Daily Forex Fundamentals | Written by GCI Financial | Aug 29 08 14:59 GMT |
€
The euro moved higher vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.4765 level and was supported around the $1.4685 level. Data released in the U.S. today saw July personal spending rise 0.2% but when adjusted for inflation, it was off 0.4%, the largest decline since June 2004. Also, personal income fell 0.7%, much lower-than-expected and the largest decline since August 2005. The core personal consumption expenditures price index that excludes food and energy rose 0.3% in July while the headline PCE price index was up 0.6%. On an annualized basis, the core PCE price index has risen 2.4% - well above the Fed's perceived comfort zone of 1.5% to 2.0% - while the headline PCE price index is up 4.5% y/y. Other data released in the U.S. today saw the final August University of Michigan consumer sentiment indicator improve to 63.0 from 61.2 in July while the August Chicago PMI index improved to 57.9 from 50.8 in July with the prices paid component lower at 80.6. In eurozone news, EMU-15 consumer price inflation slowed more than expected in August, falling to 3.8% y/y from 4.0% y/y but still significantly above the European Central Bank's 2.0% inflation target. Also, EMU-15 economic sentiment fell to 88.8 in August from 89.5 in July and consumer confidence ticked up to -19. European Central Bank member Liebscher echoed comments from other policymakers this week saying inflation is too high. Notably, six-month Euribor interbank lending rates reached an all-time high today with six-month rates at 5.197%. Also, German July wholesale sales were up 0.3% m/m and 3.5% y/y and the EMU-15 unemployment rate was stable at 7.3%. Euro bids are cited around the US$ 1.4315 level.
¥/ CNY
The yen appreciated vis-Ã -vis the U.S. dollar today as the greenback tested bids around the ¥108.40 level and was capped around the ¥109.55 level. The pair moved to its lowest intraweek level following the release of many Japanese economic data. The Japanese government announced that its economic stimulus package will aggregate ¥11.7 trillion with ¥2.0 trillion of its financed by a supplemental budget. Economics minister Yosano said he is concerned about escalating inflation in Japan and said prices could accelerate more. Data released in Japan overnight saw the nationwide core consumer price index rise 2.4% y/y, exceeding forecasts. Second, July housing starts rose 19.0%, the first rise in thirteen months. Third, July retail sales were up 1.9%, mostly on account of fuel spending. Fourth, July industrial output was up 0.9%. Fifth, July orders received by the 50 largest contractors were up 42.3%. The rise in core CPI represented the fastest climb since October 1997. Bank of Japan's Policy Board is expected to keep the overnight call rate unchanged at 0.50% for several months. The Nikkei 225 stock index gained 2.39% to close at ¥13,072.87. Dollar bids are cited around the ¥106.40 level. The euro moved lower vis-Ã -vis the yen as the single currency tested bids around the ¥159.75 level and was capped around the ¥161.10 level. The British pound and Swiss franc moved lower vis-Ã -vis the yen as the crosses tested bids around the ¥198.35 and ¥98.85 levels, respectively. The Chinese yuan depreciated vis-Ã -vis the U.S. dollar as the greenback closed at CNY 6.8350 in the over-the-counter market, up from CNY 6.8275.
₤
The British pound depreciated vis-Ã -vis the U.S. dollar today as cable tested bids around the US$ 1.8235 level and was capped around the $1.8340 level. Cable reached its lowest level since July 2006. Data released in the U.K. today saw July Land Registry house prices fall 2% y/y while GfK August consumer confidence rose to -36 from -39 in July. Additionally, IRS pay deals picked up 3.5% in the three months to July. Cable bids are cited around the $1.8015 level. The euro moved higher vis-Ã -vis the British pound as the single currency tested offers around the ₤0.8065 level and was supported around the ₤0.8030 level.
CHF
The Swiss franc depreciated vis-Ã -vis the U.S. dollar today as the greenback tested offers around the CHF 1.1000 figure and was supported around the CHF 1.0925 level. Data released in Switzerland today saw the KOF leading growth indicator fall to 0.68 from a revised 0.85 in July, the lowest print since August 2003. U.S. dollar offers are cited around the CHF 1.1135 level. The euro gained ground vis-Ã -vis the Swiss franc as the single currency tested offers around the CHF 1.6180 level while the British pound weakened vis-Ã -vis the Swiss franc and tested bids around the CHF 1.9990 level.
GCI Financial
http://www.gcitrading.com
DISCLAIMER : GCI's Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.
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Friday, August 29, 2008
U.S. Personal Income Falls Precipitously in July
Daily Forex Fundamentals | Written by TD Bank Financial Group | Aug 29 08 14:24 GMT |
* U.S. personal income dropped a whopping 0.7% M/M in July, compared to market consensus for a more moderate 0.2% M/M fall.
* Despite the decline in income, personal spending rose in line with expectations at 0.2% M/M.
* In terms of inflation, the core PCE deflator rose by 0.3% M/M, in line with expectations, bringing the annual rate of price inflation to 2.4% Y/Y.
U.S. personal income dropped 0.7% M/M in July, following the meagre 0.1% M/M gain in June. The decline was much worse than the 0.2% M/M drop expected by the markets, and was the first time since August 2005 that personal income in the U.S has fallen. To put this in perspective, most of the decline in income was mostly due to the fact that income was boosted in the second quarter by the fiscal stimulus package, and is now unwinding. Despite the drop in July, personal income remains a rather healthy 4.2% higher than their July 2007 levels. On a real basis, personal disposable income declined by a rather massive 1.7% M/M.
Personal spending during the month eked out a meagre 0.2% M/M gain (in line with market consensus), following the rather healthy 0.6% M/M gain in June, and is 5.3% Y/Y above its July 2007 level. Given that spending operates with a lag, we expect to see this indicator decline in the coming months just as income already has. Spending on big ticket items posted a dramatic 1.5% M/M drop, while spending on non-durables (up 0.3% M/M) and services (up 0.5% M/M) posted modest gains. In real terms, however, personal spending fell 0.4% M/M in July and is only up 0.7% Y/Y.
In terms of inflation, the core PCE deflator rose by 0.3% M/M, in line with the market consensus, with the annual rate of core inflation increasing marginally to 2.4% Y/Y from 2.3% Y/Y in June. The 3-month and 6-month annualised trend in core inflation also climbed higher, rising to 2.8% Y/Y (from 2.3% Y/Y) and 2.4% Y/Y (from 2.3% Y/Y), respectively.
On balance, the report is certainly consistent with the growing perception that as the impact of the tax stimulus package wane, U.S. personal spending and income will likely moderate in the coming months. Indeed, with the consumers continuing to be squeezed by the unrelenting demise in the labour market and high gas prices, and household wealth being consistently eroded by declining home prices, U.S. economic activity (which is powered by consumer spending) is expected to moderate significantly in the coming quarters. The risk in this report is that core inflation has remained uncomfortably high, suggesting some amount of pass-through from commodity prices.
TD Bank Financial Group
The information contained in this report has been prepared for the information of our customers by TD Bank Financial Group. The information has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does TD Bank Financial Group assume any responsibility or liability.
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* U.S. personal income dropped a whopping 0.7% M/M in July, compared to market consensus for a more moderate 0.2% M/M fall.
* Despite the decline in income, personal spending rose in line with expectations at 0.2% M/M.
* In terms of inflation, the core PCE deflator rose by 0.3% M/M, in line with expectations, bringing the annual rate of price inflation to 2.4% Y/Y.
U.S. personal income dropped 0.7% M/M in July, following the meagre 0.1% M/M gain in June. The decline was much worse than the 0.2% M/M drop expected by the markets, and was the first time since August 2005 that personal income in the U.S has fallen. To put this in perspective, most of the decline in income was mostly due to the fact that income was boosted in the second quarter by the fiscal stimulus package, and is now unwinding. Despite the drop in July, personal income remains a rather healthy 4.2% higher than their July 2007 levels. On a real basis, personal disposable income declined by a rather massive 1.7% M/M.
Personal spending during the month eked out a meagre 0.2% M/M gain (in line with market consensus), following the rather healthy 0.6% M/M gain in June, and is 5.3% Y/Y above its July 2007 level. Given that spending operates with a lag, we expect to see this indicator decline in the coming months just as income already has. Spending on big ticket items posted a dramatic 1.5% M/M drop, while spending on non-durables (up 0.3% M/M) and services (up 0.5% M/M) posted modest gains. In real terms, however, personal spending fell 0.4% M/M in July and is only up 0.7% Y/Y.
In terms of inflation, the core PCE deflator rose by 0.3% M/M, in line with the market consensus, with the annual rate of core inflation increasing marginally to 2.4% Y/Y from 2.3% Y/Y in June. The 3-month and 6-month annualised trend in core inflation also climbed higher, rising to 2.8% Y/Y (from 2.3% Y/Y) and 2.4% Y/Y (from 2.3% Y/Y), respectively.
On balance, the report is certainly consistent with the growing perception that as the impact of the tax stimulus package wane, U.S. personal spending and income will likely moderate in the coming months. Indeed, with the consumers continuing to be squeezed by the unrelenting demise in the labour market and high gas prices, and household wealth being consistently eroded by declining home prices, U.S. economic activity (which is powered by consumer spending) is expected to moderate significantly in the coming quarters. The risk in this report is that core inflation has remained uncomfortably high, suggesting some amount of pass-through from commodity prices.
TD Bank Financial Group
The information contained in this report has been prepared for the information of our customers by TD Bank Financial Group. The information has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does TD Bank Financial Group assume any responsibility or liability.
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Consumer Spending Is Poised For A Major Slowdown
| Daily Forex Fundamentals | Written by Wachovia Corporation | Aug 29 08 14:19 GMT | | |
| Personal income fell 0.7 percent in July but most of that drop reflects a payback from the Economic Stimulus checks. Disposable income fell an even-larger 1.1 percent. Wages and salaries grew 0.3 percent, which is in line with recent months. Personal spending rose 0.2 percent but declined 0.4 percent after adjusting for inflation. Sorting Out The Impact Of The Tax CutsThe tax rebates have largely worked their way through the income and spending data. The net result has been increased volatility in personal income and an ever-so-slight boost in consumer spending. Personal income leapt 1.8 percent in May and disposable income surged at a 5.7 percent pace. The past two months have seen a payback, with personal income rising just 0.1 percent in June and declining 0.7 percent this past month. After-tax income has been even weaker, tumbling at a 1.9 percent pace in June and a 1.1 percent pace in July. When you net it all out, personal income grew at a 7.8 percent pace over the past three months and after tax income surged at a 12.2 percent pace. Given the boost to income, spending did not receive anywhere near the boost that was hoped for. The only gain was in May and that was just 0.3 percent. Spending fell 0.1 percent in June and declined another 0.4 percent this past month. Apparently, a large portion of the extra money provided by the rebate checks was eaten up by higher prices at the grocery store or siphoned away by higher prices at the gas pump. While the rebate checks did not provide a significant boost to spending, they probably did help avoid larger drops in spending that would have likely occurred due to the mid-summer spike in energy prices. Wages & Salaries Give A Clearer Picture Of Income TrendsNow that the rebate checks are behind us, income and spending will be driven by the fundamentals, which are notably weaker than they were earlier in the year. Nonfarm employment has fallen for seven consecutive months and wage and salary growth has slowed to just a 3.0 percent pace over the past three months. Wage and salary growth normally sets the pace for consumer spending and we can expect nominal consumer expenditures to move back to a 3 to 3.5 percent pace. Since inflation is running faster than that, inflation adjusted outlays will likely drop. Our August macro forecast has real personal consumption expenditures declining at a 0.7 percent annual rate during both the third and fourth quarters. The latest data are in line with this forecast. Inflation Should Moderate In AugustThe PCE deflator rose 0.6 percent in July and is currently up 4.5 percent over the past year. Prices increased only half that much after excluding food and energy prices but is still up a problematic 2.4 percent over the past year. Gasoline prices plummeted in August, which should provide some near-term relief to the inflation figures and real incomes. Further declines in energy prices would improve the second half outlook, but with storms brewing in the Caribbean and Atlantic it is way too soon to bank on that.
Wachovia Corporation Disclaimer: The information and opinions herein are for general information use only. Wachovia Corporation and its affiliates, including Wachovia Bank, N.A., do not guarantee their accuracy or completeness, nor does Wachovia Corporation or any of its affiliates, including Wachovia Bank, N.A., assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or any foreign exchange transaction, or as personalized investment advice. Securities and foreign exchange transactions are not FDIC-insured, are not bank-guaranteed, and may lose value. | |
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Canada's Economic Growth Back in the Plus Column
Daily Forex Fundamentals | Written by RBC Financial Group | Aug 29 08 14:14 GMT |
Canada's real GDP expanded at a marginal 0.3% annualized pace in the second quarter, weaker than expectations for a 0.6% annualized increase. This followed a downwardly revised first-quarter report with real GDP having contracted at a 0.8% annualized rate, faster than the preliminary report showing a 0.3% annualized dip. June's GDP was up 0.1% in line with market forecasts.
The key sources of strength were consumer spending (up 2.4% annualized) and inventories, which contributed 1.4 percentage points to growth in the quarter. Net exports clipped 2.8 percentage points from the quarterly growth rate and business capital investment trimmed 0.45 percentage points.
Canada's economy stalled in the first half of the year with second-quarter growth weighed down by a big drag from net exports and weaker gross fixed capital investment. Exports sank at a 5.9% annualized rate, while imports rallied back and posted a 2.3% annualized increase, a partial recovery from the 9% rate drop recorded in the first quarter.
Personal consumption spending moderated in the second quarter, recording a 2.4% annual rate increase. The slowing reflected a decline in motor vehicle purchases following two quarters of solid gains. Investment in residential structures posted the second consecutive decline with spending on renovations falling for the first time since 1999. Business cut back investment in machinery and equipment and non-residential structures in the quarter, but boosted inventories after the massive slowing in the first quarter.
Today's report confirmed that the economy grew at a mild pace in the second quarter, marking an improvement over the first quarter but still indicating limited momentum in the pace of activity. The slump in employment in July, moderating housing market activity and indications that growth in the U.S. economy may have already hit this year's high-water mark will leave the Bank of Canada with concerns about the downside risk to their projection that the economy will grow at about a 1.5% pace over the second half of this year.
On inflation, the GDP deflator increased at its fastest pace in 1982 in the second quarter, boosted by the high level of energy prices. This is in line with the run-up in the headline CPI inflation rate, which stood at 3.4% in July, above the upper end of the Bank's target band. Against this inflation backdrop, the Bank is unlikely to discount the upside risks to the inflation outlook until there are clearer signs that these elevated inflation readings will not fuel a pick-up in inflation expectations. Even with today's disappointing growth data, we do not expect the Bank of Canada to change the policy rate at next week's meeting but rather to maintain their position of "monitoring carefully the evolution of risks", both upside and downside.
RBC Financial Group
http://www.rbc.com
The statements and statistics contained herein have been prepared by the Economics Department of RBC Financial Group based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.
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Canada's real GDP expanded at a marginal 0.3% annualized pace in the second quarter, weaker than expectations for a 0.6% annualized increase. This followed a downwardly revised first-quarter report with real GDP having contracted at a 0.8% annualized rate, faster than the preliminary report showing a 0.3% annualized dip. June's GDP was up 0.1% in line with market forecasts.
The key sources of strength were consumer spending (up 2.4% annualized) and inventories, which contributed 1.4 percentage points to growth in the quarter. Net exports clipped 2.8 percentage points from the quarterly growth rate and business capital investment trimmed 0.45 percentage points.
Canada's economy stalled in the first half of the year with second-quarter growth weighed down by a big drag from net exports and weaker gross fixed capital investment. Exports sank at a 5.9% annualized rate, while imports rallied back and posted a 2.3% annualized increase, a partial recovery from the 9% rate drop recorded in the first quarter.
Personal consumption spending moderated in the second quarter, recording a 2.4% annual rate increase. The slowing reflected a decline in motor vehicle purchases following two quarters of solid gains. Investment in residential structures posted the second consecutive decline with spending on renovations falling for the first time since 1999. Business cut back investment in machinery and equipment and non-residential structures in the quarter, but boosted inventories after the massive slowing in the first quarter.
Today's report confirmed that the economy grew at a mild pace in the second quarter, marking an improvement over the first quarter but still indicating limited momentum in the pace of activity. The slump in employment in July, moderating housing market activity and indications that growth in the U.S. economy may have already hit this year's high-water mark will leave the Bank of Canada with concerns about the downside risk to their projection that the economy will grow at about a 1.5% pace over the second half of this year.
On inflation, the GDP deflator increased at its fastest pace in 1982 in the second quarter, boosted by the high level of energy prices. This is in line with the run-up in the headline CPI inflation rate, which stood at 3.4% in July, above the upper end of the Bank's target band. Against this inflation backdrop, the Bank is unlikely to discount the upside risks to the inflation outlook until there are clearer signs that these elevated inflation readings will not fuel a pick-up in inflation expectations. Even with today's disappointing growth data, we do not expect the Bank of Canada to change the policy rate at next week's meeting but rather to maintain their position of "monitoring carefully the evolution of risks", both upside and downside.
RBC Financial Group
http://www.rbc.com
The statements and statistics contained herein have been prepared by the Economics Department of RBC Financial Group based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.
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Daily Technical Strategist
| Daily Forex Technicals | Written by FXTechstrategy | Aug 29 08 12:02 GMT | | |||||||||||||||||||||||||||||||||||||
| Today's Focus: EURUSD & GBPUSD
EURUSDAlthough EUR reversed its intra day upside gains to close lower at 1.4703 on Thursday, as long as its LT rising trendline continues to provide support and its daily stochastics is trending higher, odds are for corrective nearer term recovery off the 1.4570 level (Aug 26'08 low) to be seen. In such a case, the 1.4814 level, its August 12'08 low will be targeted before the 1.4967/51 zone (its range highs from Nov'07 and Jan'08/.618 Ret) and then the 1.5304/1.5285 zone (May/Jun'08 lows). These last two key levels are expected to turn the pair lower and resume its recent weakness. On the downside, breaking back below the 1.4728 level, its .786 Ret (1.4310-1.6038 rally), its August 19'08 low at 1.4630 and its LT rising trendline currently at 1.4595 is required to annul our nearer term upside recovery view. Below the latter will set the stage for a decline towards its Aug 26'08 low at 1.4570 with a loss of there opening the door for further weakness towards the 1.4364 level, its Jan 22'08 low. On the whole, while the pair continues to maintain its bearish medium term structure, corrective strength in the nearer term could be seen.
GBPUSDGBP weakened for a fourth day in a row since breaking below its range,printing a new two-year plus low at 1.8238 on Thursday. It is now attacking its descending triangle breakout price target at 1.8274 where a convincing break and close below it should clear the way for additional decline towards the 1.8176 level, its July 16'06 low and next the 1.8090 level, its Jun'06 low. Longer term time frame charts remain supportive of this view. On the upside, if strength is seen at the current price level, GBP should head towards the 1.8398 level (Aug 28'08 high) initially with the next upside located at the .8510/17 levels, its August 15'08/Oct 08'06 lows followed by the 1.8745 level, its .618 Ret (1.7250-2.1160 rally) with price extension if seen aiming at the 1.9009 level, its weekly 200 ema.All in all,GBP's medium term downside remains intact and its vulnerability to further losses can not be ruled out.
Mohammed Isah 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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U.S. Personal Consumer Spending Despite Drop in Personal Income
| Daily Forex Fundamentals | Written by RBC Financial Group | Aug 29 08 14:15 GMT | | |
| Personal consumer expenditure (PCE) rose once again in July, although by a modest 0.2%, down from gains of 0.6% in June and 0.8% in May. The slowdown was in line with market expectations and, in large part, reflects the waning effect of the tax rebate cheques. The declining impact of the fiscal stimulus is also evident in the personal income numbers, which jumped 1.8% higher in May, rose only 0.1% in June and were reported this morning as declining 0.7% in July. The wage and salaries component, which was less affected by the tax rebate cheques, rose 0.3% in July following gains of 0.2% in June and 0.3% in May. The overall increase largely reflected gain for non-durables (+0.3%) and for services (+0.5%). This offset a 1.5% decline in durables, reflecting weakening auto sales in the month. However, all of the upward strength reflected higher prices as the volume of overall consumer spending fell 0.4% in July and compares to a drop of 0.1% in June and a 0.3% gain in May. The continued strength in energy and food prices was evident in the 0.6% rise in the overall PCE price index in the month, which sent the year-over-year rate up to 4.5% from 4% in June. On a core basis, prices were up a more moderate 0.3%, which sent the annual rate up to 2.4% from 2.3% in June and 2.2% in May. The decline in real consumer spending in July suggests that support from fiscal policy is starting to wane and that negative factors such as declining employment and falling net worth are starting to have a more dominant impact. This is clearly a worrying development from the Fed's point of view and will emphasize the transitory nature of the strength evident in yesterday's stronger-than-expected second-quarter GDP numbers indicating annualized growth of 3.3%. To temper the weakening in growth going forward, the Fed is expected to keep policy relatively accommodative despite indications that trend inflation is creeping higher as evidenced in today's number for core PCE. Our forecast assumes that Fed funds will be maintained at its current stimulative 2% through the first half of next year. RBC Financial Group The statements and statistics contained herein have been prepared by the Economics Department of RBC Financial Group based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities. | |
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Morning Market Recap: Markets Seesaw on Economic Data
Morning Market Recap: Markets Seesaw on Economic Data
29 Agustus 2008 21:06
(CEP News) - Fixed income is selling off and North American equities are down on Friday after a series of economic data reports in Canada and the United States.
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29 Agustus 2008 21:06
(CEP News) - Fixed income is selling off and North American equities are down on Friday after a series of economic data reports in Canada and the United States.
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U.S. Chicago Purchasing Managers' Index Rises to 57.9
By Bob Willis
Aug. 29 (Bloomberg) -- A measure of U.S. business activity showed expansion at the fastest pace in more than a year, as production accelerated the most since October 2004.
The National Association of Purchasing Management-Chicago said today its business index rose to 57.9 this month, the highest level since June 2007, from 50.8 in July. Fifty is the dividing line between growth and contraction. The index averaged 54.4 last year.
Demand from abroad is keeping American assembly lines moving as a weak dollar makes U.S. goods cheaper overseas. That's helping offset weakness in sales at home, as house prices and elevated fuel costs squeeze consumers.
``Sky-high exports clearly appear to be bolstering confidence,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``But with consumer demand falling for a second straight month, and auto sales at decade lows, it remains an open question whether business confidence can stay at these elevated levels.''
Economists surveyed by Bloomberg News had projected the index would fall to 50, according to the median of 62 forecasts. Estimates ranged from 48 to 52.5.
Earlier today, a Commerce Department report showed spending by U.S. consumers slowed in July as the impact of the tax rebates faded and a pickup in inflation eroded Americans' buying power. The 0.2 percent rise in purchases matched economists' forecasts and followed a 0.6 percent increase in June, the department said. Prices rose by the most in 17 years.
Demand Strengthens
The Chicago report's measure of new orders increased to 60.2, the highest level since September, from 53.5 in July. The production gauge rose to 63.4, the highest since June 2007 and biggest jump since October 2004, from 49.2 in July.
Order backlogs gained to 63 from 45.7, while the employment index decreased to 39.2 from 45.9 a month ago.
The group's inventories index fell to 52.2 from 54.9.
The purchasing managers' measure of prices paid for raw materials declined to 80.6 from 90.7 the prior month, when it reached its highest since March 1980.
Rising costs have hurt some companies. Eastman Kodak Co., which has invested heavily to focus on digital cameras and inkjet printers, reported a 14 percent decline in second quarter net income, on rising costs to buy raw materials and develop electronic cameras and printers.
``It's hard to deal rapidly with the rising commodity costs in a declining business,'' said Chief Executive Officer Antonio Perez on a July 21 conference call from Rochester, New York.
Economists monitor the Chicago index for an early reading on the outlook for U.S. manufacturing, which makes up about 12 percent of the economy.
Manufacturing in the U.S. probably contracted in August for a fifth time in eight months, economists project a report Sept. 2 will show. The Institute for Supply Management's factory index probably dropped to 49.5 from 50 in July, according to the survey median.
In the second quarter, the economy expanded at a 3.3 percent annual pace, faster than the prior estimate of 1.9 percent, as exports grew faster, the government said yesterday.
To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
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Aug. 29 (Bloomberg) -- A measure of U.S. business activity showed expansion at the fastest pace in more than a year, as production accelerated the most since October 2004.
The National Association of Purchasing Management-Chicago said today its business index rose to 57.9 this month, the highest level since June 2007, from 50.8 in July. Fifty is the dividing line between growth and contraction. The index averaged 54.4 last year.
Demand from abroad is keeping American assembly lines moving as a weak dollar makes U.S. goods cheaper overseas. That's helping offset weakness in sales at home, as house prices and elevated fuel costs squeeze consumers.
``Sky-high exports clearly appear to be bolstering confidence,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``But with consumer demand falling for a second straight month, and auto sales at decade lows, it remains an open question whether business confidence can stay at these elevated levels.''
Economists surveyed by Bloomberg News had projected the index would fall to 50, according to the median of 62 forecasts. Estimates ranged from 48 to 52.5.
Earlier today, a Commerce Department report showed spending by U.S. consumers slowed in July as the impact of the tax rebates faded and a pickup in inflation eroded Americans' buying power. The 0.2 percent rise in purchases matched economists' forecasts and followed a 0.6 percent increase in June, the department said. Prices rose by the most in 17 years.
Demand Strengthens
The Chicago report's measure of new orders increased to 60.2, the highest level since September, from 53.5 in July. The production gauge rose to 63.4, the highest since June 2007 and biggest jump since October 2004, from 49.2 in July.
Order backlogs gained to 63 from 45.7, while the employment index decreased to 39.2 from 45.9 a month ago.
The group's inventories index fell to 52.2 from 54.9.
The purchasing managers' measure of prices paid for raw materials declined to 80.6 from 90.7 the prior month, when it reached its highest since March 1980.
Rising costs have hurt some companies. Eastman Kodak Co., which has invested heavily to focus on digital cameras and inkjet printers, reported a 14 percent decline in second quarter net income, on rising costs to buy raw materials and develop electronic cameras and printers.
``It's hard to deal rapidly with the rising commodity costs in a declining business,'' said Chief Executive Officer Antonio Perez on a July 21 conference call from Rochester, New York.
Economists monitor the Chicago index for an early reading on the outlook for U.S. manufacturing, which makes up about 12 percent of the economy.
Manufacturing in the U.S. probably contracted in August for a fifth time in eight months, economists project a report Sept. 2 will show. The Institute for Supply Management's factory index probably dropped to 49.5 from 50 in July, according to the survey median.
In the second quarter, the economy expanded at a 3.3 percent annual pace, faster than the prior estimate of 1.9 percent, as exports grew faster, the government said yesterday.
To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
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European Economic Confidence Drops, Inflation Eases
By Fergal O'Brien
Aug. 29 (Bloomberg) -- Europeans' confidence fell more than forecast this month as the economy teetered on the brink of a recession.
An index of executive and consumer sentiment in the economic outlook dropped to 88.8 from 89.5 in July, the European Commission in Brussels said today. That is below the 89.3 median estimate of 26 economists surveyed by Bloomberg News. Inflation unexpectedly eased in August and a measure of consumer-price expectations declined.
The reports signal the slump in economic growth is extending through the third quarter and a 20 percent drop in oil prices from a record $147.27 a barrel last month is easing inflation pressures. Consumer-price increases are still above the European Central Bank's limit, prompting policy makers including Axel Weber to indicate they are in no hurry to cut interest rates even as expansion slows.
``The euro-zone economic situation is deteriorating markedly,'' said Carsten Brzeski, an economist at ING Group in Brussels. ``Therefore, it is somewhat striking that some central bankers still consider interest rates to be accommodative.''
Inflation eased to 3.8 percent from 4 percent, according to a separate report today. Economists had forecast that inflation would remain unchanged at a 16-year high. National data this week showed inflation in Germany, Europe's largest economy, Spain and Belgium eased this month.
Less Chance
European companies and consumers see less chance of prices rising, the commission data indicate. A measure of companies' selling-price expectations fell to 17 in August from 20 in July. Consumers' outlook for prices dropped to 22 from 30, falling below its average reading for the past 18 years.
The euro pared gains after the reports and was up 0.2 percent to $1.4737 against the dollar at 12:40 p.m. in London, having been as high as $1.4767 earlier. The yield on the German 1-year bund fell 4 basis points to 4.13 percent today. It's down 22 basis points since the start of the month.
The ECB, which aims to keep inflation just below 2 percent, raised its key interest rate to 4.25 percent on July 3, a seven- year high. While the central bank left the rate on hold this month, ECB Executive Board member Lorenzo Bini Smaghi said in a Bloomberg Television interview broadcast today that inflation is ``too high'' and must be brought below the bank's ceiling.
The ECB's Weber this week said the central bank may need to raise borrowing costs once the economic outlook ``brightens'' toward the end of the year.
`Too High'
``Inflation has started to slow, but remains too high for the ECB to soften its rhetoric,'' said Marco Valli, chief Italian economist at Unicredit MIB in Milan. He said the ECB may begin cutting rates from the middle of 2009.
The 15-nation euro-area economy shrank in the second quarter while the region's manufacturing and service industries contracted in August. L'Oreal SA, the world's largest cosmetics maker, today reported the slowest profit growth in three years. Bertelsmann AG, Europe's largest media company, yesterday cut its 2008 profit forecast after advertisers slashed marketing budgets.
Confidence among euro-area manufacturers fell more than economists forecast to minus 10 this month from minus 8 in July, while sentiment among retailers also declined, according to today's report from the commission. Consumer confidence rose 1 point from July's minus 20, staying close to a 5 1/2-year low. Spanish retail sales fell for an eighth month in July, while in the U.K., consumer confidence stayed near a record low in August, GfK NOP said today.
In the euro area, unemployment remained at 7.3 percent in July, another report showed.
Most investors have pared bets on the ECB raising rates again as the economic outlook worsens, Eonia forward contracts show. The May contract yielded 4.15 percent today, down from 4.44 percent a month ago.
To contact the reporter on this story: Fergal O'Brien in Dublin at fobrien@bloomberg.net.
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Aug. 29 (Bloomberg) -- Europeans' confidence fell more than forecast this month as the economy teetered on the brink of a recession.
An index of executive and consumer sentiment in the economic outlook dropped to 88.8 from 89.5 in July, the European Commission in Brussels said today. That is below the 89.3 median estimate of 26 economists surveyed by Bloomberg News. Inflation unexpectedly eased in August and a measure of consumer-price expectations declined.
The reports signal the slump in economic growth is extending through the third quarter and a 20 percent drop in oil prices from a record $147.27 a barrel last month is easing inflation pressures. Consumer-price increases are still above the European Central Bank's limit, prompting policy makers including Axel Weber to indicate they are in no hurry to cut interest rates even as expansion slows.
``The euro-zone economic situation is deteriorating markedly,'' said Carsten Brzeski, an economist at ING Group in Brussels. ``Therefore, it is somewhat striking that some central bankers still consider interest rates to be accommodative.''
Inflation eased to 3.8 percent from 4 percent, according to a separate report today. Economists had forecast that inflation would remain unchanged at a 16-year high. National data this week showed inflation in Germany, Europe's largest economy, Spain and Belgium eased this month.
Less Chance
European companies and consumers see less chance of prices rising, the commission data indicate. A measure of companies' selling-price expectations fell to 17 in August from 20 in July. Consumers' outlook for prices dropped to 22 from 30, falling below its average reading for the past 18 years.
The euro pared gains after the reports and was up 0.2 percent to $1.4737 against the dollar at 12:40 p.m. in London, having been as high as $1.4767 earlier. The yield on the German 1-year bund fell 4 basis points to 4.13 percent today. It's down 22 basis points since the start of the month.
The ECB, which aims to keep inflation just below 2 percent, raised its key interest rate to 4.25 percent on July 3, a seven- year high. While the central bank left the rate on hold this month, ECB Executive Board member Lorenzo Bini Smaghi said in a Bloomberg Television interview broadcast today that inflation is ``too high'' and must be brought below the bank's ceiling.
The ECB's Weber this week said the central bank may need to raise borrowing costs once the economic outlook ``brightens'' toward the end of the year.
`Too High'
``Inflation has started to slow, but remains too high for the ECB to soften its rhetoric,'' said Marco Valli, chief Italian economist at Unicredit MIB in Milan. He said the ECB may begin cutting rates from the middle of 2009.
The 15-nation euro-area economy shrank in the second quarter while the region's manufacturing and service industries contracted in August. L'Oreal SA, the world's largest cosmetics maker, today reported the slowest profit growth in three years. Bertelsmann AG, Europe's largest media company, yesterday cut its 2008 profit forecast after advertisers slashed marketing budgets.
Confidence among euro-area manufacturers fell more than economists forecast to minus 10 this month from minus 8 in July, while sentiment among retailers also declined, according to today's report from the commission. Consumer confidence rose 1 point from July's minus 20, staying close to a 5 1/2-year low. Spanish retail sales fell for an eighth month in July, while in the U.K., consumer confidence stayed near a record low in August, GfK NOP said today.
In the euro area, unemployment remained at 7.3 percent in July, another report showed.
Most investors have pared bets on the ECB raising rates again as the economic outlook worsens, Eonia forward contracts show. The May contract yielded 4.15 percent today, down from 4.44 percent a month ago.
To contact the reporter on this story: Fergal O'Brien in Dublin at fobrien@bloomberg.net.
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Japan Plans to Spend 2 Trillion Yen on Stimulus Plan
By Keiko Ujikane and Toru Fujioka
Aug. 29 (Bloomberg) -- Japanese Prime Minister Yasuo Fukuda, facing elections within a year, plans to spend about 2 trillion yen ($18 billion) to revive the world's second-largest economy.
Included will be 400 billion yen earmarked for a small and midsize company credit-guarantee program that would back about 9 trillion yen of loans, bringing the size of the package to 11.7 trillion yen, the government said in a statement in Tokyo today.
``Most of this is just padding from lending-related measures,'' said Richard Jerram, chief Japan economist at Macquarie Securities Ltd. in Tokyo. ``It looks as though the genuine spending-related components will be 1 trillion to 2 trillion yen spread over a year, which is insignificant.''
Fukuda's popularity has fallen by half since he became leader of the ruling Liberal Democratic Party last September, amid disputes with the opposition-controlled Upper House and after he re-imposed a tax on gasoline in May.
Economic and Fiscal Policy Minister Kaoru Yosano said the government won't issue new bonds to pay for the 2 trillion yen of spending, which also includes providing medical benefits for low- income elderly people and improving earthquake resistance of schools.
``The program earmarks 2 trillion yen in real spending, but probably barely half of it will contribute to boost GDP,'' said Kyohei Morita, chief economist at Barclays Capital in Tokyo. ``The government needs to provide steps to encourage spending by companies and households, but no such steps are in the package.''
Plan's Focus
``The emphasis of this plan is on helping out small and medium-sized companies, agriculture, the forestry and fishing industries and other enterprises affected by rising oil prices,'' Fukuda told reporters in Tokyo today.
Japan already has 778 trillion yen of outstanding debt, which at 147 percent of gross domestic product is the largest among industrialized nations. Yosano said the government is ``still on track'' to meet its goal of balancing the budget by 2011 to contain the debt.
Yosano said the government was also considering tax cuts for low-income earners, without specifying their scale or how they would be funded.
Debate over the package exposed divisions within the ruling coalition.
``The LDP had to compromise for a tax cut because they are afraid of losing New Komeito party support before an election within a year,'' said Takehiro Sato, chief Japan economist at Morgan Stanley in Tokyo. ``These measures will probably push up the gross domestic product only by about 0.2 percent and that isn't much for the economy in a recession.''
Party Divisions
LDP Secretary General Taro Aso said the government should consider postponing its budget goal because the economy may be in a recession. The New Komeito Party, the junior coalition partner, advocated a bigger spending program.
In contrast, Yosano and Finance Minister Bunmei Ibuki, both of whom were appointed in a Cabinet reshuffle this month, stressed the need to maintain fiscal discipline.
The economy shrank an annualized 2.4 percent last quarter, the most since 2001, and the fastest inflation in a decade is eroding the spending power of consumers amid sluggish wage growth.
Last month Japan's 250,000 commercial fishermen staged the biggest strike of its kind demanding the government ease the cost of running their boats.
``Fukuda just wants to demonstrate to the public that he's trying to do something about the deteriorating economy,'' said Jiro Yamaguchi, political science professor at Hokkaido University in northern Japan. ``The countdown for a general election has started.''
To contact the reporters on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net
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Aug. 29 (Bloomberg) -- Japanese Prime Minister Yasuo Fukuda, facing elections within a year, plans to spend about 2 trillion yen ($18 billion) to revive the world's second-largest economy.
Included will be 400 billion yen earmarked for a small and midsize company credit-guarantee program that would back about 9 trillion yen of loans, bringing the size of the package to 11.7 trillion yen, the government said in a statement in Tokyo today.
``Most of this is just padding from lending-related measures,'' said Richard Jerram, chief Japan economist at Macquarie Securities Ltd. in Tokyo. ``It looks as though the genuine spending-related components will be 1 trillion to 2 trillion yen spread over a year, which is insignificant.''
Fukuda's popularity has fallen by half since he became leader of the ruling Liberal Democratic Party last September, amid disputes with the opposition-controlled Upper House and after he re-imposed a tax on gasoline in May.
Economic and Fiscal Policy Minister Kaoru Yosano said the government won't issue new bonds to pay for the 2 trillion yen of spending, which also includes providing medical benefits for low- income elderly people and improving earthquake resistance of schools.
``The program earmarks 2 trillion yen in real spending, but probably barely half of it will contribute to boost GDP,'' said Kyohei Morita, chief economist at Barclays Capital in Tokyo. ``The government needs to provide steps to encourage spending by companies and households, but no such steps are in the package.''
Plan's Focus
``The emphasis of this plan is on helping out small and medium-sized companies, agriculture, the forestry and fishing industries and other enterprises affected by rising oil prices,'' Fukuda told reporters in Tokyo today.
Japan already has 778 trillion yen of outstanding debt, which at 147 percent of gross domestic product is the largest among industrialized nations. Yosano said the government is ``still on track'' to meet its goal of balancing the budget by 2011 to contain the debt.
Yosano said the government was also considering tax cuts for low-income earners, without specifying their scale or how they would be funded.
Debate over the package exposed divisions within the ruling coalition.
``The LDP had to compromise for a tax cut because they are afraid of losing New Komeito party support before an election within a year,'' said Takehiro Sato, chief Japan economist at Morgan Stanley in Tokyo. ``These measures will probably push up the gross domestic product only by about 0.2 percent and that isn't much for the economy in a recession.''
Party Divisions
LDP Secretary General Taro Aso said the government should consider postponing its budget goal because the economy may be in a recession. The New Komeito Party, the junior coalition partner, advocated a bigger spending program.
In contrast, Yosano and Finance Minister Bunmei Ibuki, both of whom were appointed in a Cabinet reshuffle this month, stressed the need to maintain fiscal discipline.
The economy shrank an annualized 2.4 percent last quarter, the most since 2001, and the fastest inflation in a decade is eroding the spending power of consumers amid sluggish wage growth.
Last month Japan's 250,000 commercial fishermen staged the biggest strike of its kind demanding the government ease the cost of running their boats.
``Fukuda just wants to demonstrate to the public that he's trying to do something about the deteriorating economy,'' said Jiro Yamaguchi, political science professor at Hokkaido University in northern Japan. ``The countdown for a general election has started.''
To contact the reporters on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net
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Malaysia Cuts Taxes, Pledges Handouts to Fight Inflation, Anwar
By Stephanie Phang and Soraya Permatasari
Aug. 29 (Bloomberg) -- Malaysian Premier Abdullah Ahmad Badawi cut taxes, promised free electricity for the poor and raised food subsidies in a budget designed to fight inflation and prevent the opposition from seizing power.
Announcing a 5.1 percent increase in next year's spending, Abdullah today pledged bonuses to civil servants, lowered duty on home purchases and doubled the number of households on state welfare. Higher spending in 2008 will reverse five years of shrinking budget deficits and create Malaysia's biggest overspend since 2003.
Abdullah, 68, is facing renewed calls from his own ruling National Front coalition to resign after leading the government in March to its worst election performance in half a century. Today's handouts may soften the impact of the fastest inflation in 26 years and stall a campaign by opposition leader Anwar Ibrahim to oust the government.
``These are populist measures,'' said Singapore-based Kelvin Miranda, an investment strategist at Blufire Asset Management Sdn., which manages $110 million in assets. ``He's trying to buy time.''
The government will reduce the top personal tax rate to 27 percent in 2009 from 28 percent, Abdullah said in a speech to parliament. About 1.1 million lower-income households will be eligible for free electricity, while the premier allocated an extra 3.6 billion ringgit for food subsidies this year.
Suffering Poor
The handouts are ``not commensurate with the vast increase in inflation and high costs,'' Anwar said after Abdullah's speech. ``What is given does not actually alleviate the problems and sufferings of the poor.''
The government's 2008 budget shortfall will reach 34.5 billion ringgit, or 4.8 percent of gross domestic product, the Ministry of Finance said today. The deficit last grew in 2002.
Abdullah increased by 20 percent the tax on cigarettes sold by companies including British American Tobacco (Malaysia) Bhd. to help offset the widening gap between spending and revenue.
Voter anger over rising prices contributed to opposition gains in the March vote that deprived Abdullah's coalition of its two-thirds majority in parliament. Malaysia's inflation accelerated to 8.5 percent last month after the government raised fuel prices to lower subsidies as crude surged.
Malaysian stocks jumped the most in more than five months on speculation that the first cut to the personal income tax rate in seven years will spur consumer spending. Abdullah proposed a range of tax exemptions for employers, from medical costs to maternity expenses.
Economic Growth
Abdullah needs Malaysians to spend more as exports slow to the U.S., Malaysia's largest trading partner. The Asian nation's economy expanded at the slowest pace in a year in the second quarter as manufacturing eased amid a global slowdown and faster inflation hurt consumer spending.
Southeast Asia's third-largest economy grew 6.3 percent in the three months ended June from a year earlier, down from a 7.1 percent gain in the first quarter, the central bank said today. Economic growth is forecast to ease to 5.7 percent this year and 5.4 percent in 2009, the weakest pace since 2005.
Anwar, who won a parliamentary by-election this week, has said he plans to lure enough lawmakers from the ruling coalition to form a new government next month. The former deputy premier has promised to reduce fuel prices should he seize power.
``The government is responsive to the concerns of the people and has taken measures to lighten the burden of all Malaysians,'' Abdullah said in his speech. ``Efforts by certain parties to destabilize the country by attempting to seize power through illegitimate means, and without the mandate of the people, must be rejected.''
Gasoline Prices
Governments across Asia are spending more on subsidies to help the poor cope with higher oil and food costs. Inflation that the Asian Development Bank estimates may reach the highest in a decade in 2008 has stoked voter unrest in the region.
In response to public discontent over costlier fuel, Abdullah last week cut gasoline prices by 5.6 percent and lowered diesel costs by 3.1 percent, saying he wants to ease the burden of consumers and reduce inflationary pressure. The government will also spend 5 billion ringgit on cash rebates to car owners this year, is subsidizing gasoline for taxis and has allocated 2.5 billion ringgit for food security.
Malaysia's government subsidies on bread, cooking oil, fuel and programs to enhance food security will jump to 34.1 billion ringgit this year and total 33.8 billion ringgit in 2009, according to the finance ministry. Still, the ministry expects the budget deficit to narrow to 3.6 percent of GDP next year.
Inflation in Malaysia will remain high until early 2009 before ``moderating towards mid-year,'' according to today's report by the Finance Ministry. The government will introduce new measures to boost its social assistance program, it said.
To contact the reporters on this story: Stephanie Phang in Kuala Lumpur at sphang@bloomberg.net; Soraya Permatasari in Kuala Lumpur soraya@bloomberg.net
Read more...
Aug. 29 (Bloomberg) -- Malaysian Premier Abdullah Ahmad Badawi cut taxes, promised free electricity for the poor and raised food subsidies in a budget designed to fight inflation and prevent the opposition from seizing power.
Announcing a 5.1 percent increase in next year's spending, Abdullah today pledged bonuses to civil servants, lowered duty on home purchases and doubled the number of households on state welfare. Higher spending in 2008 will reverse five years of shrinking budget deficits and create Malaysia's biggest overspend since 2003.
Abdullah, 68, is facing renewed calls from his own ruling National Front coalition to resign after leading the government in March to its worst election performance in half a century. Today's handouts may soften the impact of the fastest inflation in 26 years and stall a campaign by opposition leader Anwar Ibrahim to oust the government.
``These are populist measures,'' said Singapore-based Kelvin Miranda, an investment strategist at Blufire Asset Management Sdn., which manages $110 million in assets. ``He's trying to buy time.''
The government will reduce the top personal tax rate to 27 percent in 2009 from 28 percent, Abdullah said in a speech to parliament. About 1.1 million lower-income households will be eligible for free electricity, while the premier allocated an extra 3.6 billion ringgit for food subsidies this year.
Suffering Poor
The handouts are ``not commensurate with the vast increase in inflation and high costs,'' Anwar said after Abdullah's speech. ``What is given does not actually alleviate the problems and sufferings of the poor.''
The government's 2008 budget shortfall will reach 34.5 billion ringgit, or 4.8 percent of gross domestic product, the Ministry of Finance said today. The deficit last grew in 2002.
Abdullah increased by 20 percent the tax on cigarettes sold by companies including British American Tobacco (Malaysia) Bhd. to help offset the widening gap between spending and revenue.
Voter anger over rising prices contributed to opposition gains in the March vote that deprived Abdullah's coalition of its two-thirds majority in parliament. Malaysia's inflation accelerated to 8.5 percent last month after the government raised fuel prices to lower subsidies as crude surged.
Malaysian stocks jumped the most in more than five months on speculation that the first cut to the personal income tax rate in seven years will spur consumer spending. Abdullah proposed a range of tax exemptions for employers, from medical costs to maternity expenses.
Economic Growth
Abdullah needs Malaysians to spend more as exports slow to the U.S., Malaysia's largest trading partner. The Asian nation's economy expanded at the slowest pace in a year in the second quarter as manufacturing eased amid a global slowdown and faster inflation hurt consumer spending.
Southeast Asia's third-largest economy grew 6.3 percent in the three months ended June from a year earlier, down from a 7.1 percent gain in the first quarter, the central bank said today. Economic growth is forecast to ease to 5.7 percent this year and 5.4 percent in 2009, the weakest pace since 2005.
Anwar, who won a parliamentary by-election this week, has said he plans to lure enough lawmakers from the ruling coalition to form a new government next month. The former deputy premier has promised to reduce fuel prices should he seize power.
``The government is responsive to the concerns of the people and has taken measures to lighten the burden of all Malaysians,'' Abdullah said in his speech. ``Efforts by certain parties to destabilize the country by attempting to seize power through illegitimate means, and without the mandate of the people, must be rejected.''
Gasoline Prices
Governments across Asia are spending more on subsidies to help the poor cope with higher oil and food costs. Inflation that the Asian Development Bank estimates may reach the highest in a decade in 2008 has stoked voter unrest in the region.
In response to public discontent over costlier fuel, Abdullah last week cut gasoline prices by 5.6 percent and lowered diesel costs by 3.1 percent, saying he wants to ease the burden of consumers and reduce inflationary pressure. The government will also spend 5 billion ringgit on cash rebates to car owners this year, is subsidizing gasoline for taxis and has allocated 2.5 billion ringgit for food security.
Malaysia's government subsidies on bread, cooking oil, fuel and programs to enhance food security will jump to 34.1 billion ringgit this year and total 33.8 billion ringgit in 2009, according to the finance ministry. Still, the ministry expects the budget deficit to narrow to 3.6 percent of GDP next year.
Inflation in Malaysia will remain high until early 2009 before ``moderating towards mid-year,'' according to today's report by the Finance Ministry. The government will introduce new measures to boost its social assistance program, it said.
To contact the reporters on this story: Stephanie Phang in Kuala Lumpur at sphang@bloomberg.net; Soraya Permatasari in Kuala Lumpur soraya@bloomberg.net
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Swiss Leading Indicators Decline More Than Expected
By Joshua Gallu
Aug. 29 (Bloomberg) -- Switzerland's leading economic indicators fell more than expected to the lowest level in five years this month, evidence that growth may grind to a halt.
The monthly aggregate of indicators that aims to predict the economy's direction about six months ahead slid to 0.68 from a revised 0.85 in July, the KOF research institute in Zurich said today in an e-mailed release. That's the lowest since August 2003. Economists expected a drop to 0.83 from a previously reported 0.90, the median of 13 estimates in a Bloomberg survey showed.
Switzerland's expansion is losing momentum as stalling growth elsewhere in Europe threatens exports of machines and chemicals, and finance market turmoil sparked by the U.S. housing crisis erodes profit at banks including UBS AG and Credit Suisse Group. With inflation at the fastest pace in 15 years, the central bank has limited room to ease lending rates.
``This is quite a sharp slowdown,'' said Jan Amrit Poser, chief economist at Bank Sarasin in Zurich. ``The risk of a recession is there, but it's still unlikely. Growth may even have been negative in the second quarter, and we see it averaging only 0.1 percent through the end of the year.''
The Swiss National Bank left its benchmark rate on hold at a six-year high on June 19 as central banks from Asia to North America shifted their focus from the global credit squeeze to stamping out inflation. The SNB holds its next monetary policy meeting on Sept. 18.
Franc Drops
The Swiss franc fell to as low as 1.6165 against the euro after the release from 1.6129 earlier. Against the dollar, the franc fell to $1.0978 from $1.0924.
SNB President Jean-Pierre Roth said on Aug. 19 the economy is slowing even more than policy makers had expected and added this week that growth will slow more markedly in the second half of the year than it did in the first.
The economy of Germany, Switzerland's biggest trading partner, contracted 0.5 percent in the second quarter and the economy of the euro area shrank for the first time since monetary union a decade ago.
Like other European countries, Switzerland is struggling to stave off the impact of waning growth. German business confidence plunged to a three-year low this month and European services and manufacturing contracted for a third straight month, increasing the risk of a recession.
Export Question
``Net trade continues to be surprisingly resilient, but given that two thirds of exports go to Europe, it's questionable whether they can continue to surprise to the upside,'' said Eoin O'Callaghan, an economist at BNP Paribas in London.
Export growth will probably slow to 3 percent this year after reaching 10 percent in the past two years, according to the government.
With sales weakening and the market turmoil hurting banks' profits, two engines of Swiss growth are stalling. At the same time, inflation is outpacing wage gains and may hurt household spending. Swiss consumer confidence fell to the lowest in four years this month.
Inflation may have reached its peak this summer, Roth said in an interview with the newspaper Finanz und Wirtschaft on Aug. 26. The risk of second-round effects from inflation are limited and it would be ``absurd'' to use monetary policy to counter rising prices for oil and food, he said.
Full-year growth will probably slow to between 1.5 percent and 2 percent in 2008 after reaching 3.3 percent in 2007, the central bank estimates.
The price of oil has dropped 18 percent after climbing to a record $147.27 a barrel on July 11.
To contact the reporter on this story: Joshua Gallu in Zurich at jgallu@bloomberg.net
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Aug. 29 (Bloomberg) -- Switzerland's leading economic indicators fell more than expected to the lowest level in five years this month, evidence that growth may grind to a halt.
The monthly aggregate of indicators that aims to predict the economy's direction about six months ahead slid to 0.68 from a revised 0.85 in July, the KOF research institute in Zurich said today in an e-mailed release. That's the lowest since August 2003. Economists expected a drop to 0.83 from a previously reported 0.90, the median of 13 estimates in a Bloomberg survey showed.
Switzerland's expansion is losing momentum as stalling growth elsewhere in Europe threatens exports of machines and chemicals, and finance market turmoil sparked by the U.S. housing crisis erodes profit at banks including UBS AG and Credit Suisse Group. With inflation at the fastest pace in 15 years, the central bank has limited room to ease lending rates.
``This is quite a sharp slowdown,'' said Jan Amrit Poser, chief economist at Bank Sarasin in Zurich. ``The risk of a recession is there, but it's still unlikely. Growth may even have been negative in the second quarter, and we see it averaging only 0.1 percent through the end of the year.''
The Swiss National Bank left its benchmark rate on hold at a six-year high on June 19 as central banks from Asia to North America shifted their focus from the global credit squeeze to stamping out inflation. The SNB holds its next monetary policy meeting on Sept. 18.
Franc Drops
The Swiss franc fell to as low as 1.6165 against the euro after the release from 1.6129 earlier. Against the dollar, the franc fell to $1.0978 from $1.0924.
SNB President Jean-Pierre Roth said on Aug. 19 the economy is slowing even more than policy makers had expected and added this week that growth will slow more markedly in the second half of the year than it did in the first.
The economy of Germany, Switzerland's biggest trading partner, contracted 0.5 percent in the second quarter and the economy of the euro area shrank for the first time since monetary union a decade ago.
Like other European countries, Switzerland is struggling to stave off the impact of waning growth. German business confidence plunged to a three-year low this month and European services and manufacturing contracted for a third straight month, increasing the risk of a recession.
Export Question
``Net trade continues to be surprisingly resilient, but given that two thirds of exports go to Europe, it's questionable whether they can continue to surprise to the upside,'' said Eoin O'Callaghan, an economist at BNP Paribas in London.
Export growth will probably slow to 3 percent this year after reaching 10 percent in the past two years, according to the government.
With sales weakening and the market turmoil hurting banks' profits, two engines of Swiss growth are stalling. At the same time, inflation is outpacing wage gains and may hurt household spending. Swiss consumer confidence fell to the lowest in four years this month.
Inflation may have reached its peak this summer, Roth said in an interview with the newspaper Finanz und Wirtschaft on Aug. 26. The risk of second-round effects from inflation are limited and it would be ``absurd'' to use monetary policy to counter rising prices for oil and food, he said.
Full-year growth will probably slow to between 1.5 percent and 2 percent in 2008 after reaching 3.3 percent in 2007, the central bank estimates.
The price of oil has dropped 18 percent after climbing to a record $147.27 a barrel on July 11.
To contact the reporter on this story: Joshua Gallu in Zurich at jgallu@bloomberg.net
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ECB's Bini Smaghi Says Inflation Must Be Lowered
By Tommaso Ebhardt and Steve Scherer
Aug. 29 (Bloomberg) -- European Central Bank Executive Board member Lorenzo Bini Smaghi said inflation among the 15 countries sharing the euro is ``too high'' and must be brought below the bank's limit.
``Inflation is still high, too high,'' he said in an interview with Bloomberg Television yesterday in Cortina D'Ampezzo. ``We have a 2 percent target and we must bring it back to 2 percent -- below 2 percent.''
Bini Smaghi is the fourth policy maker this week to signal that the ECB hasn't moderated its resolve to fight inflation even as economic growth falters. Inflation in the euro area is running at twice the ECB's limit, driven by record oil and commodity prices. The Frankfurt-based bank raised its key rate to a seven-year high of 4.25 percent in July to prevent higher consumer prices from pushing up wages, entrenching inflation even further.
The euro rose as high as $1.4758 from $1.4720 after Bini Smaghi's comments were published. The yield on the Euribor interest rate futures contract for December 2009 rose as much as 4 basis points.
Bini Smaghi said the ECB has only one tool for fighting inflation -- interest rates.
Higher Rates?
``But we're not the only players. There are others,'' Bini Smaghi said. ``Everyone must adhere to this objective, which is price stability.''
Fellow Governing Council members Axel Weber and Lucas Papademos said Aug. 27 the bank may need to raise interest rates further should the inflation outlook deteriorate. Executive Board member Juergen Stark told German newspaper Sueddeutsche Zeitung earlier this week that he already sees ``broad-based second-round effects emerging.''
Their comments prompted investors to reduce bets that a cooling economy will force the ECB to lower borrowing costs.
``It doesn't seem to me that we have rates, monetary policy that's too restrictive,'' Bini Smaghi said yesterday during a roundtable discussion in Cortina D'Ampezzo.
The euro-area economy, which contracted 0.2 percent in the second quarter, is at risk of a ``genuine recession'' as a stronger currency hurts exports, house prices fall and inflation erodes purchasing power, Standard & Poors said earlier this week.
Still, ``I don't expect inflation to come down necessarily just with weaker growth,'' ECB council member Weber said in an interview published Aug. 27. ``If the economic outlook brightens somewhat again toward the end of the year and next year, which I still expect, we'll have to see if action is necessary.''
To contact the reporter on this story: Steve Scherer in Rome at sscherer@bloomberg.net
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U.S. July Personal Income and Spending: Summary (Table)
By Kristy Scheuble
Aug. 29 (Bloomberg) -- Following is a summary of the U.S. personal income and spending report for July released by the Commerce Department.
===============================================================================
July June May April March Feb. Jan. July
2008 2008 2008 2008 2008 2008 2008 YOY
===============================================================================
-----------------Based on Current Dollars-----------------
Personal income -0.7% 0.1% 1.8% 0.2% 0.4% 0.2% 0.1% 4.2%
Compensation 0.3% 0.2% 0.3% 0.1% 0.4% 0.3% 0.1% 4.0%
Wage & salary 0.3% 0.2% 0.3% 0.1% 0.5% 0.3% 0.0% 4.1%
Disposable incom -1.1% -1.9% 5.7% 0.3% 0.4% 0.2% 0.0% 5.8%
Personal spending 0.2% 0.6% 0.8% 0.4% 0.6% 0.0% 0.4% 5.3%
3-mo. annual % 7.1% 6.0% 4.9% 3.4% 4.5% 5.1% 6.4% n/a
Savings rate 1.2% 2.5% 4.9% 0.2% 0.2% 0.3% 0.1% 0.3%
--------------Based on Chained (2000) Dollars-------------
Personal spending -0.4% -0.1% 0.3% 0.1% 0.3% -0.2% 0.1% 0.7%
3-mo. annual % 1.2% 1.8% 1.6% 0.5% 0.9% 0.9% 1.4% n/a
===============================================================================
July June May April March Feb. Jan. July
2008 2008 2008 2008 2008 2008 2008 YOY
===============================================================================
--------------Based on Chained (2000) Dollars-------------
Disposable income -1.7% -2.6% 5.2% 0.1% 0.1% 0.0% -0.3% 1.2%
-----------------Price Indexes (2000=100)-----------------
Personal spending 0.6% 0.7% 0.4% 0.2% 0.3% 0.1% 0.3% 4.5%
3-mo. annual % 5.8% 4.2% 3.3% 2.9% 3.6% 4.2% 4.9% n/a
Ex-food, energy 0.3% 0.3% 0.2% 0.2% 0.2% 0.1% 0.2% 2.4%
3-mo. annual % 2.4% 2.1% 2.1% 2.2% 2.3% 2.2% 2.3% n/a
-----------------------YOY%-----------------------
PCE Deflator 4.5% 4.0% 3.5% 3.4% 3.4% 3.5% 3.6% n/a
(3 decimals) 4.527% 4.048% 3.511% 3.404% 3.435% 3.493% 3.610% n/a
Ex food & energy 2.4% 2.3% 2.2% 2.2% 2.2% 2.1% 2.2% n/a
(3 decimals) 2.426% 2.296% 2.224% 2.191% 2.226% 2.131% 2.177% n/a
Market Based PCE 4.7% 4.1% 3.5% 3.3% 3.3% 3.4% 3.5% n/a
Market Core PCE 2.1% 2.0% 1.9% 1.8% 1.7% 1.7% 1.8% n/a
-----------------------MOM%-----------------------
PCE Deflator 0.6% 0.7% 0.4% 0.2% 0.3% 0.1% 0.3% n/a
(3 decimals) 0.634% 0.745% 0.442% 0.239% 0.310% 0.133% 0.313% n/a
===============================================================================
July June May April March Feb. Jan. July
2008 2008 2008 2008 2008 2008 2008 YOY
===============================================================================
PCE Deflator -----------------------MOM%-----------------------
Ex food & energy 0.3% 0.3% 0.2% 0.2% 0.2% 0.1% 0.2% n/a
(3 decimals) 0.273% 0.254% 0.161% 0.150% 0.186% 0.143% 0.232% n/a
Market Based PCE 0.7% 0.8% 0.5% 0.3% 0.3% 0.1% 0.3% n/a
Market Core PCE 0.2% 0.3% 0.1% 0.2% 0.1% 0.1% 0.2% n/a
===============================================================================
NOTE: All figures are seasonally adjusted and month-over-month
unless otherwise stated. Three month annualized calculations are
the latest three months average compared to the previous three
months average.
SOURCE: U.S. Commerce Department. http://www.bea.gov
To contact the reporter on this story: Kristy Scheuble in Washington at kmckeaney@bloomberg.net
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Persian Gulf Tanker Rates May Advance as Owners Withhold Ships
By Alaric Nightingale
Aug. 29 (Bloomberg) -- The cost of shipping Middle East crude to Asia may advance from a three-week high as owners delay leasing their vessels and demand strengthens.
An increase in vessel bookings since last week has reduced the supply of carriers that can load cargoes next month, Charlie Fowle, a director at London-based shipbroker Galbraith's Ltd., said in an e-mailed note today.
``Owners now have the confidence to take it up and hold off offering,'' Fowle said. Recent gains are taking the market ``to what it should be'' after the benchmark rate for Saudi Arabian cargoes to Japan plunged as much as 73 percent between July 1 and Aug. 21, he said.
Sinochem Corp., China's largest chemicals trader, hired the tanker Darab for 90 Worldscale points, according to a report today from Athens-based Optima Shipbrokers. That's little changed from the Baltic Exchange's benchmark rate of 90.31 points for cargoes to Asia.
Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
A rate of 90.31 Worldscale points equates to daily rental income after fuel and port fees are paid out of $27,705 a day for the average very large crude carrier, or VLCC, according to the London-based Baltic Exchange.
The index fell to 65.94 points on Aug. 21 from 244.53 on July 1. Daily rental income from the ships dropped to about $5,290 on Aug. 22, according to the exchange.
Frontline Ltd., the world's biggest VLCC operator, said Aug. 21 it needs $31,400 a day, including finance costs, to break even on each of its supertankers. Excluding fuel and port costs, daily expenses such as crew, insurance and routine repairs total $11,500 per ship, Frontline said.
To contact the reporter on this story: Alaric Nightingale in London at Anightingal1@bloomberg.net
Read more...
Aug. 29 (Bloomberg) -- The cost of shipping Middle East crude to Asia may advance from a three-week high as owners delay leasing their vessels and demand strengthens.
An increase in vessel bookings since last week has reduced the supply of carriers that can load cargoes next month, Charlie Fowle, a director at London-based shipbroker Galbraith's Ltd., said in an e-mailed note today.
``Owners now have the confidence to take it up and hold off offering,'' Fowle said. Recent gains are taking the market ``to what it should be'' after the benchmark rate for Saudi Arabian cargoes to Japan plunged as much as 73 percent between July 1 and Aug. 21, he said.
Sinochem Corp., China's largest chemicals trader, hired the tanker Darab for 90 Worldscale points, according to a report today from Athens-based Optima Shipbrokers. That's little changed from the Baltic Exchange's benchmark rate of 90.31 points for cargoes to Asia.
Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
A rate of 90.31 Worldscale points equates to daily rental income after fuel and port fees are paid out of $27,705 a day for the average very large crude carrier, or VLCC, according to the London-based Baltic Exchange.
The index fell to 65.94 points on Aug. 21 from 244.53 on July 1. Daily rental income from the ships dropped to about $5,290 on Aug. 22, according to the exchange.
Frontline Ltd., the world's biggest VLCC operator, said Aug. 21 it needs $31,400 a day, including finance costs, to break even on each of its supertankers. Excluding fuel and port costs, daily expenses such as crew, insurance and routine repairs total $11,500 per ship, Frontline said.
To contact the reporter on this story: Alaric Nightingale in London at Anightingal1@bloomberg.net
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Oil May Drop to $90 Before Rebounding Late in Year, Nordea Says
By Jakob Lindstroem
Aug. 29 (Bloomberg) -- Oil prices may fall to $90 a barrel in the fourth quarter before rallying to reach $105 next year, Nordea Bank AB executives said at a presentation in Stockholm.
``Higher fuel prices and the weaker U.S. economy will hamper demand for oil and drive prices lower before remaining high in the coming two years,'' said Thina Margrethe Saltvedt, Oslo-based global head of commodities research at Nordea.
``Long-term, oil is fundamentally determined by supply and demand, and prices will remain high as we expect Saudi Arabia will not be able to increase production as much as they have indicated,'' Saltvedt said today at the bank's headquarters.
Crude headed for its biggest weekly gain in almost two months as producers evacuated rigs before the arrival of Gustav, forecast to be the largest hurricane in the Gulf of Mexico since Katrina. Oil traded at $117.22 a barrel at 8:29 a.m. in New York. Crude futures reached a record $147.27 in July.
To contact the reporter on this story: Jakob Lindstroem in Stockholm at jlindstroem@bloomberg.net.
Read more...
Aug. 29 (Bloomberg) -- Oil prices may fall to $90 a barrel in the fourth quarter before rallying to reach $105 next year, Nordea Bank AB executives said at a presentation in Stockholm.
``Higher fuel prices and the weaker U.S. economy will hamper demand for oil and drive prices lower before remaining high in the coming two years,'' said Thina Margrethe Saltvedt, Oslo-based global head of commodities research at Nordea.
``Long-term, oil is fundamentally determined by supply and demand, and prices will remain high as we expect Saudi Arabia will not be able to increase production as much as they have indicated,'' Saltvedt said today at the bank's headquarters.
Crude headed for its biggest weekly gain in almost two months as producers evacuated rigs before the arrival of Gustav, forecast to be the largest hurricane in the Gulf of Mexico since Katrina. Oil traded at $117.22 a barrel at 8:29 a.m. in New York. Crude futures reached a record $147.27 in July.
To contact the reporter on this story: Jakob Lindstroem in Stockholm at jlindstroem@bloomberg.net.
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Transocean Evacuates 400 Workers From Gulf Rigs, More Planned
By Aaron Clark
Aug. 29 (Bloomberg) -- Transocean Inc., the largest offshore oil driller, evacuated about 400 workers from rigs in the Gulf of Mexico ahead of Tropical Storm Gustav.
The Houston-based company plans to move more staff from three semi-submersible rigs today and tomorrow, according to an e-mail from spokesman Guy Cantwell.
The company will also move its eight semi-submersible drillships ``out of the path of the storm.''
About 1,150 employees were aboard rigs in the Gulf this morning, Cantwell said.
To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net
Read more...
Aug. 29 (Bloomberg) -- Transocean Inc., the largest offshore oil driller, evacuated about 400 workers from rigs in the Gulf of Mexico ahead of Tropical Storm Gustav.
The Houston-based company plans to move more staff from three semi-submersible rigs today and tomorrow, according to an e-mail from spokesman Guy Cantwell.
The company will also move its eight semi-submersible drillships ``out of the path of the storm.''
About 1,150 employees were aboard rigs in the Gulf this morning, Cantwell said.
To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net
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Exxon Mobil Refineries, Chemical Plants Prepare for Gustav
By Jim Polson
Aug. 29 (Bloomberg) -- Exxon Mobil Corp., the world's biggest oil company, said its refineries and chemical works along the Gulf of Mexico began preparing for Tropical Storm Gustav, which is forecast to hit Louisiana as a hurricane in about five days.
Production hasn't been affected at refineries, offshore oil and natural-gas platforms or the chemical plants, Irving, Texas- based Exxon Mobil said in a notice posted on its Web site at 8 p.m. New York time yesterday. No offshore workers have been evacuated, the company said.
Gustav will strike the central Louisiana coast as a hurricane Sept. 2, the U.S. National Weather Service has forecast.
The storm pounded Jamaica today with rain and sustained winds of 65 miles per hour (105 kilometers per hour) and will intensify into a major hurricane with winds of at least 111 miles per hour before entering the Gulf on Aug. 31, the U.S. National Hurricane Center forecast. Gustav killed 50 people in Haiti and the Dominican Republic.
Exxon Mobil said it completed plans for staged evacuation of offshore personnel from its platforms, beginning with those not needed to maintain production.
Chevron Corp., the second-largest U.S. energy company, said yesterday it had begun evacuating workers from some platforms. ConocoPhillips, the third-biggest energy company, said Aug. 27 it had shut its only platform in the Gulf, which is about 150 miles southwest of New Orleans.
BP Plc, Europe's second-largest oil company, said yesterday in a recorded message that it was completing evacuation of non- essential personnel from offshore installations. Production was undiminished, the company said.
To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net.
Read more...
Aug. 29 (Bloomberg) -- Exxon Mobil Corp., the world's biggest oil company, said its refineries and chemical works along the Gulf of Mexico began preparing for Tropical Storm Gustav, which is forecast to hit Louisiana as a hurricane in about five days.
Production hasn't been affected at refineries, offshore oil and natural-gas platforms or the chemical plants, Irving, Texas- based Exxon Mobil said in a notice posted on its Web site at 8 p.m. New York time yesterday. No offshore workers have been evacuated, the company said.
Gustav will strike the central Louisiana coast as a hurricane Sept. 2, the U.S. National Weather Service has forecast.
The storm pounded Jamaica today with rain and sustained winds of 65 miles per hour (105 kilometers per hour) and will intensify into a major hurricane with winds of at least 111 miles per hour before entering the Gulf on Aug. 31, the U.S. National Hurricane Center forecast. Gustav killed 50 people in Haiti and the Dominican Republic.
Exxon Mobil said it completed plans for staged evacuation of offshore personnel from its platforms, beginning with those not needed to maintain production.
Chevron Corp., the second-largest U.S. energy company, said yesterday it had begun evacuating workers from some platforms. ConocoPhillips, the third-biggest energy company, said Aug. 27 it had shut its only platform in the Gulf, which is about 150 miles southwest of New Orleans.
BP Plc, Europe's second-largest oil company, said yesterday in a recorded message that it was completing evacuation of non- essential personnel from offshore installations. Production was undiminished, the company said.
To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net.
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Natural Gas Gains as Tropical Storms Threaten Gulf Production
By Reg Curren
Aug. 29 (Bloomberg) -- Natural gas in New York rose as Tropical Storm Gustav prompted producers to evacuate workers from oil and natural gas platforms in the Gulf of Mexico.
The projected track of the storm takes Gustav over the Gulf coast energy region by Sept. 2. Gulf platforms produce 1.3 million barrels of oil and 7 billion cubic feet of gas a day. The storm and evacuations may reduce the flow of gas from the Gulf, which accounts for about 14 percent of U.S. supplies.
``If there is damage from Gustav, we're clearly going to $10 or $12'' per million British thermal units, said Peter Linder, an analyst and senior adviser at DeltaOne Energy Fund in Calgary. ``At $8, this has a lot of legs to go higher.''
Natural gas for October delivery rose 19.6 cents, or 2.4 percent, to $8.246 per million Btu at 9:42 a.m. on the New York Mercantile Exchange. The price earlier rose 3.4 percent to $8.32.
The exchange is closed Sept. 1 because of the Labor Day holiday in the U.S. Electronic trading will be open.
Gustav pounded Jamaica with rain, flooding streets with water and mud, as Louisiana prepared for the system to strengthen into a hurricane.
Gustav had sustained winds of 65 miles (105 kilometers) per hour as of 8 a.m. Miami time today and was centered near the western tip of Jamaica, 100 miles west-northwest of the capital, Kingston, the Miami-based U.S. National Hurricane Center said on its Web site. It is heading west-northwest at 8 mph.
Remember Katrina
Hurricane Katrina formed over the Bahamas on Aug. 23, 2005, making landfall in southeast Louisiana on Aug. 29. Hurricane Rita, the most intense tropical cyclone ever observed in the Gulf, made landfall Sept. 24, 2005, at Sabine Pass near the border of Texas and Louisiana.
The storms curtailed Gulf gas flow, prompting the fuel to touch $15.78 per million Btu on Dec. 13, 2005, the highest since gas began Nymex trading. Katrina, which reached Category 5, the strongest grade hurricane, closed 95 percent of offshore output in the Gulf.
The hurricane season runs through November with the peak time for storms between now to the end of September.
Royal Dutch Shell Plc shut some offshore operations, removing about 800 workers to shore before Gustav arrives and Anadarko Petroleum Corp. will idle offshore Gulf operations by Aug. 31.
Houston-based Transocean Inc., the largest offshore oil driller, evacuated about 400 workers from rigs in the Gulf. Another 1,500 will be moved before the storm arrives.
To contact the reporters on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
Read more...
Aug. 29 (Bloomberg) -- Natural gas in New York rose as Tropical Storm Gustav prompted producers to evacuate workers from oil and natural gas platforms in the Gulf of Mexico.
The projected track of the storm takes Gustav over the Gulf coast energy region by Sept. 2. Gulf platforms produce 1.3 million barrels of oil and 7 billion cubic feet of gas a day. The storm and evacuations may reduce the flow of gas from the Gulf, which accounts for about 14 percent of U.S. supplies.
``If there is damage from Gustav, we're clearly going to $10 or $12'' per million British thermal units, said Peter Linder, an analyst and senior adviser at DeltaOne Energy Fund in Calgary. ``At $8, this has a lot of legs to go higher.''
Natural gas for October delivery rose 19.6 cents, or 2.4 percent, to $8.246 per million Btu at 9:42 a.m. on the New York Mercantile Exchange. The price earlier rose 3.4 percent to $8.32.
The exchange is closed Sept. 1 because of the Labor Day holiday in the U.S. Electronic trading will be open.
Gustav pounded Jamaica with rain, flooding streets with water and mud, as Louisiana prepared for the system to strengthen into a hurricane.
Gustav had sustained winds of 65 miles (105 kilometers) per hour as of 8 a.m. Miami time today and was centered near the western tip of Jamaica, 100 miles west-northwest of the capital, Kingston, the Miami-based U.S. National Hurricane Center said on its Web site. It is heading west-northwest at 8 mph.
Remember Katrina
Hurricane Katrina formed over the Bahamas on Aug. 23, 2005, making landfall in southeast Louisiana on Aug. 29. Hurricane Rita, the most intense tropical cyclone ever observed in the Gulf, made landfall Sept. 24, 2005, at Sabine Pass near the border of Texas and Louisiana.
The storms curtailed Gulf gas flow, prompting the fuel to touch $15.78 per million Btu on Dec. 13, 2005, the highest since gas began Nymex trading. Katrina, which reached Category 5, the strongest grade hurricane, closed 95 percent of offshore output in the Gulf.
The hurricane season runs through November with the peak time for storms between now to the end of September.
Royal Dutch Shell Plc shut some offshore operations, removing about 800 workers to shore before Gustav arrives and Anadarko Petroleum Corp. will idle offshore Gulf operations by Aug. 31.
Houston-based Transocean Inc., the largest offshore oil driller, evacuated about 400 workers from rigs in the Gulf. Another 1,500 will be moved before the storm arrives.
To contact the reporters on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
Read more...
Solaria Tumbles as Goldman Cuts Share-Price Target
By Gareth Gore
Aug. 29 (Bloomberg) -- Solaria Energia y Medio Ambiente SA dropped to a record low in Madrid trading after Goldman Sachs Group Inc. cut its price estimate on the Spanish maker of solar panels, citing ``weak'' second-quarter earnings.
Solaria retreated as much as 58 cents, or 12 percent, to 4.21 euros, the lowest since the shares started trading in June last year. The stock was at 4.44 euros as of 12:17 p.m. local time, valuing the Puertollano-based company at 449.1 million euros ($662 million).
The results were ``weak'' because of a drop in production of photovoltaic panels to 11.5 megawatts in the quarter from 20 megawatts in the previous three months, London-based analyst Mariano Alarco said today in a note to clients. Goldman cut its price estimate on Solaria to 5.50 euros from 6 euros.
Net income jumped to 27.2 million euros from 8.4 million euros a year earlier, Solaria said yesterday in a regulatory filing. Sales more than tripled to 159.8 million euros from 45.2 million euros.
Today's decline takes Solaria's slump to 79 percent this year. That compares with a 23 percent drop in the IBEX 35 Index.
``Two of Solaria's key suppliers failed to deliver contracted quantities of cells in the quarter, a problem that is likely to persist in the third quarter and affect profitability through 2008,'' Goldman's Alarco said in the note.
Piper Jaffray reduced its recommendation on Solaria to ``neutral'' from ``buy'' and cut its price target to 5 euros from 10 euros, according to a note e-mailed to clients today.
To contact the reporter on this story: Gareth Gore in Madrid ggore1@bloomberg.net
Read more...
Aug. 29 (Bloomberg) -- Solaria Energia y Medio Ambiente SA dropped to a record low in Madrid trading after Goldman Sachs Group Inc. cut its price estimate on the Spanish maker of solar panels, citing ``weak'' second-quarter earnings.
Solaria retreated as much as 58 cents, or 12 percent, to 4.21 euros, the lowest since the shares started trading in June last year. The stock was at 4.44 euros as of 12:17 p.m. local time, valuing the Puertollano-based company at 449.1 million euros ($662 million).
The results were ``weak'' because of a drop in production of photovoltaic panels to 11.5 megawatts in the quarter from 20 megawatts in the previous three months, London-based analyst Mariano Alarco said today in a note to clients. Goldman cut its price estimate on Solaria to 5.50 euros from 6 euros.
Net income jumped to 27.2 million euros from 8.4 million euros a year earlier, Solaria said yesterday in a regulatory filing. Sales more than tripled to 159.8 million euros from 45.2 million euros.
Today's decline takes Solaria's slump to 79 percent this year. That compares with a 23 percent drop in the IBEX 35 Index.
``Two of Solaria's key suppliers failed to deliver contracted quantities of cells in the quarter, a problem that is likely to persist in the third quarter and affect profitability through 2008,'' Goldman's Alarco said in the note.
Piper Jaffray reduced its recommendation on Solaria to ``neutral'' from ``buy'' and cut its price target to 5 euros from 10 euros, according to a note e-mailed to clients today.
To contact the reporter on this story: Gareth Gore in Madrid ggore1@bloomberg.net
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Maurel & Prom Loses $21.8 Million From Single Trader
By Tara Patel
Aug. 29 (Bloomberg) -- Etablissements Maurel & Prom SA said unauthorized trading by an employee cost the French oil company 14.8 million euros ($21.8 million) in the foreign exchange market and could lead to losses of more than double that amount.
The person was in the process of being fired and made ``extremely complex currency trades with many layers of buy and sell options that are a total aberration for an industrial company like ours,'' Chief Executive Officer Jean-Francois Henin said in an interview. ``There is no explanation for this. Even financial experts are having trouble understanding them.''
The actions by the Maurel staffer come seven months after Societe Generale SA, France's second-biggest bank, announced a 4.9 billion-euro trading loss from employee Jerome Kerviel's unauthorized equity bets. Maurel could end up with a further shortfall of as much as 21 million euros once the positions are unwound, Henin said.
The trading loss dented first-half profit from continuing operations, which rose 52 percent to 21.1 million euros, reflecting higher oil prices that have led to record earnings for energy companies. Maurel shares rose after the company also said today that oil production could double by the end of the year.
``Maurel announced good news on operations,'' said Emma Ritter, an analyst at Exane BNP Paribas in London, citing a planned increase in production in Gabon.
Maurel rose 21 cents, or 1.5 percent, to 13.96 euros at 12:30 p.m. Paris time. The shares are down 2.3 percent this year, giving the company a market value of 1.7 billion euros.
The Trader
Henin said that while the trader may not have benefited personally from the bets or have a medical condition, ``he may have been out to prove that our decision to fire him was wrong because he was the best trader in the world.''
Henin declined to name the trader, who handled daily financial operations, or the bank carrying out the transactions. He said the irregularities were discovered Aug. 20 and that the trader's employment with the company is being terminated. Maurel hasn't filed criminal charges against the person, he said.
Maurel said it's studying the ``possibility of recourse.''
The potential additional loss of 21 million euros from the trades that haven't yet been completely unwound would be the ``maximum'' possible, Henin said. The company will know ``within two months'' the full extent of the loss, he said, adding that the uncertainty stems from difficulties valuing the trades.
Financial Loss
``This is very unfortunate,'' Henin said, adding that the loss from the trade should be seen in the context of comparing it with the $15 million average cost of drilling a well and failing to find oil. ``It's unpleasant but it's the cost of a dry well,'' he said.
The foreign exchange trades contributed to an overall financial loss of 48.7 million euros for the period, including a 10.4 million-euro loss on swaps on crude oil and foreign exchange losses of 17.2 million euros.
Net income in the first half fell to 21.1 million euros from 812.1 million, after Maurel sold almost all Congolese oil field stakes to Eni SpA in February last year for $1.4 billion.
Maurel's group shareholders' equity totaled 643.6 million euros at the end of the first half compared with 1.06 billion euros at the end of last year due to a 222.5 million euros adjustment in derivative instruments, the statement said.
The company also had a dividend amounting to 137.1 million euros, foreign exchange losses of 59.8 million euros and 31.6 million euros in treasury buybacks, the company said.
Maurel production rose to 15,098 barrels a day, including Venezuela, which could double to 30,000 barrels a day ``as soon as the end of 2008 due to added output from Gabon,'' the statement said.
To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net
Read more...
Aug. 29 (Bloomberg) -- Etablissements Maurel & Prom SA said unauthorized trading by an employee cost the French oil company 14.8 million euros ($21.8 million) in the foreign exchange market and could lead to losses of more than double that amount.
The person was in the process of being fired and made ``extremely complex currency trades with many layers of buy and sell options that are a total aberration for an industrial company like ours,'' Chief Executive Officer Jean-Francois Henin said in an interview. ``There is no explanation for this. Even financial experts are having trouble understanding them.''
The actions by the Maurel staffer come seven months after Societe Generale SA, France's second-biggest bank, announced a 4.9 billion-euro trading loss from employee Jerome Kerviel's unauthorized equity bets. Maurel could end up with a further shortfall of as much as 21 million euros once the positions are unwound, Henin said.
The trading loss dented first-half profit from continuing operations, which rose 52 percent to 21.1 million euros, reflecting higher oil prices that have led to record earnings for energy companies. Maurel shares rose after the company also said today that oil production could double by the end of the year.
``Maurel announced good news on operations,'' said Emma Ritter, an analyst at Exane BNP Paribas in London, citing a planned increase in production in Gabon.
Maurel rose 21 cents, or 1.5 percent, to 13.96 euros at 12:30 p.m. Paris time. The shares are down 2.3 percent this year, giving the company a market value of 1.7 billion euros.
The Trader
Henin said that while the trader may not have benefited personally from the bets or have a medical condition, ``he may have been out to prove that our decision to fire him was wrong because he was the best trader in the world.''
Henin declined to name the trader, who handled daily financial operations, or the bank carrying out the transactions. He said the irregularities were discovered Aug. 20 and that the trader's employment with the company is being terminated. Maurel hasn't filed criminal charges against the person, he said.
Maurel said it's studying the ``possibility of recourse.''
The potential additional loss of 21 million euros from the trades that haven't yet been completely unwound would be the ``maximum'' possible, Henin said. The company will know ``within two months'' the full extent of the loss, he said, adding that the uncertainty stems from difficulties valuing the trades.
Financial Loss
``This is very unfortunate,'' Henin said, adding that the loss from the trade should be seen in the context of comparing it with the $15 million average cost of drilling a well and failing to find oil. ``It's unpleasant but it's the cost of a dry well,'' he said.
The foreign exchange trades contributed to an overall financial loss of 48.7 million euros for the period, including a 10.4 million-euro loss on swaps on crude oil and foreign exchange losses of 17.2 million euros.
Net income in the first half fell to 21.1 million euros from 812.1 million, after Maurel sold almost all Congolese oil field stakes to Eni SpA in February last year for $1.4 billion.
Maurel's group shareholders' equity totaled 643.6 million euros at the end of the first half compared with 1.06 billion euros at the end of last year due to a 222.5 million euros adjustment in derivative instruments, the statement said.
The company also had a dividend amounting to 137.1 million euros, foreign exchange losses of 59.8 million euros and 31.6 million euros in treasury buybacks, the company said.
Maurel production rose to 15,098 barrels a day, including Venezuela, which could double to 30,000 barrels a day ``as soon as the end of 2008 due to added output from Gabon,'' the statement said.
To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net
Read more...
Oil-Rig Insurers Brace for Test as Gustav Bears Down
By Erik Holm
Aug. 29 (Bloomberg) -- Tropical Storm Gustav, projected to reach the Gulf of Mexico by Sunday, may reveal whether insurers have done enough to limit risks of covering offshore oil rigs in the wake of hurricanes Katrina and Rita.
American International Group Inc., Zurich Financial Services Group AG and Liberty Mutual Group Inc. were among insurers that raised prices fivefold and capped losses after the two hurricanes caused record offshore claims estimated at $8 billion in 2005.
Insurers are betting on a better outcome this time as Gustav threatens to become a hurricane and blow across the gulf anywhere from Texas to Alabama. Crude oil headed for the biggest weekly gain in almost two months, up 2 percent since Monday, on forecasts that Gustav may enter the region, home to more than 5,000 oil-drilling sites and one-fifth of U.S. production.
``We won't know if the changes we made are valid until they're tested by another storm,'' Christopher Pluchino, vice president at the Liberty Mutual unit that sells coverage for the platforms, said in an interview yesterday. ``We tend to stay glued to the Weather Channel this time of year.''
Katrina and Rita destroyed 113 platforms and damaged 457 pipelines, according to a 2006 report from the U.S. Minerals Management Service. They forced oil companies to redrill thousands of wells, said Frank Costa, president of AIG's rig- insurance division.
Billions in Damage
Insurers are trying to curtail their losses by putting limits for the first time on how much they'll pay out for storm damage over the course of the entire hurricane season. They're also repricing coverage based on studies of what kinds of oil- drilling equipment held up best when Katrina and Rita struck.
Insurers typically now limit coverage to $500 million in storm losses for all of a company's offshore assets over the six-month season, said Pluchino. Just one of the largest platforms can cost over $1 billion.
``It was estimated the premium in the Gulf of Mexico was $300 million a year'' before Katrina and Rita hit, Costa said. ``If you looked at the sum of those two losses to the industry versus the premium generated in the Gulf of Mexico, it was obvious that the formula was broken, that the exposures were a lot larger than anyone anticipated.''
Including expenses shouldered by the oil-drilling companies, the storms caused as much as $30 billion in damage before they ever made landfall on the Gulf Coast, said Paolo Bazzurro, director of engineering analysis for AIR Worldwide, the Boston-based catastrophe modeling firm that advises insurers.
Cat-in-a-Box
With insurers paring risk in the Gulf, ``the percentage that's insured now compared to before Katrina is lower than it used to be,'' Bazzurro said.
Gustav packed maximum sustained winds of 65 miles (105 kilometers) per hour at 8 a.m. Miami time and may reach hurricane strength of at least 74 mph today, the National Hurricane Center said. It was west of Kingston, Jamaica, and is expected to reach the Cayman Islands overnight before cutting across the eastern tip of Cuba and entering the Gulf of Mexico.
Owners of offshore platforms are responding to Gustav by seeking out a new type of coverage that protects them from a single storm, said Pat Gonnelli, a senior vice president for the capital-markets division at reinsurance brokerage Carvill Group. The coverage is known as the ``cat-in-a-box'' option, a name derived from the industry term for catastrophes and a rectangular area from Galveston, Texas, to Mobile, Alabama.
No Takers
The sellers of such options agree to pay the buyer if a hurricane enters the box at a size and intensity agreed upon in advance. Sellers can include hedge funds, insurance companies and so-called weather traders, who look to profit in part by swapping securities tied to disasters.
No buyers and sellers had agreed on a price and completed a transaction related to Gustav as of late yesterday, Gonnelli said. Still, the interest has grown, compared with the six other storms that reached tropical-storm status this year, he said.
``It will really pick up'' starting today, said Al Selius, the head of the insurance-linked securities desk at Swiss Re Capital Markets. ``There are people out there who could probably use some more protection.''
To contact the reporter on this story: Erik Holm in New York at eholm2@bloomberg.net.
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Rosneft's Second-Quarter Net Exceeds Lukoil's as Output Expands
By Greg Walters
Aug. 29 (Bloomberg) -- OAO Rosneft, Russia's biggest crude oil producer, earned more than domestic rival OAO Lukoil in the second quarter by raising output and integrating assets bought from bankrupt OAO Yukos Oil Co.
Rosneft said net income more than doubled to $4.31 billion, beating analysts' forecasts. Lukoil, the country's second- biggest oil producer, said profit rose 64 percent to $4.13 billion, missing estimates.
State-run Rosneft went from being a second-tier oil company to Russia's leading producer after buying up assets belonging to Yukos, which collapsed in 2006 under back-tax claims of more than $30 billion. Lukoil has struggled against declining crude output in western Siberia.
``Rosneft will probably eclipse Lukoil,'' said Ronald Smith, chief strategist at Moscow-based Alfa Bank. ``It has a better long-term profile, and it has younger, more-productive fields.''
Lukoil fell 51.03 rubles, or 2.7 percent, on Moscow's Micex Stock Exchange to 1,829.60 rubles at 4:04 p.m. local time. UBS AG cut its price estimate today on Lukoil shares by 2.5 percent to $94.20 (2,315 rubles), citing ``cost inflation across the board.'' Rosneft rose 3.53 rubles, or 1.7 percent, to 209.50 rubles.
Rosneft also outpaced Lukoil in terms of earnings before interest, taxation, depreciation and amortization, or Ebitda, a measure of underlying profitability. Rosneft's Ebitda rose 97 percent to $7.05 billion, as Lukoil's rose 59.2 percent to $6.24 billion.
Cost Control
``The cost discipline showed by Lukoil was not very impressive in the second quarter.''said Igor Kurinnyy, oil and gas analyst at ING Bank Groep, by phone from London. ``In my personal opinion, Rosneft's management is slightly more efficient than Lukoil's management.''
Both companies benefited from export blend Urals crude averaging $117.64 a barrel in the period, up 80 percent from a year earlier, according to data compiled by Bloomberg.
Rosneft borrowed $22 billion to buy units and refineries at auctions after former Yukos Chief Executive Officer Mikhail Khodorkovsky was jailed for tax evasion and fraud. The company agreed to sell half of production unit Tomskneft to OAO Gazprom Neft in December.
Rosneft reported net income of $7.66 billion in the second quarter of last year after receiving one-time payments from the sale of assets by Yukos, dismantled in President Vladimir Putin's second term after getting more than $30 billion of back-tax claims. Adjusted to exclude the Yukos payments, profit was $1.7 billion during the period, Rosneft said today. Rosneft was Yukos's second-biggest creditor.
Lukoil Hedges
Lukoil's cost of purchased oil, gas and products jumped 77 percent in the second quarter to $12.5 billion as prices rose. That included a loss of $621 million from hedging, compared with $45 million a year earlier. Selling, general and administrative expenses increased 22 percent in the first half of the year.
Lukoil said profits were hurt by operating expenses that rose by 26.2 percent in the first half as oil extraction and refining became more expensive and the ruble appreciated.
To contact the reporter on this story: Greg Walters in Moscow gwalters1@bloomberg.net
Read more...
Aug. 29 (Bloomberg) -- OAO Rosneft, Russia's biggest crude oil producer, earned more than domestic rival OAO Lukoil in the second quarter by raising output and integrating assets bought from bankrupt OAO Yukos Oil Co.
Rosneft said net income more than doubled to $4.31 billion, beating analysts' forecasts. Lukoil, the country's second- biggest oil producer, said profit rose 64 percent to $4.13 billion, missing estimates.
State-run Rosneft went from being a second-tier oil company to Russia's leading producer after buying up assets belonging to Yukos, which collapsed in 2006 under back-tax claims of more than $30 billion. Lukoil has struggled against declining crude output in western Siberia.
``Rosneft will probably eclipse Lukoil,'' said Ronald Smith, chief strategist at Moscow-based Alfa Bank. ``It has a better long-term profile, and it has younger, more-productive fields.''
Lukoil fell 51.03 rubles, or 2.7 percent, on Moscow's Micex Stock Exchange to 1,829.60 rubles at 4:04 p.m. local time. UBS AG cut its price estimate today on Lukoil shares by 2.5 percent to $94.20 (2,315 rubles), citing ``cost inflation across the board.'' Rosneft rose 3.53 rubles, or 1.7 percent, to 209.50 rubles.
Rosneft also outpaced Lukoil in terms of earnings before interest, taxation, depreciation and amortization, or Ebitda, a measure of underlying profitability. Rosneft's Ebitda rose 97 percent to $7.05 billion, as Lukoil's rose 59.2 percent to $6.24 billion.
Cost Control
``The cost discipline showed by Lukoil was not very impressive in the second quarter.''said Igor Kurinnyy, oil and gas analyst at ING Bank Groep, by phone from London. ``In my personal opinion, Rosneft's management is slightly more efficient than Lukoil's management.''
Both companies benefited from export blend Urals crude averaging $117.64 a barrel in the period, up 80 percent from a year earlier, according to data compiled by Bloomberg.
Rosneft borrowed $22 billion to buy units and refineries at auctions after former Yukos Chief Executive Officer Mikhail Khodorkovsky was jailed for tax evasion and fraud. The company agreed to sell half of production unit Tomskneft to OAO Gazprom Neft in December.
Rosneft reported net income of $7.66 billion in the second quarter of last year after receiving one-time payments from the sale of assets by Yukos, dismantled in President Vladimir Putin's second term after getting more than $30 billion of back-tax claims. Adjusted to exclude the Yukos payments, profit was $1.7 billion during the period, Rosneft said today. Rosneft was Yukos's second-biggest creditor.
Lukoil Hedges
Lukoil's cost of purchased oil, gas and products jumped 77 percent in the second quarter to $12.5 billion as prices rose. That included a loss of $621 million from hedging, compared with $45 million a year earlier. Selling, general and administrative expenses increased 22 percent in the first half of the year.
Lukoil said profits were hurt by operating expenses that rose by 26.2 percent in the first half as oil extraction and refining became more expensive and the ruble appreciated.
To contact the reporter on this story: Greg Walters in Moscow gwalters1@bloomberg.net
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Storm Gustav Floods Jamaica; Louisiana Faces Revisit of 2005
By Alex Morales and Robin Stringer
Aug. 29 (Bloomberg) -- Tropical Storm Gustav pounded Jamaica with rain, flooding streets with water and mud, as Louisiana prepared for the system to strengthen into a hurricane bound for areas devastated by Katrina and Rita in 2005.
Gustav had sustained winds of 65 miles (105 kilometers) per hour as of 8 a.m. Miami time today and was centered near the western tip of Jamaica, 100 miles west-northwest of the capital, Kingston, the U.S. National Hurricane Center said on its Web site. It is heading west-northwest at 8 mph and is predicted to bring as much as 25 inches (64 centimeters) of rain to Jamaica and the Cayman Islands.
``The whole island is affected by the system; it's still moving very slowly and dumping a lot of rain,'' Kerry-Ann Morris, a spokeswoman for Jamaica's Office of Disaster Preparedness and Emergency Management, said today in a telephone interview from Kingston. The office reported ``extensive flooding'' and ``several'' landslides, and said 1,520 people were in shelters.
The storm's approach prompted the evacuation of Gulf of Mexico oil workers. The governors of Louisiana, Texas and Mississippi declared emergencies, and some Louisiana parishes prepared to evacuate residents.
Gustav will ``likely explode into a major hurricane over the next two days as it tracks on a west to northwesterly course across the northwestern Caribbean toward western Cuba and the Cayman Islands,'' said Jim Rouiller, a senior energy meteorologist with Planalytics Inc., a forecaster based in Wayne, Pennsylvania.
At Risk
``The upper Texas coastline to Louisiana will remain most at risk to receive the brunt,'' Rouiller said. ``Landfall projections into this high-risk target zone expected to occur very late Monday night and Tuesday.''
There were no confirmed reports of casualties in Jamaica, where conditions were ``calm'' at 4 a.m. after ``horizontal rain'' earlier, Morris said. In Haiti, 51 people were killed, Agence France-Presse reported. In the neighboring Dominican Republic, eight people died and two were hurt in a landslide, the country's Center of Emergency Operations said on its Web site.
The Cayman Islands were warned to expect tropical storm- force winds of at least 39 mph today as Gustav approaches, the country's National Hurricane Committee said on its Web site. The U.S. hurricane center predicts Gustav will enter the Gulf of Mexico on Aug. 31, when it may strengthen into a ``major'' hurricane, with winds of at least Category 3 strength of 111 mph or more.
Strengthening Seen
``Soon the center will be back over water, and in that area of the Caribbean, the waters are very warm and the system could become a very powerful hurricane in the next two days,'' Lixion Avila, a forecaster at the center, said today in a telephone interview from Miami. ``The indications are that this system has all the ingredients to become a major hurricane.''
The current forecast shows Gustav making landfall in central Louisiana as a hurricane on Sept. 2, then moving northwest into areas of Louisiana and Texas ravaged by Hurricane Rita three weeks after Katrina devastated New Orleans in 2005. Both hit as Category 3 storms.
Avila said there are uncertainties in a forecast several days ahead, adding ``if I lived on the Gulf coast, all the way from Texas to Florida, I'd be paying attention to this system.''
``A land strike to the west of New Orleans will place this great city within the most dangerous part of the storm,''Rouiller said by e-mail. ``Gustav has the potential to generate much more damage than Katrina did.''
The U.S. Federal Emergency Management Agency was on alert for Gustav and said it had food, water and supplies ready to move into the area. The U.S. Department of Defense has authorized its units to respond to a storm, said Homeland Security Secretary Michael Chertoff. During Hurricane Katrina three years ago, that permission had to be secured before action could be taken.
Emergency Declarations
Texas Governor Rick Perry and Mississippi Governor Haley Barbour yesterday added state emergency and disaster declarations to one issued in neighboring Louisiana a day earlier by Governor Bobby Jindal. Perry put 5,000 National Guard members on standby to help with relief efforts, adding to 3,000 Guard members activated by Jindal. Alabama Governor Bob Riley also put a 3,000- strong National Guard force on standby to help if needed.
Southern Louisiana parishes, where several oil refineries are located, plan to evacuate civilians today and tomorrow, the local governments said on their Web sites. St. Charles parish, west of New Orleans, accelerated its emergency plan to begin assisted evacuations today and mandatory evacuations will likely take place at noon local time tomorrow. St. Bernard parish officials anticipate mandatory evacuations tomorrow.
Energy companies, including ConocoPhillips and Royal Dutch Shell Plc, accelerated evacuations from the Gulf.
Offshore Fields
U.S. oil and gas platforms and pipelines are most concentrated in the waters south of Louisiana and east of Texas. Offshore fields in the Gulf accounted for 26 percent of total U.S. crude production and 12 percent of natural gas output in April, according to the U.S. Energy Department.
Crude oil for October delivery rose as much as 98 cents, or 0.85 percent, to $116.57 a barrel on the New York Mercantile Exchange as of 8 a.m.
The hurricane center also is monitoring Tropical Storm Hanna, which was about 245 miles north-northeast of the Caribbean's northern Leeward Islands and heading northwest at 14 mph as of 5 a.m. Miami time. The ``poorly organized'' system had maximum sustained winds of 50 mph, and may become a hurricane in the next two days, the center said.
Hanna is predicted to turn west and then southwest toward the central Bahamas next week. Landfall isn't forecast over the next five days, according to the center's Web site.
To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net: Robin Stringer in New York at rstringer@bloomberg.net.
Read more...
Aug. 29 (Bloomberg) -- Tropical Storm Gustav pounded Jamaica with rain, flooding streets with water and mud, as Louisiana prepared for the system to strengthen into a hurricane bound for areas devastated by Katrina and Rita in 2005.
Gustav had sustained winds of 65 miles (105 kilometers) per hour as of 8 a.m. Miami time today and was centered near the western tip of Jamaica, 100 miles west-northwest of the capital, Kingston, the U.S. National Hurricane Center said on its Web site. It is heading west-northwest at 8 mph and is predicted to bring as much as 25 inches (64 centimeters) of rain to Jamaica and the Cayman Islands.
``The whole island is affected by the system; it's still moving very slowly and dumping a lot of rain,'' Kerry-Ann Morris, a spokeswoman for Jamaica's Office of Disaster Preparedness and Emergency Management, said today in a telephone interview from Kingston. The office reported ``extensive flooding'' and ``several'' landslides, and said 1,520 people were in shelters.
The storm's approach prompted the evacuation of Gulf of Mexico oil workers. The governors of Louisiana, Texas and Mississippi declared emergencies, and some Louisiana parishes prepared to evacuate residents.
Gustav will ``likely explode into a major hurricane over the next two days as it tracks on a west to northwesterly course across the northwestern Caribbean toward western Cuba and the Cayman Islands,'' said Jim Rouiller, a senior energy meteorologist with Planalytics Inc., a forecaster based in Wayne, Pennsylvania.
At Risk
``The upper Texas coastline to Louisiana will remain most at risk to receive the brunt,'' Rouiller said. ``Landfall projections into this high-risk target zone expected to occur very late Monday night and Tuesday.''
There were no confirmed reports of casualties in Jamaica, where conditions were ``calm'' at 4 a.m. after ``horizontal rain'' earlier, Morris said. In Haiti, 51 people were killed, Agence France-Presse reported. In the neighboring Dominican Republic, eight people died and two were hurt in a landslide, the country's Center of Emergency Operations said on its Web site.
The Cayman Islands were warned to expect tropical storm- force winds of at least 39 mph today as Gustav approaches, the country's National Hurricane Committee said on its Web site. The U.S. hurricane center predicts Gustav will enter the Gulf of Mexico on Aug. 31, when it may strengthen into a ``major'' hurricane, with winds of at least Category 3 strength of 111 mph or more.
Strengthening Seen
``Soon the center will be back over water, and in that area of the Caribbean, the waters are very warm and the system could become a very powerful hurricane in the next two days,'' Lixion Avila, a forecaster at the center, said today in a telephone interview from Miami. ``The indications are that this system has all the ingredients to become a major hurricane.''
The current forecast shows Gustav making landfall in central Louisiana as a hurricane on Sept. 2, then moving northwest into areas of Louisiana and Texas ravaged by Hurricane Rita three weeks after Katrina devastated New Orleans in 2005. Both hit as Category 3 storms.
Avila said there are uncertainties in a forecast several days ahead, adding ``if I lived on the Gulf coast, all the way from Texas to Florida, I'd be paying attention to this system.''
``A land strike to the west of New Orleans will place this great city within the most dangerous part of the storm,''Rouiller said by e-mail. ``Gustav has the potential to generate much more damage than Katrina did.''
The U.S. Federal Emergency Management Agency was on alert for Gustav and said it had food, water and supplies ready to move into the area. The U.S. Department of Defense has authorized its units to respond to a storm, said Homeland Security Secretary Michael Chertoff. During Hurricane Katrina three years ago, that permission had to be secured before action could be taken.
Emergency Declarations
Texas Governor Rick Perry and Mississippi Governor Haley Barbour yesterday added state emergency and disaster declarations to one issued in neighboring Louisiana a day earlier by Governor Bobby Jindal. Perry put 5,000 National Guard members on standby to help with relief efforts, adding to 3,000 Guard members activated by Jindal. Alabama Governor Bob Riley also put a 3,000- strong National Guard force on standby to help if needed.
Southern Louisiana parishes, where several oil refineries are located, plan to evacuate civilians today and tomorrow, the local governments said on their Web sites. St. Charles parish, west of New Orleans, accelerated its emergency plan to begin assisted evacuations today and mandatory evacuations will likely take place at noon local time tomorrow. St. Bernard parish officials anticipate mandatory evacuations tomorrow.
Energy companies, including ConocoPhillips and Royal Dutch Shell Plc, accelerated evacuations from the Gulf.
Offshore Fields
U.S. oil and gas platforms and pipelines are most concentrated in the waters south of Louisiana and east of Texas. Offshore fields in the Gulf accounted for 26 percent of total U.S. crude production and 12 percent of natural gas output in April, according to the U.S. Energy Department.
Crude oil for October delivery rose as much as 98 cents, or 0.85 percent, to $116.57 a barrel on the New York Mercantile Exchange as of 8 a.m.
The hurricane center also is monitoring Tropical Storm Hanna, which was about 245 miles north-northeast of the Caribbean's northern Leeward Islands and heading northwest at 14 mph as of 5 a.m. Miami time. The ``poorly organized'' system had maximum sustained winds of 50 mph, and may become a hurricane in the next two days, the center said.
Hanna is predicted to turn west and then southwest toward the central Bahamas next week. Landfall isn't forecast over the next five days, according to the center's Web site.
To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net: Robin Stringer in New York at rstringer@bloomberg.net.
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Yuan Completes First Monthly Loss Against Dollar Since May 2006
By Judy Chen and Jiang Jianguo
Aug. 29 (Bloomberg) -- China's yuan had its first monthly loss against the dollar since May 2006 on speculation weaker global demand will prompt the government to limit currency gains to protect exporters. Government bonds rose.
Slower growth worldwide will weigh on China's exports in the second half of 2008, Vice Commerce Minister Gao Hucheng said yesterday. The yuan's 6.6 percent gain in the first half, which almost matched the advance for the whole of 2007, crimped profits at exporters and cooled sales abroad.
``It's obvious that the government is adjusting the pace of yuan appreciation against the dollar to make sure it won't do more harm to exports,'' said Liu Dongliang, a foreign-exchange analyst in Shenzhen at China Merchants Bank Co., the country's sixth largest lender. ``Most foreign trade transactions are settled in dollars.''
The yuan fell 0.05 percent this month to 6.8350 a dollar as of 5:30 p.m. in Shanghai, according to the China Foreign Exchange Trade System. It weakened 0.11 percent today, halting three days of gains.
China's exports may increase in the second half at the same pace as in the first six months of the year, Gao said at a press conference in Beijing yesterday. Overseas shipments rose 21.8 percent in the first half of 2008, slower than the 27.6 percent growth a year earlier.
The yuan is allowed to trade by up to 0.5 percent against the dollar either side of a daily reference rate, which was set at 6.8345 per dollar today.
Hot Money
China will start annual checks on how well domestic and foreign banks implement rules on foreign-currency controls, the State Administration of Foreign Exchange, the country's top currency regulator, said in a statement on its Web site today.
The government approved new foreign-currency controls on Aug. 6 to tighten monitoring of cross-border capital payments and deter ``illegal'' inflows that seek to profit from the yuan's one-way appreciation.
The yuan will have a ``minor'' depreciation against the dollar for the rest of this year, and about 4 percent appreciation in 2009, Tao Dong, chief Asia economist at Credit Suisse Group AG in Hong Kong, wrote in an Aug. 26 report.
Government bonds rose, pushing 10-year yields to a two- month low, on concern slowing exports will stall economic growth.
The yield on the 4.41 percent note due June 2018 fell 7 basis points to 4.18 percent, the lowest since July 1, according to the China Interbank Bond Market. The yield dropped 42 basis points this month. The price rose 0.56 per 100 yuan face amount to 101.83. A basis point is 0.01 percentage point.
``Growth will probably decline, easing pressure for the central bank to raise interest rates,'' said Jiang Chao, a fixed-income analyst at Guotai Junan Securities Co. in Shanghai. ``Yields may keep going down.''
China's economy grew 10.1 percent in the second quarter, the fourth successive slowdown. Electricity output rose 12 percent in the first seven months, compared with a 17 percent a year earlier, according to China Electricity Council.
To contact the reporters on this story: Judy Chen in Shanghai at xchen45@bloomberg.net; Jiang Jianguo in Shanghai at jjiang@bloomberg.net.
Read more...
Aug. 29 (Bloomberg) -- China's yuan had its first monthly loss against the dollar since May 2006 on speculation weaker global demand will prompt the government to limit currency gains to protect exporters. Government bonds rose.
Slower growth worldwide will weigh on China's exports in the second half of 2008, Vice Commerce Minister Gao Hucheng said yesterday. The yuan's 6.6 percent gain in the first half, which almost matched the advance for the whole of 2007, crimped profits at exporters and cooled sales abroad.
``It's obvious that the government is adjusting the pace of yuan appreciation against the dollar to make sure it won't do more harm to exports,'' said Liu Dongliang, a foreign-exchange analyst in Shenzhen at China Merchants Bank Co., the country's sixth largest lender. ``Most foreign trade transactions are settled in dollars.''
The yuan fell 0.05 percent this month to 6.8350 a dollar as of 5:30 p.m. in Shanghai, according to the China Foreign Exchange Trade System. It weakened 0.11 percent today, halting three days of gains.
China's exports may increase in the second half at the same pace as in the first six months of the year, Gao said at a press conference in Beijing yesterday. Overseas shipments rose 21.8 percent in the first half of 2008, slower than the 27.6 percent growth a year earlier.
The yuan is allowed to trade by up to 0.5 percent against the dollar either side of a daily reference rate, which was set at 6.8345 per dollar today.
Hot Money
China will start annual checks on how well domestic and foreign banks implement rules on foreign-currency controls, the State Administration of Foreign Exchange, the country's top currency regulator, said in a statement on its Web site today.
The government approved new foreign-currency controls on Aug. 6 to tighten monitoring of cross-border capital payments and deter ``illegal'' inflows that seek to profit from the yuan's one-way appreciation.
The yuan will have a ``minor'' depreciation against the dollar for the rest of this year, and about 4 percent appreciation in 2009, Tao Dong, chief Asia economist at Credit Suisse Group AG in Hong Kong, wrote in an Aug. 26 report.
Government bonds rose, pushing 10-year yields to a two- month low, on concern slowing exports will stall economic growth.
The yield on the 4.41 percent note due June 2018 fell 7 basis points to 4.18 percent, the lowest since July 1, according to the China Interbank Bond Market. The yield dropped 42 basis points this month. The price rose 0.56 per 100 yuan face amount to 101.83. A basis point is 0.01 percentage point.
``Growth will probably decline, easing pressure for the central bank to raise interest rates,'' said Jiang Chao, a fixed-income analyst at Guotai Junan Securities Co. in Shanghai. ``Yields may keep going down.''
China's economy grew 10.1 percent in the second quarter, the fourth successive slowdown. Electricity output rose 12 percent in the first seven months, compared with a 17 percent a year earlier, according to China Electricity Council.
To contact the reporters on this story: Judy Chen in Shanghai at xchen45@bloomberg.net; Jiang Jianguo in Shanghai at jjiang@bloomberg.net.
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Asian Currencies Decline in Month as Funds Dump Local Assets
By Aaron Pan and Kim Kyoungwha
Aug. 29 (Bloomberg) -- Asian currencies declined this month, led by South Korea's won, as overseas funds dumped stocks on concern that slowing global growth will damp demand for Asian exports just as central banks grapple with quickening inflation.
The won posted its biggest monthly decline since August 1998, Malaysia's ringgit had its worst month since the end of a dollar link in 2005 and Taiwan's dollar posted its biggest loss in seven years. Weakening currencies threaten to push up the cost of imports and accelerate inflation while decreasing demand for exports puts pressure on trade and current-account balances.
``It's been a bad environment for stocks with persistent inflation eroding the value of assets and people have been disappointed with the growth numbers coming out of the region,'' said Sean Callow, senior currency strategist at Westpac Banking Corp. in Sydney. ``With that comes a fading of confidence in currencies in the region as well.''
South Korea's currency dropped 0.7 percent to 1,089 against the dollar as of the 3 p.m. local close, according to Seoul Money Brokerage Services Ltd., taking the decline in August to 7.1 percent, Asia's worst performer. The ringgit, the second- biggest loser in the region, fell 4.1 percent this month and Taiwan's dollar 2.6 percent.
Overseas investors sold more stocks than they bought this month in Korea, Thailand, the Philippines, Taiwan and Indonesia, according to data compiled by Bloomberg. Global funds were so- called net sellers of Korean shares today for a ninth day, stock exchange data showed.
Korea Intervention
Korea's central bank said today that the current-account balance returned to a deficit in July as a weaker currency and rising oil prices increased the import bill. Policy makers have intervened in the market to curb losses in the currency, depleting the nation's foreign-exchange reserves.
Attempts by officials to halt the won's slide failed to keep the currency from reaching its lowest since 2004, said Kim Sung Soon, a dealer at Industrial Bank of Korea in Seoul.
``Demand for the dollar from foreign stock sales and importers is still high,'' Kim said. ``The market is on the lookout for the government's intervention.''
Central banks intervene in the currency market by buying or selling foreign exchange.
Malaysia's ringgit fell to near the lowest in 11 months on speculation heightened political turmoil will prompt investors to sell the country's stocks.
Malaysia Politics
The currency declined this week, extending a monthly slump. The Kuala Lumpur Composite Index of shares dropped 6.2 percent in August for a fourth month of losses. Malaysia doesn't reveal numbers on stocks transactions by foreigners.
The ringgit traded at 3.3935 per dollar versus 3.3400 a week ago, according to data compiled by Bloomberg. It reached 3.3975 on Aug. 27, the weakest since October.
Opposition leader Anwar Ibrahim was yesterday sworn in as a lawmaker after winning a by-election on Aug. 26. He has said defections from ruling lawmakers will unseat Prime Minister Abdullah Ahmad Badawi's government by Sept. 16.
Second Finance Minister Nor Mohamed Yakcop said on Aug. 4 the government won't achieve its target of narrowing its fiscal deficit to 3.2 percent of gross domestic product.
``There are crosswinds in the ringgit market because the political risks could turn for the worse in September,'' said Goh Puay Yeong, a currency strategist at Barclays Capital Plc in Singapore. ``Sentiment is weak and economic policies could come to a standstill'' amid a power struggle, he said.
Thai Protests
Malaysia's second-quarter GDP expanded 6 percent, the slowest in a year, according to the median forecast in a Bloomberg News survey before Bank Negara Malaysia reports the figure at 6 p.m. in Kuala Lumpur. The economy expanded 7.1 percent in the first quarter.
Thailand's baht dropped, posting a sixth month of losses. The currency fell as oil climbed for a second week and protesters led by opposition leaders occupied the office of Prime Minister Samak Sundaravej in Bangkok for a fourth day to force his resignation.
A government report today showed the nation posted a current-account deficit in July. Inflation accelerated to 9.2 percent last month, the fastest pace since 1998.
The baht fell 0.4 percent to 34.20, according to data compiled by Bloomberg. The currency has declined 2 percent in August, reaching 34.29 on Aug. 26, the lowest since September 2007.
Taiwan's dollar fell on concern that cooling demand in the U.S. and Europe will hurt the island's exports, which account for half of the gross domestic product. The government cut its economic growth forecast and reported the smallest increase in export orders in five years.
The Taiwan dollar declined 0.1 percent to NT$31.520 per U.S. dollar, according to Taipei Forex Inc. The currency, which touched a six-month low of NT$31.571 on Aug. 26, has dropped 0.5 percent this week and 2.6 percent since the end of July.
Elsewhere, Singapore's dollar lost 3.4 percent this month, and Indonesia's rupiah dropped 0.6 percent. The Philippine peso declined 3.8 percent. Vietnam's dong has gained 1.4 percent since the end of July.
To contact the reporters on this story: Aaron Pan in Hong Kong at apan8@bloomberg.net; Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
Read more...
Aug. 29 (Bloomberg) -- Asian currencies declined this month, led by South Korea's won, as overseas funds dumped stocks on concern that slowing global growth will damp demand for Asian exports just as central banks grapple with quickening inflation.
The won posted its biggest monthly decline since August 1998, Malaysia's ringgit had its worst month since the end of a dollar link in 2005 and Taiwan's dollar posted its biggest loss in seven years. Weakening currencies threaten to push up the cost of imports and accelerate inflation while decreasing demand for exports puts pressure on trade and current-account balances.
``It's been a bad environment for stocks with persistent inflation eroding the value of assets and people have been disappointed with the growth numbers coming out of the region,'' said Sean Callow, senior currency strategist at Westpac Banking Corp. in Sydney. ``With that comes a fading of confidence in currencies in the region as well.''
South Korea's currency dropped 0.7 percent to 1,089 against the dollar as of the 3 p.m. local close, according to Seoul Money Brokerage Services Ltd., taking the decline in August to 7.1 percent, Asia's worst performer. The ringgit, the second- biggest loser in the region, fell 4.1 percent this month and Taiwan's dollar 2.6 percent.
Overseas investors sold more stocks than they bought this month in Korea, Thailand, the Philippines, Taiwan and Indonesia, according to data compiled by Bloomberg. Global funds were so- called net sellers of Korean shares today for a ninth day, stock exchange data showed.
Korea Intervention
Korea's central bank said today that the current-account balance returned to a deficit in July as a weaker currency and rising oil prices increased the import bill. Policy makers have intervened in the market to curb losses in the currency, depleting the nation's foreign-exchange reserves.
Attempts by officials to halt the won's slide failed to keep the currency from reaching its lowest since 2004, said Kim Sung Soon, a dealer at Industrial Bank of Korea in Seoul.
``Demand for the dollar from foreign stock sales and importers is still high,'' Kim said. ``The market is on the lookout for the government's intervention.''
Central banks intervene in the currency market by buying or selling foreign exchange.
Malaysia's ringgit fell to near the lowest in 11 months on speculation heightened political turmoil will prompt investors to sell the country's stocks.
Malaysia Politics
The currency declined this week, extending a monthly slump. The Kuala Lumpur Composite Index of shares dropped 6.2 percent in August for a fourth month of losses. Malaysia doesn't reveal numbers on stocks transactions by foreigners.
The ringgit traded at 3.3935 per dollar versus 3.3400 a week ago, according to data compiled by Bloomberg. It reached 3.3975 on Aug. 27, the weakest since October.
Opposition leader Anwar Ibrahim was yesterday sworn in as a lawmaker after winning a by-election on Aug. 26. He has said defections from ruling lawmakers will unseat Prime Minister Abdullah Ahmad Badawi's government by Sept. 16.
Second Finance Minister Nor Mohamed Yakcop said on Aug. 4 the government won't achieve its target of narrowing its fiscal deficit to 3.2 percent of gross domestic product.
``There are crosswinds in the ringgit market because the political risks could turn for the worse in September,'' said Goh Puay Yeong, a currency strategist at Barclays Capital Plc in Singapore. ``Sentiment is weak and economic policies could come to a standstill'' amid a power struggle, he said.
Thai Protests
Malaysia's second-quarter GDP expanded 6 percent, the slowest in a year, according to the median forecast in a Bloomberg News survey before Bank Negara Malaysia reports the figure at 6 p.m. in Kuala Lumpur. The economy expanded 7.1 percent in the first quarter.
Thailand's baht dropped, posting a sixth month of losses. The currency fell as oil climbed for a second week and protesters led by opposition leaders occupied the office of Prime Minister Samak Sundaravej in Bangkok for a fourth day to force his resignation.
A government report today showed the nation posted a current-account deficit in July. Inflation accelerated to 9.2 percent last month, the fastest pace since 1998.
The baht fell 0.4 percent to 34.20, according to data compiled by Bloomberg. The currency has declined 2 percent in August, reaching 34.29 on Aug. 26, the lowest since September 2007.
Taiwan's dollar fell on concern that cooling demand in the U.S. and Europe will hurt the island's exports, which account for half of the gross domestic product. The government cut its economic growth forecast and reported the smallest increase in export orders in five years.
The Taiwan dollar declined 0.1 percent to NT$31.520 per U.S. dollar, according to Taipei Forex Inc. The currency, which touched a six-month low of NT$31.571 on Aug. 26, has dropped 0.5 percent this week and 2.6 percent since the end of July.
Elsewhere, Singapore's dollar lost 3.4 percent this month, and Indonesia's rupiah dropped 0.6 percent. The Philippine peso declined 3.8 percent. Vietnam's dong has gained 1.4 percent since the end of July.
To contact the reporters on this story: Aaron Pan in Hong Kong at apan8@bloomberg.net; Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
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