Mid-Day Report: Dollar Lifted by Hawkish Plosser, Rebound to Resume?

Market Overview | Written by ActionForex.com | Jul 22 08 13:01 GMT |

Dollar is talked up by Fed Plosser's hawkish comments in early US session. Plosser argues that monetary policy makers will have to "back up their words with actions" to keep inflation expectations anchored. Fed will need to "reverse course" and Plosser anticipate the reversal to be started "sooner rather than later". Treasury Paulson said he remained confident that Congress will pass GSE legislation this week and Fannie Mae and Freddie Mac are important to the US financial system. Paulson also reiterated that a strong dollar policy is of interest to the US. Technically speaking, The recovery is EUR/USD, GBP/USD and AUD/USD is still limited by respective intraday resistance and thus, there is not confirmation of completion of the pull back yet. On the other hand, the mild strength in dollar could indeed be the start of another leg up in the greenback to complete the corrective rebound. Some more strength in the dollar is likely for the rest of the day. Canadian dollar is also mildly lower against dollar after May retail sales report missed expectation. Headline sales grew 0.4% versus consensus of 0.6% while ex-auto sales grew 0.4% versus expectation of 0.8%. We're still treating the fall of USD/CAD from 1.0322 as a correction with USD/CAD close to key near term support at 0.9957, we're expecting such correction to end soon. Though a break above 1.0081 resistance is needed to be the first signal. Markets will look into tomorrow's CPI report from Canada for direction. The Japanese yen, on the other hand, remains bounded in tight range today. US stock markets set to open lower following dismal quarterly report from Wachovia and will probably keep the yen in range. Other data released today saw Swiss trade surplus jumped to 2.41B in Jun. Japan all industry index climbed 0.4% in May, inline with expectation. USD/CAD Mid-Day Outlook Daily Pivots: (S1) 0.9972; (P) 1.0020; (R1) 1.0045; More. USD/CAD continues to stay in established range today and outlook remains neutral so far. With 0.9957 support zone (100% projection of 1.0322 to 1.0048 from 1.0230 at 0.9964) still holds, price actions from 1.0322 is still treated as correction to rally from 0.9818 only. Break above 1.0081 will be the first signal that such correction has completed and encourage stronger rally towards 1.0230 resistance first. Break of 1.0230 resistance will confirm that such correction from 1.0322 has completed and bring strong rise to retest this high. On the downside, though, below 0.9957 will dampen this view and encourage deeper fall towards 0.9823 low. In the bigger picture, after all, USD/CAD is still staying in established range of 0.9709 and 1.0378. The corrective nature of the price actions inside this range argues that it's merely consolidation to the whole rebound from 0.9056. While further choppy sideway trading could still be seen, the rise from 0.9056 is still expected to extend further as long as 0.9709 support holds. Break of 1.0378 will bring rise to 61.8% projection of 0.9056 to 1.0378 from 0.9709 at 1.0526 and above. Though, break of 0.9709 support will indicate that the correction from 0.9056 could have completed and short term bias will then be turned back to the downside for retesting this low.

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
23:50	JPY	Japan All industry index May	0.40%	0.40%	0.80%
06:15	CHF	Swiss Trade balance (chf) Jun	2.41B	1.60B	1.87B
12:10	USD	U.S. Treasury's Paulson speaks
12:30	CAD	Canada Retail sales M/M May	0.40%	0.60%	0.60%
12:30	CAD	ex. Autos May	0.40%	0.80%	1.10%	1.20%
14:00	USD	U.S. House Price index M/M May		-0.50%	-0.80%

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Canadian Consumer Spending Feels The Pinch Of High Energy

Daily Forex Fundamentals | Written by DailyFX | Jul 22 08 13:03 GMT |

Canadian Retail Sales (MAY) (Sales) (ex Autos) Actual: 0.4% 0.4% Expected: 0.6% 0.7% Previous: 0.6% 1.2% (R+) Though its economy is still running strong, Canada's consumers are still feeling the impact of rising energy prices, steady inflation and the jump in credit costs. Statistics Canada reported retail sales through the month of May rose at a more restrained pace than economists had expected. A 0.4 percent pickup in the headline spending indicator fell short of the market's 0.6 percent official consensus and an increase of the same magnitude from last month. When auto sales were excluded, the consumption report still rose 0.4 percent against a 0.7 percent forecast and 1.2 percent, upwardly revised improvement from the period before. Looking into the components of the indicator, it was clear that much of the strength in the indicator was a component of price and not demand. Gas station reciepts were the greatest contributor the overall report with a 2.4 percent jump after May's 2.2 percent increase - as global prices for necessary goods were hitting record highs. With the help of the gasoline figure, autos rose 1.1 percent. On the other hand, food and beverage sales were unchanged even as global prices were still elavated. Elsewhere, discretionary building supplies and furniture/eletronic sales actually improvemed - by 0.7 percent and 0.3 percent respectively. Showing some signs of a frugal consumer though was the 0.7 percent slip in clothing sales - a modest decline following the 2.7 percent surge in the previous period. Overall, these indicators hold little surprise and are not that disappointing. Discretionary spending was likely to reflect rising prices and turning employment and wage trends. However, considering Canadians are still buying building materials and durable goods, the economy is still far from the position that the US is in. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.

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Forex Brokers London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Jul 22 08 12:19 GMT |

London Session Recap The buck saw some sideways trading in the London session as the lack of anything to bite on seems to have the market focused on stocks once again. Indeed, just as the session came to a close we saw a US bank report much worse than expected earnings and the buck come under pressure. Earnings have been the thing to watch in the last week or so and we expect they will continue to be a factor as US stocks continue to look for direction. That direction this morning is lower, with stock futures pointing to a -1% decline at the open. Europe was light on activity with two ECB speakers the only highlights overnight. The tone continued to be hawkish with Bini Smaghi saying that the current interest rate is not “exactly restrictive” -- in other words, not too high. Liebscher followed this up by noting that the ECB must prevent “worrying” inflation. So while the ECB’s stance is that they have “no bias”, they are clearly ready to act if inflation becomes unmoored. EUR/USD was a touch lower in the session, opening near 1.5920 and closing around the 1.5910 mark. USD/JPY was lower as unsteady European stock markets likely led to some paring of carry trades. Stocks in Europe were down about -2% last we checked and this coupled with the expected poor open in US stocks is helping to put pressure on JPY crosses. USD/JPY opened London trading near 106.50 and was sitting near 106.40 at the close. A poor US earnings report sent the pair as low as 106.05 in early NY trading. Stay tuned for some major earnings releases after the US stock market close. Upcoming Economic Data Releases (NY Session) Prior Estimate 7/22 12:10 GMT US Paulson Speaks in NYon U.S. Economy, Markets 7/22 12:30 GMT CA Retail Sales MoM MAY 0.60% 0.50% 7/22 12:30 GMT CA Retail Sales Less Autos MoM MAY 1.10% 0.60% 7/22 12:30 GMT US Fed's Plosser Speaks in PA on U.S. Economy 7/22 14:00 GMT US Richmond Fed Manufact. Index JUL -12 -10 7/22 14:00 GMT US House Price Index MoM MAY -0.80% - - 7/22 21:00 GMT US ABC Consumer Confidence 20-Jul -41 -41 Forex.com http://www.forex.com DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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Top Picks: Euros and GBP/JPY

Daily Forex Technicals | Written by DailyFX | Jul 22 08 13:34 GMT |

DailyFX Analysts Bullish Euros, Bearish British Pounds Top Picks: EUR/USD and GBP/JPY The Euro and the British pound have been consolidating near their highs, but they are beginning to lose strength. 5 out of 9 DailyFX Analysts are still bullish Euros while 3 analysts favor trading the British pound against the Japanese Yen. Chief Currency Analyst - Kathy Lien My picks: Long EUR/GBP Expertise: Combining Fundamentals with Technicals Average Time Frame of Trades: 1-3 Days My favorite pick of the week is EUR/GBP and I am sticking with it. Yesterday's levels still hold: Hawkish comments from the European Central Bank and dovish comments from the Bank of England has me increasingly bullish EUR/GBP. This morning ECB member Draghi reminded everyone about the danger of inflationary pressures while BoE Blanchflower confirmed what Britons are fearing, which is that the UK economy is headed for a recession. Technically, moving averages in EUR/GBP are in a "perfect order," with the 10-day SMA above the 20, which is above the 50, the 100 and 200-day SMA. I am bullish here (7945) against 7890 for at least a move above 8000 Senior Currency Strategist - Boris Schlossberg My picks: Long EURCAD Expertise: Fundamental Average Time Frame of Trades:6-24 hours Canadian Retail sales printed weak. Meanwhile euro should continue to receive safe haven flows despite Plosser's comments. So I am long EURCAD with 1.5900 stop Technical Currency Analyst - Jaime Saettle My picks: Remaining Long EURUSD against 1.5611 Expertise: Technical Average Time Frame of Trades: 1 month Last week: If the blow-off is underway, then the EURUSD will remain above 1.5611. Fibonacci extensions serve as bullish abjectives at at 1.6325 and 1.70. 1.5775-1.5875 is the buy zone for those not already long. There is no change to the GBPUSD analysis. A push through 2.04 is possible but the triangle count has yet to be proved invalid. Those that wish to trade the GBPUSD should look for support near 1.9942, against 1.9810, for a break of 2.04. This week: We remain longer term bullish against 1.5611 but expect a drop below 1.5783 in order to complete a 2nd wave correction from 1.6039. While the decline from 1.6039-1.5783 is in 3 waves, the rally from 1.5783 does not count well as an impulse. What tips our hand is the portion that is labeled wave a of X, which is in 3 waves and therefore corrective. Longer term traders should remain bullish against 1.5611 while short term traders can try the short side (keep in mind that shorting here is going against the larger established trend). There is no change to the GBPUSD. Quantitative Currency Strategist - Antonio Sousa My picks: Long EUR/USD Expertise: Interest Rate Dynamics, Sentiment and Volatility Average Time Frame of Trades: 1 week - 1 Year I expect the U.S. dollar to remain vulnerable to further depreciation ahead of this week release of fresh data on the housing market which could prompt speculation the U.S. Federal Reserve will be unable to raise interest rates as fast as traders had previously expected. Tomorrow, the Federal Reserve releases its Beige Book, which describes economic conditions in various parts of the country and on Friday a report is likely to show that New Home Sales fell by 2.5% in June. On the other hand, I expect the ECB to keep its hawkish tone since inflation has exceeded the 2% price stability limit for the last 10 months. According to interest rate swaps for deposits denominated in euros, the market has already priced additional rate hikes by the ECB in 2008. While the overnight rate stands at 4.25 percent, the 1 year LIBOR rate is being offered at 5.42 percent. I project the EUR/USD to trade above 1.60 over the next few weeks. Yet, I have been wrong before and if my assumptions for the price action prove to be incorrect a trader should exit this position in a daily close below 1.5750. Currency Strategist - Terri Belkas My picks: Short GBP/JPY Expertise: Fundamentals Combined With Technicals Average Time Frame of Trades: 1-3 Days Like USD/JPY yesterday, GBP/JPY is hovering below the 200 SMA at 213.89. At the time of writing, we're seeing the US dollar rocket higher following commentary by Federal Open Market Committee member Charles Plosser, who said that the Fed should raise rates "sooner rather than later." As a result, a surge in USD/JPY has pushed many of the Japanese yen crosses higher. I'm skeptical that this move will continue throughout the day, especially with GBP/JPY since the pair faces resistance from not only the 200 SMA, but also a falling trendline that connects the July 2007 and November 2007 highs. Furthermore, the 38.2% fib of 251.10-192.47 at 214.79 also looms above, which essentially creates a 100 pip-wide band of resistance. Overall, I think it'll take a lot of steam to push GBP/JPY through that band and above 215, so as long as price holds below that mark, I will hold a bearish bias on the pair. Currency Analyst - David Rodriguez My picks: GBP/JPY long Expertise: System trading Average Time Frame of Trades: 2-10 weeks I've been hawking JPY-short positions for a couple of weeks now, and I called for a GBPJPY long exactly this time last week. The pair has since resumed its climb, and I have little reason to believe that it will do anything other than break out of nearby significant resistance. Of course, there's no need to jump the gun here; I'll look to buy the GBP/JPY if and only if it breaks above nearby significant resistance at its 200-day SMA of 213.71. An hourly close above said level would be my buy signal. Unfortunately, risk is going to have to be relatively loose on this position--the first reasonable stop level would be below intraday lows of 212.15. Initial profit targets are eyed at the 61.8 percent Fibonacci retracement of 231-12-192.59 at 216.27. Currency Analyst - John Kicklighter My picks: Short EURCHF Expertise: Combining Money Management with Fundamental and Technical Analysis Average Time Frame of Trades: 3 days - 1 week Choosing a trade among the euro and pound crosses comes with considerable risk. I am writing off most pound trades (besides the potential GBPJPY upside breakout I set yesterday) due to the advanced second quarter GDP number scheduled for release on Thursday. For the euro pairs, our focus currency is at various levels across a number of ranges (both at resistance, support and floating somewhere in the middle). With the potential for risk trends kicking up; and the NZD, AUD, GBP and CAD all looking at significant event risk. With EURJPY and EURCHF as alternatives, I want to take the pair with a typically more stable correlation to risk trends, so the latter it is. EURCHF is at the top of its range on resistance defined by a 61.8% retracement of the May 16th to July 16th swing low, 200-day SMA and falling trendline from the October 26th high. Spot is near a good entry now and two lots would work best for this set up. My initial stop will be placed above the range of intraday highs around 1.6255. The first lot's target will equal the risk taken and the second will be more aggressive with 50 to 75 percent of the range down to 1.6025 (where a range of lows has met a lesser 38.2 percent retracement and 100-day SMA). While this is one of the most promising of the euro crosses, it does come with its risk. The probability of a sudden shift in risk appetite is still relatively high as second quarter earnings continue to cross the wires and international investors are keeping track of Fannie Mae and Freddie Mac's vital signs. I expect this trade to unfold over the next two to four session. Currency Analyst - Ilya Spivak My picks: Short GBPJPY Expertise: Macro Fundamentals, Classic Technical Analysis Average Time Frame of Trades: 1 week - 6 months GBPJPY has put in a Hanging Man reversal candlestick directly below a major top at 213.70. This will be the fifth test of this resistance, with GBPJPY unable to break above since January. A reversal lower aims at support at a trend line that has marked price action since mid-March. The trade offers excellent risk-reward parameters, with a stop-loss at 214.32 and a profit target at 210.00. Currency Analyst - John Rivera My picks: Long EUR/USD Expertise: Fundamentals Combined With Technicals Average Time Frame of Trades: 2-4 Days It looks like EURUSD has one more leg up before we see the bottom for the dollar. Earnings disapointments should weigh on U.S. equities over the next few days, which has recently been very supportive for the EURUSD pair. I'd look for a fresh all time high with a target of 1.6150. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.

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Daily Technical Strategist

Daily Forex Technicals | Written by FXTechstrategy | Jul 22 08 12:25 GMT |

Today's Focus: EURUSD & GBPUSD EURUSD: Rising Channel Keeps EUR's Short Term Trend To The Upside. GBPUSD: Begins Recovery After Declining Off The 2.0155 High EURUSD Like its GBP counterpart, EUR's short term upside gains continue to be underpinned by a rising channel and its hold above the 1.5842 level, its Jun 09'08 high. Recovery ahead of its channel base saw the pair trading to as high as 1.5932 on Monday leaving GBP targeting the 1.6018/37 zone, its April 22'08/YTD highs where a break could risk price extension towards the 1.6182 level, its 1.272 Fib Ext and then the 1.6380 level, its 1.618 Fib Ext.Both the daily and weekly studies are positive and trending higher suggestive strength. On the downside, the 1.5842 level is expected to provide support on any pullback from the present levels initially with additional support coming in between the 1.5800 level, its channel base and the 1.5718 level, its daily 200 ema.Clearing the latter will push the pair even lower aiming at the 1.5610 level, representing its July 07'08(coinciding with its LT rising trendline).On the whole, with short term bullish bias supported by its rising channel, EUR looks towards retesting the 1.6018/37 zone and possibly higher. Support Comments 1.5842 Jun 09'08 high 1.5800 Rising daily channel base 1.5610 July 07'08/LT rising trendline 1.5467 Jun 23'08 low Resistance Comment 1.5947 July 11'08 1.6018 YTD high 1.6182 1.272 Fib Ext 1.6380 1.618 Fib Ext GBPUSD GBP was seen heading higher in early morning trading today building on its recovery off the 1.9904 low on Friday (last week) following a decline off the 2.0155 high. This price action is likely to continue while the pair continues to trade within its two-month daily rising channel and should push GBP further higher aiming at the 2.0155 high, its July 15'08 high where an invalidation could extend upside gains towards the 2.0191 level, its Mar 27'08 high and ultimately its Mar 14'08 high at 2.0398.Its daily momentum indicators remain supportive of this view. Nearby support now resides at its July 02'08/April 21'08 highs at 2.0004/26 with the next two downside objectives resting at the 1.9905/04 zone, representing its July 18/21'08 lows and the 1.9850 level, its May 23'08 high ahead of the 1.9800/1.9790 zone, its Jun 09 & 20'08 highs. All in all, GBP should continue to focus on higher prices while maintaining above the 2.0000 level and trading within its rising channel. Support Comments 2.0004/26 July 01'08/April 21'08 highs 1.9905/04 July 18/21'08 lows 1.9850 May 23'08 high 1.9800/1.9790 Jun 09 & 20'08 highs Resistance Comments 2.0004/26 July 02'08/April 21'08 highs 2.0155 July 15 high 2.0191 Mar 27'08 2.0396 Mar 14'08 high Mohammed Isah Market Analyst www.fxtechstrategy.com This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report

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Morning Market Recap: Canadian Dollar Down, Bonds Up Following May Retail Sales

Market Updates | Written by CEP News | Jul 22 08 13:06 GMT |

(CEP News) - A lower-than-expected May Canadian retail sales report on Tuesday pushed the country's bond prices higher and dollar down against major foreign currencies. Economists were expecting sales excluding autos to increase 0.7% in the month due to higher gasoline prices, but sales were only 0.4% higher. The miss was mitigated somewhat because April's figure was revised to 1.2% from 1.1%. Including autos, retail sales increased 0.6%, but that number falls to 0.1% if gasoline station sales are excluded. The Canadian dollar is down 0.0057 to 0.9945 against the U.S. dollar (1.0056 USD/CAD) and down 0.31 to 106.15 against the yen. Yields on two-year Canadian government bonds are down 1.6 bps to 3.16%, with five-year yields down 1.7 bps to 3.40%, 10-year yields down 0.9 bps to 3.81% and 30-year yields flat at 4.15%. The Canadian 10-year note is yielding 27.1 bps less than the U.S. 10-year note. U.S. equity futures are pointing to losses at the open after several companies reported lower-than-expected quarterly results. Wachovia announced a $8.9 billion loss and slashed its dividend by 87%. American Express and Texas Instruments missed estimates while Apple lowered guidance. U.S. equity market futures are lower with contracts on the Dow Jones industrial average down 68 points to 11397, the S&P 500 down nine points to 1253 and the Nasdaq down 31 points to 1797. European stock markets are also lower, with the Eurostoxx down 46 points to 2805, the UK FTSE 100 down 86 points to 5319 and the German DAX down 63 points to 6362. Asian markets were mixed, with the Japanese Nikkei closing up 381 points to 13185 and the Hang Seng Index closing down five points to 22527. U.S. two-year yields are up 4.9 bps to 2.64%, with five-year yields up 4.2 bps to 3.41%, 10-year yields up 3.5 bps to 4.08% and 30-year yields up 4.3 bps to 4.66%. In Germany, returns on two-year German bonds are down 5.2 bps to 4.57%, with five-year yields down 3.8 bps to 4.63%, 10-year yields down 0.6 bps to 4.63% and 30-year yields flat at 4.87%. Yields on UK two-year bonds are down 5.3 bps to 5.05%, with five-year yields down 5.2 bps to 5.01%, 10-year yields down 4.4 bps to 5.01% and 30-year yields down 2.7 bps to 4.64%. The U.S. dollar is up 0.30 to 106.74 against the yen and the Dollar Index is down 0.097 to 71.893. The euro is down 0.0036 to 1.5886 against the U.S. dollar, up 0.0051 to 1.5972 against the Canadian dollar, down 0.0004 to 0.7943 against the pound sterling and is higher by 0.10 to 169.58 against the yen. The pound sterling is down 0.0033 to 2.0000 against the U.S. dollar and up 0.0074 to 2.0107 against the Canadian dollar. WTI crude oil is down $1.72 to $130.10. The front month gold contract at the Chicago Board of Trade is up $5.60 to $969.70 per ounce. All data taken at 8:55 a.m. EDT. By Adam Button, abutton@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, ngirgis@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News. A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.

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Overnight News Recap: Italian Trade Balance & Cons Conf Decline, ECB Speakers

News Recap | Written by CEP News | Jul 22 08 10:39 GMT |

(CEP News) - Italian consumer confidence declined and the trade deficit widened in what was a relatively quiet overnight for European and Asia-Pacific markets. Some European Central Bankers continued to reiterate the current monetary policy stance in various newspapers, and in Japan supermarket sales slipped further while convenience store sales picked up. According to the Institute for Studies and Economic Analyses (ISAE), Italian consumer confidence fell to 95.8 in July, its lowest level since November 1993. Economists had expected a more modest decline to 99.0 from June's 99.9 level, which had been revised down from 100.0. On Tuesday, the National Institute of Statistics (ISTAT) reported that the Italian non-EU trade deficit fell to €2.328 billion in June from a deficit level of €1.772 billion in May. According to ISTAT, exports to countries outside of the European Union fell to €12.7 billion from May's €12.9 billion, while imports increased to €15.01 billion in June from the previous month's €14.7 billion. On Tuesday, the Swiss Federal Customs Office reported that the trade surplus in June rose to CHF 2.41 billion in nominal terms in June, up from May's CHF 1.87 billion surplus level. The customs office highlighted that exports had increased to CHF 18.51 billion from CHF 17.5 billion in May, while imports grew to CHF 16.09 billion from the previous month's CHF 15.62 billion. According to Statistics Finland, the Finnish unemployment rate slipped to 6.8% in June from May's 8.8% level. In a press release, the statistics agency noted that there were 195,000 unemployed persons in Finland, 14,000 less than one year ago. Meanwhile, the number of employed persons in Finland grew by 49,000 to 2,668,000 over the same period. In an interview with Italian newspaper La Stampa published on Tuesday, European Central Bank Executive Board member Lorenzo Bini Smaghi said the current refinancing level of 4.25% wasn't "exactly restrictive" and suggested that the economic recovery in the euro zone could come after the fourth quarter of 2008, a little later than previously expected. "We've always said that with respect to these forecasts there were risks," Bini Smaghi said to the daily. "The forecasts are based on a hypothesis that won't necessarily happen, such as the return of oil prices to $120 a barrel." The current inflation level is "causing concern" and the European Central Bank must avoid possible second-round effects that could result, ECB Governing Council member Klaus Liebscher said, according to Austrian newspaper Salzburger Nachrichten. "We must do everything to ensure that no second-round effects emerge," Liebscher was quoted as saying. Speaking at the UK Treasury on Tuesday about reforms in the UK banking sector, Bank of England Governor Mervyn King conceded that he would prefer taking time with the changes and get them right than rushing them through with possible mistakes just to have them implemented early next year. "I think a lot (of) detail is still to be discussed," King said. "There's still a lot to play for." Speaking at a conference near Madrid on Tuesday, Spanish finance minister Pedro Solbes acknowledged that Spain may see a budget deficit in 2008 and 2009. "If growth is clearly below 2.3%, it's possible that we could have a small deficit and that's something that concerns me greatly," Solbes said. Turning to the Pacific, the Japanese all-industry activity index advanced 0.4% month-over-month in May, in line with expectations but short of the previous month's 0.8% rise. Japanese convenience store sales also showed optimism with a 4.2% annual gain in June, further than May's 3.7% rise. However, Japanese supermarket sales continued to struggle, declining 0.9% year-over-year in June after contracting 1.1% in May. The National Hurricane Center expects Tropical Storm Dolly to become a hurricane before making landfall between the Mexican and Texas border on Wednesday. JP All Industry Activity Index (M/M) May +0.4% vs. Exp: +0.4% Prior: +0.8% JP Supermarket Sales (Y/Y) June -0.9% vs. Prior: -1.1% JP Convenience Store Sales (Y/Y) June +4.2% vs. Prior: +3.7% IT Consumer Confidence (SA) July 95.8 vs. Exp: 99.0 Revised: 99.9 Prior: 100.0 IT Trade Balance June -€1218.0M vs. Prior: -€1774.0M By Erik Kevin Franco, efranco@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, ngirgis@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News. A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.

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FX Thoughts for the Day

Daily Forex Technicals | Written by Kshitij Consultancy Services | Jul 22 08 12:21 GMT |

USD-CHF @ 1.0148/53.... Thin volatility. R: 1.0200 / 1.0235-50 / 1.0270-80 S: 1.0170 / 1.0150 / 1.0110 / 1.0060 In a day that did not have much volatility, the pair has seen a high-low range of only 35 pips. The day ahead is also not expected to be any different with no US data releases. This calm trading in the market, needless to say, is not only unfavorable for the intra-day traders like us but is also very unlike the market we are so used to. Support is expected at 1.0150-30 and 1.0100. Resistance will be faced if an attempt to surpass 1.0200 is made. Beyond 1.0200, 1.0250 will come into the picture. The range looks pretty good now, and the market is expected to head towards the bigger Support region at 1.0100-0060, which seems to be a good level to enter long. Limit Buy Order: Buy 10K USD at 1.0050, SL 0.9975, TP 1.0150 GBP-USD @ 2.0062/67... Bullishness regained R: 2.0080 / 2.0138-150 / 2.0200 S: 2.0050-30 / 2.00 /1.9970-50 A rally to beyond 2.0050 has materialized in the day today. In the day today a close above 2.0050-2.00 is of high importance for the bullishness to continue. Continuing to trade above 2.0050 in the US session will raise the chances of a further rally towards 2.0200 in the later half of the week. For now, Support is expected near 2.0050-30 and below that 2.0000. Resistance is expected at 2.0130-40. AUD-USD @ 0.9776/80... Targetting 0.9900 R: 0.9800 / 0.9835 / 0.9850-67 S: 0.9740-30 / 0.9700 / 0.9660 / 0.9600 Aussie has remained within a tight range of 40 pips in the day. For the US session ahead, if the steady rise continues, expect a test of 0.9825-35. However, this would be seen only if the minor Resistance at 0.9800 gives way. A dip, if seen, is not expected to see levels below 0.9750. Holding: Long 10K AUD at 0.9782, SL 0.9670, TP 0.9820 Kshitij Consultancy Service http://www.fxthoughts.com Legal disclaimer and risk disclosure These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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FX Thoughts for the Day

Daily Forex Technicals | Written by Kshitij Consultancy Services | Jul 22 08 12:21 GMT |

USD-CHF @ 1.0148/53.... Thin volatility. R: 1.0200 / 1.0235-50 / 1.0270-80 S: 1.0170 / 1.0150 / 1.0110 / 1.0060 In a day that did not have much volatility, the pair has seen a high-low range of only 35 pips. The day ahead is also not expected to be any different with no US data releases. This calm trading in the market, needless to say, is not only unfavorable for the intra-day traders like us but is also very unlike the market we are so used to. Support is expected at 1.0150-30 and 1.0100. Resistance will be faced if an attempt to surpass 1.0200 is made. Beyond 1.0200, 1.0250 will come into the picture. The range looks pretty good now, and the market is expected to head towards the bigger Support region at 1.0100-0060, which seems to be a good level to enter long. Limit Buy Order: Buy 10K USD at 1.0050, SL 0.9975, TP 1.0150 GBP-USD @ 2.0062/67... Bullishness regained R: 2.0080 / 2.0138-150 / 2.0200 S: 2.0050-30 / 2.00 /1.9970-50 A rally to beyond 2.0050 has materialized in the day today. In the day today a close above 2.0050-2.00 is of high importance for the bullishness to continue. Continuing to trade above 2.0050 in the US session will raise the chances of a further rally towards 2.0200 in the later half of the week. For now, Support is expected near 2.0050-30 and below that 2.0000. Resistance is expected at 2.0130-40. AUD-USD @ 0.9776/80... Targetting 0.9900 R: 0.9800 / 0.9835 / 0.9850-67 S: 0.9740-30 / 0.9700 / 0.9660 / 0.9600 Aussie has remained within a tight range of 40 pips in the day. For the US session ahead, if the steady rise continues, expect a test of 0.9825-35. However, this would be seen only if the minor Resistance at 0.9800 gives way. A dip, if seen, is not expected to see levels below 0.9750. Holding: Long 10K AUD at 0.9782, SL 0.9670, TP 0.9820 Kshitij Consultancy Service http://www.fxthoughts.com Legal disclaimer and risk disclosure These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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PREVIEW-India's Reliance, ONGC profits set for small rise

Tue Jul 22, 2008 5:24am EDT

* What: April-June earnings at India's top oil firms

* When: Reliance on July 24, ONGC on July 28

* Reliance earnings seen up 14 pct; ONGC up 13 pct

By Narayanan Somasundaram

MUMBAI, July 22 (Reuters) - India's top petrochemicals
maker and oil refiner, Reliance Industries Ltd , is
forecast to report a modest 14 percent rise in quarterly net
profit as its petrochemical business clips the pace of earnings
growth despite strong refining margins.

Analysts expect Reliance, India's biggest private company
with a market value of $73 billion, to benefit further from
robust refining margins and natural gas sales later in the
year.

Oil and Natural Gas Corp , India's No. 1 oil
producer, is expected to report 13 percent growth in net profit
as the state-run firm is bound by the government to sell oil at
lower prices to state refiners.

Analysts highlighted risks for the sector as high oil
prices could curtail demand.

"Future earnings of oil and gas companies are at risk due
to risk to refining and petchem margins on account of demand
destruction from high crude prices and uncertainty on subsidy
sharing, especially if crude prices remain firm," Amit Mishra,
analyst at ICICI Securities, said in a note.

Reliance is however expected to get a boost and produce up
to 80 million cubic metres of gas a day from its fields in the
Krishna Godavari (KG) basin off India's east coast by
September.

"That would be significant. Gas sales should start chipping
in significantly from the third quarter boosting
profitability," said Rohit Nagraj, a oil and gas analyst at
Angel Broking.

Reliance Petroleum , in which Chevron owns
5 percent, is expected to commission its 580,000 barrels per
day refinery around September adding to the company's revenue
and profit. Reliance Petroleum is 70.4 percent owned by
Reliance Industries.

Net profit at Reliance, controlled by billionaire Mukesh
Ambani, is seen at 41.4 billion rupees ($967 million) in its
fiscal first quarter ended June, up from 36.3 billion rupees
reported a year ago, a Reuters poll of 10 analysts showed.

Reliance has notched more than 20 pct net profit growth in
the last four quarters.

(See bottom of story for detailed earnings poll)

Its refining margins are forecast at $15-$18.5 a barrel,
double the benchmark Asian crack margin on Dubai crude that
averaged about $8 a barrel in the quarter, and
compared with $15.4 a year earlier.

This is because Reliance's 660,000 barrel per day refinery
in western India, which contributed 64 percent of its revenue
in the March quarter, can process cheap high-sulphur crude to
produce high-value products.

Analysts said operating margins of the petrochemical
business, which contributes a third of Reliance's revenue, are
likely to be under pressure as prices of inputs such as naphtha
rose 54 percent in the quarter, faster than product prices.

DISCOUNTS HIT ONGC

ONGC, which produces 80 percent of India's crude, has to
sell oil from its domestic output at huge discount to state-run
refiners to keep retail prices low.

Analysts estimated ONGC sold oil at $62-$68 a barrel to
local refiners against the global average of $123 in the
quarter. ONGC's crude is benchmarked to Nigeria's Bonny Light
BON-E.

Brokerage Motilal Oswal said it expected ONGC to have
offered discounts worth 96.7 billion rupees for the quarter,
more than double the 36.5 billion it gave in the year-ago
period.

However, analysts said ONGC's earnings will get a boost in
the coming quarters from higher production from its overseas
assets that can be sold at world prices.

ONGC Videsh, its overseas investment arm, owns stakes in
oil and gas blocks in Myanmar, Sudan, Russia, Venezuela,
Vietnam, Egypt, Qatar and Brazil. It has also qualified for
development of Iraqi's oil reserves, the world's third largest.

Shares in Reliance fell 7.6 percent in the June quarter,
outperforming a 14 percent drop in the broader market index
.BSESN and a 10 percent fall in the sector index .
ONGC's shares fell 17 percent.

 Following are forecasts from the Reuters poll.
COMPANY     NET PROFIT   RANGE    % CHANGE   QTR SHARE     P/E

            (in bln rupees)             PERFORMANCE in %
---------------------------------------------------------------
-- Reliance      41.4     39.4-43.5    +14.2      -7.6   
20.1 ONGC          51.9     46.2-57.0    +12.6      -17   
10.1
---------------------------------------------------------------
--  

Note: Estimates compiled from: Batliwala & Karani,
Morgan Stanley, Merrill Lynch, Motilal Oswal, Prabhudas
Lilladher, Angel Broking, ICICI Securities, Kotak Institutional
Equities, CLSA Asia Pacific Markets and Religare.
($1=42.8 rupees)
(Editing by Ranjit Gangadharan and Anshuman Daga)






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Home Business & Finance Markets U.S. U.K. Europe Asia Markets News Hot Stocks Economy Bonds News Advances/Declines Most Actives Indices Calendars Dea

Tue Jul 22, 2008 4:47am EDT

* HSI hovers as investors book gains on previous rally * Lenovo slides on IBM share sale, JP Morgan downgrade * SMIC rallies 11 percent on report of stake sale

(Updates to close)

By Parvathy Ullatil

HONG KONG, July 22 (Reuters) - Hong Kong shares flitted in and out of negative territory before closing flat on Tuesday, as investors locked in gains on a four-session, 6.4 percent rally after oil prices rose, but shares in Lenovo slid after IBM sold a stake in the Chinese PC maker.

Turnover on the exchange was the third lowest this year, with investors expecting Wall Street to fall overnight after a raft of U.S. companies, including American Express , Apple and Texas Instruments announced dismal earnings growth after the closing bell on Monday.

Shares in Lenovo slid more than 5 percent after U.S. computer giant IBM sold a 1.3 percent stake in the company for around $77.3 million and JP Morgan downgraded the stock on slowing Chinese demand.

But shares in Semiconductor Manufacturing International Co. (SMIC) jumped 11 percent on a news report that Datang Telecom group may buy a 20 percent stake in SMIC, the nation's biggest contract chip maker.

The Hang Seng Index .HSI closed 5.42 points lower at 22,527.48 after vacillating between 22,690.74 and 22,393.14 earlier.

Mainboard turnover fell to HK$51.9 billion ($6.7 billion) from HK$69.6 billion on Monday.

"Wall Street looks set for a correction tonight and that seems to have made investors cautious. The rally in financial shares was not expected to last very long anyway," said Conita Hung, head of equity markets with Delta Asia Financial Group.

The China Enterprises Index .HSCE of top locally listed Chinese firms fell 0.1 percent.

CNOOC ended 0.7 percent higher but off its day's peak, after fears that a tropical storm could hit U.S. offshore oil installations sent crude over $131 per barrel.

Esprit dragged the main index lower, falling 2.3 percent after the company's deputy chairman and group CFO, John Poon, resigned with effect from July 20, ahead of the company's results in August. Analysts said the company had denied any connection between Poon's resignation and a potential earnings disappointment.

Shares in the smaller of China's two mobile network operators China Unicom slid 2.3 percent after it reported a significant decline in CDMA subscriber additions in June.

The China Enterprises Index .HSCE of top locally listed Chinese firms fell 0.12 percent.

Higher oil prices ended a rally in airline stocks, with Air China giving up 3.4 percent and Cathay Pacific Airways dropping 3.2 percent.

Aluminium Corp of China (Chalco) , the country's largest producer of the metal, fell 3.3 percent after Goldman Sachs cut its rating on the stock to neutral from buy on Monday on expectations of another power tariff hike by Beijing.

On Monday, Chalco said it may lose 30,000 metric tonnes of output after it halted some capacity at two ventures in Shanxi province because of a power shortage.

Cement stocks took a beating after Goldman Sachs cut Anhui Conch and rival China National Building Materials to sell from neutral on Monday, citing potential difficulties in passing on climbing coal and power prices.

Anhui Conch slid 6 percent, adding to Monday's 6 percent decline. CNBM fell 4.4 percent.

Zhejiang Glass Co Ltd jumped 6.8 percent after rallying 13.6 percent earlier in the day.

The company said its net profit for the first half of 2008 was likely to double, owing to a relatively high return from its unit Qinghai Soda Ash Co Ltd. The company posted a 100.28 million yuan ($14.69 million) profit in the first half of 2007. (Editing by Anne Marie Roantree)

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Vodafone, banks drag FTSE lower; commodities gain

Tue Jul 22, 2008 4:36am EDT
* FTSE 100 falls 1.4 pct to snap 3-day winning streak

* Vodafone slumps after trading update

* Banks slip; oil, mining shares track firmer commodity prices

By Atul Prakash

LONDON, July 22 (Reuters) - Britain's blue-chip FTSE index fell 1.4 percent on Monday, as a sharp drop in Vodafone shares and weaker banking stocks outweighed commodity sector gains.


By 0806 GMT, the commodity-heavy FTSE 100 .FTSE was down 72.7 points at 5,331.6, after closing 0.5 percent higher on Monday. The index, which had risen for the past three sessions, has fallen more than 17 percent this year.

Vodafone, world No. 1 mobile phone company by revenue, topped the FTSE 100 losers list by slipping 12 percent after it said full-year revenue was expected to be around the bottom of its previously stated range due to economic weakness.

"It's not a good day for European mobile," one London-based analyst said.
"European mobile is saturated, it's harder to show top line progression. Top line is now under pressure, and Vodafone is obviously the benchmark for European mobile," the analyst said.

Banking shares also slipped on concerns about a tough economic outlook and tight credit market conditions.

Macroeconomic research consultancy Capital Economics said UK banks may be forced to rein in lending by as much as 180 billion pounds, the equivalent of 13 percent of economic output, to shore up their balance sheets, the Daily Mail reported.

"We had some reasonably reassuring comments from some of the U.S. banks in recent days, but it's difficult to say that all of the difficulties in relation to the credit market are behind us," said Keith Bowman, analyst at Hargreaves Lansdown.

"I am sure we are going to be results-driven in the next few days," he added.

HBOS, the latest European bank to raise capital to repair its balance sheet, fell 1 percent, while Royal Bank of Scotland , Barclays , HSBC , Lloyds TSB and Standard Chartered fell between 2 and 4.2 percent.

COMMODITIES GAIN

But commodities shares advanced, tracking a rise in crude oil and metal prices.
BP , Royal Dutch Shell , BG Group , Cairn Energy and Tullow Oil all advanced.

Higher metals prices gave a lift to mining stocks, with BHP Billiton , Anglo American , Vedanta Resources , Lonmin , Xstrata , Antofagasta , Eurasian Natural Resources and Rio Tinto up between 0.8 and 2.4 percent.

Platinum specialist Johnson Matthey rose 4.4 percent to top the FTSE 100 gainers list after it said it had made a strong start to the new financial year and expected first half profit to be "well ahead" of the same period last year.

Enterprise Inns fell 8.5 percent after Britain's second-biggest pubs group said earnings had come under pressure in the first 42 weeks of its financial year due to a continuing fall in beer sales. (Additional reporting by Dominic Lau; Editing by Louise Ireland)


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UK small caps open lower; Network Data hard-hit by FY warning

07.22.08, 5:34 AM ET

LONDON (Thomson Financial) - UK small caps were lower in early trade, dragged down by the wider market, with Network Data hard-hit on the back of a full-year results warning.

The FTSE Small Cap index was 7.40 points shy at 2,723.90 by 9.08 am, while the FTSE 100 was 71.40 off at 5,332.90.

Network Data was a major casualty early on, plunging 42.86 percent -- or 6 pence to 8 pence -- after the company warned full-year results are likely to be below market expectations.

Its trio of businesses are reliant on the volume of transactions in the mortgage and property markets and have consequently found the first six months of 2008 to be a challenging environment.

'The declining transaction levels have been well-chronicled in the national business press and the results for the six-month period will reflect these market conditions,' said the company in a trading update.

Hard on Network Data's heels was Myhome International, whose shares slid 2.75 pence to 5.125 pence as the domestic cleaning franchise warned it is in breach of some of its banking facility covenants due to a weak economic climate and reduced trading expectations.

However, it is in 'constructive' talks with Lloyds TSB to restructure its 8 million-pound bank line.

A number of options are being explored to reduce the facility, including an equity issue at 'a realistic discount' to the current share price. The board is in preliminary discussions with some of its larger shareholders about the possibility of participating in such an equity fundraising.

Meanwhile, Myhome's Q3 results were in line with the board expectations.

Punters also exited Supporta, 6-1/2 pence lower at 22-1/2 pence, after Romac Investments terminated its offer talks and said it does not currently intend to make an offer for the outsourced services provider.

Last month, Supporta, rejected Romac's proposal saying it undervalued the company. Romac owns 28.2 percent of Supporta through its Gingko Investments unit.

Still on the downside, Nestor Healthcare slid 4-1/4 pence to 43-3/4 pence after the company confirmed it received indications of interest for certain parts of its business, but that no interest has been expressed in the company as a whole.

Talks are underway, but there can be no guarantee that any agreement will be reached.

And shares in WIN lost 8 pence, at 106 pence, after the provider of interactive mobile entertainment and information services warned that, despite results for the second half of 2008 being substantially ahead of the first, management expectations are below current market forecasts for the full-year overall.

Aim-listed Canadian miner Kirkland Lake Gold dropped 22-1/2 pence to 412-1/2 pence, with news of reduced gold production outweighing a narrowing of full-year losses.

On the upside, biotechnology company Summit Corp climbed 4 pence to 59-1/2 pence following news of a worldwide licensing agreement with BioMarin Pharmaceutical Inc. for the company's pre-clinical candidate SMT C1100 to treat the fatal genetic disorder Duchenne muscular dystrophy.

Under the deal -- worth $143 million -- biotechnology company Summit said it will receive an upfront payment of $7 million in the form of an equity investment in Summit shares, along with future development and regulatory milestones of up to $51 million, tiered royalties in the low teens tied to sales and product sales milestones.

Landsbanki's valuation of 135 pence a share represents around 127 percent potential upside to the current share price and underpins the broker's 'buy' recommendation for the stock.

Again on the upside, Sinclair Pharma ticked up 2-3/4 pence to 35-1/2 pence as the international specialty pharma company said it expects sales for 2008 to be 30.2 million pounds, up 30 pct on last year, and that it would achieve its first profitable full year since its IPO.

The company achieved 2.5 million profits at EBITDA level in the second half, before exceptional net credits.

In response, Lansbanki firmly reiterated its 'buy' recommendation on the stock. The shares are trading well below the broker's 152 pence fair value on the business. Moreover, with further clarity expected on Impede/Decapinol in the near term and the good financial performance for the year indicating the benefit of the business' focus on its key disease and geographic areas, Landsbanki expects the company to start to deliver attractive profit growth from its positive operational gearing in F2009.

Elsewhere, buyers came for Velosi, 5-1/2 pence higher at 92-1/2 pence, after the oil equipment and services company said it continued to experience strong revenue growth in the first half and that trading for the year to end-December is in line with market expectations.

With recently won contracts commencing in the coming months, it expects profits to be more heavily weighted to the second half of the current year.

smartFOCUS Group, too, attracted support and hardened 1/2 of a penny to 10 pence as the international marketing software group was selected to provide Chelsea Football Club with its Intelligent Marketing Software and services.

Still with the risers, Lithic Metals & Energy edged up 1/4 of a penny to 5 pence as the company successfully negotiated with BHP Billiton for 100 percent unencumbered ownership of the Mavita licences, Mozambique.

Finally, Fortune Oil moved up 0.60 of a penny to 10 pence following government approval for the company's Tianjin Tianhui Natural Gas joint venture to construct a high capacity gas pipeline from Xiao-Bian-Zhuang to the Jinghai Industrial Park in Tianjin.

tf.TFN-Europe_newsdesk@thomsonreuters.com

fjb/lam

COPYRIGHT

Copyright Thomson Financial News Limited 2008. All rights reserved.

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Elan's Tysabri patient number impresses analysts

07.22.08, 5:32 AM ET
DUBLIN, July 22 (Reuters) - Irish drugmaker Elan Corp said on Tuesday that more than 31,800 patients worldwide were receiving its multiple sclerosis (MS) drug Tysabri at the end of June, exceeding the expectations of several analysts.

The Dublin-based group said in May it expected to make a profit in 2010 thanks to growing sales of the drug, with 100,000 patients on Tysabri therapy targeted by the end of 2010.

Elan and U.S. partner Biogen Idec , which co-developed Tysabri, said in a joint statement they had more than 17,800 patients on Tysabri commercially in the United States, 13,400 outside the U.S. and 600 in clinical trials.

'The numbers are impressive at 1.6 percent ahead of our expectations,' Davy analyst Jack Gorman said.

Goodbody analyst Ian Hunter said the 31,200 commercial patients figure was above his forecast for 30,700.

Tysabri returned to the market with tougher MS prescription guidelines in 2006 after sales were suspended in 2005 over links to a rare and potentially fatal brain disease.

In May, Elan said 26,000 patients were using Tysabri, which was also launched in the United States in March as a treatment for Crohn's bowel disorder.

Biogen reports second quarter earnings on Tuesday, with Elan's due on Thursday.

Shares in Elan traded 2.3 percent lower by 0756 GMT, broadly in line with a 2.4 percent weaker Irish market <.ISEQ>.

(Reporting by Andras Gergely; editing by Rory Channing) Keywords: ELAN/TYSABRI

tf.TFN-Europe_newsdesk@thomsonreuters.com

jlw

COPYRIGHT

Copyright Thomson Financial News Limited 2008. All rights reserved.



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Italy July consumer confidence 95.8 vs 99.9 in June - ISAE UPDATE

07.22.08, 5:34 AM ET

MILAN (Thomson Financial) - Italy's consumer confidence index fell in July to 95.8 from 99.9 in June, the lowest level since Nov. 1993, according to the research institute ISAE.

The June figure was revised down slightly from 100.0.

Economists polled by Thomson Financial News were expecting the index to decline to 99.1 in July.

'While the correlation between sentiment and private spending tends to be loose, consumption fundamentals (the labor market in particular) are deteriorating rapidly, paving the way for sluggish consumer spending in coming quarters with increasing risks of an outright contraction,' Marco Valli, chief Italian economist at UniCredit SpA's unit HVB, wrote in a note.

The bank said it expects Italian GDP growth to be nil in the second quarter and 'flattish' in the second half of the year.

philip.webster@thomsonreuters.com



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Italy July consumer confidence 95.8 vs 99.9 in June - ISAE UPDATE

07.22.08, 5:34 AM ET

MILAN (Thomson Financial) - Italy's consumer confidence index fell in July to 95.8 from 99.9 in June, the lowest level since Nov. 1993, according to the research institute ISAE.

The June figure was revised down slightly from 100.0.

Economists polled by Thomson Financial News were expecting the index to decline to 99.1 in July.

'While the correlation between sentiment and private spending tends to be loose, consumption fundamentals (the labor market in particular) are deteriorating rapidly, paving the way for sluggish consumer spending in coming quarters with increasing risks of an outright contraction,' Marco Valli, chief Italian economist at UniCredit SpA's unit HVB, wrote in a note.

The bank said it expects Italian GDP growth to be nil in the second quarter and 'flattish' in the second half of the year.

philip.webster@thomsonreuters.com



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Dollar Weakens After American Says Profits Fell

Daily Forex Fundamentals | Written by Finotec Group | Jul 22 08 08:59 GMT |

The dollar traded near a record low against the euro after American Express Co. said profit dropped because more consumers defaulted on loans, raising concern the U.S. economic slowdown will deepen. The currency may extend declines against the yen before reports this week forecast by economists to show that U.S. home sales and durable-goods orders dropped in June. American Express, the biggest U.S. credit-card company by purchases, reported second-quarter profit fell 37 percent on bad consumer loans, as the housing market slumped and economic growth slowed. 'Traders will look for opportunities to sell the dollar,' said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. 'The housing market and corporate earnings show that the U.S. economy's fundamentals are weak.' EUR/Dollar is currently trading at 1.5921 as of 7:40 am, GMT. Chancellor of the Exchequer Alistair Darling said fallout from a global credit crunch is proving worse than previously expected, a sign that U.K. policy makers are bracing for slower growth. 'The effect of what has happened is going to be far more profound than people predicted even at the turn of this year,' Darling said in an interview with Bloomberg Television, which will air excerpts today. 'It is quite clear that if you look during the course of this year, conditions have become more difficult across the world.' The finance minister, whose tenure has coincided with the sharpest decline in house prices and the steepest rise in living costs in a decade, reiterated his belief the British economy will escape recession and pledged to keep up the fight against inflation. GBP/USD is currently trading at 2.0026 as of 7:43 am, GMT. The euro is also poised to strengthen versus the yen. 'The euro still looks strong on charts,' said Hashimoto at the unit of Japan's biggest publicly traded lender by assets. The next target of about 173.60 yen is also a 123.6 percent reversal of the euro's decline to 149.27 on Aug. 17 from a high of 168.99 set on July 23, 2007, based on the Fibonacci sequence, he said. Other Fibonacci points are 50 percent, 61.8 percent and 76.4 percent. A break of one of these indicates a currency may move to the next level. A failure suggests a trend may stall. Resistance is a level where selling may outweigh buying. Economic Calendar Time Country Event Period Previous Forecast Significance 14:00 Household Confidence USD -0.8% 14:00 Richmond Fed Index USD Jul -12 12:30 Core Retail Sales m/m CAD May 1.1% *** 12:30 Retail Sales m/m CAD May 0.6% ** 12:30 FOMC Meeting Minutes USD *** 08:45 BOE Governor King Speaks GBP *** 07:15 Trade Balance CHF Jun 1.87B ** 00:50 All Industries Activity Index m/m JPY 0.8% ** 00:50 All Industries Activity Index m/m JPY 0.8% ** Finotec Group Inc. http://www.finotec.com/ Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.

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East Asia's Growth to Slow to 7.6% in 2008, ADB Says

By Shamim Adam

July 22 (Bloomberg) -- Asia's developing economies will expand at the slowest pace in five years in 2008 as easing U.S. growth weighs on exports and accelerating inflation crimps consumer spending, the Asian Development Bank said.

East Asia may expand 7.6 percent in 2008, less than a December estimate of 8 percent, according to a report released today by the lender's Office for Regional Economic Integration in Manila. Next year's growth is also estimated at 7.6 percent.

A U.S. housing recession has roiled financial markets and hurt demand for Asian-made technology and other goods, threatening expansion in a region the ADB says will account for more than a fifth of global growth this year. Record commodity costs have forced central banks from Vietnam to Indonesia to raise interest rates at the risk of stifling expansion further.

``Emerging East Asia is facing stronger headwinds as external demand weakens, global oil and food prices remain elevated, the global IT recovery remains fragile, and the subprime-generated financial turmoil continues to work itself out,'' the ADB division said.

China's growth is likely to cool amid a ``more protracted'' U.S. slowdown and as the government tightens policies to keep inflation contained, according to the report. Asia's second- largest economy will expand 9.9 percent in 2008, compared with a December estimate of 10.5 percent, the ADB unit said. Expansion may slow to 9.7 percent next year.

`Pain, Nervousness'

``It will take a while for things to turn around in Asia, probably not until the second half of 2009,'' said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. ``The oil and commodity price shock has caused a lot of pain and there is still a lot of nervousness over the financial market turmoil.''

There are few signs that price pressures will subside anytime soon, the ADB unit said, predicting inflation in the region will average 6.3 percent this year, more than double the average in the 10 years to 2006, and ease to 4.6 percent in 2009.

``Inflation will likely continue to plague much of emerging East Asia as record global energy and food prices seep down into overall economic activity,'' it said. ``Rapidly rising inflation threatens to dampen consumer spending and risks a wage-price spiral that could derail the region's recent solid growth.''

Asian central banks need ``decisive tightening of monetary policies'' to combat the rise in prices, said the unit, which makes forecasts separately from the ADB.

`Behind the Curve'

The Philippine central bank has raised interest rates at its last two meetings, while Bank Indonesia has boosted borrowing costs for three consecutive months. In Vietnam, rates were increased to 14 percent, the highest in Asia, and Thailand raised its benchmark for the first time in two years last week.

Still, monetary policy in many East Asian economies is ``behind the curve,'' the ADB unit said. ``There are growing signs that inflation expectations are beginning to drift, with second-round price effects beginning to burrow through the region's economies.''

Stronger currencies can help Asian economies combat price pressures, Jong-Wha Lee, the Manila-based head of the ADB unit, said in a statement today.

``Allowing more exchange rate flexibility can help mitigate imported inflation,'' Lee said. ``Greater currency flexibility will also give more wiggle room to monetary authorities.''

Best Performer

In China, the yuan's 7.1 percent advance this year has made it Asia's best performer and some Chinese officials are pressing for slower currency appreciation to protect jobs as cooling global demand threatens exports.

``With inflation still relatively high, though moderating, more tightening may be expected,'' the ADB unit said. ``A gradually appreciating renminbi, continued monetary tightening, and an expected deceleration in external demand growth should lead to an easing in overall GDP growth.''

Growth in the second quarter was the slowest since 2005, China's government said last week.

Emerging East Asia groups China, the Southeast Asian nations of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand and Vietnam, and the newly industrialized economies of Hong Kong, Singapore, South Korea and Taiwan.

The following is a table of the Asia Development Bank's Office of Regional Economic Integration estimates for annual gross domestic product growth for this year and next.

====================================================
                             2008    2008    2009
                              New    Prior
====================================================
                               Annual GDP Growth
Emerging East Asia            7.6%    8.0%    7.6%
ASEAN                         5.5%    6.1%    5.8%
Cambodia                     7.5%    8.0%    7.0%
Indonesia                    6.0%    6.4%    6.2%
Lao PDR                      7.7%    7.9%    7.8%
Malaysia                     5.4%    5.9%    5.6%
Philippines                  5.5%    6.4%    5.6%
Thailand                     5.0%    4.8%    5.2%
Vietnam                      6.5%    8.5%    6.8%
Newly Industrialized
Economies                     4.7%    5.1%    4.9%
Hong Kong                    4.9%    5.4%    4.9%
South Korea                  4.7%    5.0%    4.9%
Singapore                    4.9%    6.3%    5.8%
Taipei, China                4.5%    4.8%    4.8%
China                         9.9%   10.5%    9.7%
Japan                         1.5%    1.7%    1.5%
U.S.                          1.5%    1.9%    1.6%
Euro Area                     1.8%    2.1%    2.0%
=====================================================

To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net

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Italian Consumer Confidence Plunges to 15-Year Low

By Flavia Krause-Jackson

July 22 (Bloomberg) -- Italian consumer confidence slumped in July to the lowest level since the 1993 recession after record food and energy prices eroded purchasing power.

The Rome-based Isae Institute's index, calculated from a survey of 2,000 families, fell to 95.8 from a revised 99.9 last month. Economists had expected a decline to 99, according to the median of 13 forecasts collected by Bloomberg. In November 1993, the 26-year-old index hit a record low of 95.4.

Oil prices have risen 37 percent this year, clouding the outlook for economic growth and driving up consumer prices in the 15 euro nations at the fastest pace in more than 16 years. Atlantia SpA, Italy's biggest toll-road company, announced last week it would offer drivers discounts on gasoline to try to increase traffic on its highways.

``Confidence has crashed,'' said Marco Valli, an economist at UniCredit SpA in Milan, who forecast a confidence reading of 99.6. ``People are spending less and will continue to make more and more cutbacks,''

Europe's fourth-biggest economy will expand 0.5 percent this year and the next, the slowest among the world's advanced economies, the International Monetary Fund said last week. Italy's growth has trailed the European Union average for more than a decade. Unemployment is rising and the inflation rate reached an 11-year high of 4 percent in June, cutting into the buying power of consumers.

Prospects Dimming

A sub-index measuring optimism about the broad economic situation dropped to a 14-year low of 72.2 from 81.6, Isae said today in its report. A gauge of households' perception about their short-term prospects decreased to 88.4 from 97.6.

Italians are cutting back on spending on everything from new cars to going out to dinner, Isae said. Retail sales declined for the 16th consecutive month, the Bloomberg purchasing managers index showed on June 27.

Sales in Europe's second-biggest car market fell 19.5 percent in June, a sixth straight monthly decline. Fiat SpA, which controls almost a third of the Italian car market, announced that it will shut four of its six Italian factories for three weeks because of weak demand. Autogrill SpA, the world's biggest manager of airport restaurants, cut its full- year sales target on July 16 because the rise in gasoline prices has led to a decrease in highway travel and caused a 1.5 percent drop in air traffic.

Pessimism Spreading

The drop in Italian confidence mirrors growing pessimism in Germany and France. German consumer confidence fell to the lowest in more than two years in July and French optimism fell to a record low in June on soaring inflation and signs that economic growth was slowing.

To fight inflation, the European Central Bank raised its benchmark interest rate on July 3 by 25 basis points to 4.25 percent. The move will raise borrowing costs for manufacturers and could further slow economic growth.

Europe's economy may take longer to recover than the ECB forecasts and could come after the fourth quarter, Italian daily La Stampa reported today, citing an interview with board member Lorenzo Bini Smaghi. He also told the newspaper that the ECB's current benchmark rate wasn't ``exactly restrictive.''

Italian Prime Minister Silvio Berlusconi has abolished a property tax on first homes and unveiled a plan to freeze mortgage payments to try to offset price increases and revive growth. Consumer spending accounts for two thirds of Italy's $2.4 trillion economy.

The Isae survey was conducted between July 1 and July 16.

-- With reporting by Michele Seghizzi in London. Editors: Andrew Davis, John Fraher

To contact the reporter on this story: Flavia Krause-Jackson in Rome at fjackson@bloomberg.net



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South Korean Academics Urge Finance Minister Kang to Resign

By Seyoon Kim and William Sim

July 22 (Bloomberg) -- South Korean Finance Minister Kang Man Soo should resign after pursuing ``irrational'' policies that fanned inflation and hurt the nation's economy, a group of 118 economics and business professors said.

Kang ``was obsessed with short-term growth and tried to manipulate the exchange rate to boost exports despite numerous warnings from economists that stable policies should be pursued in the midst of rising oil and grain prices,'' the academics said in a statement published on the Web site of the Citizen's Coalition for Economic Justice dated July 21.

South Korea's currency fell as much as 11 percent since Kang became finance minister on Feb. 29. In April he said the won's decline reflected the state of the economy and that it had risen more than other Asian currencies in previous years. The government is now taking steps to reverse the slide, spending more than $20 billion on intervention, according to Ko Yun Jin, a currency dealer with Kookmin Bank in Seoul.

``Minister Kang had to shift policy focus to stabilizing prices after soaring oil costs fueled inflation,'' said Kwon Young Sun, an economist at Lehman Brothers Holdings Inc. in Hong Kong. ``This change in policy wasn't limited to South Korea, but happened across Asia.''

When Kang became minister crude oil was trading at about $100 a barrel. It was at $130.59 at 12:12 p.m. in Singapore.

Kang helped President Lee Myung Bak win last year's election with a pledge to boost economic growth to 7 percent from 5 percent last year, double per-capita income to $40,000 by 2015, and lift the economy's ranking to 7th largest from 12th.

Foreign-Exchange Policy

``Minister Kang must take responsibility for his failure to manage economic policies, especially the foreign-exchange policy,'' Yang Hyuck Seung, a professor at Yonsei University in Seoul and who is a spokesman for the academics, said in an interview. ``He was obsessed by achieving the 7 percent growth target.''

South Korea's inflation accelerated to 5.5 percent in June, the fastest past in 10 years, squeezing household incomes and corporate profits. The government this month cut its economic- growth forecast to 4.7 percent from 6 percent. The economy grew 5 percent last year.

Speaking in an interview in Madrid on May 5, Kang said South Korea's inflation was ``inevitable'' because global food and energy costs were climbing and that the government should pursue policies to drive growth. In April, he said the nation's borrowing costs are ``higher'' than those of many other economies.

`No Secret'

``It was no secret Kang wanted lower interest rates a few months ago,'' said Lim Jiwon, economist at JPMorgan Chase & Co. in Seoul. ``But the external conditions deteriorated far more than anyone expected since then.''

South Korea's government switched its focus to fighting inflation from promoting growth in June after President Lee's approval rating dropped amid rising prices and strikes that crippled the nation's ports.

Lee dismissed Vice Finance Minister Choi Joong Kyung, who was in charge of the government's foreign-exchange policy, in a Cabinet reshuffle on July 7. Kang kept his job.

Speaking in parliament today, Kang said he took the criticism by the academics as a ``rebuke,'' and promised to work harder to stabilize prices.

The won traded at 1,017.30 against the dollar as of 2:04 p.m. in Seoul from 1,018.00 yesterday. The currency has risen 3.3 percent since July 4, when it fell to the lowest close for the year.

To contact the reporter on this story: Seyoon Kim in Seoul at skim7@bloomberg.net

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Daily Report: Dollar Mildly Lower but Still in Range

Market Overview | Written by ActionForex.com | Jul 22 08 07:20 GMT |

Dollar weakens mildly but is still staying in tight range today as consolidation continues. Yesterday's earnings announcements from Bank of America and American Express triggered some volatility but not much direction in the greenback. The yen and carry trades will likely remain the major focus and the could very much depends on earning results of Wachovia Corp and Countrywide Financial Corp to be released today. After all, at this moment, there is no confirmation of completion of dollar's recovery yet and we could still see another leg down in EUR/USD, GBP/USD and AUD/USD. But more upside are expected in yen crosses The economic calendar is again pretty light today. Japan all industry index released overnight climbed 0.4% in May, inline with expectation. Jun Swiss trade balance to be released is expected to show surplus shrank from 1.87b to 1.60b. US house price index is expected to drop -0.5% mom in May. Treasury Paulson and Fed Plosser's speech will also be paid attention to. The main focus in the US session will be on Canadian retail sales which is expected to show 0.6% mom growth, with ex-auto sales rising 0.8%. GBP/USD Daily Outlook Daily Pivots: (S1) 1.9945; (P) 1.9992; (R1) 2.0077; More Cable drew some support from 4 hours 55 EMA and recovers from there. With 4 hours MACD crossed above signal line, an intraday low should be in place at 1.9906. Intraday outlook is turned neutral for the moment. On the upside, above 2.0072 2.0072 minor resistance will suggest that such correction from 2.0158 has completed and rise from 1.9408 has resumed for 161.8% projection of 1.9363 to 1.9852 from 1.9408 at 2.0199 first and probably extends further to retest 2.0391 resistance. Though, on the downside, below 1.9906 will indicates that such correction has resumed, and will target inner channel support (now at 1.9814). Nevertheless, downside is expected to be contained well above 1.9647 support and bring rally resumption. In the bigger picture, down trend from 2.1161 have made a low at 1.9337. The corrective nature of the rise from 1.9337 to 2.0391 and fall from 2.0391 to 1.9363 suggests that price actions from 1.9337 are developing into sideway consolidation to whole fall from 2.1161. Though, the structure and length of this consolidation could either be in form of a three wave sideway consolidation or in form of five wave triangle pattern. But in either case, another rise is still expected to test 2.0391 resistance. Nevertheless upside of such consolidation should still be limited by 61.8% retracement of 2.1161 to 1.9337 at 2.0464. On the downside, though, below 1.9647 support will be the first signal that the final rise in the consolidation pattern has completed. Sustained break of 1.9337/63 support zone will indicate that decline from 2.1161 has resumed.

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
23:50	JPY	Japan All industry index May	0.40%	0.40%	0.80%
9:30	CHF	Swiss Trade balance (chf) Jun		1.60B	1.87B
12:10	USD	U.S. Treasury's Paulson speaks
12:30	CAD	Canada Retail sales M/M May		0.60%	0.60%
12:30	CAD	ex. Autos May		0.80%	1.10%
14:00	USD	U.S. House Price index M/M May		-0.50%	-0.80%

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