would be "a mistake."

Analysts have attributed the yen's rally also to seasonal, end-of-quarter strength as exporters repatriated their overseas earnings.

Fuji reportedly made similar comments Friday, echoing comments he has consistently made since being appointed Finance Minister earlier this month in the new government of Prime Minister Yukio Hatoyama.

Despite Fujii's stated opposition to intervention, some analysts were skeptical the government can really afford to wait much longer to intervene if the yen's strength continued.

"In our opinion, even though Fujii has proven to be more supportive of a stronger than weaker yen, political pressure on the new government may force them to intervene prematurely," Kathy Lien, director for currency research, wrote in a note to clients.

Lien, however, cautioned selling in the dollar-yen pair could accelerate "if there are any disappointments in economic data next week."

Fujii's Friday comments "are probably an indication that he wouldn't intervene even if the dollar breaks below 90 yen," Eisuke Sakakibara, who served as vice finance minister for international affairs in 1997-1999, said in an interview with Dow Jones Newswires Friday.

Sakakibara was also quoted as saying that the finance minister would likely take fall below 80 yen as abnormal.

"These comments are about as clear a buy signal as is likely to be heard," said Societe Generale's Asia forex and rates strategist Patrick Bennett.

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=qaPjW9BvV%2BVg1VIZNjeFbw%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

September 27, 2009 23:21 ET (03:21 GMT)

China confident it can overcome economic crisis

Mon, Sep 28 2009, 02:29 GMT
http://www.forexlive.com

Vice Chairman, Liu Tienan, of the NDRC, has said that they are confident that China can overcome the economic crisis but should guard against risks such as inflation. He also said there was an improvement in production in recent months.

Shanghai Composite turns negative, Nikkei trades under 10,000

The Shanghai Composite is trading in negative territory after opening up this morning, currently its down 0.3%, as weak Shanghai copper prices weigh on the Index. The move lower has accelerated the Nikkei's losses, now trading under 10,000, down 2.8% as a strong Yen contiues to hit shares of exporters.

Fujii says currency moves becoming one-sided, USDJPY edges higher, Fu

In his latest comments, Hirohisa Fujii said that currency moves were becoming one-sided in favour of a rising Yen, and that he was watching the Yen's rise carefully. He said he favours stable currency moves. Seems he has changed his tone a bit after such a big move. USDJPY has moved up thru 89.30.

Japan Fin Min Fujii: Desirable If Forex Rates Stable

Mon, Sep 28 2009, 05:14 GMT
http://www.djnewswires.com/eu

Japan Fin Min Fujii: Desirable If Forex Rates Stable

TOKYO -(Dow Jones)- Japanese Finance Minister Hirohisa Fujii Monday adjusted his pro-strong-yen comments from earlier in the day, saying the currency's recent rise is slightly "one-sided" and that it is desirable for foreign exchange rates to stay stable.

"The temporary movements (in the yen against the dollar) at present are a little one-sided," Fujii said at a seminar in Tokyo. "Prime Minister (Yukio) Hatoyama said in Pittsburgh that it's desirable if foreign exchange rates are stable, and I feel absolutely the same," he added.

Fujii also said that although he voiced opposition to nations devaluing their currencies to lift exports, he did not mean to signal support for a further rise in the yen.

Fujii's comments suggest that while he has little intention to intervene in markets to curb a strengthening yen, he doesn't want to unnecessarily fuel speculation and encourage dealers to push the currency higher to the detriment of Japan's export-led economy.

-By Takashi Nakamichi, Dow Jones Newswires; 813-6895-7558; takashi.nakamichi@dowjones.com

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(END) Dow Jones Newswires

September 28, 2009 01:14 ET (05:14 GMT)


Copyright 2009 Dow Jones & Company, Inc.

Asian Forex Wrap

Mon, Sep 28 2009, 04:32 GMT
http://www.forexlive.com

Merkel to form Center-Right Coalition. EURUSD trades up to 1.4720 on the back of the Merkel victory. RBA says downturn in Australia "mild", interest rates to move higher. Japan Finance Minister, Fujii, says recent FX moves normal. Accelerates USDJPY sell off. NDRC: Confident China can overcome economic crisis. Nikkei smashed down thru 10,000. Gold lower at 988.50. Fujii Backtracks, says currency moves becoming one sided in favour of a rising Yen. Prefers stable currency moves. USDJPY pops up above 89.30 on the comments. Probably the busiest days so far in USDJPY seen in Asia. It was a wild and volatile day which started with the EURUSD taking out stops above 1.4700 for a run to 1.4720 on the back of the Merkel win, only to end up over 100 points lower soon after. USDJPY started steadily but with comments from the new Japanese government implying that they will not intervene in the FX market, the sell off was soon under way. It fell away thru the much talked about bids at 89.50 like a knife thru butter. Stops were hit all the way down before eventually pulling up at 88.20. Support came via importer bids and profit takers which saw USDJPY rebound back above 89.00 and continue higher with backtracking comments from Fujii saying that the FX moves were one sided in favour of arising Yen. Yen crosses also suffered, GBPJPY the most volatile, falling from 143.15 to 139.70 at one stage, before recovering to above 141.40. EURJPY followed the USDJPY lower trading under 130.00, but found support from importer bids into the Tokyo fix, helping it recover back above 130.50 in the afternoon. It found no support via the EURUSD though, it collapsing down thru Sovereign bids at 1.4620 and taking out stops under 1.4600 and 1.4580. Notable sellers towards 9300 in EURGBP also added to its fall. AUDUSD found some early morning resilience via hawkish RBA comments but was no match for the sell off in AUDJPY, pushing the AUD back below 86c, in what turned out to be a 100 pip range trading day. Ranges: EURUSD 1.4559 - 1.4720 GBPUSD 1.5768 - 1.5972 USDJPY 88.22 - 89.65 EURJPY 129.80 - 131.81 AUDUSD 8582 - 8682 Goodluck, Sam

GLOBAL MARKETS: European Stocks Seen Lower On Earns Concerns

Mon, Sep 28 2009, 06:26 GMT
http://www.djnewswires.com/eu

GLOBAL MARKETS: European Stocks Seen Lower On Earns Concerns

  By Ishaq Siddiqi
  Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--European stock markets are expected to open on a weaker note Monday, weighed down by negative sessions on U.S. markets Friday and Asia earlier Monday, as concerns mount over the quality of upcoming third quarter corporate earnings.

Following the disappointment from Blackberry maker Research in Motion, there’s a growing feeling among analysts that the next set of results out of corporate America won’t be as rosy as the previous quarter, said Ben Potter, research analyst at IG Markets.

"Globally, the momentum generated from second quarter earnings is fast abating with investors concerns growing by the day as to whether or not this market has got ahead of itself. Gone are the days of rising on ‘less bad’ economic releases. The market is desperately searching for the next catalyst to take us higher and at the moment, no one seems to know where it might come from," he said.

Potter expected London's FTSE 100 index to open 15 points lower at 5067, Frankfurt's DAX index off 11 points at 5570, and the CAC-40 index in Paris 21 points lower at 3718.

Still, as the week progresses, "we have the final U.K. GDP figure for 2Q tomorrow (at 0830 GMT) and the U.S. non farm payrolls on Friday (at 1230 GMT) as just a couple of the higher profile numbers due, so although the short term may end up being focused on consolidation, there’s certainly scope for another break out in the coming days," Potter added.

Earlier Monday, Asian stock markets were sharply lower, tracking Wall Street's weak showing on Friday. Tokyo stocks were leading the losers, hurt by the Japanese yen's continued strength against the dollar.

"Concern over the yen’s recent appreciation and how this will impact profits in Japan is weighing heavily across the continent and with the month-end nearing, the potential for traders to keep taking money off the table amidst this current uncertainty cannot be overlooked," said Potter.

Japan's Nikkei 225 index closed 2.5% lower at 9994.66, below the key 10,000 mark for the first time since July. South Korea's Kospi Composite was down 0.8%, and Hong Kong's Hang Seng Index was down 1.6%.

On Wall Street Friday, a prevailing concern that the nearly six-month surge in stocks may have overextended the current economic environment forced some of the best-performing companies of the third quarter, including Caterpillar and American Express, to the downside Friday, while Research In Motion paced technology companies into the red.

Overall, the Dow Jones Industrial Average slipped 0.4% to 9665.19, marking its fourth decline in five sessions. The index lost 155.01 points, or 1.6%, this week, snapping a two-week winning streak. For September, the DJIA remains up 1.8%. The Standard & Poor's 500 lost 0.6% to 1044.38, on Friday, closing out the week down 23.92, or 2.2%.

In the currency markets, the spotlight was on the rising Japanese yen. At 0620 GMT, the dollar was buying Y89.36, down from Y89.76 late in New York trade on Friday. The dollar hit Y88.23 earlier, an eight-month low, with the yen bolstered by increased risk aversion as well as exporters' yen purchases for settling accounts before the end of the third quarter.

Japanese Finance Minister Hirohisa Fujii told reporters early Monday that he had no comment on the current level of the yen against the dollar, but the yen's recent strengthening trend was "not abnormal." He added that it was a mistake to use "foreign exchange dumping" to defend industry.

Royal Bank of Scotland said in a note that "investors may try to push the dollar below the year's low of Y87.10 in the early stage of this week. But still, we don't think the Japanese government will step into the market to curb the yen's rise."

The euro was also hit by increased risk aversion, and touched a two-month low against the yen of Y129.84. It was last at Y130.58 from Y131.72 in late New York trade on Friday. The euro was at $1.4613, from $1.4672.

Meanwhile, the sterling continued its recent selloff against the greenback. At 0620 GMT, sterling stood at $1.5844, compared with $1.5932 on Friday.

Elsewhere, spot gold traded at $989.55 per troy ounce, down over $4 from the New York close, while Nymex light, sweet crude contract for November delivery was 36 cents lower on Globex, at $65.66 per barrel.

European government bonds have opened strongly Monday, boosted by the weak tone on the equity markets. At 0625 GMT, the December bund contract stood at 121.73, 0.25 higher.

-By Ishaq Siddiqi, Dow Jones Newswires; +44-20-7842-9488; ishaq.siddiqi@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=T8ZKY07wPDWtrJ1DMHaoMw%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

September 28, 2009 02:26 ET (06:26 GMT)


Copyright 2009 Dow Jones & Company, Inc.

Asian stocks fall on earns concerns, Yen continues with its strengthening

Mon, Sep 28 2009, 07:00 GMT
http://www.fxstreet.com

FXstreet.com (Barcelona) – Asian stocks markets have started today's session following the weak note posted by Wall Street last Friday on the back of concerns on earnings and yen strengthening. European markets seem to continue with the red numbers. USD/JPY fell to 8-month low.

Nikkei 225 collapses 2.50% today to trade just above 10,000 points level. Hang Seng index drops 1.66% so far today, S&P 500 posts 0.75% declines, MSCI Asia Apex 50 decreases 1.75%.

Asian stocks, as well as European markets, are concerning on earnings on the back of the Yen strengthening and the Japanese finance minister blessing the recent appreciation

Yen has continue today with its strengthening against the Dollar with the pair losing 0.35% on the day from opening price at 89.63 to the current 89.30, and collapsing around 335 pips from last Thursday high at 91.60 to 8-month low at 88.22.

EUR/USD is falling 0.90% from opening price action at 1.4704 to the current 1.4610/20 after posting 1.4560 as 2-week low. GBP/USD is trading at 4-month lows close to 1.5800, 0.90% below todqay's opening price action at 1.5966.

EUR/JPY trades 0.75% lower than 131.76 opening price to the current 130.80. GBP/JPY declines 1.00% from opening at 143.10 to the 141.50 zone.

DATA SNAP: Hungary Jun-Aug Jobless Rate At 13-Year High

Mon, Sep 28 2009, 07:00 GMT
http://www.djnewswires.com/eu

DATA SNAP: Hungary Jun-Aug Jobless Rate At 13-Year High

  By Veronika Gulyas
  Of DOW JONES NEWSWIRES

BUDAPEST (Dow Jones)--Hungary's average unemployment rate in June-August again hit a 13-year high, meeting analysts' expectations, as a result of the deep economic downturn, data published Monday showed.

The three-month moving-average rate of unemployment rose in June-August to 9.9%, from 9.7% in May-July and from 7.5% in the corresponding period a year earlier, the Central Statistics Office, or KSH, said.

The data met the forecast of three analysts polled by Dow Jones Newswires for 9.9%.

Unemployment hit a 13-year high of 9.9% in the February-April period.

Statistics office Web site: www.ksh.hu

-By Veronika Gulyas, Dow Jones Newswires; +361-267-0623; veronika.gulyas@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=T8ZKY07wPDWtrJ1DMHaoMw%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

September 28, 2009 03:00 ET (07:00 GMT)


Copyright 2009 Dow Jones & Company, Inc.

DATA SNAP:Italy Sep Consumer Confidence Highest Since Dec 06

DATA SNAP:Italy Sep Consumer Confidence Highest Since Dec 06

  By Luca Di Leo and Chiara Vasarri
  Of DOW JONES NEWSWIRES

ROME (Dow Jones)--Italian consumer confidence rose unexpectedly in September to its highest level in nearly three years on households' optimism over the economy and their own personal situation, data showed Monday.

State-funded research center ISAE said its seasonally-adjusted consumer confidence index for Europe's fourth-largest economy jumped to 113.6 in September from 111.8 in August.

The 113.6 reading was well above the 111.4 forecast by eight economists polled by Dow Jones Newswires. Consumer confidence has been rising since March, when the index hit a low of 99.8.

  Web site: www.isae.it

-By Luca Di Leo and Chiara Vasarri, Dow Jones Newswires; 39 06 69766925; luca.dileo@dowjones.com

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(END) Dow Jones Newswires

September 28, 2009 03:39 ET (07:39 GMT)


Copyright 2009 Dow Jones & Company, Inc.

UK Mandelson: Economy Has Relied Too Much On Financial Services

Mon, Sep 28 2009, 07:48 GMT
http://www.djnewswires.com/eu

UK Mandelson: Economy Has Relied Too Much On Financial Services

LONDON -(Dow Jones)- The U.K. economy has relied too heavily on financial services and failed to develop alternative generators of rapid growth, Secretary of State for Business, Innovation and Skills Peter Mandelson said Monday.

Mandelson was speaking to the BBC during the annual conference of the ruling Labour Party, which is set to sharply increase regulation of the banking sector, having championed the industry as a source of dynamism since it came to power in 1997.

"We relied too much on financial services," Mandelson said. "We should have been nurturing different bases in our economies."

Mandelson defended the government's record in regulating the banking sector, and particularly the decision to create the Financial Services Authority, which concentrated powers previously distributed across a variety of different agencies, including the Bank of England.

"It's not that it didn't work," Mandelson said. "It should have been more intrusive, should have imposed its will on more banking practices, on banking bonuses. We did the right thing, but we could have supplied the solutions in a tougher way."

-Paul Hannon, Dow Jones Newswires, +44 20 7842 9491, paul.hannon@dowjones.com

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(END) Dow Jones Newswires

September 28, 2009 03:48 ET (07:48 GMT)


Copyright 2009 Dow Jones & Company, Inc.

US ECONOMIC INDICATORS: Housing Data

Fri, Sep 25 2009, 16:36 GMT
http://www.djnewswires.com/eu/

US ECONOMIC INDICATORS: Housing Data

    Data seasonally adjusted except actual, which is not seasonaly adjusted.
Median and average prices for existing and single family homes in dollars.
Housing construction and homes sold in 1,000 units. R = revised.
(*) data reflect the increase in the universe of permits-issuing places
   from 19,000 to 20,000 places.      tbr = To Be Released.

HOUSING CONSTRUCTIO    Aug       Jul       Jun       May       Apr       Mar
Housing Starts         598 :     589R:     590R:     551 :     479 :     521
    % change           1.5 :    -0.2R:     7.1R:    15.0 :    -8.1 :    -9.2
   Actual (NSA)       55.1 :    56.5R:    59.1R:    52.2 :    42.5 :    42.7
    % change          -2.5 :    -4.4R:    13.2R:    22.8 :    -0.5 :     7.3
Permits Issued(*)      579 :     564 :     570 :     518 :     498 :     511
    % change           2.7 :    -1.1 :    10.0 :     4.0 :    -2.5 :    -7.1
   Actual (NSA)       52.3 :    54.7 :    59.5 :    48.2 :    46.5 :    44.0
    % change          -4.4 :    -8.1 :    23.4 :     3.7 :     5.7 :    15.8
Units Completed        760 :     804R:     794R:     812 :     846 :     833
    % change          -5.5 :     1.3R:    -2.2R:    -4.0 :     1.6 :     0.6
   Actual (NSA)       71.0 :    67.7R:    70.3R:    68.1 :    65.5 :    62.1
    % change           4.9 :    -3.7R:     3.2R:     4.0 :     5.5 :     9.9
Under Constr           595 :     612R:     630R:     650 :     680 :     719
    % change          -2.8 :    -2.9R:    -3.1R:    -4.4 :    -5.4 :    -4.8
   Actual (NSA)      610.3 :   628.4R:   640.2R:   654.2 :   672.9 :   701.6
    % change          -2.9 :    -1.8R:    -2.1R:    -2.8 :    -4.1 :    -4.1

EXISTING HOME SALES     Aug       Jul       Jun       May       Apr       Mar
Total Homes Sold     5,100 :   5,240 :   4,890R:   4,720 :   4,660 :   4,550
    % change          -2.7 :     7.2 :     3.6R:     1.3 :     2.4 :    -3.4
 Median Prices       177.7 :   181.5 :   182.0R:   174.7 :   166.6 :   169.9
 Average Prices      222.8 :   227.4 :   227.9R:   218.1 :   208.8 :   211.3
S/F Homes Sold         tbr :   4,610 :   4,330R:   4,220 :   4,170 :   4,080
    % change           6.5 :     6.5 :     2.6R:     1.2 :     2.2 :    -3.3
 Median Prices       178.3 :   178.3 :   181.6R:   174.6 :   166.0 :   169.7
 Average Prices      238.5 :   238.5 :   228.5R:   218.3 :   208.5 :   211.4

NEW S/F HOMES           Aug       Jul       Jun       May       Apr       Mar
Homes Sold             429 :     426 :     400R:     371R:     345R:     332
    % change           0.7 :     6.5 :     7.8R:     7.5R:     3.9R:    -6.2
   Actual (NSA)         38 :      38R:      37R:      34R:      32R:      31
    % change          unch :     2.7 :     8.8R:     6.3R:     3.2R:     6.9
  Median Prices      195.2 :   215.6 :   212.5R:   222.3R:   219.2R:   205.1
  Average Prices     256.8 :   273.1 :   275.6R:   274.6R:   269.8R:   259.8

FHLB                    Aug       Jul       Jun       May       Apr       Mar
  ARM Index           tbr  :    5.26 :    5.09 :    4.88 :    4.88 :    5.06
  -By Kareema Clark; Dow Jones Newswires; 202-646-1880;
   csstat@dowjones.com
   Related fixed story numbers:
    84697    US ECONOMIC INDICATORS: FWN Survey of Forecasters (STATS)
    84698    US ECONOMIC INDICATORS: Latest 6 months (STATS)
    80055-57 US MONTHLY ECONOMIC CALENDAR

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(END) Dow Jones Newswires

September 25, 2009 12:36 ET (16:36 GMT)


Copyright 2009 Dow Jones & Company, Inc.

BASE METALS: Comex Copper Rises On Short-Covering Correction

Fri, Sep 25 2009, 17:35 GMT
http://www.djnewswires.com/eu/

BASE METALS: Comex Copper Rises On Short-Covering Correction

  By Allen Sykora
  Of DOW JONES NEWSWIRES

Copper futures bounced Friday on short covering as traders who previously sold were buying back to offset their positions ahead of the weekend.

Most-active December copper rose 3.10 cents to settle at $2.7405 per pound on the Comex division of the New York Mercantile Exchange.

"It's just re bounding from its two-day sell-off," said one trader. "Yesterday, it was down sharply, and we're certainly down from where we were just Tuesday."

As recently as three days ago, the metal was as high as $2.8920 before hitting a five-week low of $2.6730 early Friday.

"This is a little short covering," the trader said. The market held just above the Aug. 19 low of $2.66.

Ira Epstein, director of the Ira Epstein division of The Linn Group, described copper's uptick as a correction in a market disappointed by a U.S. existing-home sales report Thursday.

"It took all the pizzazz out of it, but it got oversold because it has fallen so far from its most recent high," he said. "That [existing-home sales] took it back three or four steps at one time, and today's rally is probably no more than a reaction to being the weakest of the metals, falling the most and now bouncing a bit. It's just a correction-type bounce."

Epstein listed support for December lies around $2.71, although noting it dipped as low as $2.6730. He lists resistance at $2.84.

Inventories of copper stored in London Metal Exchange warehouses fell 175 metric tons Friday, leaving them at 340,700. The most recent Comex inventory data, released late Thursday afternoon, were up 46 short tons at 53,750 short tons.

Once-a-week data released on Fridays by the Shanghai Futures Exchange showed a weekly decline of 5,559 metric tons to 98,689.

Copper settlements (ranges include electronic and pit trading):
December    $2.7405; up 3.10c; Range $2.6730-$2.7435
March       $2.7540; up 3.05c; Range $2.7090-$2.7550

-By Allen Sykora, Dow Jones Newswires; 541-318-8765; allen.sykora@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=GlH6AMTSSOGIVuxVW%2BwH7g%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

September 25, 2009 13:35 ET (17:35 GMT)


Copyright 2009 Dow Jones & Company, Inc.

PRECIOUS METALS: Comex Gold, Silver Still Correcting Lower

Fri, Sep 25 2009, 18:03 GMT
http://www.djnewswires.com/eu/

PRECIOUS METALS: Comex Gold, Silver Still Correcting Lower

   By Allen Sykora
  Of DOW JONES NEWSWIRES

Gold futures continued to correct lower Friday, initially falling as the euro slid but then staying on the defensive even when the dollar gave up its early gains.

December gold fell $7.30 to $991.60 an ounce on the Comex division of the New York Mercantile Exchange. December silver fell 23.5 cents to $16.06.

A trader characterized the move as follow through from the decline on Thursday. It was the second straight close for gold below $1,000 after the market previously settled above there each day since Sept. 10.

"We're just seeing a correction back down to support," said a New York trader. "It's sort of like a flock of birds. It turned south yesterday and a bit again today."

Much of the selling appeared to be in the form of long liquidation, in which those who previously bought were selling in order to exit positions.

"We've gone from $950 to $1,025 and we're correcting back," said the trader. "In silver, we've gone from $14 to $17.50 in the course of a month, and we're just correcting back."

December gold fell as far as $985.50 an ounce, its weakest level since the Sept. 10 low of $983.20. But around here, some chart support appeared to emerge, said the trader.

Gold fell swiftly first thing in the morning after the dollar upticked and stocks downticked on a weaker-than-forecast report on U.S. durable-goods orders. Durables fell 2.4%, when economists were looking for a 0.3% uptick. The precious metal then remained softer even when the euro recovered.

Some technical selling was triggered as December gold fell back below the 20-day moving average, which now lies around $995.80.

There was potential for the recent correction in prices to prompt further liquidation out of long positions, said Tom Pawlicki, precious-metals analyst with MF Global. He pointed out that there was an increase of some 90,000 contracts of open interest, which is the number of positions open at the end of the trading day, during a rally in the first half of September.

"Now that we're putting a lot of those positions under water, it could encourage additional liquidation by weak longs," he said. "That rally began around the $960 level. So there is an indication we could approach $960 based on liquidation of some of these longs."

A "negative" for the market was the decline in exchange-traded fund holdings, he added. Holdings in the world's largest ETF, SPDR Gold Shares, fell 7.63 metric tons Thursday to 1,094.11.

Ira Epstein, director of the Ira Epstein division of The Linn Group, commented that gold is approaching a time frame when it tends to have a seasonal pullback. The period from autumn until Christmas is often considered a seasonally strong time from gold. But gold often has a downside bias in October and in fact has fallen in 13 of the last 15 years, Epstein said.

"People have already done their first wave of buying for the Christmas season and the jewelry season and so on," he said. "They step back and are waiting to see what happens in the November time frame.

"Of the past 15 years, 13 have produced a decline in the month of October. I think gold has shown that bias already. With the bonds rallying sharply and the dollar down and no upside in the metals market, I think it's telling you that it's made a top."

Still, the analyst looks for any pullback to stop in the $970 to $950 area during October.

"So I'm not looking for a crash of any type, but for the market to gradually work lower."

Epstein put support for December gold at $977 and nearby resistance around $1,000. He pegged support for December silver at $15.50 and resistance around $16.60.

Meanwhile, January platinum fell $24.80 to $1,288.90 an ounce, while December palladium declined $3 to $294.90 an ounce.

"We saw a little more liquidation, especially when gold traded back below $990," said one trader.

Some technical selling occurred in January platinum. It fell to $1,275 an ounce, its lowest level since Sept. 8.

"We were trading around $1,300 when we first came in," the trader said. "As soon as it got below that, it came off even harder."

Settlements (includes open-outcry and electronic trading):
London PM Gold Fix: $991.50 versus $1,009.75 on Thursday
Spot gold at 1:30 p.m. ET: $990.70, down $4.05 from previous day; Range: $984.90-$999.40
December gold:  $991.60, down $7.30; Range $985.50-$1,000.50
December silver:  $16.06, down 23.5 cents; Range $15.955-$16.41
January platinum:  $1,288.90, down $24.80; Range $1,275-$1,312
December palladium:  $294.90, down $3; Range $292.55-$297.80

-By Allen Sykora, Dow Jones Newswires; 541-318-8765; allen.sykora@dowjones.com

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ICE FCOJ Review: Lower Close Caps Weekly Sell-Off

Fri, Sep 25 2009, 18:09 GMT
http://www.djnewswires.com/eu/

ICE FCOJ Review: Lower Close Caps Weekly Sell-Off

KANSAS CITY (Dow Jones)--Frozen concentrated orange juice futures closed lower Friday, capping a week that saw a sharp sell-off in orange juice and the commodity sector as a whole.

Most active November orange juice lost 115 points to settle at 90.90 cents a pound.

For the week, November juice lost a staggering 1,290 points, or 12 3/4 cents a pound, bolstering the market's bearish mentality, both fundamentally and technically.

The market may have already wrung most of the sellers out of the market, however, with this week's decline, as prices approach fair value.

"I believe fair value is right around 95 cents a pound," said James Cordier, analyst and founder of OptionSellers.com.

"We're close to a low and close to fair value and I just don't see the bottom falling out from under this thing," he said.

Prices could easily gravitate either above or below 95 cents until fresh news hits the market, he said.

Though bearish traders have pushed November juice down through all of its major moving averages, additional bear targets are in place at the 90-cent low from Sept. 15 and Sept. 11 low of 86.10 cents. Traders may sell the market down to near 80 cents a pound in the absence of bullish news, a broker said.

Fresh news could come in the form of threatening weather in the Atlantic Basin, though it has been a quiet tropical storm season so far. Traders have their eyes on a tropical disturbance in the eastern Atlantic, which National Hurricane Center forecasters say has a 30%-50% chance of developing into a tropical depression or storm. It is still too far away to be considered any kind of threat to Florida, a broker said.

Conditions further west in the Atlantic Ocean continue to be hostile for storm development, however, with wind shear effects in place, said Cordier.

Florida's orange crop continues to see favorable growing conditions, with scattered to widely scattered showers and thundershowers possible over the weekend. The oranges continue to be rated in good condition and the fruit is sizing well, state agriculture officials said.

The U.S. Agriculture Department will issue its initial projection for the 2009-10 Florida orange crop on Oct. 9. Traders have pegged the crop in a wide range of 140 million boxes up to 154 million 90-pound boxes. The 2008-09 crop totaled 162 million boxes.

Open interest fell 157 to total 29,160 contracts, ICE data showed.

Futures volume was estimated at 874 contracts, with 125 calls and two put options traded.

ICE         Settle     Change     Range (At time of settlement)
Nov         $0.9090    dn 115     $0.9040-$0.9115
Jan         $0.9440    dn 115     $0.9390-$0.9445

-By Tom Sellen, Dow Jones Newswires; 913-322-5177; tom.sellen@dowjones.com

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September 25, 2009 14:09 ET (18:09 GMT)


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CME Livestock Review: Hogs, Most Cattle Fade

Fri, Sep 25 2009, 18:51 GMT
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CME Livestock Review: Hogs, Most Cattle Fade

CHICAGO (Dow Jones)--Chicago Mercantile Exchange hogs settled lower Friday on bearish fundamentals, sell stops and caution before the U.S. Department of Agriculture's quarterly hog report on Friday at 3 p.m. EDT.

The following are analysts' estimated averages and ranges for data's top three categories:

                             Average      Range
All hogs and pigs on Sep 1     98.2      97.4-99.0
Kept for breeding              97.4      96.5-98.2
Kept for marketing             98.3      97.3-99.1 

Feeder cattle also finished lower. In addition, most live cattle contracts closed in slightly bearish territory. February pork bellies, the only contract that traded, ended higher.

Spillover from Thursday's losses and that evening's pork cutout decline undercut lean hogs from the outset. Worrisome hog kills and scant pork packer profit margins hastened October's and December's descent, which triggered sell stops.

Furthermore, U.S. stock market weakness and soft Chicago Board of Trade corn set would-be bulls on their heels.

By the same token, speculative buying on breaks tied to front-month discounts to CME's hog index cushioned those contracts' fall. Also, December benefited from spreading into the contract out of February.

Cash hog prices came in generally weak on Friday. Packers are expected to maintain cash pressure on Monday due to abundant supplies.

Market participants will factor in Friday's U.S. government pig report.

October hogs ended down 27 points at 49.95 cents a pound, and December closed down 32 points at 49.02 cents.

February pork bellies closed 67 points higher at 80.70 cents a pound on short covering, buy stops and the contract's oversold chart indicator.

Other belly contracts were unquoted.

  Cattle Complex

CME live cattle closed mostly weak on slumping boxed beef prices, sell stops and cash cattle returns this week that came in just shy of last week's values.

Cash-basis cattle this week moved at $82 to mostly $84.50. Fed cattle last week brought $84 to mainly $84.50.

Cattle futures flip-flopped during the quiet session, stirred by follow-through selling from Thursday's futures slip and boxed beef prices' recent pullback.

USDA's midday Friday boxed beef data showed choice cuts fell $1.25 per hundredweight, and select items were down $0.99.

Cattle market participants will wipe the slate clean on Monday as they look forward to next week's cash cattle transactions.

On Monday, those in the live cattle pit who also trade lean hogs will watch the market's response to Friday's USDA hog report.

October live cattle ended down 5 points at 86.05 cents a pound, and December closed up 7 points at 85.35 cents.

CME feeder cattle ended lower on more selling from futures' retreat on Thursday, several contracts' premiums to CME's feeder cattle index and sell stops.

Some traders sold November and bought October and January on spreads.

October closed 52 points lower at 96.60 cents a pound, and November finished 55 points lower at 96.72 cents.

-By Theopolis Waters, Dow Jones Newswires; 312-341-5778; theopolis.waters@dowjones.com

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(END) Dow Jones Newswires

September 25, 2009 14:51 ET (18:51 GMT)


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ICE Canada Grain Review: Canola Firms On Late Soy Gains

ICE Canada Grain Review: Canola Firms On Late Soy Gains

WINNIPEG (Dow Jones) -- Grain and oilseed futures at ICE Futures Canada closed Friday's session mostly higher, with canola posting marginal gains as a late U.S. soy rally supported the market, brokers said.

Canola saw a light trade with intermonth spreading accounting for much of the volume. The thinness of the trade contributed to the choppy tone, traders said.

The total canola volume was estimated at 8,022 contracts, down from 11,153 contracts on Thursday.

Canola futures bounced to both sides of unchanged throughout the overnight session, edging down as the North American trading session approached. Canola turned higher as the North American trading session got underway and the Chicago Board of Trade soybean complex rallied. However at the close canola turned a bit higher as the CBOT soy market rallied.

Canola was pressured down for most of the session by the rapid harvest pace as traders estimate that 60% of the harvest is completed and that overall yields will be close to normal. The weak tone in CBOT soyoil, bearish technical signals and a slower pace to demand undermined prices as well.

Exporter demand remains brisk but analyst noted that crusher demand has slowed as the inability to sell canola meal into the U.S., because of salmonella contamination, has reduced the crush pace. Friday morning the Canadian Oilseed Processors Association pegged the canola crush this week at 61.5% of capacity, well behind last year's 84.3%.

Giving some support and leading to a choppy tone throughout the session was the slower pace to farmer selling and the weak Canadian dollar. The late rally in CBOT soybean futures helped to pull canola to marginal gains.

Japanese pricing augmented exporter and light crusher buying. The selling came from some light commodity fund selling, and commercial offerings. Position evening was also noted by speculators ahead of the weekend.

Western barley ended mixed in light trade. The October contract was dominated by liquidation trade as the contract will be de-listed at its expiration.

The November contracts edged higher on the lack of farmer selling which offset weakness in CBOT corn and the lower feed barley prices in Thursday's Canadian Wheat Board Pool Return Outlook, brokers said.

The total barley volume was estimated at 81 contracts, up from 62 contracts on Thursday.

Prices are in Canadian dollars per metric ton:

        Price   Change
Canola
Nov     386.60  up 0.20
Jan     391.60  up 0.20
Mar     394.60  up 0.20

Western Barley
Nov     148.00  up 0.80
Jan     156.00  up 0.80

No spread trade prices or volumes are available today.

-By Don Bousquet; contributing to Dow Jones Newswires; 204-947-1700 resnews@shawbiz.ca

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(END) Dow Jones Newswires

September 25, 2009 14:57 ET (18:57 GMT)


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IMF Reform 'Bright Spot' Of G-20 Summit-China Vice Foreign Min

Fri, Sep 25 2009, 19:06 GMT
http://www.djnewswires.com/eu

IMF Reform 'Bright Spot' Of G-20 Summit-China Vice Foreign Min

By Ian Berry

Of DOW JONES NEWSWIRES

PITTSBURGH -(Dow Jones)- China's vice foreign affairs minister said a shift in voting rights for the International Monetary Fund likely to emerge Friday will be a key success of the Group of 20 summit and called for increasing coordination between the world economies.

He Yafei, the vice foreign minister, wouldn't specify the extent of the shift but said progress on reform of the international financial system "is a bright spot of the Pittsburgh summit." China and other developing nations have argued for a more equal distribution of voting rights in the IMF.

"The most important thing is to send a message, that is to say the governance structure and decision-making procedures of the [international financial institution] should reflect the reality of the world economy today," he said in a briefing.

Earlier Friday, an Argentine official speaking on the sidelines of the G-20 summit said countries had agreed on a 5% increase in developing nations' shares under the IMF quota system.

On currency, He didn't specifically mention the U.S. dollar but said that given China's major holdings of foreign currencies fluctuation in them was a concern in both the short and long term.

He voiced support for a system of "mutual assessment" involving the IMF, and said he thought "assessments of the policies of major reserve currency-issuing counties will be included in this."

But when asked about any enforcement mechanism to settle potential currency disputes between the U.S. and China, He noted the system of mutual assessment would be voluntary and legally nonbinding.

With the G-20 poised to take a more permanent role in coordinating economic policy, He also called the locations of future summits "a very important issue." Summit locations should be based on principles such as justice, fairness and equality, and developing countries should also get a chance to host, he said.

"I think we still need to discuss and finalize who and which counties will host future summits," He said. "As for whether China will be a host, I think we will give serious consideration to that."

-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com

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(END) Dow Jones Newswires

September 25, 2009 15:06 ET (19:06 GMT)


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IMF Says Room Exists To Cut Rates For Hungary If Needed

IMF Says Room Exists To Cut Rates For Hungary If Needed

WASHINGTON -(Dow Jones)- The International Monetary Fund says room exists to reduce interest rates and spur the economy in Hungary, if necessary.

The IMF reviewed Hungary's economy as part of a loan program designed to help the European country weather the global financial crisis.

Hungary has gotten $12.12 billion in IMF disbursements.

Takatoshi Kato, the IMF's acting chairman, said policies to guide Hungary's economy and budget were "on track."

"Continued implementation of policies consistent with the program remains essential to strengthen macroeconomic stability and provide the basis for strong, sustainable growth over the medium term," he said. "Fiscal sustainability is being strengthened through structural spending reforms to the pension system, social transfers, and subsidies."

Kato said monetary and exchange-rate policy will continue to target inflation over the medium term, while authorities will remain prepared to act as needed to moderate risks to financial stability. "The combination of improved global financial conditions and increased confidence in fiscal sustainability has created room for cautious interest-rate cuts," he said.

-By Jeff Bater, Dow Jones Newswires; 202-862-9249; jeff.bater@dowjones.com

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(END) Dow Jones Newswires

September 25, 2009 14:59 ET (18:59 GMT)


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US New Home Sales-Stats-Sep 25

Fri, Sep 25 2009, 16:38 GMT
http://www.djnewswires.com/eu

US New Home Sales-Stats-Sep 25

    Seasonally adjusted levels (except actual level, which is not
seasonally adjusted) and percent changes for houses sold by region
in thousands during period. Prices in millions of dollars. Previous
months are subject to revision. A-denotes ratio of houses for sale
to houses sold. Source: U.S. Commerce Department.

                                         Month
Month/                                    supplyActual        Median Average
Year   Total % chg    NE    MW South  West rate/ Total % chg   Price   Price
-2009-
Aug     429   0.7    36    49   224   120   7.3    38   0.0   195.2   256.8
Jul     426   6.5    43    52   224   107   7.6    38   2.7   215.6   273.1
Jun     400   7.8    34    62   195   109   8.4    37   8.8   212.5   275.6
May     371   7.5    25    48   206    92   9.5    34   6.3   222.3   274.6
Apr     345   3.9    21    40   204    80  10.4    32   3.2   219.2   269.8
Mar     332  -6.2    19    44   195    74  11.3    31   6.9   205.1   259.8
Feb     354   7.6    28    50   207    69  11.1    29  20.8   209.7   258.6
Jan     329 -12.0    30    53   181    65  12.4    24  -7.7   208.6   245.2
-2008-
Dec     374  -4.1    30    59   193    92  11.2    26  -3.7   229.6   263.1
Nov     390  -4.6    38    55   210    87  11.4    27 -15.6   221.6   290.1
Oct     409  -6.2    35    63   225    86  11.1    32  -8.6   213.2   274.0
Sep     436  -1.8    25    63   246   102  10.9    35  -7.9   225.2   287.1
Aug     444 -11.2    28    72   252    92  11.1    38 -11.6   221.0   265.5
Jul     500   2.5    41    64   272   123  10.1    43  -4.4   237.3   301.9
Jun     488  -4.1    35    69   270   114  10.7    45  -8.2   234.3   299.4
May     509  -4.5    31    75   287   116  10.7    49   0.0   229.3   298.2
Apr     533   4.7    40    83   284   126  10.4    49   0.0   246.4   314.3
Mar     509 -11.6    30    71   287   121  11.1    49   2.1   229.3   287.6
Feb     576  -5.3    39    78   316   143   9.9    48   9.1   245.3   301.2
Jan     608  -1.8    51    78   331   148   9.6    44   0.0   232.4   284.6
-2007-
Dec     619  -3.4    54    76   354   135   9.6    44  -2.2   227.7   284.0
Nov     641 -11.8    52    90   349   150   9.4    45 -21.1   249.1   316.8
Oct     727   6.0    62   127   386   152   8.5    57   7.5   234.3   310.1
Sep     686  -1.9    63   102   350   171   9.2    53 -11.7   240.3   292.2
Aug     699 -10.2    59   118   362   160   9.2    60 -11.8   236.5   301.3
Jul     778  -1.9    48   105   415   210   8.3    68  -6.8   246.2   307.1
Jun     793  -5.8    65   113   440   175   8.2    73  -7.6   235.5   306.5
May     842  -5.1    83   139   420   200   7.8    79  -4.8   245.0   309.7
Apr     887   6.5    85   121   475   206   7.4    83   3.8   242.5   311.7
Mar     833   0.6    88   130   413   202   7.9    80  17.6   262.6   329.4
Feb     828  -7.1    50   128   445   205   7.9    68   3.0   250.8   321.5
Jan     891 -10.7    60   165   496   170   7.2    66  -7.0   254.4   314.6
-2006-
Dec     998  -0.5    73   166   510   249   6.5    71   0.0   244.7   301.9
Nov   1,003   6.6    66   155   545   237   6.6    71  -4.1   240.1   291.8
Oct     941  -7.4    38   136   517   250   7.3    74  -7.5   250.4   306.8
Sep   1,016  -1.8    62   141   562   251   6.7    80  -9.1   226.7   296.2
Aug   1,035   7.3    88   152   577   218   6.7    88   6.0   243.9   317.3
Jul     965 -10.1    63   140   499   263   7.3    83 -15.3   238.1   311.3
Jun   1,074  -1.1    63   172   561   278   6.3    98  -3.9   243.2   305.0
May   1,086  -3.3    65   177   581   263   6.2   102   2.0   238.2   293.9
Apr   1,123   0.6    56   168   609   290   6.3   100  -7.4   257.0   310.3
Mar   1,116   5.2    59   168   584   305   5.9   108  22.7   238.8   298.8
Feb   1,061  -9.6    65   187   562   247   6.1    88  -1.1   250.8   307.9
Jan   1,174  -5.2    65   174   600   335   5.3    89   2.3   244.9   301.0
-2005-
Dec   1,239   2.1    69   201   644   325   4.9    87   1.2   238.6   290.2
Nov   1,214  -9.1    85   171   636   322   5.0    86 -18.1   237.9   294.4
Oct   1,336   7.4    78   186   668   404   4.5   105   6.1   243.9   293.6
Sep   1,244  -0.9    62   215   643   324   4.7    99 -10.0   240.4   299.6
Aug   1,255  -9.6    80   195   628   352   4.5   110  -6.0   240.1   295.0
Jul   1,389   9.0   100   208   645   436   4.2   117   1.7   229.2   289.3
Jun   1,274  -0.9    83   231   620   340   4.3   115  -4.2   226.1   279.6
May   1,286   2.1    91   237   593   365   4.2   120   3.4   228.3   287.4
Apr   1,260  -5.1    99   210   597   354   4.3   116  -8.7   236.3   289.1
Mar   1,328   0.7    78   215   669   366   4.1   127  16.5   229.3   289.6
Feb   1,319   9.6    85   183   697   354   4.3   109  18.5   237.3   289.1
Jan   1,203  -3.1    67   186   618   332   4.4    92  10.8   233.1   283.0
-2004-
Dec   1,242   5.3    66   240   616   320   4.1    83  -1.2   229.6   284.3
Nov   1,179  -9.7    82   159   597   341   4.3    84 -16.8   224.5   283.2
Oct   1,305   7.5   104   249   537   415   3.9   101   7.4   229.2   289.6
Sep   1,214   3.3    81   222   553   358   4.1    94  -7.8   211.6   269.2
Aug   1,175   8.0    65   220   551   339   4.3   102   6.3   218.1   272.2
Jul   1,088  -7.8    54   219   490   325   4.5    96  -8.6   212.4   279.2
Jun   1,180  -4.9    74   192   575   339   3.9   105  -8.7   215.7   263.2
May   1,241   4.6   102   206   576   357   3.8   115   5.5   211.7   260.4
Apr   1,186  -7.1    85   212   540   349   4.0   109 -11.4   222.3   269.3
Mar   1,276  10.1    86   196   620   374   3.6   123  20.6   209.6   261.0
Feb   1,159  -0.5    84   192   532   351   3.7   102  14.6   219.6   264.1
Jan   1,165   3.2   103   225   545   292   3.8    89  18.7   209.5   262.1
-2003-
Dec   1,129   3.3    98   180   515   336   4.0    75  -1.3   196.0   253.9
Nov   1,093  -4.5    88   156   527   322   4.1    76 -13.6   207.1   268.3
Oct   1,144   1.1    84   195   547   318   3.8    88  -2.2   194.1   242.8
Sep   1,131  -6.2    88   192   523   328   3.8    90 -14.3   192.0   254.5
Aug   1,206   3.3    78   256   558   314   3.5   105   6.1   190.5   241.0
Jul   1,168  -2.1    83   218   557   310   3.6    99  -7.5   190.2   248.4
Jun   1,193  10.7    77   196   549   371   3.5   107   5.9   187.9   239.7
May   1,078   6.5    72   165   519   322   3.9   101  11.0   195.5   243.7
Apr   1,012   1.3    75   175   473   289   4.1    91  -7.1   189.5   237.2
Mar     999   6.7    92   170   487   250   4.1    98  19.5   185.1   231.1
Feb     936  -6.3    49   183   447   257   4.5    82   7.9   187.0   233.4
Jan     999  -4.7    77   179   459   284   4.0    76   8.6   181.7   230.2
-2002-
Dec   1,048   2.3    55   255   470   268   4.0    70  -4.1   197.6   237.8
Nov   1,024   1.8    63   217   454   290   4.0    73  -5.2   181.2   227.1
Oct   1,006  -3.6    61   182   465   298   4.0    77  -6.1   189.2   231.3
Sep   1,044   3.0    83   197   488   276   3.9    82  -8.9   177.5   215.3
Aug   1,014   6.1    55   205   471   283   4.0    90   9.8   178.9   221.3
Jul     956  -0.1    63   186   456   251   4.2    82  -2.4   175.6   217.8
Jun     957  -2.1    71   158   442   286   4.2    84  -4.5   190.6   225.2
May     978   4.5    70   183   442   283   4.0    88   2.3   181.0   226.5
Apr     936   1.4    58   171   438   269   4.3    86  -4.4   187.1   228.1
Mar     923  -2.6    65   154   430   274   4.1    90   7.1   183.4   227.1
Feb     948   7.7    66   173   450   259   4.0    84  27.3   191.1   226.5
Jan     880 -10.1    67   180   399   234   4.2    66   0.0   187.1   226.9
-2001-
Dec     979   6.0    73   162   464   280   3.7    66  -1.5   180.2   228.7
Nov     924   6.1    70   171   472   211   4.0    67   1.5   168.1   206.9
Oct     871   2.1    67   153   440   211   4.4    66   0.0   171.3   207.1
Sep     853  -1.5    51   161   429   212   4.4    66 -10.8   166.4   203.3
Aug     866  -1.6    65   147   423   231   4.3    74  -2.6   173.7   207.5
Jul     880  -0.2    72   154   424   230   4.2    76  -3.8   175.0   209.3
Jun     882  -0.3    61   171   415   235   4.2    79  -1.3   179.4   211.7
May     885  -2.6    55   152   444   234   4.1    80  -4.8   175.3   211.4
Apr     909  -3.2    70   163   436   240   4.0    84 -10.6   175.2   205.5
Mar     939  -2.5    75   189   439   236   3.7    94  10.6   166.3   210.2
Feb     963   2.9    70   168   447   278   3.8    85  18.1   169.1   211.0
Jan     936  -4.8    56   171   435   274   3.8    72  10.8   171.3   209.0
-2000-
Dec     983  11.7    65   173   449   296   3.6    65   3.2   162.0   208.1
Nov     880  -5.7    68   146   418   248   4.2    63 -11.3   174.7   210.7
Oct     933   2.3    87   161   420   265   4.0    71   1.4   176.3   215.1
Sep     912   7.5    69   163   421   259   4.0    70  -4.1   171.5   208.3
Aug     848  -4.4    63   144   395   246   4.4    73  -3.9   166.6   200.2
Jul     887  11.9    64   170   402   251   4.1    76   7.0   169.0   202.2
Jun     793  -7.5    73   147   380   193   4.8    71  -7.8   160.1   197.7
May     857   1.9    70   151   408   228   4.4    77  -1.3   164.7   200.0
Apr     841  -6.6    75   138   399   229   4.4    78 -11.4   162.6   207.3
Mar     900   5.1    75   169   395   261   4.3    88  12.8   165.1   204.9
Feb     856  -1.9    70   163   401   222   4.3    78  16.4   162.4   199.2
Jan     873   0.0    76   145   397   255   4.3    67  17.5   163.5   200.3
-1999-
Dec     873   1.2    83   148   393   249   4.3    57  -6.6   164.8   202.1
Nov     863  -1.0    63   178   378   244   4.3    61  -9.0   172.0   211.5
Oct     872   5.6    69   189   377   237   4.2    67   3.1   161.1   200.2 

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=GlH6AMTSSOGIVuxVW%2BwH7g%3D%3D. You can use this link on the day this article is published and the following day.

(MORE TO FOLLOW) Dow Jones Newswires

September 25, 2009 12:38 ET (16:38 GMT)

G-20 Officials Seek To Convey Solidarity On Iran,Global Econ

G-20 Officials Seek To Convey Solidarity On Iran,Global Econ

By Maya Jackson Randall and Henry J. Pulizzi

Of DOW JONES NEWSWIRES

PITTSBURGH -(Dow Jones)- Leaders of the Group of 20 nations are working hard to convey a new level of cooperation, a message that was front and center as the contours of their economic agreement emerged and the U.S., U.K., and France stood in solidarity to condemn Iran.

"Iran is breaking rules that all nations must follow, endangering the global nonproliferation regime, denying its own people access to the opportunity they deserve, and threatening the stability and security of the region and the world," said U.S. President Barack Obama, who was flanked by French President Nicolas Sarkozy and U.K. Prime Minister Gordon Brown at a surprise early-morning news conference Friday in Pittsburgh.

Officials also put their push for greater international cooperation on display Thursday evening with news that the G-20 will now eclipse the Group of Eight as the major platform for addressing global economic policy.

Earlier this week, it was unclear if there would even be any future G-20 summits.

Critics argued that the broad group, which includes both industrialized and developing nations, fails to produce concrete policy actions.

However, proponents point out that the world economy is changing and developing nations such as Brazil, China and India are growing rapidly and should have a seat at the table when it comes to key policy initiatives.

It is clear that Obama believes that the G-20 will have a key role to play going forward. The president's strong support for the forum reinforces the Obama administration's view that the U.S. cannot solve the world's economic policies single-handedly.

"We can't do this alone," U.S. Treasury Secretary Timothy Geithner said Thursday during a press briefing with reporters as he highlighted new financial rules and rebalancing the global economy as two key issues that will be discussed during the G-20 summit. "To achieve a more stable financial system, we need strong reforms here in this country, but in other countries around the world. If we want more rapid growth here and lower unemployment, we need more rapid growth outside the United States."

"We're in this together. And that's why cooperation in the G-20 is so important to the interest of Americans," Geithner continued.

Leaders, clearly, also are working to show solidarity on Iran.

The U.S., France and U.K. held their news conference on Iran at Pittsburgh's David L. Lawrence Convention Center before heading into official G-20 meetings. They accused Tehran of building a covert uranium enrichment facility.

Sarkozy said sanctions "will have to be taken" if Iran doesn't address the matter by December.

Brown echoed Sarkozy and Obama. "The level of deception by the Iranian government and the scale of what we believe is a breach of international commitments, will shock and anger the whole international community and it will harden our resolve," the prime minister said.

To be sure, Russian President Dmitry Medvedev was conspicuously absent from Friday's announcement on Iran. Russia will have a key say in any potential sanctions, and its stance is unclear.

Other disagreements remain among G-20 officials when it comes to changing the International Monetary Fund's governance structure and agreeing on ways to overhaul financial regulations. But what is also clear is that leaders are committed to elevating the G-20's status to reflect key changes in the global economy and appear to be rallying around a U.S. proposal to "rebalance" global economic growth.

"We have taken active steps to adjust the domestic and overseas demand structure and the investment and consumption structure, and strike the right balance among the speed, structure, quality and efficiency of economic growth," Chinese President Hu Jintao said.

The leaders of Canada and South Korea said Friday their countries would host the G-20 summits in 2010, as the larger group supplants the G-8 as the main coordinating forum for global economic policy.

"The G-20 forum, ladies and gentleman, has now become the premier forum for discussing international economic cooperation," South Korean President Lee Myung-bak said at a joint press conference with Canadian Prime Minister Stephen Harper.

Peter Morici, a professor at the University of Maryland's Smith School of Business, said the G-20's elevated status is a recognition of reality rather than a new sign of progress.

"The salient issues, other than bank regulatory reform, require genuine action from China and other prominent developing countries, which are members of the G-20 but not members of the G-8," Morici wrote.

-By Henry J. Pulizzi and Maya Jackson-Randall, Dow Jones Newswires; 202-862-9256; henry.pulizzi@dowjones.com

(Tom Barkley contributed to this article.)

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(END) Dow Jones Newswires

September 25, 2009 12:24 ET (16:24 GMT)

U.S.: Recession’s Tail Is Still Hurting

The U.S. economy is prudently moving out of recession, although the recovery might be different than those experienced in the recent past. Banks are very caution about lending money, while borrowing is drying up, as households are cleaning up their records. The Eurocurrency might try to explore higher levels against the U.S. dollar, if major support holds.

U.S.: sales to increase

As the economy is slowing moving out of recession supported by the recovery of the real estate market (housing starts were up 1.5% in August) and the industrial sector, employment stays very weak in the U.S. and will keep the Federal Reserve on hold for some more time. For the second straight month, industrial production rose by 0.8% month-on-month in August, overcoming expectations for a 0.5% rise, on the top of July increase of 1.0%. Gains were broad-based, albeit motor vehicle production moved up 5.5% following July’s gain of 20.1%. The cash-for-clunkers program, incentives to trade a less fuel efficient car for new fuel efficient vehicle, helped the outputs in August. However, the economy appears to be on the move again, since production rose 0.6% excluding autos. In reality, industry usage remains low at 47.4%, while capacity utilization is at 69.6% and away from the average of 82% registered the past years. Nonetheless, consumer spending might pick up again by the last part of 2009, along with an increase of the Gross Domestic Product (GDP). In August, retail sales spending jumped almost 3.0% (+2.0% expected), after having declined 0.2% in July. Here again, the auto and part components moved up 10.6%, but sales remained strong at 1.1% (+0.4% expected) excluding the auto industry.


Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media.

This article contains the following sections:

U.S.: sales to increase

Long term unemployment rate at record high

Europe: Germany continues to improve

USDCAD: At key support lines.

US Jobless Claims -38K To 550K In August 1 Week; Survey +1K

Thu, Aug 6 2009, 12:45 GMT
http://www.djnewswires.com/eu

US Jobless Claims -38K To 550K In August 1 Week; Survey +1K

   By Sarah N. Lynch
  Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- The number of U.S. workers filing new claims for state jobless benefits fell last week, providing another glimmer of hope that the economy may be on the road to recovery.

Initial claims for jobless benefits fell by 38,000 to 550,000 on a seasonally adjusted basis in the week ended Aug. 1, the Labor Department said in its weekly report Thursday. The four-week average of new claims, which aims to smooth volatility in the data, fell by 4,750 to 555,250, the lowest level since Jan. 24.

The tally of continuing claims -- those drawn by workers for more than one week -- rose by 69,000 during the week ended July 25 to 6,310,000, the highest level since July 4.

Economists surveyed by Dow Jones had predicted an increase in initial claims of only 1,000.

Analysts with both J.P. Morgan Chase & Co. and Barclay's Capital had predicted recently that claims for the week ending August 1 would start to edge downward. Both noted that claims are way down from their peaks in the spring, signaling some positive economic signs.

"Claims are still at a very high level, but the fact you're seeing a downturn in claims is an encouraging sign," said Barclay's Capital economist Michelle Meyer in a Wednesday interview with Dow Jones.

Thursday's numbers represented a return to normalcy following a volatile period in July which included two weeks of steep declines followed by two weeks of rebounds in the figures. The declines occurred after the usual layoffs in the automobile and other manufacturing sectors, which are expected this time of year, never panned out.

On Thursday, an analyst with the Labor Department called the latest data on jobless claims "fairly uneventful."

The unemployment rate for workers with unemployment insurance remained steady at 4.7%.

Still even with the numbers starting to look a little better, Meyer noted that "we are not out of the woods yet."

"We think we will see further job cuts, but a noticeable slowdown in the pace of cuts," she said.

-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com

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(END) Dow Jones Newswires

August 06, 2009 08:45 ET (12:45 GMT)


Copyright 2009 Dow Jones & Company, Inc.

DJ Table Of US Initial, Continuing Claims

DJ Table Of US Initial, Continuing Claims

Week   Initial          4-Week  Continuing
Ended  Claims  Change   Moving    Claims  Change
      (000)   (000)    Average    (000)   (000)

Aug 1   550     -38     555,250    N/A      N/A
Jul 25  588r    29r     560,000r  6,310     69
Jul 18  559     35      567,250   6,241r   -10r
Jul 11  524    -45      585,000   6,251r   -62r
Jul 4   569    -48      607,000   6,313    -591
Jun 27  617    -13      616,000   6,904     180
Jun 20  630     18      618,000   6,724    -31
Jun 13  612      7      616,750   6,755     41
Jun 6   605r    -20    622,750r  6,687    -148
May 30  625       0     632,250   6,835    78r
May 23  625     -11     627,250   6,757      6
May 16  636      -7     629,750   6,751      73
May 9   643      38     632,000   6,678      91
May 2   605     -30     624,500   6,587     207
Apr 25  635     -10     638,250   6,380      87
Apr 18  645      32     648,000   6,293     155
Apr 11  613     -47     651,000   6,138      93
Apr 4   660     -14     658,750   6,045     195
Mar 28  674      17     658,000   5,850     105
Mar 21  657      13     650,250   5,745     178
Mar 14  644     -13     650,000   5,567     129
Mar 7   657      14     646,750   5,438     185
Feb 28  643     -13     636,750   5,253     179
Feb 21  656      25     632,000   5,074       9
Feb 14  631      14     615,500   5,065     117
Feb 7   617      -7     601,500   4,948     193
Jan 31  624      34     581,000   4,755       7
Jan 24  590      15     547,000   4,748      75
Jan 17  575      40     526,500   4,673      97
Jan 10  535      47     523,750   4,576      89
Jan 3   488     -20     528,000   4,487     -42

Source: U.S. Department of Labor; Numbers reflect annual revisions to seasonal factors.

UK Pooled Property Funds See 1st Net Inflow For 12 Months In 2Q-Study

UK Pooled Property Funds See 1st Net Inflow For 12 Months In 2Q-Study

LONDON -(Dow Jones)- Unlisted pooled property funds, or PPFs, in the U.K. posted the first net inflow in a year in the second quarter, demonstrating investor confidence due to improving economic conditions, the Association of Real Estate Funds reported in a study.

"Not only were net sales positive for the first time in a year, but actual redemptions have also started to see a significant slowdown over the past couple of quarters," said AREF Chief Executive Rachel McIsaac.

"This could be an indication that the direct property market cycle might be in the process of stabilizing."

In its Investment Quarterly study, AREF said PPFs had an overall net inflow of GBP52.4 million in the second quarter, compared with an outflow of GBP39.2 million a year earlier.

The study showed that in total, GBP320.4 million of new money went into PPFs, with redemptions totaling GBP268 million. Like in the first quarter, redemptions in the second quarter were significantly lower than in previous quarters.

AREF examines data provided by 67 unlisted member funds with a net asset value of some GBP21.1 billion.

Company Web site: www.aref.org.uk

By Anita Likus, Dow Jones Newswires; +44 20 7842 9407; anita.likus@dowjones.com

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(END) Dow Jones Newswires

August 06, 2009 08:43 ET (12:43 GMT)

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2nd UPDATE: Pound Plunges As BOE Expands Asset Purchases

2nd UPDATE: Pound Plunges As BOE Expands Asset Purchases

(Adds further comments.)

LONDON (Dow Jones)--The pound has fallen sharply after the Bank of England announced Thursday that it intends to expand its bond-buying program by GBP50 billion.

Sterling has dipped by over 0.8% to hit a low of $1.6833 against the dollar, while the euro jumped by nearly 1% against the pound to hit GBP0.8547.

Economists had been split in their predictions on what the BOE was likely to decide at its policy meeting this month. However, a run of surprisingly positive U.K. data Wednesday had encouraged some economists to expect that the BOE might suspend or trim back its bond purchases.

Now it appears that growing optimism about the U.K.'s economic outlook may have been misplaced.

"The U.K. still has a long way to go, and that's what the bank is reacting to," said Geoffrey Kendrick, a currencies analyst at UBS in London.

Kendrick said that the U.K.'s unexpectedly weak reading of gross domestic product for the second quarter should have been a reminder that the economic outlook was precarious. GDP shrank by 0.8% in the second quarter and dropped 5.6% on the year, the largest annual decline since quarterly records began in 1955.

"The market got ahead of itself back in June, with the pound supported by its correlation with global banking stocks," he said.

It remains to be seen whether the pound's shift lower Thursday will prove to be a knee-jerk reaction or the start of a sustained move lower.

Some sterling bulls remained unfazed. French bank Calyon, which has long predicted that the pound will end the year at $1.75, said the slip in the pound should be viewed as a neat opportunity to buy.

"The central bank has again shown a willingness to act to ensure the recovery can gain traction and get inflation back on target in the medium term. This, in turn, should make the market more, not less, confident about recovery and ultimately drive sterling higher," said Daragh Maher, a senior currencies analyst at Calyon in London.

"The BOE has simply provided a better level to start buying sterling afresh," he added.

At 1215 GMT, the pound had regained a little stability. It was trading at $1.6852. The euro was at GBP0.8528.

-By Katie Martin, Dow Jones Newswires; +44 (0) 207 842 9346; katie.martin@dowjones.com

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CURRENCIES: Euro And Pound Fall After Policy Announcements

CURRENCIES: Euro And Pound Fall After Policy Announcements

By William L. Watts

The euro and the British pound fell versus the U.S. dollar on Thursday after both the Bank of England and the European Central Bank kept interest rates unchanged.

The British currency dropped after the BoE boosted its quantitative-easing program by an unexpectedly large 50 billion pounds ($84 billion) Thursday, signaling that worries about the fragility of the economic outlook continue to dominate the monetary-policy-making process.

Policy makers "surprised the market by extending its asset-purchase plan' by that much and for three months, said analysts at Brown Brothers Harriman. "This drove sterling sharply lower."

The BOE also left its key rate unchanged at 0.5%.

The British pound fell to $1.6868, from $1.6968 before the announcement and from $1.7020 in late North American trading on Wednesday.

Also Thursday, the European Central Bank left its key lending rate unchanged at a historic low of 1%, as expected. ECB President Jean-Claude Trichet's monthly news conference is scheduled to begin at 8:30 a.m. Eastern.

The euro bought $1.4373, down from $1.4432 Wednesday.

Many analysts had pointed to signs that the British economy could pull out of recession by year's end to justify expectations that the central bank would put its 125-billion-pound ($211 billion) asset-purchase program on hold

The dollar index (DXY), which tracks the U.S. unit against a trade-weighted basket of six major currencies, rose to 77.881, from 77.515 late Wednesday.

One dollar bought 95.61 Japanese yen, up from 94.99 yen late Wednesday.

Looking further ahead, investors were awaiting the U.S. government's monthly report on nonfarm payrolls for July, due out Friday. Economists surveyed by MarketWatch expect a loss of 275,000 jobs, which would be the fewest jobs lost since August.

"Investors should stay cautious" ahead of Friday's U.S. non-farm payrolls report for July, wrote strategists at UniCredit MIB in Milan.

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=lwy%2FldcGHKHpqaunEKCa2g%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

August 06, 2009 08:26 ET (12:26 GMT)

UPDATE: Sterling Plunges As BOE Expands Asset Purchase Scheme

UPDATE: Sterling Plunges As BOE Expands Asset Purchase Scheme

(Adds detail, comments.)

LONDON (Dow Jones)--The pound has fallen sharply after the Bank of England announced Thursday that it intends to expand its bond-buying program by GBP50 billion.

Sterling has dipped by over 0.8% to hit a low of $1.6833 against the dollar, while the euro jumped by nearly 1% against the pound to hit GBP0.8547.

Economists had been split in their predictions on what the BOE was likely to decide at its policy meeting this month. However, a run of surprisingly positive U.K. data Wednesday had encouraged some economists to expect that the BOE might suspend or trim back its bond purchases.

Now it appears that growing optimism about the U.K.'s economic outlook may have been misplaced.

"The U.K. still has a long way to go, and that's what the bank is reacting to," said Geoffrey Kendrick, a currencies analyst at UBS in London.

Kendrick said that the U.K.'s unexpectedly weak reading of gross domestic product for the second quarter should have been a reminder that the economic outlook was precarious. GDP shrank by 0.8% in the second quarter and dropped 5.6% on the year, the largest annual decline since quarterly records began in 1955.

"The market got ahead of itself back in June, with the pound supported by its correlation with global banking stocks," he said.

It remains to be seen whether the pound's shift lower Thursday will prove to be a knee-jerk reaction or the start of a sustained move lower.

At 1150 GMT, the pound was at $1.6843. The euro was at GBP0.8533.

-By Katie Martin, Dow Jones Newswires; +44 (0) 207 842 9346; katie.martin@dowjones.com

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(END) Dow Jones Newswires

August 06, 2009 07:58 ET (11:58 GMT)

2nd UPDATE:Romania Ctrl Bk Revises Dn 09 CPI Forecast-Mediafax

2nd UPDATE:Romania Ctrl Bk Revises Dn 09 CPI Forecast-Mediafax

(Adds further comment referring to 2009 GDP contraction)

BUCHAREST (Dow Jones)--Romania's central bank has revised down its forecast on the country's inflation rate for 2009 to 4.3%, from 4.4% estimated in May, Central Bank Governor Mugur Isarescu said Thursday, news agency Mediafax reported.

The central bank also revised its projection on 2010 annual inflation to 2.6%, from 2.8% seen three months ago.

Although the 2009 inflation forecast is not significantly changed, the central bank is more optimistic about next year's annual rate, Isarescu told a news conference at which he presented the quarterly inflation report.

The governor added that there are "potential" reasons for deviations from the main forecast, with the main uncertainty being the development of the international crisis.

"We try to be realistic and say there are so many factors that can alter our forecasts. The main risk factor is that we don't know with enough certainty how the global economic crisis will evolve, as we are seeing very different projections," Isarescu said.

The central bank's revised inflation forecast is based on an 8% economic contraction in 2009, similar to the figure discussed with the International Monetary Fund, central bank's deputy governor Cristian Popa said in his turn.

Also, the central bank estimates a current account deficit of 5%-6% of the gross domestic product by year-end, Popa added.

The country's annual inflation rate was 6.3% at the end of 2008.

Romanian annual inflation slowed down to 5.86% in June, on lower fuel and food prices and a stable Romanian leu exchange rate.

The central bank Tuesday cut its key monetary rate by 50 basis points to 8.5% on the year and lowered the minimum reserve requirements on foreign currency-denominated liabilities to 30%, from 35%.

For 2009, Romania's central bank targets a 3.5% inflation rate, with a one percentage point variation band around the target. The same objective was set for 2010.

Agency Web site: www.mediafax.ro

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(END) Dow Jones Newswires

August 06, 2009 08:11 ET (12:11 GMT)

Romania Ctrl Bker: IMF Financing Might Boost Econ - MediaFax

Romania Ctrl Bker: IMF Financing Might Boost Econ - MediaFax

BUCHAREST (Dow Jones)--Using a EUR1.9 billion second tranche from an International Monetary Fund loan to finance Romania's budget deficit could help revive the economy, Romanian Central Bank Governor Mugur Isarescu said Thursday, news agency Mediafax reported.

The governor said the central bank would discuss using the IMF funds to finance the budget and not for foreign currency reserves consolidation.

"Eventually, the IMF funds will end up at the central bank. If the Finance Ministry spends this tranche locally, then it will sell foreign currency to the central bank and it will buy lei and the foreign currency will go to the reserves. Likewise, if the ministry uses the money abroad, then the central bank's reserves will be spared from certain external payments," Isarescu told a news conference.

Romanian President Traian Basescu said late Wednesday he would talk to IMF representatives on using the second tranche of the IMF loan to finance the budget, instead of raising central bank's foreign currency reserves.

Romania agreed a EUR12.95 billion two-year stand-by loan with the IMF in March as part of a EUR19.95 billion financial rescue package which also includes funds from the European Commission and other international institutions.

The first tranche of EUR5 billion, was released in May and entered the central bank's reserve. The second tranche of around EUR1.9 billion, should be released Sept. 15, based on the results an IMF evaluation of the use of the first tranche, first evaluation and the economic performance in the first six months.

An IMF mission arrived last week in Bucharest for the first evaluation report.

Agency Web site: www.mediafax.ro

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(END) Dow Jones Newswires

Bank of England Rate Decision Statement

Bank of England Rate Decision Statement

The verbatim statement which accompanied the Bank of England's rate decision Thursday follows:

The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.

The Committee also voted to continue with its programme of asset purchases financed by the issuance of central bank reserves and to increase its size by GBP50 billion to GBP175 billion.

The world economy remains in recession, though there have been increasing signs that output in the U.K.'s main export markets is stabilising.

Financial market strains have eased and banks' funding conditions have improved a little, although financial conditions remain fragile.

Household and business confidence has picked up, albeit from the very low levels experienced in the wake of the financial crisis last autumn.

In the U.K., the recession appears to have been deeper than previously thought.

Gross Domestic Product fell further in the second quarter of 2009. But the pace of contraction has moderated and business surveys suggest that the trough in output is close at hand.

Underlying broad money growth has picked up since the end of last year but remains weak.

And though there are signs that credit conditions may have started to ease, lending to business has fallen and spreads on bank loans remain elevated.

Consumer price inflation fell back to 1.8% in June, a little below the 2% target. The decline in recent months was mainly accounted for by lower food and energy inflation, though past falls in sterling continued to put upward pressure on inflation.

The margin of spare capacity in the economy increased further and pay growth remained weak.

The future evolution of output and inflation will be determined by the balance of two sets of forces.

On the one hand, there is a considerable stimulus still working through from the easing in monetary and fiscal policy and the past depreciation of sterling.

On the other hand, the need for banks to continue repairing their balance sheets is likely to restrict the availability of credit, and past falls in asset prices and high levels of debt may weigh on spending.

While some recovery in output growth is in prospect, the margin of spare capacity in the economy is likely to continue to grow for some while yet, bearing down on inflation in the medium term.

But the recession and the restricted availability of credit are also likely to impact adversely on the supply capacity of the economy, moderating the increase in economic slack.

In the light of the Committee's latest Inflation Report projections and in order to keep inflation on track to meet the 2% inflation target over the medium term, the Committee judged that maintaining Bank Rate at 0.5% was appropriate.

In the light of that outlook, the Committee also agreed that it should extend its programme of purchases of government and corporate debt to a total of GBP175 billion, financed by the issuance of central bank reserves.

The Committee expects the announced programme to take another three months to complete. The scale of the programme will be kept under review. The Committee noted that the increase in the scale of the programme would necessitate an increase in the range of maturities of government debt that the Bank was willing to purchase.

That is explained in an accompanying market notice. Following today's meeting of the MPC, the Governor and the Chancellor exchanged letters about the expansion of the Asset Purchase Facility.

The Committee's latest inflation and output projections will appear in the Inflation Report to be published at 9:30am on Wednesday 12 August.

The minutes of the meeting will be published at 9.30am on Wednesday 19 August.

Web Site: www.bankofengland.co.uk

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(END) Dow Jones Newswires

August 06, 2009 07:28 ET (11:28 GMT)

BOE Raises Bond-Buying Program To GBP175B, Rates On Hold

LONDON (Dow Jones)--The Bank of England's Monetary Policy Committee Thursday voted to boost its bond-buying program by GBP50 billion to GBP175 billion, suggesting it still harbors concerns about the sustainability of recent signs of economic improvement.

But it kept its main interest rate on hold at a record low of 0.5%.

All eyes will now turn to the bank's quarterly Inflation Report and press conference Wednesday, when it will unveil its latest forecasts for inflation and output, for a clearer indication of the policy outlook.

Economists had been highly divided over the likely outcome of the meeting. Sluggish M4 money supply growth and a larger than expected contraction in U.K. output in the second quarter had persuaded a majority of economists polled by Dow Jones Newswires that the MPC would extend its quantitative easing program, under which it has already bought GBP125 billion of mostly government bonds.

But a large minority had tipped the MPC's nine members to stay on hold Thursday, with many of those saying that more action at a later date remained a distinct possibility. Figures Wednesday supported that view, showing that the dominant U.K. services sector expanded for a second straight month in July.

All those polled thought the BOE would keep its benchmark interest rate at the current record low of 0.5%.

-By Natasha Brereton, Dow Jones Newswires; +44 20 7842 9254; natasha.brereton@dowjones.com

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(END) Dow Jones Newswires

August 06, 2009 07:06 ET (11:06 GMT)

Sterling Plunges As BOE Expands Asset Purchase Scheme

Sterling Plunges As BOE Expands Asset Purchase Scheme

LONDON (Dow Jones)--The pound has fallen sharply after the Bank of England announced that it intends to expand its bond-buying program by GBP50 billion.

Sterling has dipped by over 0.8% to hit a low of $1.6833 against the dollar, while the euro jumped by nearly 1% against the pound to hit GBP0.8547.

Economists had been split in their predictions on what the BOE was likely to decide at its policy meeting this month.

-By Katie Martin, Dow Jones Newswires; +44 (0) 207 842 9346; katie.martin@dowjones.com

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(END) Dow Jones Newswires

August 06, 2009 07:11 ET (11:11 GMT)