Monday, 26 July 2010

Toyota, Sony rumored to beat consensus on strong EM demand

Asian Market Update: Australia Q2 PPI tempers expectation for surprise RBA hike in August; Toyota, Sony rumored to beat consensus on strong EM demand

As of 1:30amET:

- Nikkei225 +0.7%

- S&P/ASX +0.7%

- Kospi +0.7%

- Taiex +0.3%

- Shanghai Composite +0.1%

- US S&P Futures +0.2% at 1,102

- Gold Aug $1,191/oz

- Crude oil unchanged at $79.02/brl

Economic Data

- (KS) SOUTH KOREA Q2 PRELIM GDP Q/Q: 1.5% V 1.3%E; Y/Y: 7.2% V 6.9%E

- (JP) JAPAN JUN MERCHANDISE TRADE BALANCE TOTAL ¥687B V ¥691BE; ADJUSTED: ¥456B V ¥539BE; EXPORTS Y/Y: 27.7% V 23.5%E; IMPORTS Y/Y: 26.1% V 24.7%E

- (AU) AUSTRALIA Q2 PPI Q/Q: 0.3% V 0.8%E; Y/Y: 1.0% V 1.5%E (1 year high)

- (SI) SINGAPORE JUN INDUSTRIAL PRODUCTION M/M: -23.4% V -14.0%E; Y/Y: 26.1% V 38.4%E

Overview/Top headlines

- Equity markets are opening the week in rally mode, tracking another session of gains seen in the US on Friday. Risk-related FX majors are also shrugging some mixed regional economic data. A key economic event on the session, Australia Q2 PPI was notably below consensus estimates as fixed income market repriced probability for an early August hike to 25% fom 30%. However, AUD/USD shrugged the post-data decline late in the day, testing 2-month high around 0.8980. Likewise, despite a widespread critique of the EU stress tests as not being sufficiently stringent, the focus on appears to be on diminished uncertainty over the health of the EU banking system. Both EUR and GBP and also in rally mode against the floundering greenback: EUR/JPY rose above 113.40 - the highest level since early June - and GBP/USD hit a 3-month high at 1.5470. Commentary from several WSJ reports on the stress tests appears to be far more scathing. One of the pieces says the "mild assumptions" include EU GDP falling 0.2% this year and 0.6% next year and Spain unemployment rising to 20.3% from current 20% under "adverse scenario" - both under adverse scenario. Moreover, a separate report says the next challenge for EU banks is in fundraising to finance further lending to non-financials, given that EU's reliance on bank lending for financing is substantially heavier than in US, where companies are more willing to tap the capital markets.

Macro/FX

China

FX/Policy:

- (CH) PBoC's Hu Xiaolian: Greater FX flexibility to help China cap inflation and avoid asset bubbles

- (CH) China SAFE: China's excess liquidity may lead to asset speculation

Housing:

- (CH) PBoC Adviser Xia Bin: Warns against implementing property measures too fast as economy already shows signs of slowing in H2 - China Business News

- (CH) China's Finance Ministry Research Director Jia Kang: Property tax will not affect first homes; Sees 2010 fiscal tax revenue rising 13-17% y/y - Chinese press

- (CH) China to carry out stress tests on property trust loans - Economic Observer; In the first half of this year Chinese trust firms issued property trust investment plans totaling ¥67.7B, compared to ¥40B for the whole of 2009.

- (CH) China Ministry of Finance Tax Dept official Yin Boqin: China's property tax may be applied on graduated basis and levied on market value of the property rather than the price paid - Chinese press

Economy:

- (CH) China Academy of Social Sciences (CASS) economist Yang Tao sees 2010 GDP at 9.5-10% range; Expects inflation to remain below 3% as growth slows in H2 - Chinese press

- (CH) China NDRC researcher Zhang Yansheng: Export growth likely to slow in H2 because of weaker EU demand, higher production costs, and inflation expectations - People's Daily

- (CH) China Electricity Council: 2010 power demand to rise about 12% y/y, slow to 5% growth in H2

Australia

- (AU) Australia Treasury Pre Election Forecasts: Reiterates forecasts for FY11 and FY12 GDP

- (AU) Australian mining lobby plans to resume their advertising campaign against the mining tax

- (AU) The Australian warns the progress being made in Panama Canal project may benefit Atlantic-based miners like Vale at the expense of Australian miners

- (AU) Australian banks are expected to proceed with fund raising efforts internationally after the successful completion of the European stress tests - Sydney Morning Herald

- (AU) Australia's Access Economics reports that the Reserve Bank of Australia may be forced to raise interest rates due to increasing inflation pressures - The Australian

Japan

- (JP) Japan Finance Ministry raises quarterly economic assessment in Q1

- Japanese Press

- (JP) Japan Govt Spokesman Sengoku: Asking ministries for a 10% spending cut in the 2011/12 budget; extra budget to be well above ¥1T to stimulate economic sectors with growth potential

- (JP) Japan Fin Min Noda: Hopes EU stress test will calm investor concerns; Debate needed regarding overhaul of tax system, cannot rely on govt debt issuance

- (JP) Japan PM Kan's approval rating fell 2pts to 41%, disapproval rating rose 4pts to 40% - latest Mainichi poll

Korea

- (KS) Bank of Korea Gov Kim: Economy likely to have entered expansionary phase

- (KS) US and South Korea began their 4-day joint war games in the Sea of Japan (east of Korean peninsula) despite opposition from the North as well as from China - Washington Post

Other

- (NZ) New Zealand Unions go up in arms over proposed new labor laws announced by the government - Dominion Post

- (SI) Singapore National Development Min Mah Bow Tan: There is an imbalance in the housing resale market that may take a year or so for prices of resale flats to stabilize - Straits Times

- (VN) Vietnamese smaller banks are struggling to find affordable sources of funds for loans while major banks have an excess of funds due to the central banks limited lending to the interbank market - Tuoi Tre

- (VN) Vietnam's trade deficit for January to July is expected to reach $7.4B v $3.9B y/y - Vietnam press

- (TT) China Banking Regulator (CBRC) to allow Taiwan banks to apply for licenses to set up mainland branches - Commercial Times citing Taiwan's financial regulator

Equities

Australia

- HVN.AU: Reports Q4: FY Sales +0.8% y/y; SSS -3.4% y/y

- QBE.AU: Guides H1 Net down about 40% y/y; Gross premiums A$6.9B, +20%

- ROC.AU: Reports Q2 output 8.2K BOEPD v 8.7K BOEPD q/q

- WES.AU: Reports Q4 Coles unit +5.5% to A$7.5B; FY +4.3% at A$29.8B

- CBA.AU: CEO Norris: Says NAB claims are "rubbish" and that the comments are a result of NAB's "poor" performance in the mortgage market - Australian

- FMG.AU: CEO Forrest is going to take a less active role in the company in the near future and will be replaced by Worley Parsons - The Australian

Japan

Automakers:

- TM: May post Q1 Op profit about ¥100B (profit ¥82Be, loss ¥195B y/y) - Japanese press (update)

Tech:

- SNE: May report Q1 Op profit of ¥10-30B (¥2Be, loss ¥37B y/y) - Japanese press

- Fujitsu Ltd to begin selling low-end PCs in Asia and N America in FY12 - Japanese press

- Sharp Corp providing smartphones to AT&T that are capable of receiving video transmitted using MediaFLO technology - Japanese press

- Fuji Electric Holding may raise its investment in semiconductor business by about 20% to ¥12B - Japanese press

Financials:

- Mizuho, Sumitomo Mitsui Financial, and Mitsubishi UFJ each may have exceeded ¥100B in profit for the quarter ended June - Japan press

- Softbank Corp denies press speculation that it may report ¥190B op profit in Q1 (¥133Be)

Other:

- NTT DoCoMo to increase supply of Xperia smartphone by 200k units by the end of July to meet increase in demand; FY sales goal of 1M units - Japanese press

- Sanyo Chemical raises FY10/11 guidance to Net ¥5.1B, Op Profit ¥8.6B, Rev ¥133B (prior Net ¥3.8B, Op Profit ¥6.6B, Rev ¥127B)

- Daiichi Sankyo denies press speculation that it is forming a joint venture with Kitasato Institute Research Center to increase vaccine production

China

- China State Construction Holdings awarded HK$3.0B contract from Hong Kong Government

- HSBC, Sedco in a consortium are close to signing a deal to fund the £600M Pinnacle skyscraper in London - Times

- China Resources Power reportedly going to issue benchmark size dollar bond due in 2015

- BIDU: In talks with mobile phone makers about using its search box on handsets sold in China; Also considering listing in China with no time line given - WSJ

- PTR: Increases 2010 Sulige gas output to 10B cubic meters

- Citic Resources put in an application to spin off Citic Dameng, its manganese unit; Assets being spun off are in China and West Africa; No set date for the spin off as of yet

Korea

- Hyundai Motor Vice Chairman Chung Eui-sun: Company's H2 outlook for sales does not seem "rosy" - Korean press

- Kookmin Bank nominated Min Byong-duk as the next CEO; Names Lim Young-rok President

- Korea Exchange Bank company expected to pay its first interim dividend - Korean press

- (KS) According to South Korea Finance Ministry officials, both KB Financial and Woori Finance will report Net losses in Q2 on rising bad loans for construction projects - Korean press

Commodities

- XAU/USD: WSJ citing analysts argue against a sharper decline in Gold prices in coming weeks

- (CH) China is aggressively developing its own LNG reserves which will drastically reduce the need to import by 2020 - FT

- (CH) China govt to limit output of certain kinds of non-ferrous metals to 41M tons by 2015 - China Securities Journal citing industry association

- (CH) China NDRC: CNOOC H1 gas output rose over 30%; Sees output as stable

Published on Mon, Jul 26 2010, 09:29 GMT

A couple of Polish numbers were released on Friday

Review

A couple of Polish numbers were released on Friday. Retail sales surprised on the upside, growing 6.4% y/y in June compared with the consensus expectation of 4.1% y/y. Unemployment dropped a bit in June to 11.6% from 11.9% in May. Both numbers confirm that the recovery in the Polish economy continues and that rate hikes have moved closer.
Friday brought more bad news regarding the situation in Hungary as the two rating agencies Moody’s and Standard & Poor’s both came out with warnings that they could downgrade Hungary’s credit rating on the back of the breakdown of talks between the Hungarian government and EU/IMF. Unfortunately, the Hungarian government once again demonstrated that it does not seem to take the concerns of investors, lenders and rating agencies seriously as Economics Minister Gyorgy Matolcsy said that the rating agencies “don’t understand” that fiscal responsibility needn’t come at the expense of independent economic policy. Telling rating agencies that they don’t understand is not going to do much for the credibility of economic policy in Hungary.

Preview

Not much on the agenda today in the region other than Hungarian retail sales. We expect the Hungarian retail sales numbers to confirm that the Hungarian economy and domestic demand in particular continues to be very weak.

Scorecard-based trade of the week Buy CZK/ZAR

The Hungarian forint once again was the big loser on Friday as the warnings about possible downgrades hit the Hungarian markets. We remain bearish on the forint and EUR/HUF could easily move above 300 soon if the Hungarian government does not take action to reassure investors that it is serious about getting back to negotiations with the IMF and EU.
On Friday we recommended investors to buy CZK/ZAR based on the scores in our EMEA FX Scorecard. We keep that trade open and with EUR/USD inching up towards 1.30 again, the trade is getting a bit more tailwind. In our view, we could be heading for a larger negative correction in the South African rand sooner rather than later.

Bull buys call spread as Arena Pharmaceuticals' shares soar

ARNA - Arena Pharmaceuticals, Inc. – Shares of the clinical-stage biopharmaceutical company shot up 10.7% today to an intraday high of $5.89, inspiring one options strategist to purchase a debit put spread in the October contract. Arena’s shares have increased significantly since an FDA advisory panel said it does not recommend rival Vivus’ obesity drug, Qnexa, receive FDA approval. The bullish options investor prepared for continued upward movement in Arena’s shares by purchasing 3,000 now in-the-money calls at the October $5.0 strike for a premium of $2.45 each, and selling the same number of calls at the higher October $7.0 strike at a premium of $1.45 apiece. The net cost of the transaction amounts to $1.00 per contract. Thus, the trader is prepared to make money should the biopharmaceutical firm’s shares rally 1.85% over the current price of $5.89 to trade above the effective breakeven price of $6.00 by October expiration day. The investor walks away with maximum potential profits of $1.00 per contract if Arena’s shares surge 18.85% to exceed $7.00 by expiration. In the nearer-term September contract, another bullish player opted to sell 2,700 puts at the September $2.0 strike to take in an average premium of $0.30 per contract. The put seller keeps the premium received on the transaction as long as Arena’s shares trade above $2.00 through expiration day in September. Options implied volatility on ARNA is higher by 14.1% to 101.05% as of 2:55 pm (ET).

CQB - Chiquita Brands International, Inc. – Call buying on the international marketer and distributor of bananas and fresh produce continues today with shares of the underlying stock trading higher by 3.15% to stand at $13.10 as of 1:20 pm (ET). Bullish traders started to buy November $12.5 strike calls yesterday afternoon as Chiquita’s shares rallied nearly 5.5% to end Thursday afternoon at an intraday high of $12.72. The company’s shares continued their ascension today, inspiring investors to build up bullish stances on the stock ahead of the second-quarter earnings report next Thursday. Investors purchased approximately 3,000 calls at the November $12.5 strike by 1:25 pm (ET) for an average premium of $1.73 apiece. Call buyers make money if Chiquita’s shares increase another 8.6% to surpass the average breakeven point at $14.23 by November expiration. Traders buying the calls on Thursday have a clear first-mover advantage because they paid an average of $1.52 each for the November $12.5 strike calls, which is $0.21 less than today’s call coveters paid for the same contracts. The demand for call options on Chiquita Brands International lifted the overall reading of options implied volatility 4.7% to 56.28% just before 1:30 pm (ET).

Banks drive markets opening after Stress Test results

Europan Stocks opened today high, receiving well the positive results of Friday's Stress Test, but with no real euphoria. Banks lead the gains: Royal Bank of Scotland Group shares were up 2%, Lloyds gained 1.5% and BNP Paribas rose 2.5%, but the skepticism over the methodology of the tests could slow this initial sentiment down.

EUR keeps strong against the USD ending the week above 1.2900 but far from weekly highs that lie at 1.3028.

The results of the 2010 EU-Wide Stress Testing Exercise showed that 7 of the 91 banks tested failed the test, with a necessity of global EUR 3.5 billion extra capital in case of continuing crisis until end of 2011. In case of sovereign shock, the aggregate lost to the whole testing could be of EUR 67.2 billion.

According to the Committee of European Banking Supervisors and national authorities across the European Union, the seven banks that failed the test are Banca Civica, Unim, Espiga, Diada and Cajasur from Spain, ATEBAN from Greece and German HYPO. French, Portuguese, Italian, Finnish, Swedish and Belgium top banks all passed.

The US economy is not likely to slip back into recession

Sunrise Headlines

US Equities advanced on Friday as the European bank stress tests showed that 84 of 91 lenders had passed the examination, easing concerns about the health of the region’s financial system. This morning, most Asian shares start the week in positive territory.
On Friday, EU regulators said that only seven of 91 of the region’s systematically important banks failed the eagerly awaited stress test and would need to raise an additional €3.5 billion in capital, but some market experts were left sceptical that the tests were rigorous enough to restore confidence.
The US economy is not likely to slip back into recession but letting tax cuts for the wealthiest expire is necessary to show commitment to cutting budget deficits, US Treasury Secretary Geithner said yesterday.
European regulators have accused Germany and its banks of reneging on a deal to publish full details of sovereign debt holdings as part of the stress test exercise. Six of the fourteen German banks tested did not publish the expected detailed breakdown of sovereign debt holdings.
The UK economy grew almost twice as mush as expected in the second quarter, the fastest expansion for four years as rebounding services, manufacturing and construction ignited the recovery.
Japan’s government can’t continue to rely on excessive bond issuance to fund fiscal spending, the finance minister waned this morning, as the ruling Democratic Party officials wrangle over spending for the next fiscal year.
ECB policymakers increased pressure on Friday on industrialised countries to cut public spending immediately in order to consolidate the present recovery.
BP is poised to announce the departure of Tony Hayward, its chief executive, in the next 24 hours, according to people close to the company, the FT reports on its website.
Japanese export rose more than expected in June from a year earlier but the pace of increase slowed for the fourth straight month, a sign the economic recovery may lose steam.
Two top ratings agencies warned on Friday they might downgrade Hungary’s sovereign debt after its prime minister snubbed the IMF and rejected austerity measures in favour of a pro-growth policy.
Today, the eco calendar contains the US new home sales. Belgium and Germany will tap the market.

Markets

On Friday, the economic data in Europe continued to surprise on the upside of expectations. The German IFO indicator rose to its highest level in three years, confirming the improvement in the euro PMI’s. In the UK, GDP rose almost twice as fast as expected, due to a sharp pick-up in construction, but also the services and manufacturing sector enjoyed fast growth in the second quarter. GDP rose by 1.1% Q/Q, while a growth rate of 0.6% Q/Q was expected. The US eco calendar was empty.

On the markets, the strong European economic data didn’t go unnoticed, while investors were also waiting for the results of the stress tests that were published after the closure of European markets. This resulted in a further correction of global bonds, modestly higher equities, while commodities showed no firm direction. In the FX markets, the euro was little changed against the US dollar, but the dollar gained on the yen.

Intra-day, US Treasuries showed a very brief reaction on the release of the stress tests, but as equities ignored the results, US Treasuries rebounded to levels from before the release, only to drop later in the session when equities rebounded. The global bond markets were on the defensive on the back of excellent German IFO and UK GDP releases, which resulted in a down-move on the release itself. It was the second day in a row that global bonds corrected lower. While the stress tests were not published yet, we think that markets continued to look at them positively, which meant that risk aversion waned further. This was also reflected in the intra-EMU bond market, where spreads versus Germany across the board narrowed. Looking at a weekly perspective, the narrowing of the spreads versus Germany was especially an issue for Italian and Spanish bonds, much less for Portuguese, Greek or Irish spreads.

The European Bank stress tests delivered some surprising results. Indeed, only 7 banks, five Spanish saving banks, German Hypo Real Estate and the Greek Agriculture Bank failed and the global shortfall of capital is only €3.5B. In the US, the stress tests revealed that 11 of the 20 tested banks needed a combined €74.6B in fresh capital as a buffer for an adverse development of the banking environment. Some investment banks had done tests that revealed capital shortages of €38 to 85B. So, a number of analysts were quickly to dismiss the European stress tests as not severe enough. The critique understandably focussed on the absence of a default probability of sovereign debt in the banking books. The tests did take account of haircuts in the trading books, but about 90% of sovereign debt sits in the banking books and not the trading books. However, dismissing these tests on that argument would be unfair. The Bank Stress Tests were certainly tough enough with regard to all bank exposure (corporate, consumer, real estate) except the sovereign risk in the bank books, admittedly a big issue in bank balance sheets. The adverse scenario tales into account a double dip recession with negative growth figures both for 2010 and 2011 and declines in commercial and residential property prices, all adapted to the individual situation of the various countries. The stress tests also applied a tough interest rate shock that was more severe that the rise in rates in May. Short interest rates were upped 125 basis points to take account of a liquidity crisis and e.g. Spanish 5-year government yield was put at 5.78% in 2011, while the Greek one was 13.87%. This is a very severe shock that was applied to all bank exposure (except the sovereign risk in the banking books). The exercise resulted in a global loss of €566B over 2010-2011, or about €237B more than in the benchmark scenario, but except for the seven banks that failed the test, other banks have enough capital to face these losses. However, the main positive of the whole stress test may be the transparency and consistency. Everybody may now do its own exercise, also because the details of the sovereign debt exposure of individual banks are known (except for a small number of German banks that will come under suspicion of the market). This softens the criticism that the stress tests didn’t take sovereign default risk on the banking books into consideration. However, while one might eventually fear a default of the Greek government under some circumstances and eventually also some other smaller governments (as a catastrophic scenario), it would show that the overwhelming majority of banks could weather the storm. This means that the market may now start to discriminate between banks. Some banks that have passed the post may still be considered as risky and thus continue to have difficulties to get access to (money market) funding. However, the more general suspicion between banks may wane and thus there might be a normalisation of the money market workings. If this would be the case, the stress tests would have fulfilled their objective and a big obstacle to normalcy would have been taken away. However, the stress tests concerned the capital situation of banks. The longer term funding of banks remains a big issue for which the stress tests didn’t bring a solution. Banks will need to compete with governments that have still a big appetite for money to fund their deficits and refund their enormous debt pile. This might still restrain bank lending and cause banks to deleverage further. Overall, we think however that banking risk has diminished greatly after the stress tests. The ECB is still active on liquidity for months to come and in case of problems can still go further in providing liquidity. The Securities Market Program and the Covered Bond Program of the ECB, while on a low pace or stopped, are still available and a government backstop, the European Financial Stability Facility, is now operational. Concluding, one can always look for more negative scenarios, like most governments default, but these aren’t realistic and the risk test scenario looks a “realistic” risk scenario that most banks can cope with.

We will closely see how the Euribors and the liquidity premium on the money markets react, as well as European equities, the euro, the government bond yield spreads. Overall, we don’t expect any steep reactions in the various markets that have already anticipated a positive outcome. However, longer term it remains a positive that should underpin risky assets at the (small) price of core bonds.

Today, the eco calendar is thin as it only contains the US new home sales. On the supply front, Belgium (OLO March 2016 and Sep 2020 for €2-2.8B) and Germany (€4B Bubills) will tap the market. Belgium cheapened recently versus peers which might attract investors. Most investors will chew and react on the publication of the stress tests. Later this week, the EMU and US eco calendars are not too important expect for the M3 and EU confidence indications in EMU and the GDP and Chicago PMI in the US. More attention will go to supply in both EMU and US, albeit it in holiday- thinned markets.

After a dramatic drop of almost 33%, US new home sales are forecasted to show a slight rebound in June. The consensus is looking for a 6.7% M/M increase, but we believe a weaker outcome is not excluded. Later this week, the euro zone M3 money supply and credit growth data, euro zone CPI and the US Q2 GDP data will receive some attention. Last month, the euro zone lending data showed an increase in lending to non-financials, which might be a first indicator that lending to the private sector might be starting to pick up. It will be interesting to see whether lending to nonfinancials increases further in June, as it is an important factor for the recovery to gain strength. In the US, growth is expected to have slowed somewhat further in the second quarter (2.5% Q/Q from 2.7% Q/Q). We have no reasons to distance ourselves from the consensus, but a weaker outcome won’t go unnoticed as will raise fears for a double dip, especially in the US as UK GDP came out surprisingly strong last Friday.

Regarding bond market trading today, as expected the Bund correction continued at the European open (or at least the after-official trading dip on Friday was confirmed). We have long advocated that the Bund had slid in a sideways trading range between 129.93 and 127.60/12, but the Bund remained stuck near the top side of the range. On Friday, the Bund showed signs that it might test now the downside of the range and this might be the issue for this week. We stick to the view that dropping below that range would be difficult, but if the market would enthusiastically react on the stress tests (not our main expectation, see above) a sustained drop below would be a warning signal that a more pronounced correction is in store. Given the months long safe haven status of the Bund, such a deeper correction cannot be excluded though. For the US Treasuries, the situation is bit different. The Sep Note future is still in an uptrend (uptrendline is tested now) and key support is still further away, notably at 121-20+. For the US, one should take into account that the eco data have shown signs of weakness.

On Friday, the market talk was on the outcome of the stress tests for the European banking sector. As was already the case for quite some time, this was a debate between believers and non-believers. For the euro, one would expect this uncertainty to be a (slightly) negative factor. The pair started the session in the 1.29 area. However, after the very strong PMI’s on Thursday, markets also had to keep an eye on the German IFO indicator. As was the case for the PMI’s, the IFO was again much stronger than expected and just as was the case on Thursday, the UK data (Q2 GDP) were also much stronger than expected. This pushed EUR/USD to an intraday high at around 1.2965. However, the stress tests were too much of a factor of uncertainty. The euro had to return the early gains soon and a defensive repositioning hammered the single currency early in US trading with the pair testing bids just below the 1.2800 mark. The publication of the test results caused some temporary volatility with EUR/USD moving up and down between 1.2800 and 1.2900. However, looking at the (US) indicators of ‘stress’, investors at least came to the conclusion that the outcome of the test didn’t contain any unexpected negative news. Equities turned north and the VIX volatility indicator eased. Finally, EUR/USD closed the session at 1.2909, very close to the 1.2893 close on Thursday.

We made an assessment on the outcome of the stress tests elsewhere in this report. A lot of issues could have been addressed in a different way. However, for us, the bottom line is that the outcome of the stress tests should be a (moderately) positive factor for the European markets. So, while the immediate impact on the euro has been limited until now, we would consider it as mildly positive. At least, it removes an additional factor of uncertainty. From a market point of view, the question is now whether this factor will be enough a reason for a new up-leg in the euro. In this respect, we are still inclined to hold on to our view that the euro has already succeeded a nice rebound, admittedly from distressed levels. Nevertheless, the easing tensions on the intra-EMU government bond markets, the outcome of the stress tests and, last but not least, the strong eco data as published at the end of last week are all euro supportive factors. So, in a day-to-day perspective, we wouldn’t be surprised to see EUR/USD go for a (re)test of the 1.3029/95 resistance area. We stay open-minded, but don’t anticipate on a sustained break of this level yet. Today’s data (Chicago Fed and Dallas Fed indicators and the New homes sales) will probably have no lasting effect on trading.

Sterling had quite a good run on Friday. EUR/GBP was changing hands just above the 0.8400 mark at the start of trading in Europe. There was a brief up-tick after the publication of the strong IFO release in Germany. However, half an hour later, the UK Q2 GDP release came out much stronger than expected. EUR/GBP turned south. This move was both sterling strength in the wake of the strong GDP figures but it was also global euro weakness going into the publication of the results of the European stress tests. The pair dropping below Wednesday’s/Thursday’s lows even accelerated the move. The pair reached an intraday low at 0.8318 late in European trading. The publication of the stress tests results finally gave the euro some downside correction and EUR/GBP joined this move. The pair closed the session at 0.8372, compared to 0.8449 on Thursday.

Last Friday’s GDP data will make the debate at next week’s BoE meeting ever more interesting. Recently, it looked that the ‘Sentence’s view’ was only an outlier within the MPC and that the doves would maintain the lead. Even a further easing of policy was not ruled out yet. However, after Friday’s strong GDP data, the case of the doves hasn’t been strengthened. We expect the BoE to maintain a wait-and-see approach for now. So, we still don’t bet on the ‘Sentance’ camp gaining much more ground. So, in this context, we don’t see a reason for EUR/GBP to break out of its recent consolidation pattern anytime soon.

On Friday, there was again no big story to tell on USD/JPY trading. The pair moved gradually higher throughout the session. Trading was mostly driven by technical considerations. The dollar profited overall from some investor caution on the euro going into the publication of the stress tests. At the same time global sentiment on risk as mirrored in the equity markets’ performance wasn’t that bad. So, the pair finally managed to create somewhat of a buffer from the recent lows and closed the session at 87.46 from 86.95 on Thursday evening.

This morning, Asian equity markets are modestly higher. However, in line with the price action of late USD/JPY fails to draw much support from this. The downside in this pair is a bit better protected now (probably also as the market fears BOJ action in case of a drop to the 85.00 area). However, the pair obviously needs very high profile positive news to make any further progress. As we don’t see a trigger for such a news flow anytime soon, the recent stalemate in this pair might still continue for a while.

Monday, 21 June 2010

Yuan rising against the USD: no sign of central bank intervention

The official mid-rate was left unchanged earlier today but the market is obviously testing the waters by buying the Yuan against the USD to see where the new limits will be. Reuters is reporting a low in USD/CNY so far today at 6.8110 compared with the official rate at 6.8275 earlier in the day.

AUD maintains strength into European open

It's pointless trying to argue with the market which is insisting on maintaining a bullish tone for the AUD. AUD/USD is again close to its session highs and risk sentiment is definitely on. EUR/USD is also comfortable above 1.2400 and it will be interesting to see what Europe makes of the weekend developments.

ForexLive Asian market wrap: China introduces Yuan flexibility

"The recovery and upturn of the Chinese economy has become more solid with the enhanced economic stability. It is desirable to proceed further with reform of the RMB exchange rate regime and increase the RMB exchange rate flexibility" Exact details of how this new found flexibility will manifest itself remain in question What the papers had to say on the Chinese move Improved risk sentiment led to sharp gaps higher on the open in the AUD in particular The official Yuan mid-point was unchanged from Friday leading to some confusion but the Yuan has subsequently to 2-year highs against the USD Oil traded higher on improved confidence in global growth prospects Regional bourses rallied almost 2% Rightmove survey of UK house prices +0.3% MoM Greek PM says budget cuts will win over investors Fitch ratings see no chance of EUR break-up Fitch also says Japan PM claims of wanting to fight public debt will be tested The USD opened quite sharply lower this morning after the weekend announcement by China that it is to allow greater flexibility for the Yuan in currency markets. Risk was generally on and this sentiment outweighed the traditional approach to Yuan moves of selling the JPY crosses and USD/JPY particularly. AUD/USD gapped 125 pips higher on the open, trading straight through stops above .8750 and leaving many traders with up to 100 pip slippage. The market pulled back to .8750 after the Yuan mid-rate was announced at exactly the same as Friday but the AUD has again rallied as USD/CNY fell. A stronger Yuan is not necessarily a good thing for the AUD but the market has ignored this and concentrated on risk sentiment. Range: .8754/.8835 (NY close .8700) EUR/USD took out stops above 1.2450 in early interbank trade, seeing a high of 1.2468. The Fitch and Greek statements will have generally helped the mood but we can expect to see some post-mortem enquiries in pairs like EUR/USD and EUR/CHF where there were stop-loss hunts in early thin markets. Range: 1.2369/1.2468, EUR/CHF 1.3695/1.3742 USD/JPY also took out stops in early trade, seeing a low of 90.04 in early interbank trade. The JPY crosses rallied as risk sentiment improved and USD/JPY jumped in line with them. Ranges: 90.04/95, 112.11/90 Sterling has been fairly quiet on the crosses, taking its lead from the EUR. Range: 1.4809/74 Markets: Nikkei +2%, HK +2%, Sydney +1%, Kospi +1%. Gold steady $1258/oz, Oil +1.25% $78.50/bbl.

Japan: All Industry Activity Index grows 1.8% in April slightly below expectations

FXstreet.com (Córdoba) - The All Industry Activity Index grew 1.8% in April against a 0.8% decrease the previous month, but the increase did not meet expectations around a 2.0% rise. This is the highest climb in the last 3 months.

The All Industry Activity Index released by the Ministry of Economy, Trade and Industry captures the monthly change in overall production by all industries of the Japanese economy. The index indicates the Japanese GDP and the overall growth figures, providing insight into current levels of Japanese economic expansion. Normally, a high reading is seen as positive (or bullish) for the JPY, while a low reading is seen as negative (or bearish).

All Industry Activity Index (MoM)

1.8%

Actual

2.0%

Consensus

-0.8%

Forex: Yen weakens on risk appetite environment

FXstreet.com (Córdoba) - Asian bourses are in green today with the Nikkei over 2% higher. Yen crosses are rising on a renewed risk appetite mood after Chinese central bank announced that it would increase exchange rate flexibility after its two-year peg to the Dollar.

USD/JPY opened lower on Monday at 90.30 and reached a fresh 3-week low at 90.18 before bouncing. USD/JPY quickly began to move higher filling the opening gap. The pair went as high as 90.94 but was capped at that level and is currently at the 90.80 zone, 0.55% above its opening price.

EUR/JPY started the week at 112.42 slightly above its Friday's closing price and, despite that at the beginning of the day the pair moved down, it rebounded at the 112.10 support area recovering more than 80 pips. Currently EUR/JPY is quoting close to daily highs at 112.90, 0.43% above its initial price.

GBP/JPY opened the session at its NY close but heading north. The Pound has consolidated gains for over 100 pips against the Yen so far and is currently trading close to Friday's high at the 135.10 zone.

Oil approaches $79.00 on flexible Yuan

FXstreet.com (Barcelona) - Crude Oil for July delivery continued its relentless ascension towards higher levels and posted a rise beyond 2% compared to Friday's close. Renewed flows of heavy buying came in through the Asian session as investors cheered up a greater consent on a flexible Yuan by the People's Bank of China.

The news triggered a vigorous chain effect on worldwide oil demand growth expectations as crude rose passed a series of upside hurdles to encounter resistance at just under $79.00/barrel (highest level in June) At present, a minor downside correction sent the price to sit around $78.80 region.

The 23-month peg to the Dollar may represent significant benefits for Chinese imports on USD-denominated energy products, with oil consumption turning more attractive should the Yuan flow in a more indulgent fashion.

Forex: EUR/USD extends higher, hits prices above 1.2450

FXstreet.com (Barcelona) - The Euro has remained trading on the steady upside channel from 4-year low at 1.1875 on Jun 7, pushing higher on Asian session to reach levels right above 1.2450, 4-week high, with support at 1.2355/60.

On the upside, the pair might find resistance at 1.2455 (May 28 high), under pressure ahead of the European opening, with next resistance levels at 1.2480 (intra-day level) and 1.2520 (May 6 low). On the downside, immediate support lies at 1.2400/15 (intra-day support/Jun 18 high), and below here, 1.2365 session low) and 1.2340/50 (Jun 15/16 high/ intra-day support).

EUR/GBP attempted to break higher on Asian session opening, but capped at 0.8400, the pair has pulled back to session low at 0.8340 ahead of the European opening. On the bigger picture, the pair remains slightly bullish, with resistance levels at 0.8380/85 and 0.8400. On the downside, support levels lie at 0.8355 and 0.8310.

Tuesday, 29 December 2009

GLOBAL MARKETS: European Stocks Rise, Setting Fresh 2009 Highs


  By Andrea Tryphonides
  Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--European stocks rose Tuesday, hitting fresh highs for 2009 as sentiment remained bullish ahead of the New Year, although activity was sluggish in most asset classes, with volumes low all round.

The focus was firmly on the approach of 2010 as equities jumped higher after the Christmas break.

"When reading the forecasts of the big investment banks, one can only conclude that 2010 will be an easy year for investor," said Ad van Tiggelen, senior strategist at ING Investment Management. "Consensus has rarely been so strong. To summarize, 2010 will be a good year for equities, especially the first half," he said.

By 0840 GMT, the pan-European Stoxx 600 index had gained 0.2% to 253.8. London's FTSE 100 was up 0.4% at 5425.3, returning from an extended week-end break. Frankfurt's DAX had increased 0.1% at 6007.8 and Paris's CAC-40 was up 0.2% at 3953.7.

Among the key sectors, basic resources stocks led Europe higher. On Monday, copper rose to its highest price in more than 15 months in New York on speculation that demand will strengthen and drain stockpiles, although copper futures were subject to some profit taking on Tuesday. Reflecting this, spot gold was at $1105.10 per troy ounce at 0900 GMT, down $2.95 from the New York close.

In London, British Airways declined 0.4%, following its U.S. peers after the terror incident on Christmas Day. Additionally, there were press reports that the airline was looking into the possibility of abandoning its first-class service on a number of routes.

Earlier, Asian stocks were mixed Tuesday in muted holiday trade, with most markets shackled by the absence of investors taking an extended break.

Australia's S&P/ASX 200 outperformed the region with a 1.1% gain as investors there returned from their extended weekend. Japan's Nikkei 225 and Hong Kong's Hang Seng index were flat, South Korea's Kospi Composite fell 0.8% but the Shanghai Composite came off its lows to stand up 0.7%.

On Monday, U.S. stocks rose to new closing highs for the year in a thinly traded session, as gains across a host of companies including International Business Machines and 3M overcame declines in American Express and other financial stocks.

The Dow Jones Industrial Average closed up 0.3% at 10,547.1, its highest close since Oct. 1, 2008. The technology-heavy Nasdaq Composite climbed 0.2% to 2291.1 its highest close since Sept. 3, 2008 and the Standard & Poor's 500 index rose 0.1% to 1127.8, its highest finish since Oct. 1, 2008. Three S&P 500 categories ended the session in the red: financials, industrials and consumer discretionary.

Meanwhile, in the European foreign exchanges Tuesday, the euro was firmer. Indeed, its slide against the dollar in recent weeks may have gone too far, said Brown Brothers Harriman in a note, and a correction higher is looking increasingly likely.

The euro was trading at $1.4435 at 0900 GMT, up from $1.4379 in late New York business Monday. The dollar was little changed at Y91.57, down from Y91.63.

Elsewhere, February Nymex crude oil was down five cents at $78.72 per barrel amid thin volumes. Despite equities' march higher, March bund futures rose 0.08 to 121.50.

-By Andrea Tryphonides, Dow Jones Newswires; +44-20-7842-9281; andrea.tryphonides@dowjones.com

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December 29, 2009 04:05 ET (09:05 GMT)

Copyright 2009 Dow Jones & Company, Inc.

DJ Currency Rates Of Coffee Producing, Consuming Countries


                                  Current     Prior
Producers
Angola (Readj Kwanza)    AOA          89.5        89
Bolivia (Boliviano)      BOB          7.02      7.02
Brazil (Real)            BRL        1.7406    1.7625
Burundi (Franc)          BIF        1240.5    1239.5
Central African States   XAF         454.5     455.5
Central Bank of West AfriXOF         454.5   456.065
Colombia (Peso)          COP        2036.5    2047.9
Costa Rica (Colon)       CRC         564.5     574.3
Cuba (Peso)              CUP             1         1
Dominican Rep (Peso)     DOP          36.1    36.025
Ecuador (USD)            USD             1         1
El Salvador (Colon)      SVC        8.7475    8.7475
Ethiopia (Birr)          ETB        12.695     12.69
Guatemala (Quetzal)      GTQ        8.3165    8.3115
Guinea Rep (Franc)       GNF          4995      4995
Haiti (Gourde)           HTG         39.75     39.75
Honduras Rep (Lempira)   HNL        18.895    18.895
India (Rupee)            INR        46.675     46.54
Indonesia (Rupiah)       IDR        9434.5      9450
Kenya (Shilling)         KES          75.9     75.75
Malawi (Kwacha)          MWK      145.9925  145.9864
Mexico (Peso)            MXN      12.97545  12.84425
Nicaragua (Cordoba Oro)  NIO       20.8322   20.8182
Papua New Guinea (Kina)  PGK        0.3789    0.3825
Peru (Nuevo Sol)         PEN        2.8815    2.8821
Philippines (Peso)       PHP         46.23     46.34
Venezuela (Bolivar)      VEB        2147.3    2147.3
Vietnam (Dong)           VND         18474     18474
Zambia (Kwacha)          ZMK          4650      4655
Zimbabwe (Dollar)        ZWD         356.3     354.7

Consumers
Denmark (Krone)          DKK        5.1587    5.1714
European Union (Euro)    EUR        1.4427    1.4393
Japan (Yen)              JPY         91.66     91.51
Norway (Krone)           NOK         5.772    5.7995
Sweden (Krona)           SEK        7.1743   7.25605
Switzerland (Franc)      CHF        1.0301    1.0355


* = The CFA Franc is the common currency of 14 African countries
which are members of the Franc zone:
XOF = Benin, Burkina, Ivory Coast, Guinea Bissau, Mali, Niger,
     Senegal and Togo under the Central Bank of the West African States.
XAF = Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea,
     and Gabon, under the Bank of the Central African States.


All currencies are quoted in units of currency per U.S. dollar.
Source: Thomson Reuters

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December 29, 2009 04:09 ET (09:09 GMT)

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Swedish November Retail Sales -0.6% On Month

Swedish November Retail Sales -0.6% On Month

The following is a press release from Statistiska Centralbyran, or SCB, the Swedish central government authority for official statistics.

STOCKHOLM--Swedish retail trade sales decreased by 0.6% in November compared to October, seasonally adjusted figures. Compared to November 2008, the retail trade sales increased by 3.6%.

Retail trade for mostly food increased by 0.7% compared to November 2008 and retail trade for mostly durables increased by 6.0%.

Statistics Sweden Web site: www.scb.se

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December 29, 2009 03:30 ET (08:30 GMT)

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DATA SNAP: Italy Dec Business Confidence Rises To 18-Mo High

DATA SNAP: Italy Dec Business Confidence Rises To 18-Mo High

By Liam Moloney and Chiara Vasarri

Of DOW JONES NEWSWIRES

ROME (Dow Jones)--Italian business confidence rose more than expected in December to its highest level in 18 months as the country emerged from recession, with expectations of output recovering and the outlook for foreign orders improving, figures showed Tuesday.

The business confidence index in the European Union's fourth-largest economy rose in December to 82.6 from an upwardly revised 79.4 in November, state-funded research center ISAE said.

December's reading was the highest since June 2008, it added.

Three economists polled by Dow Jones Newswires had forecast an increase in the index to 79.5 in December.

The ISAE business sentiment survey was carried out between Dec. 1-18.

Web site: www.isae.it

-By Liam Moloney and Chiara Vasarri; Dow Jones Newswires; +39 06 697 66923; chiara.vasarri@dowjones.com

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December 29, 2009 03:49 ET (08:49 GMT)

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UPDATE: French 3Q GDP Unrevised, Recovery Looks Fragile

UPDATE: French 3Q GDP Unrevised, Recovery Looks Fragile

(Adds background, economist comment.)


  By Gabriele Parussini
  Of DOW JONES NEWSWIRES

PARIS (Dow Jones)--French gross domestic product expanded 0.3% in the third quarter from the second, the national statistics service said Tuesday, confirming that the euro zone's second-largest economy has emerged from recession.

The quarterly growth was the second in a row, and came after a full year of contraction.

Still, compared with the July-to-September period of last year, the total value of goods and services produced in France shrank 2.3% in the third quarter.

France has weathered the crisis better than other European Union economies, but its recovery appears to be fragile.

The statistics agency Insee, in a forecast earlier this month, said industrial production will slow next year, leaving the burden for economic growth mainly on the service sector.

The main risk for the French economy, Insee said, may come from a weakening in private consumption. Households' purchasing power growth is projected to slow down next year.

Still, Tuesday's data confirmed that household consumption remains the main engine of the French economy. Throughout the year-long recession, consumption dipped only once into negative territory, shrinking 0.2% in the first quarter of 2008. It has been growing ever since.

In the third quarter of this year, household consumption posted a 0.1% increase, after a 0.4% rise in the three months to July.

Other components of GDP showed marked weakness.

Investment fell 1.4%, a faster pace of decline than the -1% posted in the previous quarter. And exports, while outpacing imports with growth of 1.7% on the quarter, were revised down from the first estimate of 2.3% growth.

"The investment outlook remains bleak and net exports are unlikely to continue to provide a positive contribution to GDP growth," said Dominique Barbet, an economist at BNP Paribas SA in Paris.

Barbet also noted that the household saving rate rose to its highest level since 1982, and that while corporate profitability recovered in the third quarter, it still remains way below the pre-crisis levels.

-By Gabriele Parussini, Dow Jones Newswires; +33 1 4017 1766; gabriele.parussini@dowjones.com

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December 29, 2009 05:08 ET (10:08 GMT)

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UK 3Q Housing Equity Withdrawal -GBP4.9B Vs -GBP6.9B 2Q

UK 3Q Housing Equity Withdrawal -GBP4.9B Vs -GBP6.9B 2Q

LONDON (Dow Jones)--U.K. households injected a net GBP4.9 billion in equity back into their homes in the third quarter of 2009, the sixth quarter that there has been a net injection, the Bank of England said Tuesday.

That was a smaller repayment than the GBP6.9 billion repayment in the second quarter of this year, a figure that was revised lower from an originally reported GBP7.0 billion. Between July and September last year, homeowners repaid a total of GBP5.8 billion of equity into from their homes.

The level of repayment was less than expected. Economists surveyed by Dow Jones Newswires last week had forecast home-owners repaid GBP5.8 billion in the third quarter.

The data measure the portion of borrowing secured on residential property that isn't invested in the U.K. housing market, but used to finance consumption or invest in financial assets.

Although the outlook for the U.K. economy is improving, consumer confidence remains below average, suggesting the trend of putting money back into your house rather than taking it out, is likely to continue for some time.

Housing equity withdrawal now represents -2.0% of take-home pay, indicating a net repayment rather than a positive contribution to consumer spending as seen during the housing market boom in previous years.

In the second quarter of 2009, housing equity withdrawal represented -2.8% of take-home pay while in the third quarter of 2008 it accounted for -2.5%, the BOE data show.

Web site: www.bankofengland.co.uk

-By Ilona Billington; Dow Jones Newswires; +44 (0) 207 842 9452; ilona.billington@dowjones.com

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December 29, 2009 04:57 ET (09:57 GMT)

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Italy Receives EUR95 Billion In Tax Amnesty Funds - Econ Ministry

Italy Receives EUR95 Billion In Tax Amnesty Funds - Econ Ministry

MILAN -(Dow Jones)- Under the Italian government's tax amnesty plan, assets worth EUR95 billion have been declared, of which 98% will be repatriated in Italy, the Italian Economy Ministry said Tuesday, citing data as of Dec. 15.

In an emailed statement, the ministry also said that the extension of the tax amnesty to April 2010 would be the "last one and definitive."

In December, Italian Economy Minister Giulio Tremonti announced the extension of the plan but with higher fees. Italians who repatriate assets by Feb. 28 will have to pay a 6% fee on those assets, while assets declared by April 30 will have a 7% fee.

In October, the Italian government started a tax amnesty plan that allowed Italians with undeclared assets outside the country to repatriate them by paying a 5% fee.

-By Sabrina Cohen, Dow Jones Newswires, +39 02 5821 99906; sabrina.cohen@dowjones.com

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December 29, 2009 05:28 ET (10:28 GMT)

Copyright 2009 Dow Jones & Company, Inc.

UPDATE: Spain Retail Sales Steepen Decline In Nov, Down 5.5%

UPDATE: Spain Retail Sales Steepen Decline In Nov, Down 5.5%

(Adds background.)


  By Christopher Bjork
  Of DOW JONES NEWSWIRES

MADRID (Dow Jones)--Spanish retail sales fell at a sharper rate in November than in recent months, Spain's National Statistics Institute said Tuesday, as high unemployment put a dent in consumer spending.

Spanish retail sales fell 5.5% on the year in calendar-adjusted terms, the INE said, after falling by 2.7% in October and by 3.4% in September.

Unadjusted retail sales fell 4.3%.

The weakness in spending is largely a consequence of Spain's rising tide of unemployment. Although government stimulus measures managed to stem the rise in joblessness during a few months in the summer, job losses resumed their upwards trend from August.

Spanish consumer spending, a key pillar of Spain's formerly buoyant economy, has plummeted following the collapse last year of the labor-intensive Spanish construction industry.

The unemployment rate was 19.3% in October, the second highest in the European Union behind Latvia, according to data from EU statistics agency Eurostat.

INE Web site: www.ine.es

-By Christopher Bjork, Dow Jones Newswires; +34 91 395 8123; christopher.bjork@dowjones.com

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December 29, 2009 05:27 ET (10:27 GMT)

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UK Economy To Grow Slowly In 2010 As Job Concerns Stay-Survey

UK Economy To Grow Slowly In 2010 As Job Concerns Stay-Survey

LONDON (Dow Jones)--The U.K. economy is set to grow only slowly in 2010, while concerns over job security persist among financial professionals based in the U.K., a survey showed Tuesday.

The survey by eFinancialCareers.com showed just 41% of U.K.-based financial professionals are expecting some economic growth next year, while over a third said the economy will be flat in 2010. Of the remaining number of professionals surveyed, 19% said they think the economy will contract again next year and just 4% said they expect strong growth.

The U.K. economy has now contracted for six straight quarters after falling 0.2% on the quarter in the third quarter of the year. That is the longest contraction on record in the U.K., although economists are confident that gross domestic product expanded in the final three months of 2009.

-By Ilona Billington, Dow Jones Newswires; 44 207 842 9452; ilona.billington@dowjones.com

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December 29, 2009 06:26 ET (11:26 GMT)

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Asian Shares End Mixed; Australia At Highest Close In 2 Months


  By Myra P. Saefong and Colin Ng

Asian markets were mixed Tuesday, with Australia closing at its highest level in more than two months supported by gains in Nufarm on news of a strategic investment from Japan's Sumitomo Chemical.

"The bigger catalyst to get Asian stocks really moving big in one-day moves would probably not occur until after New Year's Day," said Richard Hastings, a consumer strategist at Global Hunter Securities. That's "when more data and then the critical Q4 earnings in industrial and global stocks tells us how global companies want to invest their capital; where do they see growth; and whether they seem eager to merge."

Australia's S&P/ASX 200 outperformed the region, gaining 1.1% to finish at 4845.10. Japan's Nikkei 225 closed flat, South Korea's Kospi Composite fell 0.8%, Hong Kong's Hang Seng Index added 0.1%, and the Shanghai Composite tacked on 0.7%.

Among Australian banks, Commonwealth Bank closed up 1.2% and National Australia Bank gained 1.8%. Miner BHP Billiton was up 1.1%, and Rio Tinto rose 1.3%.

Nufarm advanced 2.8% to 10.86 Australian dollars ($9.68) after earlier hitting A$11.10 on news of a strategic investment by Sumitomo Chemical. The Japanese company has the Australian foreign investment review board's approval to buy 20% of Nufarm for A$14 a share. Nufarm rejected a lower offer from China's Sinochem and is planning a A$250 million entitlement offer, fully underwritten by UBS.

"Sumitomo turned out to be the white knight waiting in the wings, happy to give shareholders the opportunity to sell out part of their stake (up to 20%)...while retaining a decent percentage to benefit from a turnaround in performance," said Cameron Peacock, a market analyst at IG Markets, in a note to clients. "Christmas certainly came twice this year for Nufarm shareholders."

In Tokyo, Sumitomo Chemical ended flat for the day. But financial stocks fell, tracking their U.S. counterparts, with Sumitomo Mitsui Financial Group down 2.8% and Mizuho Financial Group off 0.6%.

The Hong Kong stock market was lifted by gains in property stocks, which were rebounding after declines on Monday in the wake of weaker-than-expected land auction results. Sino Land rose 0.5% and Henderson Land rose 0.9%.

New Zealand's exchange operator NZX continued its pre-Christmas run and rose 3.1% due to its share split and its decision to pay out a higher proportion of profits. "Mathematics would suggest it (the split) should make no difference, but it does because it actually gives you greater leverage," said Goldman Sachs JBWere broker Humphrey Sherratt.

Korea's Kospi Composite posted the biggest decline in the region, with selling in financial stocks fed by lingering concerns over 2010 earnings. Shares of Korea Exchange Bank dropped 4.5% and Shinhan Financial Group lost 2.6%.

In China, locomotive maker China CNR Corp.'s debut was weaker than expected. Interest in large Shanghai initial public offerings was waning after two recent large IPOs dropped below their public offering prices, said Li Nian at Shenyin Wanguo Securities. "CNR's weak debut will pressure other Shanghai IPOs as its IPO price was too high." CNR's IPO price was at 5.56 Chinese yuan (81 U.S. cents), and the stock opened up 4.3%, well below expectations for a 16.5% surge. It closed 2.3% higher.

In other markets, Singapore's Straits Times Index closed up 0.5%, Indonesia's headline stock index climbed 0.4%, and India's Sensex rose 0.2%. Taiwan shares closed down 0.1%, Philippine shares rose 0.7%, and New Zealand's NZX-50 added 0.6%.

Foreign exchange majors were in very tight ranges, with trading volumes thinned by the holidays. The dollar was at 91.65 yen from 91.62 yen in late New York trade Monday, while the euro was at $1.4415 from $1.4384 and 131.15 yen from 131.78 yen.

"The decline of the yen against the U.S. dollar since early December has been a high quality move, built on improving fundamentals that were given more substance from [Monday's] retail sales data from the U.S.," said Hastings, of Global Hunter Securities.

"If things go well, then we could get a move in the yen similar to the March to August 2008 decline," he said. "This time perhaps giving us a 97.50 level on the yen by mid-January."

The Euro's recent slide against the dollar may have gone too far, and a correction higher was looking increasingly likely, said Brown Brothers Harriman in a note.

Japanese government bonds ended higher on the back of solid dip-buying demand. The lead JGB futures contract rose 0.15 to 139.53 while the 10-year cash JGB yield fell 0.5 basis point at 1.295%.

Spot gold was at $1,104.10 per troy ounce, down $2.80 from the New York close. February crude oil was up 3 cents at $78.80 per barrel on Globex.

"Crude is hovering around the $79 level while the news from Shanghai Electric Power confirmed very high demand for electric power, with the same effect building up this week in the Northern and Eastern U.S. Canada," said Hastings. "So the week's fundamental demand news remains very supportive for pricing power in major industrial commodities."

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(END) Dow Jones Newswires

December 29, 2009 06:18 ET (11:18 GMT)

Copyright 2009 Dow Jones & Company, Inc.

Tuesday, 6 October 2009

Forex: GBP/USD: Pound weakens further; below 1.5930 session high

Tue, Oct 6 2009, 11:06 GMT
http://www.fxstreet.com

FXstreet.com (Barcelona) - The Pound continues trading lower after its reversal from 1.6050, and the pair has dipped below intra-day low at 1.5930 to levels right above 1.5900 at the time of writing.

Support levels, at the moment, lie at 1.5880 and below there 1.5770 (Sept 28 low) and 1.5755. On the upside, resistance levels remain at 1.6005/20, and above here 1.6050 intra-day high and 1.6125 (Sept 30 high), and 1.6200.

According to Stoyan Mihaylov, technical analyst at Deltastock.com, a clear break below 1.5900 could kick up a sell off towards 1.5766: "A clear break below 1.5901 is to be expected and it will initiate a massive sell-off for 1.5766, en route to 1.5352. The intraday bias is already negative with the recent break below 1.5961, so expect current rebound above 1.5937 to be corrective in nature and to give an entry point for the next leg downwards, to 1.5834."

EU Sets Rules For Electronic Payment Of Road Tolls Across EU

EU Sets Rules For Electronic Payment Of Road Tolls Across EU

BRUSSELS -(Dow Jones)- The European Commission Tuesday established rules to encourage a single system for electronic toll payments on European Union roads.

Several E.U. countries use electronic payments on toll roads, but these systems generally aren't useable across the bloc's borders, according to the commission, the E.U.'s executive arm.

A road trip to Denmark from Portugal requires five or more on-board units on a vehicle's dashboard, the commission said.

In the U.S., by contrast, E-ZPass, an electronic toll-payments system designed to link New York, New Jersey and Pennsylvania, now works with toll roads in 11 other states.

The commission wants a single E.U. system in place for heavy trucks and passenger buses within three years, with wider availability for passenger cars within five years.

"The European Electronic Toll Service will enable road users to easily pay tolls throughout the whole European Union thanks to one subscription contract with one service provider and one single on-board unit," European Commissioner for Transport Antonio Tajani said in a statement.

-By Adam Cohen, Dow Jones Newswires; +322 741 1486; adam.cohen@dowjones.com

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(END) Dow Jones Newswires

October 06, 2009 07:12 ET (11:12 GMT)

IMF:ECB Weber:Only Seeing Green Shoots, Downside Risks Remain

Tue, Oct 6 2009, 11:01 GMT
http://www.djnewswires.com/eu

IMF:ECB Weber:Only Seeing Green Shoots, Downside Risks Remain

ISTANBUL -(Dow Jones)- Recent positive signs in the global economy are too fragile for policy makers to assume growth has resumed, European Central Bank governing council member Axel Weber said Tuesday.

"We're only seeing green shoots...downside risks remain," Weber, who is also German Bundesbank president, said in a speech to the International Monetary Fund's board of governors at the IMF/World Bank annual meetings in Istanbul.

Fiscal and monetary stimulus measures adopted to combat the sharpest global recession in decades shouldn't be unwound at this point, said Weber.

Existing stimulus measures should remain in place until a recovery is clearly in sight, he added.

-By Christopher Emsden, Dow Jones Newswires; +39-02-58-21-99-05; chris.emsden@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=ayP1X7kVnr7MWhQ1SnmXpA%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

October 06, 2009 07:01 ET (11:01 GMT)

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Bank Of Spain Gov: Spain Economy Could Suffer A Long Slump

Tue, Oct 6 2009, 11:01 GMT
http://www.djnewswires.com/eu

Bank Of Spain Gov: Spain Economy Could Suffer A Long Slump

MADRID -(Dow Jones)- Spain's economy will likely recover later than others in Europe and could suffer a prolonged slump unless there are ambitious reforms, Bank of Spain Governor Miguel Angel Fernandez Ordonez said Tuesday.

In annual parliamentary testimony on the government's budget proposal for the following year, Fernandez Ordonez said tax and spending reforms are needed to rein in Spain's spiraling budget deficit.

-By Jonathan House, Dow Jones Newswires; +34 619 93 39 52; jonathan.house@dowjones.com

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(END) Dow Jones Newswires

October 06, 2009 07:01 ET (11:01 GMT)

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EU Clears Extension Of Italian Government Bank Support Plan

Tue, Oct 6 2009, 10:33 GMT
http://www.djnewswires.com/eu

EU Clears Extension Of Italian Government Bank Support Plan

BRUSSELS -(Dow Jones)- The European Commission Tuesday approved extending the Italian government's scheme for supporting banks until the end of 2009.

The plan, which was modified in February, complies with E.U. rules, the commission said.

-By Matthew Dalton, Dow Jones Newswires; +32 2 741 1487; matthew.dalton@dowjones.com

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(END) Dow Jones Newswires

October 06, 2009 06:33 ET (10:33 GMT)

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ECB Ordonez: Euro-Zone Econ Stabilizing, Rates Appropriate

Tue, Oct 6 2009, 10:34 GMT
http://www.djnewswires.com/eu

ECB Ordonez: Euro-Zone Econ Stabilizing, Rates Appropriate

MADRID -(Dow Jones)- The euro-zone economy is stabilizing after its worst recession in decades and interest rates are at an "appropriate" level, European Central Bank Governing Council member Miguel Angel Fernandez Ordonez said Tuesday.

Speaking in the Spanish parliament, Fernandez Ordonez said the recovery of the euro-zone economy will be slow and "not without difficulty."

-By Jonathan House, Dow Jones Newswires; +34 619 93 39 52; jonathan.house@dowjones.com

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(END) Dow Jones Newswires

October 06, 2009 06:34 ET (10:34 GMT)

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Asian Shares End Up; RBA First G-20 Ctrl Bank To Hike Rates

Tue, Oct 6 2009, 10:07 GMT
http://www.djnewswires.com/eu

Asian Shares End Up; RBA First G-20 Ctrl Bank To Hike Rates

SINGAPORE (Dow Jones)--Asian equity markets overcame another choppy session Tuesday to end mostly higher, with Australian stocks snapping a four-session losing streak despite a surprise rate increase by the central bank.

The S&P/ASX 200 ended 0.4% higher at 4591.60, well off the day's high, after the Reserve Bank of Australia became the first central bank in the Group of 20 nations to begin withdrawing monetary stimulus, by raising its key policy rate by a quarter point to 3.25%.

"I think it's good news if they're increasing rates because it shows growth is coming through domestically but the market, in its fragile state at the moment, would probably see that as a negative," said Justin Gallagher, head of Sydney sales trading at RBS.

Elsewhere, Japan's Nikkei 225 Average climbed 0.2% to 9691.80 after flirting with losses, South Korea's Kospi slipped 0.5%, New Zealand's NZX 50 gained 0.4% and Taiwan's Taiex advanced 1.3%.

Hong Kong's Hang Seng Index rallied 1.9%, while India's Sensex rose 0.5% and Singapore's Straits Times Index gained 1.1%.

U.S. stocks were pointing toward a higher opening, with Dow Jones Industrial Average futures recently up 64 points in screen trade. The DJIA rose more than 110 points overnight after falling in the previous four sessions.

Most Australian banking plays traded off early highs after the RBA rate decision. Commonwealth Bank of Australia ended down 0.4% and National Australia Bank fell 0.4%, while Australia & New Zealand Banking Group finished up 0.9%.

The Australian dollar surged to $0.8875 from about $0.8770 after the RBA decision. The New Zealand dollar also rose, climbing as high as $0.7362, from $0.7309 earlier. Among other major currencies, the euro was recently at $1.4734 from $1.4651 in late New York trade on Monday, and at 131.24 yen from 131.19 yen. The U.S. dollar was at 89.06 yen from 89.54 yen.

Asian currencies were also broadly higher against the U.S. dollar, with suspected central bank intervention to support the greenback from South Korea, Taiwan and Thailand authorities.

In Tokyo, Mazda Motor jumped 7.6% after its shares tumbled for seven sessions. Investors also cheered news from Monday that the company expected a lower net loss for the fiscal year than it had originally forecast. The company also announced plans to raise about $1 billion, partly to develop technologies that will improve the fuel-efficiency of its cars.

Other exporters also staged a rebound after heavy losses recently, despite the yen's continued strength against major currencies. Panasonic rose 1.3% and Nikon rose 3.7%.

Gains in Indian stocks were limited by mobile operators' steep falls on concerns about intensified price wars, after Reliance Communications Monday announced a low-tariff plan that effectively allows subscribers to make local and domestic long-distance calls for 0.5 rupees (one cent) a minute. Reliance Communications plunged 10.7%, its bigger rival Bharti Airtel skidded 10.7% and Idea Cellular sank 8.0% in heavy trading volumes.

"The strategic reason for (Reliance's) move is clear - to make it uneconomical for new (telecom companies) to operate in the Indian market. We believe that this is a positive move from a medium-term view despite its near-term impact on revenue/earnings per share," J.P. Morgan analysts wrote in a note.

Korean shares declined for a fourth straight session, reversing early gains after the Australian central bank's rate increase on concerns that the Bank of Korea may follow suit to contain rising inflationary pressures and prevent asset bubbles in an environment of low interest rates.

Shares of Samsung Electronics fell 0.3%, although the company said it now expects stronger third-quarter sales of 36 trillion won.

In Hong Kong, shares of China Resources Cement ended flat on their trading debut at their initial public offering price of 3.90 Hong Kong dollars (50 U.S. cents), after opening at HK$3.75. The performance, which comes after a string of weak listings in recent weeks in Hong Kong, was unlikely to lift investor sentiment toward coming IPOs, said analysts.

Financial stocks in South Korea were weak, with Shinhan Financial Group dropping 0.7% and Woori Financial dropping 3%, while Hana Financial Group slipped a further 0.1%. Hana shares had plunged 14.4% Monday following a report it planned a share sale to boost capital.

But financial shares were higher in some other markets after Goldman Sachs upgraded its view on large U.S. banks to "attractive" from "neutral" ahead of quarterly earnings. Japan's Nomura Holdings added 4.4% and Mizuho Financial Group climbed 2.8%. In Singapore, DBS Group Holdings rose 1.8% and in Hong Kong, Bank of China added 2.7% and HSBC Holdings gained 1.2%, while HDFC Bank shares were up 1.8% in Mumbai afternoon trading.

Strength in commodities prices helped regional resource plays. Australia's BHP Billiton gained 0.9% and Rio Tinto added 1.6%, while Newcrest Mining rose 2.4%. In Tokyo, Sumitomo Metal Mining surged 6.1% and in Hong Kong, Jiangxi Copper gained 4.1% and Zijin Mining Group jumped 6.3%.

Japanese government bonds advanced after a stronger-than-expected auction of 10-year JGBs. The result suggested that demand for long-term bonds was very firm, said Mizuho Securities market analyst Masashi Shimominami. "Many investors expect long-term yields to extend their declines as the economic outlook remains gloomy, and they are eager to buy JGBs in a liquidity-driven market."

The lead December JGB futures contract rose 0.09 to 139.59 points. The 10-year cash JGB yield fell 2 basis points to 1.24%.

The November Nymex crude oil futures contract was up 93 cents at $70.34 per barrel. Spot gold was at $1,023.10 per troy ounce, up $5.90 from the New York close.

-Dow Jones Newswires; +65-6415-4140; markettalk@dowjones.com

TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackAsia@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.

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(END) Dow Jones Newswires

October 06, 2009 06:07 ET (10:07 GMT)

Copyright 2009 Dow Jones & Company, Inc.

UPDATE: Hungary's Aug Output Keeps Falling On Drop In Cars

Tue, Oct 6 2009, 10:18 GMT
http://www.djnewswires.com/eu

UPDATE: Hungary's Aug Output Keeps Falling On Drop In Cars

(Adds comments from statistician, analysts.)


  By Margit Feher
  Of DOW JONES NEWSWIRES

BUDAPEST (Dow Jones)--Hungary's industrial output failed to recover in August despite expectations of some improvement, firming the market view that the central bank will continue to cut interest rates to boost the economy.

Industrial output fell 0.7% in August from the previous month and was down 19.9% on the year, following a 0.7% monthly fall and a 19.4% annual decline in July, the Central Statistics Office, or KSH, said Tuesday.

"The data confirmed that the economy remains very weak, with August preliminary industrial output worse than consensus, showing close to a 20% contraction. There is no doubt that the central bank will deliver further rate cuts," said BNP Paribas in a note.

Output remained in August at a depressed level due, to a large extent, to a fall in car manufacturing.

"The trends of the past months continued; output has been stagnating at about 80% of the previous year's level as all sectors of industry and both exports and domestic sales are depressed. Car manufacturing, which has a large weight in the overall numbers, accounted for 40% of the decline, as in previous months," KSH statistician Miklos Schiendele told reporters.

Output fell in the first eight months of the year by 21.8% from a year earlier.

"Hungarian industry doesn't seem to be able to follow the rebounding confidence indicators, PMI and the regional recovery due to the sharp collapse in domestic demand, which prolongs the recession," said economist Gergely Suppan at Takarekbank.

There could be a rise in the monthly reading in October, but that would be misleading as the rise would come against a very low base a year earlier, KSH statistician Schiendele said. Hungarian industrial output started to decline sharply from October 2008 onwards, when the country was hit hard by the global economic crisis. As a result, the full-year decline could be somewhat less than the fall recorded for the January-August period, the statistician added.

As about 80% of the country's exports go western Europe, Hungary's output is consistent with the sluggish recovery expected in the euro zone, MKB economist Zsolt Kondrat said.

"We expect a very slow and gradual pickup in domestic industrial activity, 1.5% quarterly growth [both] this quarter and the last quarter [of 2009] and a roughly 18% drop for the whole year. However, due to a very strong base effect, even this would bring positive growth figures from December," Kondrat added.

The monthly reading is adjusted seasonally as well as for the number of working days. The annual number is adjusted for the number of working days. Output also fell 19.9% under unadjusted data in August versus a year earlier.

Statistics office Web site: www.ksh.hu

-By Margit Feher, Dow Jones Newswires; +36-20-925-2364; margit.feher@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=ayP1X7kVnr7MWhQ1SnmXpA%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

October 06, 2009 06:18 ET (10:18 GMT)

Copyright 2009 Dow Jones & Company, Inc.

Czech 9-Mo New Car Registrations Up 8% On Yr At 117,748 Units

Tue, Oct 6 2009, 09:52 GMT
http://www.djnewswires.com/eu

Czech 9-Mo New Car Registrations Up 8% On Yr At 117,748 Units

PRAGUE (Dow Jones)--Czech new passenger car registrations rose 8% on the year in the nine months through Sept. 30, to 117,748 units from 109,000 in the year-earlier period, Czech Car Importers' Association, or SDA, said Tuesday.

Sales of light utility vehicles, or LUVs, dropped 66% on the year to 15,829 units, in part reflecting the economic downturn and recent changes to tax laws allowing companies to deduct VAT on standard passenger cars, including saloons.

Under previous regulations, companies could only deduct VAT on cars that had installed special metal mesh barriers separating the passenger from cargo sections, disqualifying many car models.

As in previous months, the leading car makers by sales on the Czech market are Czech Skoda Auto AS and its German parent Volkswagen AG (VOW.XE), Ford Motor Co. (F), and Renault SA (RNO.FR).

SDA Web site: www.sda-cia.cz

   Go to http://blogs.wsj.com/new-europe for the new Dow Jones blog on Central and Eastern Europe, covering business, politics, society and more, written by our correspondents across the region.

-By Leos Rousek, Dow Jones Newswires; +420 222 315 290, leos.rousek@dowjones.com

(MORE TO FOLLOW) Dow Jones Newswires

October 06, 2009 05:52 ET (09:52 GMT)

Copyright 2009 Dow Jones & Company, Inc.

Iraqi Fin Min: IMF Granted $5 Billion To Iraq For Budget

Iraqi Fin Min: IMF Granted $5 Billion To Iraq For Budget

ISTANBUL (Zawya Dow Jones)--Iraq has been granted $5 billion by the International Monetary Fund to support the government's budget, Iraqi Finance Minister Baker al-Zubaidy said Tuesday.

"We reached an agreement on an IMF loan for about $5 billion," he told reporters in Istanbul, speaking on the sidelines of the IMF's annual meeting.

The funds will be disbursed between 2010 and 2011, he said.

"We will not spend on the oil or electricity sector [any more]," he said, adding that such projects will be financed through the private sector.

Al-Zubaidy also said he has been meeting with French Finance Minister Christine Lagarde to discuss the country's investments in Iraq's oil sector.

-By Maria Abi-Habib, Dow Jones Newswires; +9714 364 4962; maria.habib@dowjones.com

Copyright (c) 2009 Dow Jones & Co.

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=ayP1X7kVnr7MWhQ1SnmXpA%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

October 06, 2009 06:03 ET (10:03 GMT)

Copyright 2009 Dow Jones & Company, Inc.

European markets advance led by financials; Euro, higher, Pound slumps

FXstreet.com (Barcelona) - European markets are going through gains on Tuesday buoyed by advances in the banking sector. In the FX markets, the Dollar has dipped against Euro and Yen, while the Pound plunged on disappointing UK industrial production.

Eurostoxx 50 Index adds 0.9%, while German DAX Index rises 0.7%, and the french CAC Index advances 0.5%. In the UK, the FTSE Index trades 0.7% up in the first hours of trading.

The banking sectors is going though a strong session while Societe Generale announced its plan to raise EUR4.8 billions in a rights offer in order to re-pay state funds.

In the macroeconomic front, UK Industrial production has declined 2.5% month on month and 11.2% year on year in August, against experts expectations of a 0.3% monthly gain and a 10.2 year on year decline. Manufacturing output has dropped 0.9% on the month and 11.3% year on year; the market consensus was a 0.4% monthly advance and a 9.1% year on year decline.

Euro at higher levels, Pound plunges

GBP/USD, which rose to 1.6048 session high, has plunged about 100 pips after worse than expected Industrial production figures, returning well below 1.6000, and giving away all the ground taken during the day. At the moment of writing, the Pound trades at 1.5950.

EUR/USD has extended its rebound from 1.4480 low on Friday to 1.4750 high on Tuesday's early European session, and the Euro remains moving between 1.4700 and 1.4750.

USD/JPY decline from 90.00 high on Monday has found support at 88.85, and the pair has remained moving sideway's between the mentioned level and Monday's low at 89.40 on the upside.

Forex: EUR/USD: Extension to the psychological 1.5000 cannot be ruled out - Mizuho

Tue, Oct 6 2009, 09:52 GMT
http://www.fxstreet.com

FXstreet.com (Barcelona) - The Euro has shrugged off last weeks' weakness and, after bottoming at 1.4480 on Friday, the pair has rallied almost 300 pips to reach 1.4750 on Monday, and according to Nicole Elliott, senior technical analyst at Mizuho Corporate Bank, it could reach 1.5000 area during the current month.

On its monthly outlook, Elliott expect a brief period of consolidation before rallying higher: "Last month the Euro squeezed higher, as expected, and is now due a short period of consolidation in the 1.4600/1.4800 area, though an extension to the psychological 1.5000 level cannot be ruled out."

On the downside, Elliott considers declines should be limited to 1.4443 area: "Declines are seen as medium and long term buying opportunities for an even weaker US dollar later this year. Dips might be limited to the nine-week moving average at 1.4443 which also happens to be the first Fibonacci support."

Forex: GBP/USD: Pound plunges below 1.6000 on weak industrial production

Tue, Oct 6 2009, 08:44 GMT
http://www.fxstreet.com

FXstreet.com (Barcelona) - The Sterling has plunged about 100 pips from session high at 1.6048, after worse than expected Industrial production figures, back well below 1.6000, and giving away all the ground taken during the day.

UK Industrial production has declined 2.5% month on month and 11.2% year on year in August, against experts expectations of a 0.3% monthly gain and a 10.2 year on year decline. Manufacturing output has dropped 0.9% on the month and 11.3% year on year; the market consensus was a 0.4% monthly advance and a 9.1% year on year decline.

At the moment of writing, the Pound trades at 1.5940, with next support levels at 1.5925 session low and below here, 1.5880 and 1.5770 (Sept 28 low). On the upside, resistance levels lie at 1.6005/20, and above here 1.6050 intra-day high and 1.6125 (Sept 30 high), and 1.6200.

DATA SNAP: UK Mfg Output Slumps Unexpectedly In August

Tue, Oct 6 2009, 08:44 GMT
http://www.djnewswires.com/eu

DATA SNAP: UK Mfg Output Slumps Unexpectedly In August


  By Ilona Billington
  Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--The U.K.'s manufacturing sector slumped unexpectedly by 1.9% in August from July as output in all thirteen sub-sectors reported a poor result, the Office for National Statistics said Tuesday.

On the year, manufacturing output declined 11.3%.

The data for August compare with a revised 0.7% rise on the month and a 10.2% fall on the year in July.

The drop came as a surprise. Economists surveyed by Dow Jones Newswires last week had expected that manufacturing output rose 0.4% on the month and fell 9.1% on the year in August.

The July data were originally reported as rising 0.9% on the month and declining 10.1% in year-on-year terms.

The monthly fall was the first drop since May this year although an ONS spokesperson did say that anecdotal evidence showed that there were various planned shutdowns in August which accounted for some of the decline, and possibly the larger-than-expected rise in July.

The seasonal adjustment would typically account for some of these seasonal shut downs but may not capture all of them, the ONS said.

The wider measure of industrial production also posted a disappointing performance in August, falling 2.5% on the month and 11.2% when compared with August 2008.

In July, industrial production rose 0.5% from June and was 9.3% lower in annual terms.

Economists had forecast this measure would rise 0.3% on the month and drop 8.6% in annual terms.

-By Ilona Billington and Adam Bradbery, Dow Jones Newswires; +44 20 7842 9452; ilona.billington@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=ayP1X7kVnr7MWhQ1SnmXpA%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

October 06, 2009 04:44 ET (08:44 GMT)

Copyright 2009 Dow Jones & Company, Inc.

GLOBAL MARKETS: European Stocks Up; Banks Offer A Timely Lift

Tue, Oct 6 2009, 08:19 GMT
http://www.djnewswires.com/eu

GLOBAL MARKETS: European Stocks Up; Banks Offer A Timely Lift


  By Andrea Tryphonides
  Of DOW JONES NEWSWIRES

DATA SNAP: UK Halifax House Prices Rise Again In September

Tue, Oct 6 2009, 08:25 GMT
http://www.djnewswires.com/eu

DATA SNAP: UK Halifax House Prices Rise Again In September


  By Nicholas Winning
  OF DOW JONES NEWSWIRES

LONDON (Dow Jones)--U.K. house prices rose for a third consecutive month in September and posted their first quarterly rise for two years in the third quarter, HBOS, a unit of the Lloyds Banking Group, said Tuesday.

The company's Halifax house price index rose 1.6% in September from August, following a 0.8% monthly increase in August. The average price in the three months to the end of September was 7.4% lower than in the corresponding period of last year, down from an annual 10.1% drop in August.

The data are stronger than the market consensus estimate of a 1.0% gain on the month and a 7.7% drop on the year from a Dow Jones Newswires survey of economists last week.

The global credit crisis and ensuing recession throttled activity on the U.K.'s house market and dragged prices lower last year. Although the market still faces headwinds from rising unemployment and a shortage of mortgages, prices have started to recover in recent months with support from a combination of pent-up demand and a shortage of property for sale.

Company Web site: www.halifax.co.uk

-Nicholas Winning, Dow Jones Newswires; +44 207 842 9498; nick.winning@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=ayP1X7kVnr7MWhQ1SnmXpA%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

October 06, 2009 04:25 ET (08:25 GMT)

Copyright 2009 Dow Jones & Company, Inc.

LONDON (Dow Jones)--European stocks climbed higher Tuesday, supported by a strong performance in the banking sector, while news of Societe Generale's EUR4.8 billion rights issue helped boost confidence in the recovery of fortunes for Europe's blue-chips.

Additionally, the U.K.'s largest retailer, Tesco, reported better than expected profit growth, which supported those who think that economic recovery in the U.K. and beyond is more than just a pipe dream.

"Earnings momentum is starting to pick up, valuations are reasonable and it can hardly be said that investor sentiment is too positive," said Bob Doll, chief investment officer of equities at BlackRock.

"Together, all of these factors support our view that the current cyclical bull market remains intact," he said.

By 0800 GMT, the pan-European Stoxx 600 index was up 0.8% at 238.0. London's FTSE 100 was up 0.7% at 5059.8, Frankfurt's DAX gained 0.7% to 5545.2 and Paris's CAC-40 was 0.6% higher at 3695.4.

Much of the morning's focus was on the banking sector after Societe Generale launched a rights issue, partly to repay state funds and using the remainder to buy out a 20% stake in Credit du Nord and boost capital ratios. It fell 0.8% to EUR51.8, although it soon came off its lows.

"New confidence in the banking sector and the desperate desire to rid themselves of the shackles of government ownership is driving these decisions," said Manoj Ladwa, senior trader at ETX Capital.

Additionally, BofA-Merrill Lynch upgraded the European bank sector to overweight. It said that with further EPS upgrades ahead, reasonable valuations offer the potential for re-rating, building on strong core profitability and positive trends in key wholesale and property markets. The Stoxx Europe banks sub-sector was up 1.4% at 229.6.

Elsewhere, Tesco, the world's third-largest retailer by sales, reported better than expected profit growth, with pretax profit before exceptional items up 8.6% to GBP1.57 billion. However, it fell 0.8% to 388 pence, with analysts still noting an air of caution, particular with regards to the U.S. business.

Earlier, Asian equity markets mostly advanced Tuesday, inspired by solid gains for U.S. stocks, although some markets slipped off earlier highs or were trading lower.

Japan's Nikkei 225 finished up 0.2% but South Korea's Kospi Composite failed to turn its fortunes around and ended 0.5% lower. Hong Kong's Hang Seng index gained 1.9%.

Australia's S&P/ASX 200 ended 0.4% higher, although the index dipped a little after the Reserve Bank of Australia hiked its key cash rate by 25 basis points to 3.25%, becoming the first central bank among the Group of 20 nations to begin monetary tightening.

In the U.S., an analyst upgrade of the banking sector and earnings-driven speculation drove a rallying stock market Monday, with Wells Fargo, Alcoa and Caterpillar leading the tape.

For the session, the DJIA gained 1.2% to 9599.8, snapping a four-day losing streak.

Goldman Sachs raised its rating on large banks to attractive Monday morning. Improved earnings, stronger balance sheets and bigger assets following a year's worth of acquisitions at several large banks have raised some analysts' views of the sector going into the quarterly reports.

Among other indexes, the Standard & Poor's 500 rose 1.5% to 1040.5 and the Nasdaq Composite increased 1.0% to 2068.2.

In the foreign exchanges, the dollar fell against the euro and the yen as risk appetite increased and Australia raised interest rates. Market participants noted that a report that Gulf countries are planning to stop using the dollar for oil dealing was swiftly denied by various parties.

The euro was trading at $1.4720 at 0815 GMT, up from $1.4648 in late New York trade on Monday. The dollar was quoted at Y89.20, down from Y89.55.

Meanwhile, the November Nymex crude oil futures contract was up 55 cents at $70.96 per barrel. Spot gold surged, jumping to $1018.40 per troy ounce, up $7.80 from the New York close.

European government bonds were lower and, at 0815 GMT, December bund futures were down 0.15 at 122.55.

-By Andrea Tryphonides, Dow Jones Newswires; +44-20-7842-9281; andrea.tryphonides@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=ayP1X7kVnr7MWhQ1SnmXpA%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

October 06, 2009 04:19 ET (08:19 GMT)

Copyright 2009 Dow Jones & Company, Inc.

DJ Currency Rates Of Coffee Producing, Consuming Countries


                                  Current     Prior
Producers
Angola (Readj Kwanza)    AOA        77.805    77.806
Bolivia (Boliviano)      BOB          7.02      7.02
Brazil (Real)            BRL        1.7598    1.7818
Burundi (Franc)          BIF          1240      1240
Central African States   XAF       445.755   448.285
Central Bank of West AfriXOF       445.755   448.285
Colombia (Peso)          COP        1928.4      1918
Costa Rica (Colon)       CRC         582.7     585.5
Cuba (Peso)              CUP             1         1
Dominican Rep (Peso)     DOP          36.2     36.15
Ecuador (USD)            USD             1         1
El Salvador (Colon)      SVC        8.7475    8.7475
Ethiopia (Birr)          ETB        12.605    12.605
Guatemala (Quetzal)      GTQ        8.3235    8.3115
Guinea Rep (Franc)       GNF          5025      5025
Haiti (Gourde)           HTG         39.75     39.75
Honduras Rep (Lempira)   HNL        18.895    18.895
India (Rupee)            INR         47.12  47.53125
Indonesia (Rupiah)       IDR          9435    9552.5
Kenya (Shilling)         KES        75.325     75.65
Malawi (Kwacha)          MWK       140.605  140.6058
Mexico (Peso)            MXN       13.5688   13.6281
Nicaragua (Cordoba Oro)  NIO       19.9713   19.9713
Papua New Guinea (Kina)  PGK       0.37535    0.3755
Peru (Nuevo Sol)         PEN        2.8765    2.8765
Philippines (Peso)       PHP       46.5675     46.71
Venezuela (Bolivar)      VEB        2147.3    2147.3
Vietnam (Dong)           VND         17842   17844.5
Zambia (Kwacha)          ZMK          4680      4730
Zimbabwe (Dollar)        ZWD         363.4     363.4

Consumers
Denmark (Krone)          DKK       5.05835    5.0876
European Union (Euro)    EUR       1.47155   1.46325
Japan (Yen)              JPY         89.21    89.835
Norway (Krone)           NOK        5.7108    5.7737
Sweden (Krona)           SEK        6.9749    7.0373
Switzerland (Franc)      CHF       1.02715   1.03265


* = The CFA Franc is the common currency of 14 African countries
which are members of the Franc zone:
XOF = Benin, Burkina, Ivory Coast, Guinea Bissau, Mali, Niger,
     Senegal and Togo under the Central Bank of the West African States.
XAF = Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea,
     and Gabon, under the Bank of the Central African States.


All currencies are quoted in units of currency per U.S. dollar.
Source: Thomson Reuters

Forex: GBP/USD: Pound stretches to 1.6048 session high on housing prices

FXstreet.com (Barcelona) - Pound's rally from 1.5800 low on Friday has extended to a fresh session high at 1.6048 high on Tuesday after better than expected UK Halifax housing prices index, to ease later to current levels around 1.6020.

Resistance levels, above 1.6025, lie at 1.6125 (Sept 30 high), and above here, 1.6200 and 1.6350. On the downside, support levels remain at 1.5925 session low and below here, 1.5880 and 1.5770 (Sept 28 low).

UK Halifax housing Prices Index have advanced 1.6% in September while they fell 7.4% year on year, beating experts expectations of a 1.0% monthly advance and a 7.7% year on year decline.

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=ayP1X7kVnr7MWhQ1SnmXpA%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

October 06, 2009 04:09 ET (08:09 GMT)

Copyright 2009 Dow Jones & Company, Inc.

Saturday, 3 October 2009

WORLD FOREX: Euro Climbs Above $1.46, Extending Recovery


  By Riva Froymovich
  Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--The euro recently climbed above $1.46, extending its recovery from an early morning selloff against the dollar.

The euro advanced to an intraday high of $1.4619, after earlier declining to more than a three-week low of $1.4480 on the release of a disappointing U.S. payrolls report.

Trading is often volatile following this highly anticipated monthly jobs data.

"It would be a mistake to take a logical look" on these moves, said Tom Fitzpatrick, global head of currency strategy at Citigroup.

"It's classic post-non-farm payrolls trading," he said. After the initial reaction, "people tend to say, 'Let's jump away to the sidelines,'" Fitzpatrick said.

The report also may add to skepticism on the dollar's prospects.

It recently fell to an intraday low against the yen, Y88.62.

Fitzpatrick added that this currency pair has been trading more closely with fixed-income markets lately, and long-end yields are down, putting pressure on the buck.

Separately, currency analysts cited a CNBC interview with Bill Gross, Pimco's co-chief investment officer. He said he thinks policymakers actually want a weak dollar, according to Reuters.

In recent trade Friday morning in New York, the euro was at $1.4611 from $1.4526 late Thursday, according to EBS via CQG. The dollar was at Y88.65 from Y89.77. The euro was at Y129.56 from Y130.39. The U.K. pound was at $1.5924 from $1.5940, while the dollar was at CHF1.0333 from CHF1.0420.

Employers eliminated 263,000 jobs in September, more than expected, as the unemployment rate climbed to 9.8%, the Labor Department said.

Economists surveyed by Dow Jones Newswires expected a 175,000 decrease.

-By Riva Froymovich, Dow Jones Newswires; 212-416-2217; riva.froymovich@dowjones.com

(Bradley Davis in New York contributed to this report.)

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=nPo2qNQG%2BYMHypL5iY1TpQ%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

October 02, 2009 10:06 ET (14:06 GMT)

Monday, 26 July 2010

Economic Data

Overview/Top headlines

Macro/FX

Equities

Commodities

A couple of Polish numbers were released on Friday

Review

Preview

Scorecard-based trade of the week Buy CZK/ZAR

Bull buys call spread as Arena Pharmaceuticals' shares soar

The US economy is not likely to slip back into recession

Sunrise Headlines

Markets

Monday, 21 June 2010

AUD maintains strength into European open

Forex: Yen weakens on risk appetite environment

Forex: EUR/USD extends higher, hits prices above 1.2450

Tuesday, 29 December 2009

DJ Currency Rates Of Coffee Producing, Consuming Countries

DATA SNAP: Italy Dec Business Confidence Rises To 18-Mo High

UK 3Q Housing Equity Withdrawal -GBP4.9B Vs -GBP6.9B 2Q

UPDATE: Spain Retail Sales Steepen Decline In Nov, Down 5.5%

Asian Shares End Mixed; Australia At Highest Close In 2 Months

Tuesday, 6 October 2009

EU Sets Rules For Electronic Payment Of Road Tolls Across EU

Bank Of Spain Gov: Spain Economy Could Suffer A Long Slump

ECB Ordonez: Euro-Zone Econ Stabilizing, Rates Appropriate

UPDATE: Hungary's Aug Output Keeps Falling On Drop In Cars

Iraqi Fin Min: IMF Granted $5 Billion To Iraq For Budget

Forex: EUR/USD: Extension to the psychological 1.5000 cannot be ruled out - Mizuho

DATA SNAP: UK Mfg Output Slumps Unexpectedly In August

GLOBAL MARKETS: European Stocks Up; Banks Offer A Timely Lift

DATA SNAP: UK Halifax House Prices Rise Again In September

Forex: GBP/USD: Pound stretches to 1.6048 session high on housing prices

Saturday, 3 October 2009

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