By Fergal O'Brien and Christian Vits
Sept. 9 (Bloomberg) -- The European Union will cut its economic-growth forecast this week as confidence wanes and inflation expectations increase, EU Commissioner Joaquin Almunia said, calling the outlook ``unusually uncertain.''
``The prospects for the second half of 2008 and the beginning of 2009 are not very good,'' Almunia, who is in charge of economic and monetary affairs, said in a speech in Frankfurt today, citing forecasts by the European Central Bank and the Organization for Economic Cooperation and Development. ``Tomorrow I will present our updated forecasts for this year and unfortunately I don't expect to convey a different message.''
Europeans' confidence fell to the lowest in more than five years in August after the euro-area economy contracted in the second quarter for the first time in almost a decade. The ECB last week lowered its 2008 euro-region growth forecast to 1.4 percent from 1.8 percent and its 2009 prediction to 1.2 percent from 1.5 percent. The OECD also cut its forecast for the region.
Exports from Germany, Europe's largest economy, declined more than economists forecast in July as cooling global growth curbed demand, according to figures published today. Spanish Finance Minister Pedro Solbes said his nation's economy, the fourth-largest in the euro region, is at risk of entering a recession because of a construction slump and tight credit conditions.
Euro Region
Luxembourg Finance Minister Jean-Claude Juncker, who leads a group of counterparts from the euro region, last week said the EU may cut its 2008 growth forecast to as low as 1 percent. It forecast growth of 1.7 percent in April.
Speaking to reporters after his speech in Frankfurt today, Almunia said he expects the slowdown in growth to be temporary.
``I hope the recovery will start in 2009,'' he said. ``In 2010, growth figures will return in line with potential.''
In the meantime, the ECB, which raised its key interest rate to a seven-year high of 4.25 percent in July to combat inflation, is showing little inclination to cut borrowing costs even as expansion cools. At the same time it cut its growth forecasts, the central bank raised its inflation prediction for 2008 and 2009.
While inflation eased in August to 3.8 percent from 4 percent, the highest in 16 years, ``this does not mean we should underestimate the risks of second-round effects,'' Almunia said today. Inflation expectations are ``moving to the upside.''
Almunia also said he expects losses related to the collapse of the U.S. subprime-mortgage market, which have already reached $500 billion, to increase.
``Hopes that we had come through the worst of the turbulence before the summer have proved unfounded,'' he said. ``Few predicted the scale of losses and writedowns we are seeing in the banking sector'' and ``there is undoubtedly more to come.''
To contact the reporters on this story: Fergal O'Brien in Dublin at fobrien@bloomberg.net; Christian Vits in Frankfurt at cvits@bloomberg.net.
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Tuesday, September 9, 2008
EDF Becomes Biggest Shareholder in Constellation
By Tara Patel
Sept. 9 (Bloomberg) -- Electricite de France SA, the biggest operator of nuclear reactors in the world, raised its stake in Constellation Energy Group Inc. to 9.51 percent, making it the largest shareholder in the U.S. power marketer.
The purchase is part of the joint-venture agreement reached by the companies in July, 2007, Paris-based Electricite de France said in an e-mailed statement today. The French government-controlled company raised its stake in Baltimore- based Constellation from a previous 4.97 percent by buying shares in the market. No price was given for the transaction.
``EDF is moving faster than expected into the U.S.,'' Emmanuel Retif, analyst at Raymond James Asset Management, said by telephone from Paris. Under the deal signed last year Electricite de France could acquire as much as 9.9 percent of Constellation, including 5 percent within 12 months.
``The strengthening of EDF's shareholding in Constellation Energy reflects the company's commitment to nuclear renewal in the U.S.,'' Electricite de France Chief Executive Officer Pierre Gadonneix said in the statement, adding that the first phase will be to build, operate and invest in four European Pressurized Reactors.
Electricite de France fell 1.605 euros, or 3 percent, to 51.90 euros at 12:58 p.m. in Paris trading.
The utility is building its 59th reactor in Flamanville, Normandy, which will be the country's first EPR, a new generation model developed by Areva SA, the world's biggest maker of nuclear reactors. In addition to expansion in the U.S. through Constellation, the French utility has a project for two reactors in the southern Chinese province of Guangdong and is aiming to operate plants in South Africa and the U.K.
U.S. Reactors
Electricite de France said last month it got board approval to raise its stake in Constellation to 9.9 percent. The French company doesn't have board room representation, spokeswoman Carole Trivi said by telephone today.
A company is subject to heightened reporting requirements and investment limits under federal regulations if it owns at least 10 percent of a U.S. electric utility.
The U.S. has 104 working reactors, almost twice as many as France. The U.S. Nuclear Regulatory Commission expects to receive as many as 34 reactor applications by 2010 as companies seek to capitalize on rising power demand without increasing so- called greenhouse gas emissions. These would be the first new nuclear facilities since the partial meltdown in 1979 at Three Mile Island in Pennsylvania.
Electricite de France and Constellation last year created a 50-50 joint venture called Unistar Nuclear Energy LLC to develop new nuclear installations in the U.S. These may include as many as four EPRs at Constellation's Calvert Cliffs plant in southern Maryland, Nine Mile Point Nuclear Station and R.E. Ginna Nuclear Plant in New York, the companies said last year.
To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net
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Sept. 9 (Bloomberg) -- Electricite de France SA, the biggest operator of nuclear reactors in the world, raised its stake in Constellation Energy Group Inc. to 9.51 percent, making it the largest shareholder in the U.S. power marketer.
The purchase is part of the joint-venture agreement reached by the companies in July, 2007, Paris-based Electricite de France said in an e-mailed statement today. The French government-controlled company raised its stake in Baltimore- based Constellation from a previous 4.97 percent by buying shares in the market. No price was given for the transaction.
``EDF is moving faster than expected into the U.S.,'' Emmanuel Retif, analyst at Raymond James Asset Management, said by telephone from Paris. Under the deal signed last year Electricite de France could acquire as much as 9.9 percent of Constellation, including 5 percent within 12 months.
``The strengthening of EDF's shareholding in Constellation Energy reflects the company's commitment to nuclear renewal in the U.S.,'' Electricite de France Chief Executive Officer Pierre Gadonneix said in the statement, adding that the first phase will be to build, operate and invest in four European Pressurized Reactors.
Electricite de France fell 1.605 euros, or 3 percent, to 51.90 euros at 12:58 p.m. in Paris trading.
The utility is building its 59th reactor in Flamanville, Normandy, which will be the country's first EPR, a new generation model developed by Areva SA, the world's biggest maker of nuclear reactors. In addition to expansion in the U.S. through Constellation, the French utility has a project for two reactors in the southern Chinese province of Guangdong and is aiming to operate plants in South Africa and the U.K.
U.S. Reactors
Electricite de France said last month it got board approval to raise its stake in Constellation to 9.9 percent. The French company doesn't have board room representation, spokeswoman Carole Trivi said by telephone today.
A company is subject to heightened reporting requirements and investment limits under federal regulations if it owns at least 10 percent of a U.S. electric utility.
The U.S. has 104 working reactors, almost twice as many as France. The U.S. Nuclear Regulatory Commission expects to receive as many as 34 reactor applications by 2010 as companies seek to capitalize on rising power demand without increasing so- called greenhouse gas emissions. These would be the first new nuclear facilities since the partial meltdown in 1979 at Three Mile Island in Pennsylvania.
Electricite de France and Constellation last year created a 50-50 joint venture called Unistar Nuclear Energy LLC to develop new nuclear installations in the U.S. These may include as many as four EPRs at Constellation's Calvert Cliffs plant in southern Maryland, Nine Mile Point Nuclear Station and R.E. Ginna Nuclear Plant in New York, the companies said last year.
To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net
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Ike Moving Over Cuba, May Intensify, Spare Gulf Oil Production
By Brian K. Sullivan and Camilla Hall
Sept. 9 (Bloomberg) -- Hurricane Ike began moving over western Cuba and is expected to strengthen as it turns west into the Gulf of Mexico on a course that may spare most U.S. oil installations.
The track ``toward southern Texas will keep a large majority of the energy-production region out of harm's way,'' Jim Rouiller, senior energy meteorologist with Planalytics Inc. in Wayne, Pennsylvania, said by e-mail. ``New Orleans and Louisiana are now out of the woods.''
Ike, still a Category 1 storm, is likely to gain steam before it makes landfall in southern Texas near the border with Mexico early on Sept. 13, the National Hurricane Center said. Earlier predictions from the NHC saw Ike heading toward Louisiana, threatening oil rigs. The eye was about 40 miles (64 kilometers) south of Havana just before 8 a.m. Cuba time today, moving west-northwest at about 13 mph, the center said.
``The storm tracker looks a little less dangerous than it did last night,'' said Mike Wittner, head of oil research at Societe Generale SA in London.
Ike's sustained winds dropped to 80 mph as it moved over land, putting it on the lowest level of the five-step Saffir- Simpson scale of intensity, the center said. Ike may regain Category 3 strength, with winds of at least 111 mph, as it moves over the warm Gulf waters, U.S. forecasters said. The hurricane made landfall in eastern Cuba at Category 3 two days ago.
Dodging a Bullet
``If this southerly track continues, the major energy complex in and around Houston and Galveston Bay may dodge this bullet as well,'' Rouiller said. ``Though Mexican energy production operations may shut down, the track of Ike will probably be too far north to create significant damage.''
Corpus Christi, Texas, which the storm may slam into given the current track, has about 650,000 barrels a day of oil refining capacity, Wittner said.
Texas Governor Rick Perry issued a disaster declaration yesterday along the coast in preparation for Ike's landfall.
``It could be a major hurricane before it gets to the western Gulf Friday and Saturday,'' AccuWeather.com senior meteorologist Paul Walker said today in a telephone interview.
Cuban authorities evacuated as many as 2 million people, or almost a fifth of the population, as Ike approached, according to Agence France-Presse. Four people were killed and seven injured, the news agency said.
International broadcasters televised images of waves crashing over five-story buildings on the north coast as Ike swept ashore two days ago.
Second Cuban Landfall
Cuba issued a hurricane warning for the provinces of Matanzas, La Habana, Ciudad de Habana, Pinar del Rio and the Isle of Youth. Tropical-storm warnings were in effect in the Florida Keys from Ocean Reef to the Dry Tortugas, the center in Miami said. All watches and warnings in the Cayman Islands have been discontinued.
Ike is forecast to move over the waters between the Isle of Youth and the south coast of Havana province in the next several hours, then move over western Cuba later in the day, the center said.
On its current track, the storm's second landfall in western Cuba will take place today.
Cuba may receive as much as 20 inches (51 centimeters) of rain in isolated area, triggering flooding and mudslides, the center said.
Ike killed 66 people in Haiti, AFP said. At least 600 people have been killed as Ike, Hurricane Gustav and two tropical storms either hit the country or passed close by in the past month, AFP said. As many as 600,000 people may need assistance, United Nations humanitarian affairs chief John Holmes said.
Crude Falls
Ike, coming on the heels of Gustav last week, may keep U.S. oil and gas production in the Gulf closed until at least mid- September. The Gulf is home to more than a quarter of U.S. oil production.
Energy producers reported that personnel from 10 rigs and 202 production platforms were evacuated, according to the Minerals Management Service. There are about 717 manned production platforms in the Gulf of Mexico.
Crude oil for October delivery fell $2.27, or 2.1 percent, to $104.07 a barrel on the New York Mercantile Exchange. Oil has dropped from a record $147.27 reached in July.
Urban search and rescue teams and supplies have been positioned in Texas, Louisiana, Mississippi, Alabama and Florida in anticipation of Ike's landfall later this week, the Federal Emergency Management Agency said in a statement.
Florida Keys residents who evacuated over the weekend should be able to return home by Sept. 13, or perhaps a day or two earlier, the agency said. Ike should have passed the region completely by Sept. 10.
To contact the reporters on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net; Camilla Hall in London at chall24@bloomberg.net.
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Sept. 9 (Bloomberg) -- Hurricane Ike began moving over western Cuba and is expected to strengthen as it turns west into the Gulf of Mexico on a course that may spare most U.S. oil installations.
The track ``toward southern Texas will keep a large majority of the energy-production region out of harm's way,'' Jim Rouiller, senior energy meteorologist with Planalytics Inc. in Wayne, Pennsylvania, said by e-mail. ``New Orleans and Louisiana are now out of the woods.''
Ike, still a Category 1 storm, is likely to gain steam before it makes landfall in southern Texas near the border with Mexico early on Sept. 13, the National Hurricane Center said. Earlier predictions from the NHC saw Ike heading toward Louisiana, threatening oil rigs. The eye was about 40 miles (64 kilometers) south of Havana just before 8 a.m. Cuba time today, moving west-northwest at about 13 mph, the center said.
``The storm tracker looks a little less dangerous than it did last night,'' said Mike Wittner, head of oil research at Societe Generale SA in London.
Ike's sustained winds dropped to 80 mph as it moved over land, putting it on the lowest level of the five-step Saffir- Simpson scale of intensity, the center said. Ike may regain Category 3 strength, with winds of at least 111 mph, as it moves over the warm Gulf waters, U.S. forecasters said. The hurricane made landfall in eastern Cuba at Category 3 two days ago.
Dodging a Bullet
``If this southerly track continues, the major energy complex in and around Houston and Galveston Bay may dodge this bullet as well,'' Rouiller said. ``Though Mexican energy production operations may shut down, the track of Ike will probably be too far north to create significant damage.''
Corpus Christi, Texas, which the storm may slam into given the current track, has about 650,000 barrels a day of oil refining capacity, Wittner said.
Texas Governor Rick Perry issued a disaster declaration yesterday along the coast in preparation for Ike's landfall.
``It could be a major hurricane before it gets to the western Gulf Friday and Saturday,'' AccuWeather.com senior meteorologist Paul Walker said today in a telephone interview.
Cuban authorities evacuated as many as 2 million people, or almost a fifth of the population, as Ike approached, according to Agence France-Presse. Four people were killed and seven injured, the news agency said.
International broadcasters televised images of waves crashing over five-story buildings on the north coast as Ike swept ashore two days ago.
Second Cuban Landfall
Cuba issued a hurricane warning for the provinces of Matanzas, La Habana, Ciudad de Habana, Pinar del Rio and the Isle of Youth. Tropical-storm warnings were in effect in the Florida Keys from Ocean Reef to the Dry Tortugas, the center in Miami said. All watches and warnings in the Cayman Islands have been discontinued.
Ike is forecast to move over the waters between the Isle of Youth and the south coast of Havana province in the next several hours, then move over western Cuba later in the day, the center said.
On its current track, the storm's second landfall in western Cuba will take place today.
Cuba may receive as much as 20 inches (51 centimeters) of rain in isolated area, triggering flooding and mudslides, the center said.
Ike killed 66 people in Haiti, AFP said. At least 600 people have been killed as Ike, Hurricane Gustav and two tropical storms either hit the country or passed close by in the past month, AFP said. As many as 600,000 people may need assistance, United Nations humanitarian affairs chief John Holmes said.
Crude Falls
Ike, coming on the heels of Gustav last week, may keep U.S. oil and gas production in the Gulf closed until at least mid- September. The Gulf is home to more than a quarter of U.S. oil production.
Energy producers reported that personnel from 10 rigs and 202 production platforms were evacuated, according to the Minerals Management Service. There are about 717 manned production platforms in the Gulf of Mexico.
Crude oil for October delivery fell $2.27, or 2.1 percent, to $104.07 a barrel on the New York Mercantile Exchange. Oil has dropped from a record $147.27 reached in July.
Urban search and rescue teams and supplies have been positioned in Texas, Louisiana, Mississippi, Alabama and Florida in anticipation of Ike's landfall later this week, the Federal Emergency Management Agency said in a statement.
Florida Keys residents who evacuated over the weekend should be able to return home by Sept. 13, or perhaps a day or two earlier, the agency said. Ike should have passed the region completely by Sept. 10.
To contact the reporters on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net; Camilla Hall in London at chall24@bloomberg.net.
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BP Completes Evacuation of Non-Essential Gulf Platform Workers
By Joe Carroll
Sept. 9 (Bloomberg) -- BP Plc, Europe's second-largest oil company, finished evacuating so-called non-essential workers from Gulf of Mexico oil and natural-gas platforms in advance of Hurricane Ike.
London-based BP made the comments in a recorded telephone message. As of 8 a.m. Miami time, Ike was a category 1 hurricane, the weakest on the 5-tier Saffir-Simpson scale, the U.S. National Hurricane Center said. The storm is expected to strike the southeast Texas coast on Saturday.
The Hague-based Royal Dutch Shell Plc is Europe's largest oil company.
To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net
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Sept. 9 (Bloomberg) -- BP Plc, Europe's second-largest oil company, finished evacuating so-called non-essential workers from Gulf of Mexico oil and natural-gas platforms in advance of Hurricane Ike.
London-based BP made the comments in a recorded telephone message. As of 8 a.m. Miami time, Ike was a category 1 hurricane, the weakest on the 5-tier Saffir-Simpson scale, the U.S. National Hurricane Center said. The storm is expected to strike the southeast Texas coast on Saturday.
The Hague-based Royal Dutch Shell Plc is Europe's largest oil company.
To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net
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Natural Gas Falls as Forecasts Show Ike Missing Gulf Platforms
By Reg Curren
Sept. 9 (Bloomberg) -- Natural gas futures fell for the first time in five days after forecasts showed that Hurricane Ike will cross the Gulf of Mexico south of energy-producing areas responsible for about 14 percent of U.S. output.
Ike's projected course shifted to a path that would take it to south Texas, the National Hurricane Center said. About 64 percent of offshore gas production is still shut because of Hurricane Gustav, which made landfall in Louisiana last week, according to the Minerals Management Service.
``The decline is mostly the move on the track, though being down $2 a barrel on crude isn't going to help the cause either,'' said Cameron Horwitz, an analyst at SunTrust Robinson Humphrey in Houston.
Natural gas for October delivery fell 36.2 cents, or 4.8 percent, to $7.165 per million British thermal units at 9:23 a.m. on the New York Mercantile Exchange. The heating and industrial fuel has declined 47 percent since hitting a 30-month closing high of $13.577 per million Btu on July 3.
Crude oil fell in New York after Saudi Arabia's oil minister, Ali al-Naimi, said supplies are sufficient to meet demand, signaling that OPEC may maintain production levels when it meets today.
Oil declined $2.01, or 1.9 percent, to $104.33 a barrel.
Ike was a Category 1 storm on the 5 step Saffir-Simpson scale of intensity, with sustained winds of 80 miles (130 kilometers) per hour, the Miami-based Hurricane Center said in an 8 a.m. bulletin. The storm is now about 40 miles south of Havana and may regain strength after it reaches the Gulf.
``The more southerly track toward southern Texas will keep a large majority of the energy region out of harm's way,'' said Jim Rouiller, a senior energy meteorologist with Planalytics Inc., a forecaster based in Wayne, Pennsylvania, whose clients include oil and gas companies.
Hurricanes Katrina and Rita damaged offshore production and pipelines in August and September 2005, sending gas futures to a record $15.78 per million Btu the following December.
To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net
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Sept. 9 (Bloomberg) -- Natural gas futures fell for the first time in five days after forecasts showed that Hurricane Ike will cross the Gulf of Mexico south of energy-producing areas responsible for about 14 percent of U.S. output.
Ike's projected course shifted to a path that would take it to south Texas, the National Hurricane Center said. About 64 percent of offshore gas production is still shut because of Hurricane Gustav, which made landfall in Louisiana last week, according to the Minerals Management Service.
``The decline is mostly the move on the track, though being down $2 a barrel on crude isn't going to help the cause either,'' said Cameron Horwitz, an analyst at SunTrust Robinson Humphrey in Houston.
Natural gas for October delivery fell 36.2 cents, or 4.8 percent, to $7.165 per million British thermal units at 9:23 a.m. on the New York Mercantile Exchange. The heating and industrial fuel has declined 47 percent since hitting a 30-month closing high of $13.577 per million Btu on July 3.
Crude oil fell in New York after Saudi Arabia's oil minister, Ali al-Naimi, said supplies are sufficient to meet demand, signaling that OPEC may maintain production levels when it meets today.
Oil declined $2.01, or 1.9 percent, to $104.33 a barrel.
Ike was a Category 1 storm on the 5 step Saffir-Simpson scale of intensity, with sustained winds of 80 miles (130 kilometers) per hour, the Miami-based Hurricane Center said in an 8 a.m. bulletin. The storm is now about 40 miles south of Havana and may regain strength after it reaches the Gulf.
``The more southerly track toward southern Texas will keep a large majority of the energy region out of harm's way,'' said Jim Rouiller, a senior energy meteorologist with Planalytics Inc., a forecaster based in Wayne, Pennsylvania, whose clients include oil and gas companies.
Hurricanes Katrina and Rita damaged offshore production and pipelines in August and September 2005, sending gas futures to a record $15.78 per million Btu the following December.
To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net
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Hurricane Ike May Spare Gulf Oil Platforms as Forecast Changes
By Jim Polson
Sept. 9 (Bloomberg) -- Hurricane Ike may hit southern Texas in four days, sparing the largest U.S. oil ports, Louisiana, and offshore platforms shut since Hurricane Gustav, forecasters said.
A high-pressure ridge across the Gulf of Mexico will direct Ike toward the west in about two days, the U.S. National Hurricane Center said in a statement at 5 a.m. New York time.
``New Orleans and Louisiana are now out of the woods,'' Jim Rouiller, senior energy meteorologist for Planalytics.com in Wayne, Pennsylvania, said today in an e-mailed message. ``This more southerly track toward southern Texas will keep a large majority of the energy production region out of harm's way.''
Mexican offshore production may be suspended, although Ike won't cause significant damage to platforms should it follow the forecast track to their north, Rouiller said.
The Louisiana Offshore Oil Port, the biggest U.S. offshore oil-import terminal, reopened Sept. 5 after being shut before Hurricane Gustav hit Louisiana Sept. 1. Prior forecasts had Ike moving through oil-producing regions off the coast of Texas and menacing Houston, the largest U.S. petroleum port.
Energy companies reported 15 rigs and 200 production platforms are evacuated, the Minerals Management Service said yesterday in a statement on its Web site. About 1 million barrels of daily oil production and 4.7 billion cubic feet of gas remained shut in.
The revised forecasts came as crude oil fell in New York following a comment by Saudi Arabian oil minister Ali Al-Naimi in Vienna that supplies are ``well-balanced.''
Ike's center was 40 miles (65 kilometers) south of Havana, Cuba, at 8 a.m. New York time today, the National Hurricane Center said. It had weakened overnight to a Category 1 hurricane, with maximum sustained winds of almost 80 miles (130 kilometers) an hour.
The National Hurricane Center cautioned that five-day hurricane forecasts, including the one today showing Ike making landfall Saturday north of Brownsville, Texas, are unreliable. Just a few days ago, the five-day forecast had the storm turning northwest from the Caribbean into Florida, the center said.
To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net.
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Sept. 9 (Bloomberg) -- Hurricane Ike may hit southern Texas in four days, sparing the largest U.S. oil ports, Louisiana, and offshore platforms shut since Hurricane Gustav, forecasters said.
A high-pressure ridge across the Gulf of Mexico will direct Ike toward the west in about two days, the U.S. National Hurricane Center said in a statement at 5 a.m. New York time.
``New Orleans and Louisiana are now out of the woods,'' Jim Rouiller, senior energy meteorologist for Planalytics.com in Wayne, Pennsylvania, said today in an e-mailed message. ``This more southerly track toward southern Texas will keep a large majority of the energy production region out of harm's way.''
Mexican offshore production may be suspended, although Ike won't cause significant damage to platforms should it follow the forecast track to their north, Rouiller said.
The Louisiana Offshore Oil Port, the biggest U.S. offshore oil-import terminal, reopened Sept. 5 after being shut before Hurricane Gustav hit Louisiana Sept. 1. Prior forecasts had Ike moving through oil-producing regions off the coast of Texas and menacing Houston, the largest U.S. petroleum port.
Energy companies reported 15 rigs and 200 production platforms are evacuated, the Minerals Management Service said yesterday in a statement on its Web site. About 1 million barrels of daily oil production and 4.7 billion cubic feet of gas remained shut in.
The revised forecasts came as crude oil fell in New York following a comment by Saudi Arabian oil minister Ali Al-Naimi in Vienna that supplies are ``well-balanced.''
Ike's center was 40 miles (65 kilometers) south of Havana, Cuba, at 8 a.m. New York time today, the National Hurricane Center said. It had weakened overnight to a Category 1 hurricane, with maximum sustained winds of almost 80 miles (130 kilometers) an hour.
The National Hurricane Center cautioned that five-day hurricane forecasts, including the one today showing Ike making landfall Saturday north of Brownsville, Texas, are unreliable. Just a few days ago, the five-day forecast had the storm turning northwest from the Caribbean into Florida, the center said.
To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net.
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Crude Oil Falls After OPEC's Al-Naimi Says Market Is `Balanced'
By Alexander Kwiatkowski
Sept. 9 (Bloomberg) -- Crude oil fell in New York as Saudi Arabia's oil minister said supplies are sufficient to meet demand, signaling that OPEC may maintain production levels when it meets today.
The oil market is ``well-balanced'' and inventories are ``healthy,'' Saudi Arabian Oil Minister Ali Al-Naimi said this morning in Vienna. Most analysts polled by Bloomberg expect the 13 members of the Organization of Petroleum Exporting Countries, which supplies more than 40 percent of the world's oil, to keep quotas unchanged and output near record levels.
``At the moment they are very satisfied with what is happening,'' said Eugen Weinberg, a commodity analyst at Commerzbank AG in Frankfurt. ``The oil price is still above $100. From what we have heard they will come short of cutting production.''
Crude oil for October delivery fell as much as $2.11, or 2 percent, to $104.23 a barrel and traded at $104.60 at 1:37 p.m. London time on the New York Mercantile Exchange. Oil has dropped 29 percent from the record $147.27 reached on July 11.
Oil also declined as Hurricane Ike weakened to Category 1 on the 5-step Saffir-Simpson scale of intensity as it passed over Cuba, easing concerns it will damage Gulf of Mexico oil facilities. Sustained winds dropped to 80 miles (130 kilometers) per hour, the U.S. National Hurricane Center said on its Web site at 5 a.m. Miami time.
Output Disruption
The contract climbed as much as 3.5 percent yesterday as Ike delayed the restoration of Gulf of Mexico output that was closed because of Hurricane Gustav last week. Ike was moving across Cuba's western tip and was forecast to strengthen as it turns west into the Gulf of Mexico. The centre's 5-day forecast shows the storm making landfall near Corpus Christi, Texas.
``It is very early days yet, the storm tracker looks a little less dangerous than it did last night,'' said Mike Wittner, head of oil research at Societe Generale SA in London. ``It is a given they will shut everything down. The question is how much damage is sustained and how quickly it can be bought back up.''
U.S. energy producers have resumed 21 percent of oil production and 36 percent of natural-gas output in the Gulf of Mexico after Hurricane Gustav.
Energy companies reported 15 rigs and 200 production platforms are evacuated, the Minerals Management Service said in a statement on its Web site. About 1 million barrels of daily oil production and 4.7 billion cubic feet of gas remain shut in.
Brent crude oil for October settlement fell as much as $2.17, or 2.1 percent, to $101.27 a barrel on London's ICE Futures Europe exchange. It was at $101.83 a barrel at 1:38 p.m. local time.
OPEC Meets
The Gulf of Mexico accounts for 26 percent of U.S. oil production and 14 percent of natural-gas output. The Gulf produces 1.3 million barrels of oil and an estimated 7.4 billion cubic feet of gas a day, according to the Minerals Management Service, part of the U.S. Interior Department.
Natural gas for October delivery fell 4.5 percent to $7.192 per million British thermal units, while gasoline futures fell 3.9 percent to $2.6440 a gallon.
OPEC will review production targets for the fourth quarter at a meeting tonight. The group will probably keep output unchanged, according to 29 of 32 energy analysts surveyed by Bloomberg last week.
U.S. Relations
Prices will continue to fall irrespective of what the group decides to do, OPEC President Chakib Khelil said in a Bloomberg television interview today.
``A production cut would not serve much of a purpose,'' Khelil said in Vienna. ``Rather, it will damage the advantage the organization has got by making a positive gesture toward consuming countries,'' he said.
Khelil, who is also Algeria's oil minister, said there probably wouldn't be any need for OPEC to meet again between now and December.
OPEC does not want to jeopardize its relations with the U.S. by cutting output, possibly sending prices back towards the record $147.27 a barrel reached in July, said Stephen Schork, president of energy markets analysis firm Schork Group Inc., in a Bloomberg radio interview.
``Crude oil is still well over $100, gasoline, heating oil prices and fuel oil prices here in the United States and in Europe are still very expensive,'' he said. ``OPEC would like to cut production, but given the elections in the United States, I think they will refrain.''
To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net
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Oil Falls as Minister Comments Signal OPEC Won't Cut Output
By Mark Shenk
Sept. 8 (Bloomberg) -- Crude oil fell to a five-month low as the Saudi Arabian and Venezuelan oil ministers signaled that OPEC may maintain production levels when it meets today in Vienna.
The market is ``well-balanced'' Saudi Oil Minister Ali al- Naimi said today. Rafael Ramirez, Venezuela's energy and oil minister, said the group should leave production unchanged. Most analysts surveyed by Bloomberg News expect the Organization of Petroleum Exporting Countries to keep output unchanged. Oil also fell as Hurricane Ike weakened and veered away from platforms.
``If Venezuela is comfortable with a rollover, we aren't going to see a cut from OPEC,'' said Tim Evans, an energy analyst with Citi Futures Perspective in New York. ``There will probably be a lot of talk about compliance, and little else.''
Crude oil for October delivery fell $2.37, or 2.2 percent, to $103.97 a barrel at 9:51 a.m. on the New York Mercantile Exchange. Futures touched $103.85, the lowest since April 3. Prices are up 36 percent from a year ago.
Ike weakened to Category 1 on the 5-step Saffir-Simpson scale of intensity as it passed over Cuba, easing concern it will damage Gulf of Mexico oil facilities. Sustained winds dropped to 80 miles (130 kilometers) per hour, the U.S. National Hurricane Center said on its Web site at 5 a.m. Miami time.
The contract climbed as much as 3.5 percent yesterday as Ike delayed the restoration of Gulf output that was closed because of Hurricane Gustav last week. Ike was moving across Cuba's western tip and was forecast to strengthen as it turns west into the Gulf. The center's 5-day forecast shows the storm making landfall near Corpus Christi, Texas.
Hard Work
``We have worked very hard since June's meeting to bring prices to where they are now,'' al-Naimi said upon arrival in Vienna. ``We have been very successful.''
Crude oil prices are down 29 percent from a record $147.27 reached July 11.
``Venezuela will support leaving production unchanged'' at today's meeting, Ramirez said as he arrived at his hotel in Vienna. ``Stocks are at a comfortable level and we're seeing an overproduction of 1 million to 1.5 million barrels a day.''
Ramirez called for stricter compliance with production quotas to counter a potential gain in stockpiles in the first quarter next year. ``History has shown that if inventories rise above normal levels, we will have a price collapse,'' he said.
The market is nearing an ``equilibrium'' at about $100 a barrel, Ramirez said. He declined to comment on whether an output cut is on the table at today's gathering and said an additional meeting before OPEC's Dec. 17 summit in Algeria is possible. ``We will carefully have to monitor the market until then,'' he added.
Strong Economies
``The last thing OPEC wants is to see economies crater around the world,'' said Chip Hodge, a managing director at MFC Global Investment Management in Boston, who oversees a $4.5 billion energy-company bond portfolio. ``They want to see strong demand growth.''
Brent crude oil for October settlement declined $1.57, or 1.5 percent, to $101.87 a barrel on London's ICE Futures Europe. Prices touched $101.27, the lowest since April 2. The contract has dropped nine straight days, the longest stretch since 1988.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
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Sept. 8 (Bloomberg) -- Crude oil fell to a five-month low as the Saudi Arabian and Venezuelan oil ministers signaled that OPEC may maintain production levels when it meets today in Vienna.
The market is ``well-balanced'' Saudi Oil Minister Ali al- Naimi said today. Rafael Ramirez, Venezuela's energy and oil minister, said the group should leave production unchanged. Most analysts surveyed by Bloomberg News expect the Organization of Petroleum Exporting Countries to keep output unchanged. Oil also fell as Hurricane Ike weakened and veered away from platforms.
``If Venezuela is comfortable with a rollover, we aren't going to see a cut from OPEC,'' said Tim Evans, an energy analyst with Citi Futures Perspective in New York. ``There will probably be a lot of talk about compliance, and little else.''
Crude oil for October delivery fell $2.37, or 2.2 percent, to $103.97 a barrel at 9:51 a.m. on the New York Mercantile Exchange. Futures touched $103.85, the lowest since April 3. Prices are up 36 percent from a year ago.
Ike weakened to Category 1 on the 5-step Saffir-Simpson scale of intensity as it passed over Cuba, easing concern it will damage Gulf of Mexico oil facilities. Sustained winds dropped to 80 miles (130 kilometers) per hour, the U.S. National Hurricane Center said on its Web site at 5 a.m. Miami time.
The contract climbed as much as 3.5 percent yesterday as Ike delayed the restoration of Gulf output that was closed because of Hurricane Gustav last week. Ike was moving across Cuba's western tip and was forecast to strengthen as it turns west into the Gulf. The center's 5-day forecast shows the storm making landfall near Corpus Christi, Texas.
Hard Work
``We have worked very hard since June's meeting to bring prices to where they are now,'' al-Naimi said upon arrival in Vienna. ``We have been very successful.''
Crude oil prices are down 29 percent from a record $147.27 reached July 11.
``Venezuela will support leaving production unchanged'' at today's meeting, Ramirez said as he arrived at his hotel in Vienna. ``Stocks are at a comfortable level and we're seeing an overproduction of 1 million to 1.5 million barrels a day.''
Ramirez called for stricter compliance with production quotas to counter a potential gain in stockpiles in the first quarter next year. ``History has shown that if inventories rise above normal levels, we will have a price collapse,'' he said.
The market is nearing an ``equilibrium'' at about $100 a barrel, Ramirez said. He declined to comment on whether an output cut is on the table at today's gathering and said an additional meeting before OPEC's Dec. 17 summit in Algeria is possible. ``We will carefully have to monitor the market until then,'' he added.
Strong Economies
``The last thing OPEC wants is to see economies crater around the world,'' said Chip Hodge, a managing director at MFC Global Investment Management in Boston, who oversees a $4.5 billion energy-company bond portfolio. ``They want to see strong demand growth.''
Brent crude oil for October settlement declined $1.57, or 1.5 percent, to $101.87 a barrel on London's ICE Futures Europe. Prices touched $101.27, the lowest since April 2. The contract has dropped nine straight days, the longest stretch since 1988.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
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Mantega Says Brazil's Currency May Weaken Further
By Andre Soliani and Heloiza Canassa
Sept. 9 (Bloomberg) -- Brazil's real, the worst performing Latin American currency in the past two months, will weaken further because of reduced investment flows and a narrowing trade surplus, Finance Minister Guido Mantega said.
The real has weakened 9.2 percent against the U.S. dollar since July 1, compared with a 9 percent drop for the Colombian peso and a 1.3 percent decline for the Mexican peso. Chile's peso fell 1 percent during the same period. Today the Brazilian currency fell to a seven-month low.
``We've reached the limit of the real's appreciation,'' Mantega said today during an event in Brasilia. ``And in a way it's good because it won't hinder our exports.''
Brazil's annual current account deficit widened to $19.5 billion in the 12 months through June. It was the biggest gap in six years as companies stepped up profit remittances and increased imports, the central bank said last month. Turbulence in global financial markets has increased risk aversion and is limiting inflows into Brazil, Mantega said.
The real declined for a sixth day in seven, dropping 1.4 percent to 1.76 per dollar at 9:29 a.m. New York time. Earlier, the real traded at 1.7659, the weakest level against the dollar since Feb. 11. The real peaked at 1.56 to the dollar on Aug. 1.
``The drop in the trade surplus, the increase in the current account deficit and the scarcity of capital in international markets has decreased the inflows of capital to Brazil,'' Mantega said late yesterday to celebrate the 200th anniversary of the finance ministry.
Mantega said today the currency decline won't stoke inflation because energy and commodity prices are falling.
Weekly Decline
The real last week had its biggest weekly decline in 5 1/2 years as a tumble in commodities and a global economic slump reduced demand for emerging-market securities. The real sank 5.2 percent, the most since January 2003.
Demand has eroded among investors seeking to take advantage of Brazil's 13 percent benchmark lending rate, which compares with the Federal Reserve's 2 percent target. Brazil's central bank will raise the benchmark rate to 13.75 percent tomorrow, according to 32 of 33 economists surveyed by Bloomberg.
The yield on Brazil's zero-coupon bonds due in January 2010 rose 5 basis points, or 0.05 percentage point, to 14.88 percent yesterday, according to Banco Votorantim. The yield on the overnight futures contract for January delivery increased 2 basis points to 13.94 percent.
To be sure, the weakening of the real will make Brazilian exports relatively cheaper for foreigners to buy and eventually help bolster the trade surplus, Mantega said.
To contact the reporters on this story: Heloiza Canassa in Sao Paulo at hcanassa@bloomberg.netAndre Soliani in Brasilia at asoliani@bloomberg.net
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Sept. 9 (Bloomberg) -- Brazil's real, the worst performing Latin American currency in the past two months, will weaken further because of reduced investment flows and a narrowing trade surplus, Finance Minister Guido Mantega said.
The real has weakened 9.2 percent against the U.S. dollar since July 1, compared with a 9 percent drop for the Colombian peso and a 1.3 percent decline for the Mexican peso. Chile's peso fell 1 percent during the same period. Today the Brazilian currency fell to a seven-month low.
``We've reached the limit of the real's appreciation,'' Mantega said today during an event in Brasilia. ``And in a way it's good because it won't hinder our exports.''
Brazil's annual current account deficit widened to $19.5 billion in the 12 months through June. It was the biggest gap in six years as companies stepped up profit remittances and increased imports, the central bank said last month. Turbulence in global financial markets has increased risk aversion and is limiting inflows into Brazil, Mantega said.
The real declined for a sixth day in seven, dropping 1.4 percent to 1.76 per dollar at 9:29 a.m. New York time. Earlier, the real traded at 1.7659, the weakest level against the dollar since Feb. 11. The real peaked at 1.56 to the dollar on Aug. 1.
``The drop in the trade surplus, the increase in the current account deficit and the scarcity of capital in international markets has decreased the inflows of capital to Brazil,'' Mantega said late yesterday to celebrate the 200th anniversary of the finance ministry.
Mantega said today the currency decline won't stoke inflation because energy and commodity prices are falling.
Weekly Decline
The real last week had its biggest weekly decline in 5 1/2 years as a tumble in commodities and a global economic slump reduced demand for emerging-market securities. The real sank 5.2 percent, the most since January 2003.
Demand has eroded among investors seeking to take advantage of Brazil's 13 percent benchmark lending rate, which compares with the Federal Reserve's 2 percent target. Brazil's central bank will raise the benchmark rate to 13.75 percent tomorrow, according to 32 of 33 economists surveyed by Bloomberg.
The yield on Brazil's zero-coupon bonds due in January 2010 rose 5 basis points, or 0.05 percentage point, to 14.88 percent yesterday, according to Banco Votorantim. The yield on the overnight futures contract for January delivery increased 2 basis points to 13.94 percent.
To be sure, the weakening of the real will make Brazilian exports relatively cheaper for foreigners to buy and eventually help bolster the trade surplus, Mantega said.
To contact the reporters on this story: Heloiza Canassa in Sao Paulo at hcanassa@bloomberg.netAndre Soliani in Brasilia at asoliani@bloomberg.net
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Canadian Dollar Gains as Housing Starts Increase in August
By Daniel Kruger
Sept. 9 (Bloomberg) -- The Canadian dollar rose after a report showed housing starts increased during August.
Canada's dollar appreciated versus 13 of the 16 most- actively traded currencies. Canada Mortgage and Housing Corp. in Ottawa said new-home starts totaled 211,000 units on an annualized basis, up from 186,500 the month before. Economists predicted 191,000 starts, the median of 18 responses in a Bloomberg News survey.
The Canadian currency, dubbed the loonie because of the aquatic bird on the one-dollar coin, strengthened 0.2 percent to C$1.0624 per U.S. dollar at 8:18 a.m. in Toronto, from C$1.0649 yesterday. One Canadian dollar buys 94.11 U.S. cents.
The Canadian dollar has fallen 5 percent against the U.S. currency since July 11, when the price of crude oil peaked at $147.27 a barrel. The U.S. currency has rallied as demand for commodities has declined amid a global economic slowdown.
Canadian Prime Minister Stephen Harper called elections for Oct. 14, promising to continue delivering budget surpluses after a record 10 in a row and warning that a ``risky'' opposition plan to tax polluters would undermine an already slowing economy.
Liberal opposition leader Stephane Dion countered that his proposed levy on polluters would be used to spark growth with tax cuts and increased spending. He also pledged to help ailing manufacturing industries that he said Harper's Conservative Party has ignored.
The Bank of Canada estimates that the economy will grow 1 percent this year, the slowest since 1992.
To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net
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Sept. 9 (Bloomberg) -- The Canadian dollar rose after a report showed housing starts increased during August.
Canada's dollar appreciated versus 13 of the 16 most- actively traded currencies. Canada Mortgage and Housing Corp. in Ottawa said new-home starts totaled 211,000 units on an annualized basis, up from 186,500 the month before. Economists predicted 191,000 starts, the median of 18 responses in a Bloomberg News survey.
The Canadian currency, dubbed the loonie because of the aquatic bird on the one-dollar coin, strengthened 0.2 percent to C$1.0624 per U.S. dollar at 8:18 a.m. in Toronto, from C$1.0649 yesterday. One Canadian dollar buys 94.11 U.S. cents.
The Canadian dollar has fallen 5 percent against the U.S. currency since July 11, when the price of crude oil peaked at $147.27 a barrel. The U.S. currency has rallied as demand for commodities has declined amid a global economic slowdown.
Canadian Prime Minister Stephen Harper called elections for Oct. 14, promising to continue delivering budget surpluses after a record 10 in a row and warning that a ``risky'' opposition plan to tax polluters would undermine an already slowing economy.
Liberal opposition leader Stephane Dion countered that his proposed levy on polluters would be used to spark growth with tax cuts and increased spending. He also pledged to help ailing manufacturing industries that he said Harper's Conservative Party has ignored.
The Bank of Canada estimates that the economy will grow 1 percent this year, the slowest since 1992.
To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net
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Dollar Rises for Ninth Day Versus Euro as Crude Oil Falls
By Ye Xie and Agnes Lovasz
Sept. 9 (Bloomberg) -- The dollar advanced for a ninth consecutive day against the euro as crude oil prices fell.
The greenback earlier traded within a cent of $1.40 per euro as the U.S. government's takeover of Fannie Mae and Freddie Mac boosted confidence in global markets.
`Commodities are coming under renewed pressure,'' said Shaun Osborne, chief currency strategist at TD Securities Inc. in Toronto. ``We have seen the correlation between crude oil and the major currencies remain strong or strengthen over the past few weeks, so weaker crude oil should translate into a weaker euro.''
The dollar increased 0.2 percent to $1.41 per euro at 9:22 a.m. in New York, from $1.4128 yesterday. It touched $1.4047, the strongest level since Oct. 9, 2007. The yen gained 0.4 percent to 107.83 per dollar, from 108.28. The euro decreased 0.6 percent to 152.09 yen, from 152.96.
The euro is likely to approach ``support'' at $1.3840 against the dollar this week, said Pak Lai Ng, a technical analyst at Forecast Pte in Singapore, citing charts that predict price movements.
That level is a 50 percent retracement of the euro's rise from the November 2005 low of $1.1640 to the all-time high of $1.6038 set in July, based on a series of numbers known as the Fibonacci sequence. The support level, where euro buy orders are concentrated, lies on an ascending trend line that began in February 2002, Ng said. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low.
RBS Forecast
Royal Bank of Scotland Group Plc cut its forecasts for the euro versus the dollar today. The single currency will end the year at $1.40 before weakening to $1.35 by the end of the first quarter of 2009, it said. The bank's previous predictions were $1.50 and $1.45, respectively.
The U.S. government seized control of Fannie Mae and Freddie Mac on Sept. 7 after the biggest surge in mortgage defaults in at least three decades threatened to topple the companies. The Treasury plans to provide secured short-term funding to Fannie, Freddie and 12 federal home loan banks.
The European currency was supported earlier on speculation Pfizer Inc. may make a bid for Bayer AG, Germany's largest drugmaker. Bayer, based in Leverkusen, Germany, has a market capitalization of almost 42 billion euros ($59 billion), based on today's share price. Bayer spokesman Guenter Forneck declined to comment. New York-based Pfizer is the world's biggest drugmaker.
To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Agnes Lovasz in London at alovasz@bloomberg.net
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Nickel Falls in London as Posco Cuts Stainless-Steel Output
By Chanyaporn Chanjaroen
Sept. 9 (Bloomberg) -- Nickel fell in London as Posco, Asia's largest maker of stainless steel, plans to extend output cuts for a third month, indicating weaker demand for the metal. Aluminum and copper also dropped.
About two-thirds of nickel production is used in stainless steel. South Korea's Posco will lower output by 20 percent, or 25,000 metric tons, from the normal monthly level, Suh Young Sea, senior vice president of the stainless-steel business, said today in a phone interview.
``Nickel is kind of stuck between weak demand and high supply,'' said Stephen Briggs, a commodity strategist at RBS Global Banking & Markets in London. ``I don't think a huge bounce in prices is warranted.''
Nickel for delivery in three months dropped $150, or 0.8 percent, to $18,700 a metric ton as of 12:48 p.m. on the London Metal Exchange.
Nickel has fallen 29 percent this year, leading declines among LME-traded metals, as a slowdown in construction undermines demand for stainless steel. China's three largest producers of the alloy said last month that usage would stay weak in September.
Stockpiles of nickel monitored by the LME rose 840 tons, or 1.7 percent, to 50,166 tons, the highest since May 9, according to the exchange's daily report.
Copper, aluminum and zinc prices may slip by 5 percent to 10 percent as a slowing global economy crimps demand, Vedanta Resources Plc Chairman Anil Agarwal told reporters in Mumbai today, without providing a timeframe for the declines. The company is India's largest producer of zinc and copper.
Copper dropped $85, or 1.2 percent, to $6,863 a ton. LME- monitored copper stockpiles jumped 1,300 tons, or 0.7 percent, to 202,125 tons, the highest since March 2007.
Lower Quality
BHP Billiton Ltd., the largest mining company, expects output at its Escondida copper mine in Chile will drop as much as 15 percent because the quality of ore is declining.
``For the next two years, we've got a 10 to 15 percent production decline, and then we'll resume the trajectory it was on earlier,'' Chief Executive Officer Marius Kloppers said yesterday in an interview in New York. Supplies from Escondida, the world's biggest copper mine, increased 18 percent in 2007.
Among other metals traded on the LME, lead lost $41, or 2.2 percent, to $1,810 and tin slipped $105, or 0.6 percent, to $18,995 a ton. Zinc declined $35, or 2 percent, to $1,735.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
Read more...
Sept. 9 (Bloomberg) -- Nickel fell in London as Posco, Asia's largest maker of stainless steel, plans to extend output cuts for a third month, indicating weaker demand for the metal. Aluminum and copper also dropped.
About two-thirds of nickel production is used in stainless steel. South Korea's Posco will lower output by 20 percent, or 25,000 metric tons, from the normal monthly level, Suh Young Sea, senior vice president of the stainless-steel business, said today in a phone interview.
``Nickel is kind of stuck between weak demand and high supply,'' said Stephen Briggs, a commodity strategist at RBS Global Banking & Markets in London. ``I don't think a huge bounce in prices is warranted.''
Nickel for delivery in three months dropped $150, or 0.8 percent, to $18,700 a metric ton as of 12:48 p.m. on the London Metal Exchange.
Nickel has fallen 29 percent this year, leading declines among LME-traded metals, as a slowdown in construction undermines demand for stainless steel. China's three largest producers of the alloy said last month that usage would stay weak in September.
Stockpiles of nickel monitored by the LME rose 840 tons, or 1.7 percent, to 50,166 tons, the highest since May 9, according to the exchange's daily report.
Copper, aluminum and zinc prices may slip by 5 percent to 10 percent as a slowing global economy crimps demand, Vedanta Resources Plc Chairman Anil Agarwal told reporters in Mumbai today, without providing a timeframe for the declines. The company is India's largest producer of zinc and copper.
Copper dropped $85, or 1.2 percent, to $6,863 a ton. LME- monitored copper stockpiles jumped 1,300 tons, or 0.7 percent, to 202,125 tons, the highest since March 2007.
Lower Quality
BHP Billiton Ltd., the largest mining company, expects output at its Escondida copper mine in Chile will drop as much as 15 percent because the quality of ore is declining.
``For the next two years, we've got a 10 to 15 percent production decline, and then we'll resume the trajectory it was on earlier,'' Chief Executive Officer Marius Kloppers said yesterday in an interview in New York. Supplies from Escondida, the world's biggest copper mine, increased 18 percent in 2007.
Among other metals traded on the LME, lead lost $41, or 2.2 percent, to $1,810 and tin slipped $105, or 0.6 percent, to $18,995 a ton. Zinc declined $35, or 2 percent, to $1,735.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
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Palm Oil to Average $700/Ton as Crude Falls, LMC Says
By Claire Leow
Sept. 9 (Bloomberg) -- Palm oil will average about $700 a metric ton over the northern hemisphere winter as crude oil prices decline, according to LMC International Ltd.'s James Fry.
Crude oil may trade between $80 and $85 a barrel over the winter months, Fry, managing director at the commodity and biofuel research company, told reporters at a conference in Singapore. Oil traded at $105.24 a barrel in New York.
Palm and soybean oils, mostly used in food, often follow crude oil as they can be used as biofuels. Crude has tumbled 27 percent from its July 11 record, while the price of palm oil has almost halved from a March peak. Palm oil tends to cloud in cold weather, reducing its appeal for use in cooking and fuels.
``Crude oil should fall another $20 from here and that will keep palm oil depressed,'' Fry said. ``Palm oil has trouble making more sales because of its cold-weather properties.''
Fry's forecast is about 28 percent less than the commodity's year-to-date average of 3,344 ringgit ($970) a ton. The vegetable oil today fell 4.6 percent to close at 2,345 ringgit.
Fry wrongly predicted Sept. 23, 2007, that prices may touch 2,250 ringgit a ton by January of this year as production rose. It averaged 3,226 ringgit in January and reached a record 4,486 ringgit in March.
On April 10, he said palm's gain of 57 percent in 12 months had been ``reasonable'' as it was tracking crude prices higher. On March 13, Fry predicted the price may average 2,060 ringgit a ton for the full year.
To contact the reporter on this story: Claire Leow in Singapore at cleow@bloomberg.net
Read more...
Sept. 9 (Bloomberg) -- Palm oil will average about $700 a metric ton over the northern hemisphere winter as crude oil prices decline, according to LMC International Ltd.'s James Fry.
Crude oil may trade between $80 and $85 a barrel over the winter months, Fry, managing director at the commodity and biofuel research company, told reporters at a conference in Singapore. Oil traded at $105.24 a barrel in New York.
Palm and soybean oils, mostly used in food, often follow crude oil as they can be used as biofuels. Crude has tumbled 27 percent from its July 11 record, while the price of palm oil has almost halved from a March peak. Palm oil tends to cloud in cold weather, reducing its appeal for use in cooking and fuels.
``Crude oil should fall another $20 from here and that will keep palm oil depressed,'' Fry said. ``Palm oil has trouble making more sales because of its cold-weather properties.''
Fry's forecast is about 28 percent less than the commodity's year-to-date average of 3,344 ringgit ($970) a ton. The vegetable oil today fell 4.6 percent to close at 2,345 ringgit.
Fry wrongly predicted Sept. 23, 2007, that prices may touch 2,250 ringgit a ton by January of this year as production rose. It averaged 3,226 ringgit in January and reached a record 4,486 ringgit in March.
On April 10, he said palm's gain of 57 percent in 12 months had been ``reasonable'' as it was tracking crude prices higher. On March 13, Fry predicted the price may average 2,060 ringgit a ton for the full year.
To contact the reporter on this story: Claire Leow in Singapore at cleow@bloomberg.net
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Orange Juice Falls to Three-Year Low as Florida Spared From Ike
By Ron Day
Sept. 9 (Bloomberg) -- Orange-juice futures tumbled to a three-year low as Hurricane Ike veered away from Florida, the world's second-biggest orange grower.
Ike hit central Cuba, killing four people and prompting mass evacuations, before heading for the Gulf of Mexico, potentially threatening U.S. oil rigs. Tropical-storm warnings were in effect in the Florida Keys from Ocean Reef to the Dry Tortugas, the U.S. National Hurricane Center said.
Orange-juice futures for November delivery fell 8.75 cents, or 8.5 percent, to 93.8 cents a pound at 8:50 a.m. on ICE Futures U.S., the former New York Board of Trade. Earlier, the price touched 91.15 cents, the lowest since Sept. 9, 2005.
Yesterday, the most-active contract plunged 8.9 percent, the most in nine years, or 10 cents, the exchange limit. The ICE maximum increased to 20 cents today.
Before today, prices dropped 29 percent this year.
Brazil is the world's largest orange grower.
To contact the reporter on this story: Ron Day in New York at rday1@bloomberg.net.
Read more...
Sept. 9 (Bloomberg) -- Orange-juice futures tumbled to a three-year low as Hurricane Ike veered away from Florida, the world's second-biggest orange grower.
Ike hit central Cuba, killing four people and prompting mass evacuations, before heading for the Gulf of Mexico, potentially threatening U.S. oil rigs. Tropical-storm warnings were in effect in the Florida Keys from Ocean Reef to the Dry Tortugas, the U.S. National Hurricane Center said.
Orange-juice futures for November delivery fell 8.75 cents, or 8.5 percent, to 93.8 cents a pound at 8:50 a.m. on ICE Futures U.S., the former New York Board of Trade. Earlier, the price touched 91.15 cents, the lowest since Sept. 9, 2005.
Yesterday, the most-active contract plunged 8.9 percent, the most in nine years, or 10 cents, the exchange limit. The ICE maximum increased to 20 cents today.
Before today, prices dropped 29 percent this year.
Brazil is the world's largest orange grower.
To contact the reporter on this story: Ron Day in New York at rday1@bloomberg.net.
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Gold, Silver Fall as Oil Drop Erodes Demand for Inflation Hedge
By Pham-Duy Nguyen
Sept. 9 (Bloomberg) -- Gold fell for a seventh straight session, touching a three-week low, as a decline in energy costs reduced demand for the precious metal as a hedge against inflation. Silver also dropped.
Crude-oil tumbled as much as 2.3 percent to $103.85 a barrel today in New York, the lowest price since April. Some investors buy gold to preserve purchasing power when energy costs rise. Gold reached a record in March as oil headed for an all-time high in July.
``Oil is starting to pull gold down,'' said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. ``The market is looking for excuses and the current excuse is oil.''
Gold futures for December delivery fell $13.50, or 1.7 percent, to $789 an ounce at 8:56 a.m. on the Comex division of the New York Mercantile Exchange, the lowest for a most-active contract since Aug. 19. A close at that price would be the first under $800 since Aug. 15.
Silver futures for December delivery fell 20 cents, or 1.7 percent, to $11.865 an ounce on Comex. Before today, silver fell 19 percent this year, while gold slipped 4.2 percent.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
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Sept. 9 (Bloomberg) -- Gold fell for a seventh straight session, touching a three-week low, as a decline in energy costs reduced demand for the precious metal as a hedge against inflation. Silver also dropped.
Crude-oil tumbled as much as 2.3 percent to $103.85 a barrel today in New York, the lowest price since April. Some investors buy gold to preserve purchasing power when energy costs rise. Gold reached a record in March as oil headed for an all-time high in July.
``Oil is starting to pull gold down,'' said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. ``The market is looking for excuses and the current excuse is oil.''
Gold futures for December delivery fell $13.50, or 1.7 percent, to $789 an ounce at 8:56 a.m. on the Comex division of the New York Mercantile Exchange, the lowest for a most-active contract since Aug. 19. A close at that price would be the first under $800 since Aug. 15.
Silver futures for December delivery fell 20 cents, or 1.7 percent, to $11.865 an ounce on Comex. Before today, silver fell 19 percent this year, while gold slipped 4.2 percent.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
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French Stocks: EADS, GL Events, Kindy, Michelin, Vallourec
By Adria Cimino
Sept. 9 (Bloomberg) -- France's CAC 40 Index gained 26.60, or 0.6 percent, to 4,366.78 at 2:19 p.m. in Paris after rallying 3.4 percent yesterday. The SBF 120 Index also added 0.6 percent.
The following shares rose or fell in Paris. Stock symbols are in parentheses.
Groupe Agta Record (AGTA FP) jumped 85 cents, or 3.8 percent, to 23.10 euros, rising for a second day. The revolving-door maker reported a 4.5 percent rise in first-half net income to 6.9 million euros ($9.7 million) and forecast full-year sales growth of at least 9 percent.
ArcelorMittal (MTP FP), the world's biggest steelmaker, slid 94 cents, or 2.1 percent, to 43.68 euros, falling for the first time this week. Cia. Vale do Rio Doce, the world's biggest iron-ore producer, asked Nippon Steel Corp. and its Japanese rivals to pay 12 percent more for the material on top of a 65 percent increase agreed to in February, two people familiar with the negotiations said.
Carbone Lorraine SA (CRL FP) advanced 1.03 euros, or 2.9 percent, to 36.80, gaining the most in five weeks. The maker of electric motor parts won two contracts worth a total $85 million from the solar energy industry.
European Aeronautic, Defence & Space Co. (EAD FP), owner of planemaker Airbus SAS, climbed 75 cents, or 4.9 percent, to 15.95 euros, advancing for a second day. Airbus SAS, the world's biggest planemaker, said it's seeking 650 million euros in further cost cuts through 2012 as it and parent EADS seek to cope with a weak dollar.
GL Events SA (GLO FP) soared 2.75 euros, or 16 percent, to 19.95, increasing the most since December 2001. The exhibition and events organizer confirmed its forecasts for the full year and predicted significant growth in 2009.
Itesoft SA (ITE FP) added 10 cents, or 4.8 percent, to 2.20 euros gaining the most in about three weeks. The software developer won a 1.8 million-euro contract from French social security agency CNAM.
Groupe Kindy SA (KIND FP) rose 63 cents, or 8 percent, to 8.50 euros, advancing the most since July 29. The maker of socks said it signed a partnership for the design and manufacture of socks with DIM.
Michelin & Cie. (ML FP), the world's second-largest tiremaker, climbed 2.48 euros, or 5.1 percent, to 50.70, gaining for a second day. Air France-KLM Group (AF FP), Europe's biggest airline, jumped 82 cents, or 4.8 percent, to 17.87 euros, rising for a second day.
Crude oil fell in New York as Saudi Arabia's oil minister said supplies are sufficient to meet demand, raising speculation that OPEC will maintain production levels when it meets today. The contract for October delivery dropped as much as 2 percent to $104.23 on the New York Mercantile Exchange.
Vallourec SA (VK FP), the second-biggest maker of steel tubes that carry oil and gas, slid 5.38 euros, or 3.3 percent, to 156.48, falling for the first time this week.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
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Sept. 9 (Bloomberg) -- France's CAC 40 Index gained 26.60, or 0.6 percent, to 4,366.78 at 2:19 p.m. in Paris after rallying 3.4 percent yesterday. The SBF 120 Index also added 0.6 percent.
The following shares rose or fell in Paris. Stock symbols are in parentheses.
Groupe Agta Record (AGTA FP) jumped 85 cents, or 3.8 percent, to 23.10 euros, rising for a second day. The revolving-door maker reported a 4.5 percent rise in first-half net income to 6.9 million euros ($9.7 million) and forecast full-year sales growth of at least 9 percent.
ArcelorMittal (MTP FP), the world's biggest steelmaker, slid 94 cents, or 2.1 percent, to 43.68 euros, falling for the first time this week. Cia. Vale do Rio Doce, the world's biggest iron-ore producer, asked Nippon Steel Corp. and its Japanese rivals to pay 12 percent more for the material on top of a 65 percent increase agreed to in February, two people familiar with the negotiations said.
Carbone Lorraine SA (CRL FP) advanced 1.03 euros, or 2.9 percent, to 36.80, gaining the most in five weeks. The maker of electric motor parts won two contracts worth a total $85 million from the solar energy industry.
European Aeronautic, Defence & Space Co. (EAD FP), owner of planemaker Airbus SAS, climbed 75 cents, or 4.9 percent, to 15.95 euros, advancing for a second day. Airbus SAS, the world's biggest planemaker, said it's seeking 650 million euros in further cost cuts through 2012 as it and parent EADS seek to cope with a weak dollar.
GL Events SA (GLO FP) soared 2.75 euros, or 16 percent, to 19.95, increasing the most since December 2001. The exhibition and events organizer confirmed its forecasts for the full year and predicted significant growth in 2009.
Itesoft SA (ITE FP) added 10 cents, or 4.8 percent, to 2.20 euros gaining the most in about three weeks. The software developer won a 1.8 million-euro contract from French social security agency CNAM.
Groupe Kindy SA (KIND FP) rose 63 cents, or 8 percent, to 8.50 euros, advancing the most since July 29. The maker of socks said it signed a partnership for the design and manufacture of socks with DIM.
Michelin & Cie. (ML FP), the world's second-largest tiremaker, climbed 2.48 euros, or 5.1 percent, to 50.70, gaining for a second day. Air France-KLM Group (AF FP), Europe's biggest airline, jumped 82 cents, or 4.8 percent, to 17.87 euros, rising for a second day.
Crude oil fell in New York as Saudi Arabia's oil minister said supplies are sufficient to meet demand, raising speculation that OPEC will maintain production levels when it meets today. The contract for October delivery dropped as much as 2 percent to $104.23 on the New York Mercantile Exchange.
Vallourec SA (VK FP), the second-biggest maker of steel tubes that carry oil and gas, slid 5.38 euros, or 3.3 percent, to 156.48, falling for the first time this week.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
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German Stocks Advance, Led by Deutsche Bank, Daimler, Lufthansa
By Henrietta Rumberger and Stefanie Haxel
Sept. 9 (Bloomberg) -- German stocks climbed for a second day as concern eased that credit-related losses will curb profits at banks and lower oil prices lifted airlines and carmakers.
Deutsche Bank AG rose to a four-week high and Commerzbank AG advanced 5 percent. Daimler AG, the world's second-largest maker of luxury cars, and Deutsche Lufthansa AG led gains among companies sensitive to fuel costs. Celesio AG jumped to a five- month high after CA Cheuvreux upgraded Europe's largest drug wholesaler to ``outperform.''
The DAX Index added 36.42, or 0.6 percent, to 6,300.16 as of 2:18 p.m. in Frankfurt. DAX futures expiring in September rallied 0.7 percent to 6,305. The HDAX Index of the country's 110 biggest companies rose 0.3 percent.
The benchmark index for German equities gained 2.2 percent yesterday on speculation the U.S. government's takeover of Fannie Mae and Freddie Mac will stabilize the mortgage market after credit losses and writedowns at financial firms worldwide topped $500 billion.
``What the example of Fannie Mae and Freddie Mac showed is that in case of emergency, there is always a solution,'' Achim Matzke, an equity strategist at Commerzbank AG in Frankfurt, said in a Bloomberg Television interview.
Deutsche Bank, Germany's largest, advanced 2.38 euros, or 4 percent, to 62.555, the highest since Aug. 12. Commerzbank, the second-biggest, gained 85 cents, or 5 percent, to 18 euros. Allianz SE, Europe's biggest insurer, increased 3.53 euros, or 3.2 percent, to 115.66.
Deutsche Postbank AG, the country's biggest consumer bank by clients, climbed 1.06 euros, or 2.4 percent, to 44.83.
Reviving Talks
Banco Santander SA, Spain's biggest bank, revived talks aimed at an acquisition of Deutsche Postbank after the lender's market value fell, two people with knowledge of the matter said. Santander is vying with Deutsche Bank for Postbank, said the people, who declined to be identified because the talks are private. Parent Deutsche Post AG added 8.5 cents, or 0.5 percent, to 15.795 euros.
Deutsche Post spokeswoman Nicole Mommsen said the company is still examining several options for the future of Postbank. Deutsche Bank spokesman Michael Lermer reiterated that the company would consider acquisitions if they make strategic sense and bolster shareholder value. Santander spokesman Peter Greiff declined to comment.
Crude oil for October delivery fell as much as 2 percent to $104.23 a barrel in New York after Saudi Arabia's oil minister said supplies are sufficient to meet demand, raising speculation that OPEC will maintain production levels when it meets today.
Daimler, Lufthansa
Daimler rose 1.05 euros, or 2.6 percent, to 41.435 euros. Bayerische Motoren Werke AG, the world's biggest luxury carmaker, gained 52 cents, or 1.8 percent, to 29.24 euros.
Lufthansa, Europe's second-largest airline, added 27 cents, or 1.8 percent, to 15.30 euros. Jet-fuel prices in northwest Europe declined for a ninth straight day, Bloomberg data show.
Bayer AG, Germany's biggest drugmaker, jumped 1.64 euros, or 3.1 percent, to 54.34, the steepest gain since July 25.
``There's speculation in the market today that Pfizer may bid for Bayer,'' said Manfred Groeschel, an equity trader at Merck Finck & Co. in Munich.
U.S.-based Pfizer Inc. is the world's largest drugmaker. Bayer spokesman Guenter Forneck declined to comment.
Celesio surged 2.75 euros, or 10 percent, to 30, the highest since April 8. Cheuvreux lifted its recommendation from ``underperform.''
A new pharmacy contract in England this week will add 150 million British pounds ($264 million) in new funds, removing the risk of further price cuts in Celesio's most important market, analyst Oliver Reinberg wrote in a note to clients today.
The following stocks also rose or fell in German markets. Symbols are in parentheses.
European Aeronautic, Defence & Space Co. (EAD GY) climbed 73 cents, or 4.8 percent, to 15.92 euros, advancing for a second day. The parent of planemaker Airbus SAS will shift some Airbus parts production to Tunisia as it seeks 1 billion euros ($1.42 billion) of savings from 2010, Le Monde reported, citing Chief Executive Officer Louis Gallois.
MediGene AG (MDG GY) added 7 cents, or 1.2 percent, to 5.80 euros. The biotechnology company said it will present clinical data for its cancer drug candidate EndoTAG-1 in Stockholm.
Patrizia Immobilien AG (P1Z GY) climbed for a second day, rising 11 cents, or 4.1 percent, to 2.77 euros. The real-estate investor sold properties in Dresden and Munich in separate transactions for a total of 78.5 million euros.
Sixt AG (SIX2 GY) dropped 75 cents, or 3.9 percent, to 18.36 euros, the lowest since June 2005. WestLB AG reduced its share- price estimate for Germany's largest car-rental operator 19 percent to 21 euros.
To contact the reporter on this story: Henrietta Rumberger in Frankfurt at hrumberger@bloomberg.net; Stefanie Haxel in Frankfurt at shaxel@bloomberg.net
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Sept. 9 (Bloomberg) -- German stocks climbed for a second day as concern eased that credit-related losses will curb profits at banks and lower oil prices lifted airlines and carmakers.
Deutsche Bank AG rose to a four-week high and Commerzbank AG advanced 5 percent. Daimler AG, the world's second-largest maker of luxury cars, and Deutsche Lufthansa AG led gains among companies sensitive to fuel costs. Celesio AG jumped to a five- month high after CA Cheuvreux upgraded Europe's largest drug wholesaler to ``outperform.''
The DAX Index added 36.42, or 0.6 percent, to 6,300.16 as of 2:18 p.m. in Frankfurt. DAX futures expiring in September rallied 0.7 percent to 6,305. The HDAX Index of the country's 110 biggest companies rose 0.3 percent.
The benchmark index for German equities gained 2.2 percent yesterday on speculation the U.S. government's takeover of Fannie Mae and Freddie Mac will stabilize the mortgage market after credit losses and writedowns at financial firms worldwide topped $500 billion.
``What the example of Fannie Mae and Freddie Mac showed is that in case of emergency, there is always a solution,'' Achim Matzke, an equity strategist at Commerzbank AG in Frankfurt, said in a Bloomberg Television interview.
Deutsche Bank, Germany's largest, advanced 2.38 euros, or 4 percent, to 62.555, the highest since Aug. 12. Commerzbank, the second-biggest, gained 85 cents, or 5 percent, to 18 euros. Allianz SE, Europe's biggest insurer, increased 3.53 euros, or 3.2 percent, to 115.66.
Deutsche Postbank AG, the country's biggest consumer bank by clients, climbed 1.06 euros, or 2.4 percent, to 44.83.
Reviving Talks
Banco Santander SA, Spain's biggest bank, revived talks aimed at an acquisition of Deutsche Postbank after the lender's market value fell, two people with knowledge of the matter said. Santander is vying with Deutsche Bank for Postbank, said the people, who declined to be identified because the talks are private. Parent Deutsche Post AG added 8.5 cents, or 0.5 percent, to 15.795 euros.
Deutsche Post spokeswoman Nicole Mommsen said the company is still examining several options for the future of Postbank. Deutsche Bank spokesman Michael Lermer reiterated that the company would consider acquisitions if they make strategic sense and bolster shareholder value. Santander spokesman Peter Greiff declined to comment.
Crude oil for October delivery fell as much as 2 percent to $104.23 a barrel in New York after Saudi Arabia's oil minister said supplies are sufficient to meet demand, raising speculation that OPEC will maintain production levels when it meets today.
Daimler, Lufthansa
Daimler rose 1.05 euros, or 2.6 percent, to 41.435 euros. Bayerische Motoren Werke AG, the world's biggest luxury carmaker, gained 52 cents, or 1.8 percent, to 29.24 euros.
Lufthansa, Europe's second-largest airline, added 27 cents, or 1.8 percent, to 15.30 euros. Jet-fuel prices in northwest Europe declined for a ninth straight day, Bloomberg data show.
Bayer AG, Germany's biggest drugmaker, jumped 1.64 euros, or 3.1 percent, to 54.34, the steepest gain since July 25.
``There's speculation in the market today that Pfizer may bid for Bayer,'' said Manfred Groeschel, an equity trader at Merck Finck & Co. in Munich.
U.S.-based Pfizer Inc. is the world's largest drugmaker. Bayer spokesman Guenter Forneck declined to comment.
Celesio surged 2.75 euros, or 10 percent, to 30, the highest since April 8. Cheuvreux lifted its recommendation from ``underperform.''
A new pharmacy contract in England this week will add 150 million British pounds ($264 million) in new funds, removing the risk of further price cuts in Celesio's most important market, analyst Oliver Reinberg wrote in a note to clients today.
The following stocks also rose or fell in German markets. Symbols are in parentheses.
European Aeronautic, Defence & Space Co. (EAD GY) climbed 73 cents, or 4.8 percent, to 15.92 euros, advancing for a second day. The parent of planemaker Airbus SAS will shift some Airbus parts production to Tunisia as it seeks 1 billion euros ($1.42 billion) of savings from 2010, Le Monde reported, citing Chief Executive Officer Louis Gallois.
MediGene AG (MDG GY) added 7 cents, or 1.2 percent, to 5.80 euros. The biotechnology company said it will present clinical data for its cancer drug candidate EndoTAG-1 in Stockholm.
Patrizia Immobilien AG (P1Z GY) climbed for a second day, rising 11 cents, or 4.1 percent, to 2.77 euros. The real-estate investor sold properties in Dresden and Munich in separate transactions for a total of 78.5 million euros.
Sixt AG (SIX2 GY) dropped 75 cents, or 3.9 percent, to 18.36 euros, the lowest since June 2005. WestLB AG reduced its share- price estimate for Germany's largest car-rental operator 19 percent to 21 euros.
To contact the reporter on this story: Henrietta Rumberger in Frankfurt at hrumberger@bloomberg.net; Stefanie Haxel in Frankfurt at shaxel@bloomberg.net
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U.K. Stocks Gain for Second Day; HSBC, Royal Bank Lead Advance
By Sarah Thompson
Sept. 9 (Bloomberg) -- U.K. stocks rose, extending the FTSE 100 Index's steepest rally in eight months, led by banks as the Times reported the U.K. government may take steps to shore up the home-loan market.
HSBC Holdings Plc, Europe's biggest bank, gained 2.3 percent and Royal Bank of Scotland Group Plc advanced 5.3 percent after the newspaper said Chancellor of the Exchequer Alistair Darling is preparing to act on the U.K.'s housing finance market.
Vodafone Plc also advanced after the world's largest wireless company named Michel Combes as head of Europe amid a revamp of the company's organizational structure.
The FTSE 100 Index climbed 32.7, or 0.6 percent, to 5,479 at 2:08 p.m. in London. The FTSE All-Share Index added 0.5 percent while Ireland's ISEQ Index increased 1.8 percent.
The FTSE 100 surged 3.9 percent yesterday after the U.S. government said it will provide short-term funding to Fannie Mae and Freddie Mac and buy mortgage-backed securities. About half the daily average of shares changed hands on the benchmark index yesterday after a computer breakdown left traders unable to buy or sell stocks for most of the day.
``It's all about financials,'' said Espen Furnes, an Oslo- based fund manager at Storebrand Asset Management, which has the equivalent of $48 billion. ``The Freddie Mac/Fannie Mae nationalization takes away the worst-case scenario in the U.S. economy. This is the first good news for financials globally for a very long time. I don't think the U.K. banks are out of the woods yet, but think there are some bargains out there.''
HSBC climbed 2.3 percent to 914.25 pence. Royal Bank, the U.K.'s second-largest bank, jumped 5.3 percent to 257.5. Barclays Plc, the third-biggest, increased 5.9 percent to 375.75.
Vodafone Gains
Vodafone gained 2.3 percent to 138.8 pence. Combes joins Vodafone from French network operator TDF Group, where he has been chief executive officer, the Newbury, England-based company said.
The company also said management of Eastern Europe, the Middle East, Africa and Asia will be split in two beginning Jan. 1. Paul Donovan, who oversees those regions, will leave the company at the end of the year. The shares have fallen 26 percent this year.
British Land Plc rose 4.4 percent to 787.5, the highest in almost a month, and Land Securities Plc added 2.2 percent to 1,370 pence.
Lehman Brothers Holdings Inc. raised its ratings on the U.K.'s two largest real estate companies to ``overweight'' and raised its recommendation on the industry, saying the sector may have reached a bottom.
The following stocks also rose or fell in the U.K. market. Stock symbols are in parentheses.
U.K. companies:
Alizyme Plc (AZM LN) added 3.67 pence, or 39 percent, to 13 pence, the steepest jump since 2003. The U.K. biotechnology company whose shares have dropped almost 80 percent since December gained on speculation it may be a takeover target for Japan's Takeda Pharmaceutical Co.
BG Group Plc (BG/ LN) added 16 pence, or 1.5 percent, to 1,109. The U.K.'s third-biggest oil and gas company said it won't increase or extend its hostile takeover offer for Origin Energy Ltd., Australia's biggest producer of natural gas from coal seams.
IG Group Holdings Plc (IGG LN) increased 9.75 pence, or 2.9 percent, to 342.25. IG, which takes bets on financial markets under the IG Index name, said first-quarter revenue gained 29 percent as increased stock market volatility prompted more gamblers to open accounts.
Imperial Tobacco Group Plc (IMT LN) advanced 44 pence, or 2.5 percent, to 1,819. Europe's second-largest cigarette maker raised $2.2 billion from a sale of bonds in euros and pounds, according to HSBC Holdings Plc, one of the banks managing the issue.
Lloyds TSB Group Plc (LLOY LN) gained 6.25 pence, or 2 percent, to 316.25. The U.K.'s biggest provider of checking accounts is ``comfortable'' it can maintain sufficient capital through 2012, Finance Director Tim Tookey said.
Omega Insurance Holdings Ltd. (OIH LN) added 4.5 pence, or 3 percent, to 153. The Lloyd's of London insurer said first-half profit rose 34 percent.
Qinetiq Group Plc (QQ/ LN) slid 17.75 pence, or 7.9 percent, to 205.75, the sharpest drop since at least 2006. The U.K. government is selling its entire stake in the U.K.'s largest defense-research company.
To contact the reporters on this story: Jonathan Browning in London jbrowning9@bloomberg.netSarah Thompson in London at sthompson17@bloomberg.net.
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Sept. 9 (Bloomberg) -- U.K. stocks rose, extending the FTSE 100 Index's steepest rally in eight months, led by banks as the Times reported the U.K. government may take steps to shore up the home-loan market.
HSBC Holdings Plc, Europe's biggest bank, gained 2.3 percent and Royal Bank of Scotland Group Plc advanced 5.3 percent after the newspaper said Chancellor of the Exchequer Alistair Darling is preparing to act on the U.K.'s housing finance market.
Vodafone Plc also advanced after the world's largest wireless company named Michel Combes as head of Europe amid a revamp of the company's organizational structure.
The FTSE 100 Index climbed 32.7, or 0.6 percent, to 5,479 at 2:08 p.m. in London. The FTSE All-Share Index added 0.5 percent while Ireland's ISEQ Index increased 1.8 percent.
The FTSE 100 surged 3.9 percent yesterday after the U.S. government said it will provide short-term funding to Fannie Mae and Freddie Mac and buy mortgage-backed securities. About half the daily average of shares changed hands on the benchmark index yesterday after a computer breakdown left traders unable to buy or sell stocks for most of the day.
``It's all about financials,'' said Espen Furnes, an Oslo- based fund manager at Storebrand Asset Management, which has the equivalent of $48 billion. ``The Freddie Mac/Fannie Mae nationalization takes away the worst-case scenario in the U.S. economy. This is the first good news for financials globally for a very long time. I don't think the U.K. banks are out of the woods yet, but think there are some bargains out there.''
HSBC climbed 2.3 percent to 914.25 pence. Royal Bank, the U.K.'s second-largest bank, jumped 5.3 percent to 257.5. Barclays Plc, the third-biggest, increased 5.9 percent to 375.75.
Vodafone Gains
Vodafone gained 2.3 percent to 138.8 pence. Combes joins Vodafone from French network operator TDF Group, where he has been chief executive officer, the Newbury, England-based company said.
The company also said management of Eastern Europe, the Middle East, Africa and Asia will be split in two beginning Jan. 1. Paul Donovan, who oversees those regions, will leave the company at the end of the year. The shares have fallen 26 percent this year.
British Land Plc rose 4.4 percent to 787.5, the highest in almost a month, and Land Securities Plc added 2.2 percent to 1,370 pence.
Lehman Brothers Holdings Inc. raised its ratings on the U.K.'s two largest real estate companies to ``overweight'' and raised its recommendation on the industry, saying the sector may have reached a bottom.
The following stocks also rose or fell in the U.K. market. Stock symbols are in parentheses.
U.K. companies:
Alizyme Plc (AZM LN) added 3.67 pence, or 39 percent, to 13 pence, the steepest jump since 2003. The U.K. biotechnology company whose shares have dropped almost 80 percent since December gained on speculation it may be a takeover target for Japan's Takeda Pharmaceutical Co.
BG Group Plc (BG/ LN) added 16 pence, or 1.5 percent, to 1,109. The U.K.'s third-biggest oil and gas company said it won't increase or extend its hostile takeover offer for Origin Energy Ltd., Australia's biggest producer of natural gas from coal seams.
IG Group Holdings Plc (IGG LN) increased 9.75 pence, or 2.9 percent, to 342.25. IG, which takes bets on financial markets under the IG Index name, said first-quarter revenue gained 29 percent as increased stock market volatility prompted more gamblers to open accounts.
Imperial Tobacco Group Plc (IMT LN) advanced 44 pence, or 2.5 percent, to 1,819. Europe's second-largest cigarette maker raised $2.2 billion from a sale of bonds in euros and pounds, according to HSBC Holdings Plc, one of the banks managing the issue.
Lloyds TSB Group Plc (LLOY LN) gained 6.25 pence, or 2 percent, to 316.25. The U.K.'s biggest provider of checking accounts is ``comfortable'' it can maintain sufficient capital through 2012, Finance Director Tim Tookey said.
Omega Insurance Holdings Ltd. (OIH LN) added 4.5 pence, or 3 percent, to 153. The Lloyd's of London insurer said first-half profit rose 34 percent.
Qinetiq Group Plc (QQ/ LN) slid 17.75 pence, or 7.9 percent, to 205.75, the sharpest drop since at least 2006. The U.K. government is selling its entire stake in the U.K.'s largest defense-research company.
To contact the reporters on this story: Jonathan Browning in London jbrowning9@bloomberg.netSarah Thompson in London at sthompson17@bloomberg.net.
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Oil Leads Commodity Slide on Saudi Comments; Wheat, Nickel Fall
By Chanyaporn Chanjaroen
Sept. 9 (Bloomberg) -- Crude oil fell to a five-month low in London, leading commodities lower, after Saudi Arabia's oil minister said supplies are sufficient to meet demand before an OPEC meeting today to discuss production.
The S&P GSCI index of 24 commodity futures fell 1.1 percent as wheat, gold and nickel weakened. The oil market is ``well- balanced'' and inventories are ``healthy,'' Saudi Oil Minister Ali Al-Naimi said today in Vienna, suggesting the Organization of Petroleum Exporting Countries will maintain output.
``The risk of an oil production cut has been lifted,'' Hussein Allidina, a commodity analyst at Morgan Stanley, said by phone from New York.
Crude oil for October delivery dropped $1.55, or 1.5 percent, to $104.79 a barrel on the New York Mercantile Exchange as of 12:50 p.m. London time.
Oil also declined as Hurricane Ike, which has curbed output in the Gulf of Mexico, weakened to Category 1 on the five-step Saffir-Simpson scale of intensity. Ike was moving to the west- northwest across southern Cuba and is forecast to enter the southeastern Gulf of Mexico late tonight.
Agricultural commodities and gold also dropped after the dollar rose to the highest in 11 months against the euro, reducing their appeal as a hedge against U.S. currency weakness.
Soybeans for November delivery slid 25 cents, or 2.1 percent, to $11.67 a bushel and wheat for December dropped 14.75 cents, or 2 percent, to $7.29 a bushel. Wheat earlier fell to the lowest since Aug. 29, 2007.
Mortgage Rescue
``The dollar recovered yesterday, following the U.S. mortgage rescue plans, which is pressuring grains today,'' said Nicholas Chung, senior manager of the commodity derivatives team at Korea Development Bank in Seoul.
Gold slipped $3.69, or 0.5 percent, to $798.61 an ounce.
``The dollar is stronger and crude oil is declining,'' Alexander Zumpfe, a precious metals trader at Hanau, Germany- based Heraeus Metallhandels GmbH, said by phone. ``As long as these two sectors are under pressure, I don't see how gold will recover.''
Nickel fell $200, or 1.1 percent, to $18,650 a metric ton on the London Metal Exchange as Posco, Asia's largest maker of stainless steel, plans to extend output cuts for a third month, indicating weaker demand. Aluminum and copper also dropped.
South Korea's Posco will lower output by 20 percent, or 25,000 tons, from the normal monthly level, Suh Young Sea, senior vice president of the stainless-steel business, said today in a phone interview. About two-thirds of nickel production is used in stainless steel.
``Nickel is kind of stuck between weak demand and high supply,'' said Stephen Briggs, a commodity strategist at RBS Global Banking & Markets in London.
Copper, aluminum and zinc prices may slip by 5 percent to 10 percent as a slowing global economy crimps demand, Vedanta Resources Plc Chairman Anil Agarwal told reporters in Mumbai today, without providing a timeframe for the declines. The company is India's largest producer of zinc and copper.
Copper dropped $90, or 1.3 percent, to $6,860 a ton.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
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Potash, Canadian Natural May Drop; Toronto-Dominion May Rise
By John Kipphoff
Sept. 9 (Bloomberg) -- Potash Corp. of Saskatchewan Inc. and Canadian Natural Resources Ltd. may decline, based on bids on the Toronto Stock Exchange, after crude oil fell to a five- month low, leading commodity prices lower.
Toronto-Dominion Bank may rise for a second day after the U.S. government took over mortgage financial companies Fannie Mae and Freddie Mac, in an attempt to bolster credit markets. Le Fashion retailer Chateau Inc. may gain, on reporting profit that beat analysts' estimates.
The Standard & Poor's/TSX Composite Index fell 1.4 percent to 12,634.64 yesterday in Toronto. Canada's main equity benchmark, which derives more than three-quarters of its value from energy, materials and financial stocks, has dropped 16 percent from its June 18 record as commodity prices slumped and financial companies worldwide credit losses topped $500 billion.
Potash Corp., the world's largest maker of the fertilizer, may drop C$2 to C$160, bids already submitted in Toronto. Goldcorp Inc., the second-largest bullion producer by market value, may fall 30 cents to C$29, based on bids.
Canadian Natural, the nation's fourth-largest energy company by market value, may slip 50 cents to C$79.50, according to bids.
Crude oil fell as much as 2 percent to $104.23 a barrel in electronic trading in New York, and natural gas also declined, after Saudi Arabia's oil minister said supplies are sufficient to meet demand. Gold, copper, soybeans and wheat prices also slid.
Toronto-Dominion may gain 68 cents to C$63.05, according to bids. Canada's second-biggest rose yesterday along with financial shares worldwide, from optimism that lenders may be able to stem $507 billion of losses tied to bad mortgages.
The U.S. seized control of Fannie Mae and Freddie Mac yesterday, putting the two mortgage companies in a government- operated conservatorship. Treasury Secretary Henry Paulson stepped in to prevent a collapse of the government-chartered companies and the $12 trillion residential mortgage market.
Toronto-Dominion Bank said in April that it had C$7.8 billion of mortgage-backed securities tied to Fannie and Freddie, RBC Capital Markets analyst Andre-Philippe Hardy said in a note yesterday.
Le Chateau may gain 65 cents to C$14.15, based on bids. The clothing retailer reported second-quarter earnings of 39 Canadian cents a share before one-time items, exceeding the average of analysts' estimates in a Bloomberg survey by 14 percent. The company also raised the quarterly dividend by 17 percent to 17.5 cents a share.
U.S. stock-index futures advanced, pointing to a third straight day of gains, as a drop in oil eased concern that higher fuel costs will erode earnings at travel companies.
To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.
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Sept. 9 (Bloomberg) -- Potash Corp. of Saskatchewan Inc. and Canadian Natural Resources Ltd. may decline, based on bids on the Toronto Stock Exchange, after crude oil fell to a five- month low, leading commodity prices lower.
Toronto-Dominion Bank may rise for a second day after the U.S. government took over mortgage financial companies Fannie Mae and Freddie Mac, in an attempt to bolster credit markets. Le Fashion retailer Chateau Inc. may gain, on reporting profit that beat analysts' estimates.
The Standard & Poor's/TSX Composite Index fell 1.4 percent to 12,634.64 yesterday in Toronto. Canada's main equity benchmark, which derives more than three-quarters of its value from energy, materials and financial stocks, has dropped 16 percent from its June 18 record as commodity prices slumped and financial companies worldwide credit losses topped $500 billion.
Potash Corp., the world's largest maker of the fertilizer, may drop C$2 to C$160, bids already submitted in Toronto. Goldcorp Inc., the second-largest bullion producer by market value, may fall 30 cents to C$29, based on bids.
Canadian Natural, the nation's fourth-largest energy company by market value, may slip 50 cents to C$79.50, according to bids.
Crude oil fell as much as 2 percent to $104.23 a barrel in electronic trading in New York, and natural gas also declined, after Saudi Arabia's oil minister said supplies are sufficient to meet demand. Gold, copper, soybeans and wheat prices also slid.
Toronto-Dominion may gain 68 cents to C$63.05, according to bids. Canada's second-biggest rose yesterday along with financial shares worldwide, from optimism that lenders may be able to stem $507 billion of losses tied to bad mortgages.
The U.S. seized control of Fannie Mae and Freddie Mac yesterday, putting the two mortgage companies in a government- operated conservatorship. Treasury Secretary Henry Paulson stepped in to prevent a collapse of the government-chartered companies and the $12 trillion residential mortgage market.
Toronto-Dominion Bank said in April that it had C$7.8 billion of mortgage-backed securities tied to Fannie and Freddie, RBC Capital Markets analyst Andre-Philippe Hardy said in a note yesterday.
Le Chateau may gain 65 cents to C$14.15, based on bids. The clothing retailer reported second-quarter earnings of 39 Canadian cents a share before one-time items, exceeding the average of analysts' estimates in a Bloomberg survey by 14 percent. The company also raised the quarterly dividend by 17 percent to 17.5 cents a share.
U.S. stock-index futures advanced, pointing to a third straight day of gains, as a drop in oil eased concern that higher fuel costs will erode earnings at travel companies.
To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.
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Buenaventura, CSN, Gap, Molinas, Vale: Latin Equity Preview
By William Freebairn and Alexander Ragir
Sept. 9 (Bloomberg) -- The following companies may have unusual price changes today in Latin America trading. Stock symbols are in parentheses, and share prices are from the previous close. Preferred shares are usually the most-traded class of stock in Brazil.
The MSCI Latin America Index fell 0.5 percent yesterday to 3,547.68.
Argentina
Molinos Rio de la Plata SA (MOLI AF): Argentina's farming areas will get a ``gradual'' increase in rainfall that will reach a peak next month, the Buenos Aires Cereals Exchange said. Until then, farms in central and western areas will be under ``stress'' because of a lack of precipitation, the exchange said yesterday in a weather forecast distributed by e-mail. Molinos, which makes food products such as soybean oil, fell 2.3 percent to 7.35 pesos.
Brazil
Cia. Siderurgica Nacional SA (CSNA3 BS): Brazil's third- biggest steelmaker had its debt rating raised one level by Moody's Investors Services to Ba1, one notch below investment grade. The rating change for CSN, as the Rio de Janeiro-based company is known, reflects the company's ``maintenance of strong debt protection metrics and liquidity in recent years,'' Moody's analysts Richard Sippli and Alexander Carpenter wrote in a statement yesterday. CSN fell 3.8 percent to 46.56 reais.
Magnesita Refratarios SA (MAGG3 BS): The acquisition of LWB Refractories GMBH is positive, ``contributing to improve its client and geographic diversification,'' Moody's analysts Richard Sippli and Alexander Carpenter wrote in a statement yesterday. The purchase won't affect Magnesita's liquidity, which ``should remain adequate, based on its robust cash position and manageable debt maturities,'' the analysts wrote. Magnesita, Latin America's largest maker of specialty tiles used in steel blast furnaces, rose 4.8 percent to 18.45 reais.
Net Servicos de Comunicacao SA (NETC4 BS): Brazil's biggest cable-TV provider, along with Sky Brasil Servicios Ltda, plan to invest about 1.6 billion reais ($920 million) to develop high- definition television services, Gazeta Mercantil reported. Net Servicos fell 2.3 percent to 17.69 reais.
Cia. Vale do Rio Doce (VALE5 BS): The world's biggest iron- ore producer, asked Nippon Steel Corp. and its Japanese rivals to pay 12 percent more for the material after agreeing in February to an increase of at least 65 percent, two people familiar with the negotiations said. Vale fell 3.5 percent to 34.85 reais.
Chile
Compania de Telecomunicaciones de Chile SA (CTCA CC): Investors probably overreacted to a proposal by authorities to ease telephone service pricing rules since competitive conditions will impede significant price increases, analysts at Banchile Inversiones wrote in a research note yesterday. The country's biggest fixed-line carrier rose for the sixth time in seven days, climbing 4.4 percent to a three-month-high of 820 pesos.
Sociedad Quimica y Minera de Chile SA (SQM/B CC): The short- and mid-term price outlook for crop nutrients remains favorable, analysts at Banchile Inversiones wrote in a research note yesterday. Chile's biggest fertilizer exporter retreated for an eighth day, losing 5.3 percent to 16,200 pesos, extending its longest losing streak in two years.
Mexico
Grupo Aeroportuario del Pacifico SAB (GAPB MM): The biggest private Mexican airport operator said passenger traffic fell 14 percent in August as domestic travel slumped. That was more than the 11 percent decline forecast by Grupo Financiero Interacciones in a research note Sept. 3. Gap, as the company is known, was little changed at 28.98 pesos.
Grupo Aeroportuario del Sureste SAB (ASURB MM): Mexico's second-biggest government airport operator reported August passenger traffic ``significantly above'' forecasts of Credit Suisse Group AG. The airport operator known as Asur benefited from high hotel occupancy rates in Cancun, analysts Vanessa Quiroga and Alan Solis wrote in a research note e-mailed yesterday. Asur rose 1.1 percent to 52.21 pesos.
Peru
Cia. de Minas Buenaventura (BVN PE): The world's seventh- largest gold producer was reduced to ``hold'' from ``buy'' by Banco Santander SA, which cited rising costs and lower forecasts for metal prices in a note yesterday. Buenaventura fell 3.4 percent to $18.35.
To contact the reporter on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net; Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net;
Read more...
Sept. 9 (Bloomberg) -- The following companies may have unusual price changes today in Latin America trading. Stock symbols are in parentheses, and share prices are from the previous close. Preferred shares are usually the most-traded class of stock in Brazil.
The MSCI Latin America Index fell 0.5 percent yesterday to 3,547.68.
Argentina
Molinos Rio de la Plata SA (MOLI AF): Argentina's farming areas will get a ``gradual'' increase in rainfall that will reach a peak next month, the Buenos Aires Cereals Exchange said. Until then, farms in central and western areas will be under ``stress'' because of a lack of precipitation, the exchange said yesterday in a weather forecast distributed by e-mail. Molinos, which makes food products such as soybean oil, fell 2.3 percent to 7.35 pesos.
Brazil
Cia. Siderurgica Nacional SA (CSNA3 BS): Brazil's third- biggest steelmaker had its debt rating raised one level by Moody's Investors Services to Ba1, one notch below investment grade. The rating change for CSN, as the Rio de Janeiro-based company is known, reflects the company's ``maintenance of strong debt protection metrics and liquidity in recent years,'' Moody's analysts Richard Sippli and Alexander Carpenter wrote in a statement yesterday. CSN fell 3.8 percent to 46.56 reais.
Magnesita Refratarios SA (MAGG3 BS): The acquisition of LWB Refractories GMBH is positive, ``contributing to improve its client and geographic diversification,'' Moody's analysts Richard Sippli and Alexander Carpenter wrote in a statement yesterday. The purchase won't affect Magnesita's liquidity, which ``should remain adequate, based on its robust cash position and manageable debt maturities,'' the analysts wrote. Magnesita, Latin America's largest maker of specialty tiles used in steel blast furnaces, rose 4.8 percent to 18.45 reais.
Net Servicos de Comunicacao SA (NETC4 BS): Brazil's biggest cable-TV provider, along with Sky Brasil Servicios Ltda, plan to invest about 1.6 billion reais ($920 million) to develop high- definition television services, Gazeta Mercantil reported. Net Servicos fell 2.3 percent to 17.69 reais.
Cia. Vale do Rio Doce (VALE5 BS): The world's biggest iron- ore producer, asked Nippon Steel Corp. and its Japanese rivals to pay 12 percent more for the material after agreeing in February to an increase of at least 65 percent, two people familiar with the negotiations said. Vale fell 3.5 percent to 34.85 reais.
Chile
Compania de Telecomunicaciones de Chile SA (CTCA CC): Investors probably overreacted to a proposal by authorities to ease telephone service pricing rules since competitive conditions will impede significant price increases, analysts at Banchile Inversiones wrote in a research note yesterday. The country's biggest fixed-line carrier rose for the sixth time in seven days, climbing 4.4 percent to a three-month-high of 820 pesos.
Sociedad Quimica y Minera de Chile SA (SQM/B CC): The short- and mid-term price outlook for crop nutrients remains favorable, analysts at Banchile Inversiones wrote in a research note yesterday. Chile's biggest fertilizer exporter retreated for an eighth day, losing 5.3 percent to 16,200 pesos, extending its longest losing streak in two years.
Mexico
Grupo Aeroportuario del Pacifico SAB (GAPB MM): The biggest private Mexican airport operator said passenger traffic fell 14 percent in August as domestic travel slumped. That was more than the 11 percent decline forecast by Grupo Financiero Interacciones in a research note Sept. 3. Gap, as the company is known, was little changed at 28.98 pesos.
Grupo Aeroportuario del Sureste SAB (ASURB MM): Mexico's second-biggest government airport operator reported August passenger traffic ``significantly above'' forecasts of Credit Suisse Group AG. The airport operator known as Asur benefited from high hotel occupancy rates in Cancun, analysts Vanessa Quiroga and Alan Solis wrote in a research note e-mailed yesterday. Asur rose 1.1 percent to 52.21 pesos.
Peru
Cia. de Minas Buenaventura (BVN PE): The world's seventh- largest gold producer was reduced to ``hold'' from ``buy'' by Banco Santander SA, which cited rising costs and lower forecasts for metal prices in a note yesterday. Buenaventura fell 3.4 percent to $18.35.
To contact the reporter on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net; Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net;
Read more...
CapitalSource, Cardica, Delta, US Airways: U.S. Equity Movers
By Lynn Thomasson
Sept. 9 (Bloomberg) -- The following companies are having unusual price changes in U.S. trading. Stock symbols are in parentheses, and share prices are as of 9:35 a.m. in New York.
Airlines advanced as crude oil fell to the lowest since April 3, declining 2 percent to $104.19 a barrel in New York. Delta Air Lines Inc. (DAL US) added 3.7 percent to $8.91. UAL Corp. (UAUA US) climbed 5.6 percent to $11.53. US Airways Group Inc. (LCC US) jumped 6.1 percent to $8.15.
CapitalSource Inc. (CSE US) lost 8.6 percent, the most since July 24, to $11.87. The lender that bought the banking business of bankrupt Fremont General Corp. cut its quarterly dividend by 92 percent to 5 cents a share.
Cardica Inc. (CRDC US) surged 30 percent, the most since June 10, to $10.41. The maker of heart surgery equipment received approval from U.S. regulators to market its PAS-Port system that's used in cardiac-bypass procedures.
DineEquity Inc. (DIN US) slumped 7.6 percent, the most since Aug. 18, to $22.15. The owner of the Ihop and Applebee's restaurant chains said Chief Financial Officer Thomas G. Conforti resigned.
H.B. Fuller Co. (FUL US) lost 13 percent, the most since June 2006, to $23.78. The world's fourth-largest producer of industrial adhesives reduced its profit forecast because of rising costs for raw materials.
To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.
Read more...
Sept. 9 (Bloomberg) -- The following companies are having unusual price changes in U.S. trading. Stock symbols are in parentheses, and share prices are as of 9:35 a.m. in New York.
Airlines advanced as crude oil fell to the lowest since April 3, declining 2 percent to $104.19 a barrel in New York. Delta Air Lines Inc. (DAL US) added 3.7 percent to $8.91. UAL Corp. (UAUA US) climbed 5.6 percent to $11.53. US Airways Group Inc. (LCC US) jumped 6.1 percent to $8.15.
CapitalSource Inc. (CSE US) lost 8.6 percent, the most since July 24, to $11.87. The lender that bought the banking business of bankrupt Fremont General Corp. cut its quarterly dividend by 92 percent to 5 cents a share.
Cardica Inc. (CRDC US) surged 30 percent, the most since June 10, to $10.41. The maker of heart surgery equipment received approval from U.S. regulators to market its PAS-Port system that's used in cardiac-bypass procedures.
DineEquity Inc. (DIN US) slumped 7.6 percent, the most since Aug. 18, to $22.15. The owner of the Ihop and Applebee's restaurant chains said Chief Financial Officer Thomas G. Conforti resigned.
H.B. Fuller Co. (FUL US) lost 13 percent, the most since June 2006, to $23.78. The world's fourth-largest producer of industrial adhesives reduced its profit forecast because of rising costs for raw materials.
To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.
Read more...
Daily Technical Strategist
Today's Focus: EURUSD & GBPUSD
- EURUSD: Reverses Marginal Gains, Breaks To A New Low.
- GBPUSD: Continued Decline Shifts Focus To 1.7251 Level.
EURUSD
EUR reversed its Friday marginal upside gains Monday breaking lower and testing a low of 1.4054 before closing at 1.4137 at the end of the session. Focus remains on its Oct'07 low at 1.4015 though an early morning low of 1.4045 today is now being reversed. Below the 1.4015 level will put the pair in position to trade even lower towards its July'07 low at 1.3852.Higher time frame momentum indicators continue to support this view. On the other hand, if the mentioned intraday reversal is sustained, its resistance residing at the 1.4197 level, marking its Sept 05'08 low will be targeted ahead of the 1.4366/10 zone, its Jan'08/Dec'07 lows . While this scenario remains corrective of its recent declines, breaking and holding above the latter will call for more strength towards its Sept 08'08 high at 1.4429 and then its broken LT rising trendline at 1.4486.On the whole, while the broader bias remains to the downside, nearer term corrective recovery may be seen.
| Support | Comments |
| 1.4015 | Oct'07 low |
| 1.3852 | July'07 high |
| 1.3361 | Aug'07 high |
| Resistance | Comment |
| 1.4197 | Sept 05'08 low |
| 1.4366/10 | Jan'08/Dec'07 lows |
| 1.4429 | Sept 08'08 |
| 1.4486 | Broken LT rising trendline |
GBPUSD
An unsustained gain Monday saw GBP tumbled lower beginning another week lower and closing the session at 1.7596 after recording a fresh new low of 1.7471.Our medium term downside target lies at the 1.7251 level, its April'06 low with weakness through there setting the stage for further declines towards the 1.7130 level, its Dec'05 low before its Nov'05 low at 1.7067.However, persistent oversold condition and continued declines should support a nearer term corrective bounce argument. If this is seen, its Sept 05'08 high at 1.7744 will be aimed at with a clean break of there clearing the way for a run at its Jan'06/Sept 08'08 highs at 1.7935/76 and then the 1.8090 level, its Jun'06 low. This view remains corrective and GBP should turn lower continuing its broader medium term weakness on ending that recovery. All in all, having weakened persistently, odds of further declines continue to be envisaged with any recoveries at this stage seen as corrective.
| Support | Comments |
| 1.7251 | April'06 low |
| 1.7130 | Dec'05 low |
| 1.7049 | Nov'05 low |
| Resistance | Comments |
| 1.7744 | Sept 05'08 high |
| 1.7935/76 | Jan'06 high/Sept 08'08 |
| 1.8090 | Jun'06 low |
| 1.8176 | July 16'06 low |
Mohammed Isah
Market Analyst
www.fxtechstrategy.com
This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report
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U.S. Stocks Drop, Led by Energy, Mining Companies; Hess Falls
By Elizabeth Stanton
Sept. 9 (Bloomberg) -- U.S. stocks fell, halting a two-day advance, after a decline in commodity prices dragged down energy producers and mining companies, and an analyst said Lehman Brothers Holdings Inc. may not sell its mutual-fund unit.
Valero Energy Corp., Devon Energy Corp. and Freeport- McMoRan Copper & Gold Inc. dropped at least 2 percent as oil touched a five-month low and copper slid for a fourth day. Lehman declined 14 percent after Ladenburg Thalmann & Co. analyst Richard Bove increased his loss estimate. US Airways Group Inc. added 4.8 percent after the retreat in crude below $105 a barrel boosted transportation companies.
The Standard & Poor's 500 Index decreased 2.35 points, or 0.2 percent, to 1,265.44 at 9:44 a.m. in New York. The Dow Jones Industrial Average slumped 6.6 to 11,504.14. The Nasdaq Composite Index climbed 6.16, or 0.3 percent, to 2,275.92.
Energy shares have lost 13 percent since the S&P 500 reached a 2 1/2-year low on July 15 as crude plunged 25 percent. The decline was overshadowed by a 31 percent rally in financial stocks, boosting the index by 4.4 percent.
The benchmark index for U.S. equities gained 2.1 percent yesterday, the most in a month, on speculation the takeover of Fannie Mae and Freddie Mac will help banks recover from $507 billion in losses from subprime securities.
Won't Last
Investors should sell stocks following the rally as economies in the U.S. and Europe remain weak, Credit Suisse Group said. The rebound is unlikely to last because the U.S. housing decline will continue, while Europe and the U.K. are ``close to recession,'' Credit Suisse's London-based analysts including Andrew Garthwaite said in a report dated yesterday.
Crude oil fell as much as 2.1 percent to $104.23 a barrel on the New York Mercantile Exchange as Saudi Arabia's oil minister said supplies are sufficient to meet demand, fueling speculation that OPEC will maintain production levels when it meets today.
Freeport-McMoRan, the largest publicly traded copper company, slipped 2.4 percent to $70.35. Copper lost 1.2 cents to $3.07 a pound on concern worldwide demand is slowing. Valero, the biggest independent oil refiner, slipped $1 to $33.60. Devon, the largest independent oil producer, fell $2.92 to $92.12.
Lehman lost $1.89 to $12.26. Chief Executive Officer Richard Fuld's decision to shuffle the top ranks of his firm for the third time in four months shows the company hasn't found an attractive price for Neuberger Berman, its mutual fund unit, Ladenburg's Richard Bove said in a note.
Loss Estimate
Bove widened his loss estimate for Lehman this year to $7.39 a share from an earlier prediction of a $6.33 loss per share. He reduced his profit forecast for Goldman Sachs Group Inc. to $12.60 a share from a previous estimate of $14.16 a share.
Financial stocks in the S&P 500 led the rebound since July 15, rising 31 percent on speculation the worst is over after more than $500 billion of credit market losses. Banks and brokerages in the S&P 500 are still down 23 percent for the year after losing 21 percent in 2007, the steepest decline in four decades.
Retailers, homebuilders and automakers gained 18 percent since the market's low, spurred by federal tax rebates and expectations the U.S. economy may avoid a recession. Gross domestic product expanded at a 3.3 percent rate in the second quarter, helped by exports and seven consecutive reductions in the Federal Reserve's target rate for overnight loans.
Stocks climbed yesterday on speculation the government takeover of Fannie Mae and Freddie Mac will stabilize the global financial system. The seizure lowered the cost of protecting corporate bonds from default and spurred a rally in the dollar.
For Related News:
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.
Read more...
Sept. 9 (Bloomberg) -- U.S. stocks fell, halting a two-day advance, after a decline in commodity prices dragged down energy producers and mining companies, and an analyst said Lehman Brothers Holdings Inc. may not sell its mutual-fund unit.
Valero Energy Corp., Devon Energy Corp. and Freeport- McMoRan Copper & Gold Inc. dropped at least 2 percent as oil touched a five-month low and copper slid for a fourth day. Lehman declined 14 percent after Ladenburg Thalmann & Co. analyst Richard Bove increased his loss estimate. US Airways Group Inc. added 4.8 percent after the retreat in crude below $105 a barrel boosted transportation companies.
The Standard & Poor's 500 Index decreased 2.35 points, or 0.2 percent, to 1,265.44 at 9:44 a.m. in New York. The Dow Jones Industrial Average slumped 6.6 to 11,504.14. The Nasdaq Composite Index climbed 6.16, or 0.3 percent, to 2,275.92.
Energy shares have lost 13 percent since the S&P 500 reached a 2 1/2-year low on July 15 as crude plunged 25 percent. The decline was overshadowed by a 31 percent rally in financial stocks, boosting the index by 4.4 percent.
The benchmark index for U.S. equities gained 2.1 percent yesterday, the most in a month, on speculation the takeover of Fannie Mae and Freddie Mac will help banks recover from $507 billion in losses from subprime securities.
Won't Last
Investors should sell stocks following the rally as economies in the U.S. and Europe remain weak, Credit Suisse Group said. The rebound is unlikely to last because the U.S. housing decline will continue, while Europe and the U.K. are ``close to recession,'' Credit Suisse's London-based analysts including Andrew Garthwaite said in a report dated yesterday.
Crude oil fell as much as 2.1 percent to $104.23 a barrel on the New York Mercantile Exchange as Saudi Arabia's oil minister said supplies are sufficient to meet demand, fueling speculation that OPEC will maintain production levels when it meets today.
Freeport-McMoRan, the largest publicly traded copper company, slipped 2.4 percent to $70.35. Copper lost 1.2 cents to $3.07 a pound on concern worldwide demand is slowing. Valero, the biggest independent oil refiner, slipped $1 to $33.60. Devon, the largest independent oil producer, fell $2.92 to $92.12.
Lehman lost $1.89 to $12.26. Chief Executive Officer Richard Fuld's decision to shuffle the top ranks of his firm for the third time in four months shows the company hasn't found an attractive price for Neuberger Berman, its mutual fund unit, Ladenburg's Richard Bove said in a note.
Loss Estimate
Bove widened his loss estimate for Lehman this year to $7.39 a share from an earlier prediction of a $6.33 loss per share. He reduced his profit forecast for Goldman Sachs Group Inc. to $12.60 a share from a previous estimate of $14.16 a share.
Financial stocks in the S&P 500 led the rebound since July 15, rising 31 percent on speculation the worst is over after more than $500 billion of credit market losses. Banks and brokerages in the S&P 500 are still down 23 percent for the year after losing 21 percent in 2007, the steepest decline in four decades.
Retailers, homebuilders and automakers gained 18 percent since the market's low, spurred by federal tax rebates and expectations the U.S. economy may avoid a recession. Gross domestic product expanded at a 3.3 percent rate in the second quarter, helped by exports and seven consecutive reductions in the Federal Reserve's target rate for overnight loans.
Stocks climbed yesterday on speculation the government takeover of Fannie Mae and Freddie Mac will stabilize the global financial system. The seizure lowered the cost of protecting corporate bonds from default and spurred a rally in the dollar.
For Related News:
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.
Read more...
London Session Recap
Daily Forex Fundamentals | Written by Forex.com | Sep 09 08 11:44 GMT |
Euro recovered against the greenback in London trading, helped in part by news that a major US pharmaceutical company is making a bid to buy Germany’s largest drug maker. EUR/USD opened the session near the intraday lows around 1.4085 and jumped nearly 100 pips in the session towards a close around the 1.4780 mark. The pair made multiple tries above 1.4200 but failed. This level looks to be a pivotal trigger for further upside.
Cable jumped more than 100 pips despite disappointing economic data out of the UK. Industrial production tumbled -0.4%in July and this took the annual run-rate to a dismal -1.9% from -1.7% previously. Weakness in the buck, however, helped GBP/USD rally towards a close near the 1.7650 area.
The buck did manage to extend gains against the yen. The good performance in European stocks, which are up about 0.7% thus far, coupled with US futures pointing to a strong market open in NY helped JPY crosses higher. USD/JPY opened the session near 107.35 and was sitting around the 108.10 mark at the close. EUR/JPY did not disappoint from a volatility standpoint and jumped 200 pips in London trading towards the 153.25 area.
No top-tier data due up out of the US today, but the lower-level indicators could still be market moving. Pending home sales are due up at 1400GMT and given that they are such a good indicator of future existing home sales activity they are likely to be closely watched. The consensus is for a -1.5% decline in July after a 5.3% jump the prior month. A tepid number here would suggest that the home sales market continues to tread water, but is not necessarily worsening. Fed Chairman Bernanke is due to speak at 1300GMT but the topic is education and there will be no Q&A session, so unlikely market moving.
Upcoming Economic Data Releases (NY Session) Prior Estimate
* 9/9 12:15 GMT CA Housing Starts AUG 186.5K 190.0K
* 9/9 13:00 GMT US Bernanke Speaks on Education in Washington 9-Sep
* 9/9 14:00 GMT US Pending Home Sales MoM JUL 5.30% -1.40%
* 9/9 14:00 GMT US IBD/TIPP Economic Optimism SEP 42.8 44
* 9/9 14:00 GMT US Wholesale Inventories JUL 1.10% 0.60%
* 9/9 21:00 GMT US ABC Consumer Confidence 7-Sep -47 - -
Forex.com
http://www.forex.com
DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
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Euro recovered against the greenback in London trading, helped in part by news that a major US pharmaceutical company is making a bid to buy Germany’s largest drug maker. EUR/USD opened the session near the intraday lows around 1.4085 and jumped nearly 100 pips in the session towards a close around the 1.4780 mark. The pair made multiple tries above 1.4200 but failed. This level looks to be a pivotal trigger for further upside.
Cable jumped more than 100 pips despite disappointing economic data out of the UK. Industrial production tumbled -0.4%in July and this took the annual run-rate to a dismal -1.9% from -1.7% previously. Weakness in the buck, however, helped GBP/USD rally towards a close near the 1.7650 area.
The buck did manage to extend gains against the yen. The good performance in European stocks, which are up about 0.7% thus far, coupled with US futures pointing to a strong market open in NY helped JPY crosses higher. USD/JPY opened the session near 107.35 and was sitting around the 108.10 mark at the close. EUR/JPY did not disappoint from a volatility standpoint and jumped 200 pips in London trading towards the 153.25 area.
No top-tier data due up out of the US today, but the lower-level indicators could still be market moving. Pending home sales are due up at 1400GMT and given that they are such a good indicator of future existing home sales activity they are likely to be closely watched. The consensus is for a -1.5% decline in July after a 5.3% jump the prior month. A tepid number here would suggest that the home sales market continues to tread water, but is not necessarily worsening. Fed Chairman Bernanke is due to speak at 1300GMT but the topic is education and there will be no Q&A session, so unlikely market moving.
Upcoming Economic Data Releases (NY Session) Prior Estimate
* 9/9 12:15 GMT CA Housing Starts AUG 186.5K 190.0K
* 9/9 13:00 GMT US Bernanke Speaks on Education in Washington 9-Sep
* 9/9 14:00 GMT US Pending Home Sales MoM JUL 5.30% -1.40%
* 9/9 14:00 GMT US IBD/TIPP Economic Optimism SEP 42.8 44
* 9/9 14:00 GMT US Wholesale Inventories JUL 1.10% 0.60%
* 9/9 21:00 GMT US ABC Consumer Confidence 7-Sep -47 - -
Forex.com
http://www.forex.com
DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
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Trade Desk Thoughts - Canadian Housing Starts
Daily Forex Fundamentals | Written by TheLFB-Forex.com | Sep 09 08 13:21 GMT |
Canadian Housing Starts (August) Actual 211k, Expected 194k. Previous 187k
Release Explanation: An economic indicator that measures the annualized number of new residential buildings that began construction during the previous month, released by the Canada Housing and Mortgage Corporation (CHMC). It is an important report since the housing market is included in most economic forecasts. Retail Sales, CPI, and PCE in the US. A happy householder will usually lead to a strong economic outlook. A miss here, either way, and the Markets gets to see the real confidence of the Canadian consumer. There is a very strong impact on the sentiment towards the Canadian Dollar from this report.
Trade Desk Thoughts: According to the CMHC, The seasonally adjusted annual rate of urban starts rose 15.2% in August compared to July. Both urban multiples and singles moved higher, with an increase of 25.2% for multiples to 114,700 units, and a 2.0% increase for singles to 71,200 units.
The seasonally adjusted annual rate of urban starts was down in every region except Ontario where housing starts jumped 81.0% to 86,500. Urban starts sagged 22.5% to 23,700 units in the Prairies and dropped 11.5% in Atlantic Canada. Smaller declines of 8.7% and 8.2% were recorded in Quebec (37,600 units) and British Columbia (30,400 units) respectively. Actual urban single starts for the January to August period of this year were 16.8% lower than they were a year earlier, while urban multiple starts were up by 17.6% over the same period.
"While the headline number of starts shows improvement, the 16.8% yearly decrease in urban single starts for the January to August 2008 period indicates overall weakness in the housing sector," said Matthew Carniol, chief currency strategist at TheLFB-forex.com.
Forex Technical Reaction: The Cad rose about 10 pips after the report was released. Also important for today is the potential for Hurricane Ike to cause damage to energy production facilities in the Gulf of Mexico. Ike has weakened, and its projected path now places it somewhat west of most oil rigs in the gulf. Crude futures were recently trading 1.55% lower on the day at $104.71 per barrel.
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com
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Canadian Housing Starts (August) Actual 211k, Expected 194k. Previous 187k
Release Explanation: An economic indicator that measures the annualized number of new residential buildings that began construction during the previous month, released by the Canada Housing and Mortgage Corporation (CHMC). It is an important report since the housing market is included in most economic forecasts. Retail Sales, CPI, and PCE in the US. A happy householder will usually lead to a strong economic outlook. A miss here, either way, and the Markets gets to see the real confidence of the Canadian consumer. There is a very strong impact on the sentiment towards the Canadian Dollar from this report.
Trade Desk Thoughts: According to the CMHC, The seasonally adjusted annual rate of urban starts rose 15.2% in August compared to July. Both urban multiples and singles moved higher, with an increase of 25.2% for multiples to 114,700 units, and a 2.0% increase for singles to 71,200 units.
The seasonally adjusted annual rate of urban starts was down in every region except Ontario where housing starts jumped 81.0% to 86,500. Urban starts sagged 22.5% to 23,700 units in the Prairies and dropped 11.5% in Atlantic Canada. Smaller declines of 8.7% and 8.2% were recorded in Quebec (37,600 units) and British Columbia (30,400 units) respectively. Actual urban single starts for the January to August period of this year were 16.8% lower than they were a year earlier, while urban multiple starts were up by 17.6% over the same period.
"While the headline number of starts shows improvement, the 16.8% yearly decrease in urban single starts for the January to August 2008 period indicates overall weakness in the housing sector," said Matthew Carniol, chief currency strategist at TheLFB-forex.com.
Forex Technical Reaction: The Cad rose about 10 pips after the report was released. Also important for today is the potential for Hurricane Ike to cause damage to energy production facilities in the Gulf of Mexico. Ike has weakened, and its projected path now places it somewhat west of most oil rigs in the gulf. Crude futures were recently trading 1.55% lower on the day at $104.71 per barrel.
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com
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Sterling Looks For Correction
Daily Forex Fundamentals | Written by Investica | Sep 09 08 10:23 GMT |
Sterling looks to have scope for a significant corrective recovery against the dollar in the short term even though gains will quickly attract selling interest.
Risk appetite recovered on Monday following the US GSE bailout and this pushed Sterling stronger, but the UK currency was unable to sustain the advance against the dollar.
The UK currency weakened sharply against the dollar with fresh 30-month lows below 1.75 before a small correction as the US currency continued to punish European currencies. Sterling was little changed against the Euro near 0.8050.
The overnight UK data remained weak with the BRC reporting a 1.0% annual decline in like-for-like retail sales while the RICS reported that housing activity remained at a very low level even with some sign of stabilisation. The UK currency was trapped close to the 1.75 level against the dollar as the US currency remained robust.
UK industrial production fell 0.4% in July while there was a 0.2% dip in manufacturing output which will maintain the underlying lack of confidence in the UK economy, although the impact should be measured given the amount of deterioration priced in
Investica
http://www.investica.co.uk
Disclaimer: Investica's market analysis is not investment advice and must not be taken as recommending particular market positions. Investica can take no responsibility for any actions taken by investors.
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Sterling looks to have scope for a significant corrective recovery against the dollar in the short term even though gains will quickly attract selling interest.
Risk appetite recovered on Monday following the US GSE bailout and this pushed Sterling stronger, but the UK currency was unable to sustain the advance against the dollar.
The UK currency weakened sharply against the dollar with fresh 30-month lows below 1.75 before a small correction as the US currency continued to punish European currencies. Sterling was little changed against the Euro near 0.8050.
The overnight UK data remained weak with the BRC reporting a 1.0% annual decline in like-for-like retail sales while the RICS reported that housing activity remained at a very low level even with some sign of stabilisation. The UK currency was trapped close to the 1.75 level against the dollar as the US currency remained robust.
UK industrial production fell 0.4% in July while there was a 0.2% dip in manufacturing output which will maintain the underlying lack of confidence in the UK economy, although the impact should be measured given the amount of deterioration priced in
Investica
http://www.investica.co.uk
Disclaimer: Investica's market analysis is not investment advice and must not be taken as recommending particular market positions. Investica can take no responsibility for any actions taken by investors.
Read more...
European Market Update
Daily Forex Fundamentals | Written by Trade The News | Sep 09 08 09:55 GMT |
European Equities continue to rally post GSE bailout; UK data highlights slowing economy
Data
(GE) July Current Account €11.8B v €15.0Be; Trade Balance: €13.9B v €17.5Be; Imports M/M: 7.4% v 0.3%e; Exports M/M: -1.7% v -1.1%e
(NE) July Industrial Production M/M: -2.0% v 0.1%e; Y/Y: -2.6% v -0.1%e
(NE) July Industrial Sales Y/Y: 11.6% v 8.9% prior
(SW) August CPI Level: 301.98 v 302.13e
(SW) August CPI - Headline Rate: M/M 0.2% v 0.0%e; Y/Y 4.3% v 4.4%e; CPI - Underlying Inflation: M/M 0.1% v -0.1%e; Y/Y 3.2% v 3.3%e;
(UK) July Industrial Production: M/M: % v -0.1%e; Y/Y: % v -1.4%
(UK) July Manufacturing Production M/M: % v -0.1%e; Y/Y: % v -1.1%e ;
(NE) Dutch sold €2.1B in 4% 2018 bonds; avg yield 4.313%
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Novartis [NOVN.SZ] Awarded FDA priority review for kidney cancer drug RAD001 || Hermes [RMS.FR] Seeks to open 3 to 4 new stores in China annually during the next three years - Exec || Tullow Oil [TLW.UK] Announced oil discovery at Kigogole-1 exploration well in the Butiaba region of Block 2, Uganda || Vendanta resources [VED.UK] Confirmed press speculation that it would simplify group structure into three commodity focused group; Company also announced that it would invest $9.8B to boost fully integrated aluminum smelting capacity to approx 2.6 mtpa by 2016 || Qinetiq [QQ.UK] UK govt will sell 18.9% stake in company || Origin Energy [ORG.AU] BG Group [BG.UK] stated it would not extend its takeover bid for Origin Energy nor raise the offer price || Oxford Biomedical [OXB.UK] Announced promising interim results from the Phase I/II trial of its novel gene therapy, ProSavin, for the treatment of Parkinson's disease. || Conergy [CGY.GE] solds its Wind unit to Warburg Pincus, noting Sale would result in a one time gain of approximately €35M from discontinued operations. || Siemens [SIE.GE] awarded contract to supply 500 wind turbines for E.On. Turbines to be installed in 2010-2011 will have an output of 1,150 MW. || Bayer [BAY.GE] Session strength attributed to chatter of a possible takeover bid with Pfizer mentioned as a possible suitor.
In speakers : EU's Almunia reiterated that signs of second round effects of inflation are surfacing, but added that perhaps inflation peaked at 3.8% in August. He Added that the recent inflation spike has lowered GDP outlook. Almunia noted that calls for wage-inflation linked deals to end. Almunia noted that ECB was doing a good job despite difficult conditions, but saw little signs of improvement in financial market turmoil.
IMF's Lipsky stated in a German speech that the Global economic slowdown would likely deepen in H2 of the year, which could help to contain inflation. He noted that the situation is the most difficult in years. Given the current environment, the FED, ECB and BOJ can afford to hold interest rates steady. Interms of growth, consumption in the US faced strong headwinds and strong but slowing economic momentum in the emerging market economies.
India Chief Gov Statistician stated that it saw double digit inflation by the end of 2008 but added that it expected inflation to decline during 2009.
Spanish Finance Minister commented that the Spanish economy could worsen further in coming quarters and the risk of recession remains. However he saw potential that the economy could bottom out in 2009 and back head back towards its potential growth in 2010. He noted that inflation continues to remain at high levels but would likely decline in 2009
(TH) Thailand court rules PM Samak violated the constitution and must resign
Energy: Saudi Arabia Oil Min Naimi noted that his country has been working hard since June to raise its production output to help bring prices to current levels. Saudi reiterated that the market remains adequately well balanced. OPEC President Khelil stated that there was no need for production cuts at this time and noted that prices would continue to decline even if OPEC cut supply. The Iranian OPEC Gov says some OPEC Members see the need for quota adherence. A Libya says general mood in OPEC focuses towards enforcing compliance, not a cut in output ceiling. Libya stated that the world could cope with oil at $100 per barrel. The National Hurricane Center noted that Hurricane Ike was weakening and currently a category 1 storm. Ike was Expected to be in the South-Eastern Gulf of Mexico on Wednesday.
In fixed-income: (BE) Belgium Debt Chief stated that the remaining 2008 financial needs seen around €3.4B || German set a 4% coupon on new 2-year issue to be sold on Wed and sought ; seeks bids on €8.0B || (UK) Jul Mortgage lending dropped 54% y/y according to the Commission Mortgage Lenders || (NE) the Dutch sold €2.1B in 4% 2018 bonds; with an avg yield 4.313%; (UK) BoE stated that UK Mortgage interest rates fell during the month of August. || ECB alloted €176.B in 7-Day Main Refi Operations v €156.5B benchmark; marginal rate at 4.39%
In currencies, the USD saw its earlier gains achieved in Asia erode throughout the European morning. Chatter of Asian central banks returning to divest some USD holdings and European M&A rumors prompted the greenback to encounter a bit of profit-taking. Firmer equity market helped the carry-related pairs move off their Asian session lows.
NOTES
European equities continued their post GSE bailout rally aided by lower oil prices following remarks from a Saudi official ahead of the opening September OPEC policy meeting. The OPEC President Khelil also stressed that there was no need for production cuts and that prices will continue to decline even if OPEC cut supply. The economic releases continued to suggest the clouds on the economic horizon as UK production data was below expectations and comments from the IMF, EU's Alumia and the Spanish finance minister Solbes throughout the morning. The financial market turmoil remains on the front burner evident by recent high profile analyst comments which ebbed away at EPS estimates as highlighted by Oppenheimer's Whitney and Ladenburg's Bove. Lastly, potential EUR 60B M&A chatter of Germany's BAY.GE from a potential US acquirer was an excuse for the EUR/USD to move off fresh 11 month lows
Looking ahead for the NY session
8:15 (CA) Aug Housing Starts: K v 191.0Ke
10:00 (US) Jul Wholesale Inventories: % v 0.7%e
10:00 (US) Jul M/M: % v -1.5%ePending Home sales
10:00 (US) Sept IBD/TIPP Economic Optimisim: v 44.0e
10:00 (MX) Aug Consumer Prices M/M: % v 0.56%e; Y/Y: % v 5.55%e; CPI Core M/M: % v 0.38%e
Trade The News Staff
Trade The News, Inc.
Legal disclaimer and risk disclosure
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.
Read more...
European Equities continue to rally post GSE bailout; UK data highlights slowing economy
Data
(GE) July Current Account €11.8B v €15.0Be; Trade Balance: €13.9B v €17.5Be; Imports M/M: 7.4% v 0.3%e; Exports M/M: -1.7% v -1.1%e
(NE) July Industrial Production M/M: -2.0% v 0.1%e; Y/Y: -2.6% v -0.1%e
(NE) July Industrial Sales Y/Y: 11.6% v 8.9% prior
(SW) August CPI Level: 301.98 v 302.13e
(SW) August CPI - Headline Rate: M/M 0.2% v 0.0%e; Y/Y 4.3% v 4.4%e; CPI - Underlying Inflation: M/M 0.1% v -0.1%e; Y/Y 3.2% v 3.3%e;
(UK) July Industrial Production: M/M: % v -0.1%e; Y/Y: % v -1.4%
(UK) July Manufacturing Production M/M: % v -0.1%e; Y/Y: % v -1.1%e ;
(NE) Dutch sold €2.1B in 4% 2018 bonds; avg yield 4.313%
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Novartis [NOVN.SZ] Awarded FDA priority review for kidney cancer drug RAD001 || Hermes [RMS.FR] Seeks to open 3 to 4 new stores in China annually during the next three years - Exec || Tullow Oil [TLW.UK] Announced oil discovery at Kigogole-1 exploration well in the Butiaba region of Block 2, Uganda || Vendanta resources [VED.UK] Confirmed press speculation that it would simplify group structure into three commodity focused group; Company also announced that it would invest $9.8B to boost fully integrated aluminum smelting capacity to approx 2.6 mtpa by 2016 || Qinetiq [QQ.UK] UK govt will sell 18.9% stake in company || Origin Energy [ORG.AU] BG Group [BG.UK] stated it would not extend its takeover bid for Origin Energy nor raise the offer price || Oxford Biomedical [OXB.UK] Announced promising interim results from the Phase I/II trial of its novel gene therapy, ProSavin, for the treatment of Parkinson's disease. || Conergy [CGY.GE] solds its Wind unit to Warburg Pincus, noting Sale would result in a one time gain of approximately €35M from discontinued operations. || Siemens [SIE.GE] awarded contract to supply 500 wind turbines for E.On. Turbines to be installed in 2010-2011 will have an output of 1,150 MW. || Bayer [BAY.GE] Session strength attributed to chatter of a possible takeover bid with Pfizer mentioned as a possible suitor.
In speakers : EU's Almunia reiterated that signs of second round effects of inflation are surfacing, but added that perhaps inflation peaked at 3.8% in August. He Added that the recent inflation spike has lowered GDP outlook. Almunia noted that calls for wage-inflation linked deals to end. Almunia noted that ECB was doing a good job despite difficult conditions, but saw little signs of improvement in financial market turmoil.
IMF's Lipsky stated in a German speech that the Global economic slowdown would likely deepen in H2 of the year, which could help to contain inflation. He noted that the situation is the most difficult in years. Given the current environment, the FED, ECB and BOJ can afford to hold interest rates steady. Interms of growth, consumption in the US faced strong headwinds and strong but slowing economic momentum in the emerging market economies.
India Chief Gov Statistician stated that it saw double digit inflation by the end of 2008 but added that it expected inflation to decline during 2009.
Spanish Finance Minister commented that the Spanish economy could worsen further in coming quarters and the risk of recession remains. However he saw potential that the economy could bottom out in 2009 and back head back towards its potential growth in 2010. He noted that inflation continues to remain at high levels but would likely decline in 2009
(TH) Thailand court rules PM Samak violated the constitution and must resign
Energy: Saudi Arabia Oil Min Naimi noted that his country has been working hard since June to raise its production output to help bring prices to current levels. Saudi reiterated that the market remains adequately well balanced. OPEC President Khelil stated that there was no need for production cuts at this time and noted that prices would continue to decline even if OPEC cut supply. The Iranian OPEC Gov says some OPEC Members see the need for quota adherence. A Libya says general mood in OPEC focuses towards enforcing compliance, not a cut in output ceiling. Libya stated that the world could cope with oil at $100 per barrel. The National Hurricane Center noted that Hurricane Ike was weakening and currently a category 1 storm. Ike was Expected to be in the South-Eastern Gulf of Mexico on Wednesday.
In fixed-income: (BE) Belgium Debt Chief stated that the remaining 2008 financial needs seen around €3.4B || German set a 4% coupon on new 2-year issue to be sold on Wed and sought ; seeks bids on €8.0B || (UK) Jul Mortgage lending dropped 54% y/y according to the Commission Mortgage Lenders || (NE) the Dutch sold €2.1B in 4% 2018 bonds; with an avg yield 4.313%; (UK) BoE stated that UK Mortgage interest rates fell during the month of August. || ECB alloted €176.B in 7-Day Main Refi Operations v €156.5B benchmark; marginal rate at 4.39%
In currencies, the USD saw its earlier gains achieved in Asia erode throughout the European morning. Chatter of Asian central banks returning to divest some USD holdings and European M&A rumors prompted the greenback to encounter a bit of profit-taking. Firmer equity market helped the carry-related pairs move off their Asian session lows.
NOTES
European equities continued their post GSE bailout rally aided by lower oil prices following remarks from a Saudi official ahead of the opening September OPEC policy meeting. The OPEC President Khelil also stressed that there was no need for production cuts and that prices will continue to decline even if OPEC cut supply. The economic releases continued to suggest the clouds on the economic horizon as UK production data was below expectations and comments from the IMF, EU's Alumia and the Spanish finance minister Solbes throughout the morning. The financial market turmoil remains on the front burner evident by recent high profile analyst comments which ebbed away at EPS estimates as highlighted by Oppenheimer's Whitney and Ladenburg's Bove. Lastly, potential EUR 60B M&A chatter of Germany's BAY.GE from a potential US acquirer was an excuse for the EUR/USD to move off fresh 11 month lows
Looking ahead for the NY session
8:15 (CA) Aug Housing Starts: K v 191.0Ke
10:00 (US) Jul Wholesale Inventories: % v 0.7%e
10:00 (US) Jul M/M: % v -1.5%ePending Home sales
10:00 (US) Sept IBD/TIPP Economic Optimisim: v 44.0e
10:00 (MX) Aug Consumer Prices M/M: % v 0.56%e; Y/Y: % v 5.55%e; CPI Core M/M: % v 0.38%e
Trade The News Staff
Trade The News, Inc.
Legal disclaimer and risk disclosure
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.
Read more...
Oil falls to new 5-month lows, awaits OPEC
LONDON (Reuters) - Oil prices fell to a new five-month low on Tuesday, pressured by a rise in the U.S. dollar and expectations that OPEC will not cut output when it meets later in the day.
U.S. crude for October delivery was down $1.39 a barrel at $104.95 by 5:31 a.m. EDT, after briefly falling more than $2 to touch a new five-month low of $104.23 a barrel.
London Brent crude was $1.41 down at $102.03 a barrel, closing in on the $100 mark.
The dollar's rise to a one-year peak against a basket of currencies has spurred a shift away from commodities that has driven down prices across the spectrum.
Oil is under pressure despite the potential threat from Hurricane Ike, which is headed towards the U.S. Gulf and offshore oil fields that produce a quarter of U.S. oil and 15 percent of its natural gas.
"If it weren't for the hurricanes, oil should be below $100 a barrel, considering the sentiment," said Tetsu Emori, fund manager at Astmax Co Ltd.
Oil has fallen nearly 30 percent from a record peak of $147.27 a barrel on July 11, depressed partly by a fall in demand from the world's top energy consumer the United States, where the economy is battling to ward off recession.
Members of the Organization of the Petroleum Exporting Countries have expressed concern about rising oil supplies, but are not expected to go as far as agreeing to cut output.
Ali al-Naimi, oil minister from Saudi Arabia, the world's largest exporter, said oil markets were fairly well balanced.
"I think everything is in balance -- inventories are in a healthy position."
The producer group may favor stricter compliance within existing output targets, rather than a cut in the targets, the head of Libya's OPEC delegation Shokri Ghanem told Reuters.
"I don't think the general mood is talking about the (output) ceiling," he said. "Rather (it is) at this stage watching the market carefully and trying to insist on compliance."
The impact of last week's Hurricane Gustav and the approach of Hurricane Ike could impact weekly U.S. government data on oil inventories, due on Wednesday.
"We will see more than the usual amount of draws coming out of inventories both this week and next," said Edward Meir of broker MF Global.
U.S. crude oil stocks are forecast to have fallen last week by 4.3 million barrels after Gustav shut down fields, a preliminary Reuters poll of analysts showed.
Gasoline stocks were seen falling by 4.2 million barrels and distillates by 2.5 million barrels.
(Reporting by Jane Merriman in London and Angela Moon in Seoul, editing by Anthony Barker)
Read more...
U.S. crude for October delivery was down $1.39 a barrel at $104.95 by 5:31 a.m. EDT, after briefly falling more than $2 to touch a new five-month low of $104.23 a barrel.
London Brent crude was $1.41 down at $102.03 a barrel, closing in on the $100 mark.
The dollar's rise to a one-year peak against a basket of currencies has spurred a shift away from commodities that has driven down prices across the spectrum.
Oil is under pressure despite the potential threat from Hurricane Ike, which is headed towards the U.S. Gulf and offshore oil fields that produce a quarter of U.S. oil and 15 percent of its natural gas.
"If it weren't for the hurricanes, oil should be below $100 a barrel, considering the sentiment," said Tetsu Emori, fund manager at Astmax Co Ltd.
Oil has fallen nearly 30 percent from a record peak of $147.27 a barrel on July 11, depressed partly by a fall in demand from the world's top energy consumer the United States, where the economy is battling to ward off recession.
Members of the Organization of the Petroleum Exporting Countries have expressed concern about rising oil supplies, but are not expected to go as far as agreeing to cut output.
Ali al-Naimi, oil minister from Saudi Arabia, the world's largest exporter, said oil markets were fairly well balanced.
"I think everything is in balance -- inventories are in a healthy position."
The producer group may favor stricter compliance within existing output targets, rather than a cut in the targets, the head of Libya's OPEC delegation Shokri Ghanem told Reuters.
"I don't think the general mood is talking about the (output) ceiling," he said. "Rather (it is) at this stage watching the market carefully and trying to insist on compliance."
The impact of last week's Hurricane Gustav and the approach of Hurricane Ike could impact weekly U.S. government data on oil inventories, due on Wednesday.
"We will see more than the usual amount of draws coming out of inventories both this week and next," said Edward Meir of broker MF Global.
U.S. crude oil stocks are forecast to have fallen last week by 4.3 million barrels after Gustav shut down fields, a preliminary Reuters poll of analysts showed.
Gasoline stocks were seen falling by 4.2 million barrels and distillates by 2.5 million barrels.
(Reporting by Jane Merriman in London and Angela Moon in Seoul, editing by Anthony Barker)
Read more...
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