Daily Market Commentary - Fundamental Outlook

Daily Forex Fundamentals | Written by GCI Financial | Apr 28 09 13:55 GMT |

€ The euro depreciated marginally vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2965 level and was capped around the US$ 1.3040 level. The common currency moved higher early in the North American session as traders continue to evaluate the growing global swine flu crisis. Dealers are also paying very close attention to the U.S. financial sector following a Wall Street Journal story the U.S. government will ask Citigroup and Bank of America to raise billions more in capital after the results of the banks’ stress tests are released next Monday. Most of the nineteen largest banks in the U.S. are said to be well-capitalized but there will definitely be cases where the government strongly encourages the banks to raise additional capital and this expectation could hang heavily over the market for the next several days. The World Health Organization lifted its level of influenza pandemic alert to “phase four” from “phase three,” evidencing an increasing likelihood the risk of a pandemic has increased. Data released in the U.S. today saw the February S&P Case-Shiller home price index off 18.6% while Redbook retail sales were up +1.6% m/m in the first three weeks of April. Other data to be released today include April consumer confidence and the April Richmond Fed manufacturing index. In eurozone news, traders are speculating Germany’s consumer price index may have increased in April after data from four of the country’s regions showed higher price pressures. Also, French consumer confidence ticked up in April. Euro bids are cited around the US$ 1.2765 level. ¥/ CNY The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥95.60 level and was capped around the ¥96.75 level. Data released in Japan overnight saw March overall retail sales off 3.9% y/y, the seventh consecutive month of declines. Despite ongoing poor economic data, the yen continues to power higher on account of a worsening of the global swine flu contagion, an economic and health risk that risks becoming a global pandemic. The Nikkei 225 stock index lost 2.67% to close at ¥8,493.77. U.S. dollar offers are cited around the ¥104.15 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥124.35 level and was capped around the ¥126.05 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥139.00 figure while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥82.65 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8270 in the over-the-counter market, down from CNY 6.8275. ₤ The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4685 level and was supported around the $1.4515 level. Data released in the U.K. saw the April CBI distributive trades survey improve markedly to +3 in April from -44 in March, a fifteen-month high. The U.K. Treasury reported there is a low risk of deflation in the U.K. Cable bids are cited around the US$ 1.4350 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.8970 level and was supported around the ₤0.8880 level. GCI Financial http://www.gcitrading.com DISCLAIMER : GCI's Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

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FX Thoughts for the Day

Daily Forex Technicals | Written by Kshitij Consultancy Services | Apr 28 09 12:05 GMT |

USD-CHF @ 1.1576/80...Bullish range break eyed R: 1.1583 / 1.1701-12 / 1.1811 S: 1.1548-25 / 1.1482 / 1.1429 Dollar-Swiss has been extremely ranged during the day after the sharp rise seen yesterday which took the pair towards 1.1600. It is trading bound by the 55-DMA (1.1548) at the bottom and 8-DMA (1.1583) at the top. Once it is able to break past the range, we might see it move towards 1.1700 over today/ tomorrow. Cable GBP-USD @ 1.4603/07...Mixed R: 1.4629 / 1.4692 / 1.4720 S: 1.4538 / 1.4481 / 1.4438 Cable dipped below the 1.4550 Support and has bounced from there. There might be a possible rush towards 1.48 over the next few sessions, but a break below 1.4500 is likely to take it further towards 1.4365 which is the 50% retracement of the rise from 1.3655 (11-Mar) to 1.5070 (16-Apr). Which way does it move is to be seen. It presently trades very near to middle of the expected upside and downside levels; besides the trend, too, is ranged. So the view is mixed. Though, the MACD indicator suggests that there might be some more room for a downside. To see the chart, click on: http://www.kshitij.com/graphgallery/gbposc.shtml#osc Aussie AUD-USD @ 0.7021/26...Support at current levels R: 0.7104 / 0.7116 / 0.7156 S: 0.6992 / 0.6968 / 0.6824 Aussie has changed little during the day. Dip during the day was Supported at 0.6992. Having broken the 200-MA on the 4-hourly, it is struggling to rise above this trendline. 200-DMA might prove to be a strong Resistance which could force the pair down initially towards 0.6780 over the next few days. It also has an immediate Support of the 13-MA on the 3-day candle charts. To see the chart, click on: http://www.kshitij.com/graphgallery/audma.shtml#ma Kshitij Consultancy Service http://www.fxthoughts.com Legal disclaimer and risk disclosure These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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Morning Forex Overview

Daily Forex Fundamentals | Written by Dukascopy Swiss FX Group | Apr 28 09 07:18 GMT |

Previous session overview The yen hit multi-week highs against the dollar and the euro in Asia Tuesday after a Wall Street Journal report that U.S. officials are pushing Bank of America and Citigroup to raise more capital fueled worries about the American banking sector. That led to buying of the Japanese currency as a safe-haven unit. Concern over the increase in suspected swine flu cases worldwide also contributed to the yen's appreciation, traders said. The EUR spent much of last week clawing its way higher from sub USD1.30 to a high just above USD1.33 on Friday night. We gave back all those gains yesterday with Nowotny comments one of the key drivers. Increasing worries over the U.K. economy and country's ballooning debt weighed on the British pound on Monday and it dropped to as low as 1.4515 against the dollar and 0.8955 versus the euro. The greenback dropped to JPY95.97, its lowest level since March 30, compared with JPY96.78 in New York late Monday. The euro plunged to JPY124.66, its weakest level since March 12 and below JPY126.22 in New York overnight. The Australian dollar was down in late Asian trade Tuesday as concerns about the global spread of swine flu and the capital adequacy of U.S. banks eroded more of the currency's recent gains. The Australian dollar was USD0.7022 from USD0.7124 late Friday. It hit a low of USD0.6999, its weakest reading since April 21. Market expectation The euro continues to be plagued by risk aversion, on top of mixed signals from European policy makers, although remarks from some officials at the European Central Bank have suggested additional easing measures are likely. Some traders are poised to push the euro below USD1.30. For EURUSD Bids seen placed at USD1.2985/80, a break below to open a deeper move toward USD1.2950/40, though traders notes that order boards seen 'well bid' below USD1.2980. Resistance seen placed at USD1.3036, more between USD1.3045/55, a break above to open a move on toward USD1.3090/00. GBPUSD recovered to USD1.4590 into early Europe, meeting resistance from reported offers placed between USD1.4590/00, before reversing again, this time extending lows to USD1.4545. Rate currently trades around USD1.4565. Support remains at USD1.4545/40, a break below to open a deeper move toward USD1.4515/00. Resistance remains at USD1.4590/00, a break above to open a move on toward USD1.4620/25 ahead of USD1.4650/60. Market participants are awaiting the releases of U.S. March quarter gross domestic product data and the Federal Open Market Committee's policy decision, both due Wednesday. Dukascopy Swiss FX Group Legal disclaimer and risk disclosure This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.

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Daily Financial Market Outlook

Daily Forex Fundamentals | Written by Lloyds TSB | Apr 28 09 07:03 GMT |

Overview & economic commentary The UK CBI distributive trades survey for April will provide the first anecdote of turnover on the high street as we approach the end of the month. In contrast to the less pessimistic consensus forecast of -40 for reported sales, we expect the index to have dropped to -50, a 4-month low. Retailers reported last month that they did foresee no improvement. The first of two gilt auctions this week is planned this morning and will see the DMO issue £3bn worth of 4% 2022 gilts. This will be the second auction of this particular gilt. The previous sale was held in February and was covered just 1.36 times and tailed 2bp, not a great show of support. More evidence of reluctant participation could weigh on sterling. The US treasury will hold its second auction of the week today when it will sell $35bn worth of 5yr notes. The $40bn 2yr auction drew solid demand yesterday despite the late spike in prices on the back off a flight-to-quality. Early clues about Q2 prospects for US consumer spending and employment may emerge from the release of April consumer confidence. It is probably too early for confidence to be impacted by reports of the outbreak of the swine flu virus, but markets will keep close track of the story as it unfolds, aware of the damage SARS caused to Eastern Asian economies in 2003. US house prices data for February are also due. Preliminary German CPI data is forecast to show annual CPI accelerated to 0.8% in April from 0.5% in March. This is a blip in the downtrend in place since the second half of last year. ECB member Bini-Smaghi speaks later in the day and could share his thoughts on interest rates and the economy ahead of the governing council meeting next week Currency commentary Asian equity markets are struggling to find a stable footing this morning in the wake of the 0.6% decline in the US and the WSJ report that BoA and Citi may need to raise more capital based on the stress tests. S&P futures are down 11, with better Q1 results of Deutsche Bank early this morning failing to stabilise sentiment. €/$ threatens to break 1.30 support and $/Y has slipped below 96.0. The FTSE is set to open a touch lower and may break below 4,100 if US indices extend their slide. The Mexican peso is still being shunned in fx markets and this led £/mxn to spike above 20.6 overnight. The CBI distributive trades survey and the 2022 gilt auction will be under scrutiny and could impact the direction of sterling in the event of a surprise outcome or bidder participation. €/sek extended its decline for a 5th successive session yesterday, heading back below 10.70 for a 2nd time this month. Swedish March PPI and retail sales data are due this morning and could decide whether the bearish trend stays in place. Major data and events today UK Nationwide house prices (07:00) (Apr) (28-30) Mar +0.9% Y-O-Y -15.7% UK CBI distributive trades survey (11:00) Mar -44 Apr (f'cast) -50 Median -40 -50:-30 German CPI (07:00) (prel) Mar -0.1% Y-O-Y +0.5% Apr (f'cast) +0.1% Y-O-Y +0.8% Median +0.1% Range -0.2%:+0.7% US House prices (S&P/CaseShiller)(Feb)(14:00) Jan Y-O-Y -18.9% US Consumer confidence (15:00) Mar 26.0 Apr (f'cast) 28.0 Median 29.0 Range 23.0:35.0 Japan Retail sales (prel) (00:50) Feb Y-O-Y -5.7% Mar (f'cast) Y-O-Y -3.9% Median -4.9% Range -6.8%:-2.3% UK DMO auction of £3bn bonds at 4% due 2022 ECB member Smaghi speaks (17:30) US Treasury auctions $35bn 5yr notes (18:00) Chart of the day: Will the UK CBI survey follow the BRC index and report an improvement in retail sales? Lloyds TSB Bank http://www.lloydstsbfinancialmarkets.com Disclaimer: Any documentation, reports, correspondence or other material or information in whatever form be it electronic, textual or otherwise is based on sources believed to be reliable, however neither the Bank nor its directors, officers or employees warrant accuracy, completeness or otherwise, or accept responsibility for any error, omission or other inaccuracy, or for any consequences arising from any reliance upon such information. The facts and data contained are not, and should under no circumstances be treated as an offer or solicitation to offer, to buy or sell any product, nor are they intended to be a substitute for commercial judgement or professional or legal advice, and you should not act in reliance upon any of the facts and data contained, without first obtaining professional advice relevant to your circumstances. Expressions of opinion may be subject to change without notice. Although warrants and/or derivative instruments can be utilised for the management of investment risk, some of these products are unsuitable for many investors. The facts and data contained are therefore not intended for the use of private customers (as defined by the FSA Handbook) of Lloyds TSB Bank plc. Lloyds TSB Bank plc is authorised and regulated by the Financial Services Authority and is a signatory to the Banking Codes, and represents only the Scottish Widows and Lloyds TSB Marketing Group for life assurance, pension and investment business.

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Yen Looking Dominant Against Ineffective Euro

Daily Forex Technicals | Written by Finotec Group | Apr 28 09 07:13 GMT |

The yen advanced to a six-week high against the euro after the World Health Organization said the swine flu outbreak is no longer containable, triggering demand for safer assets. Japan's currency also rose to a five-week high versus the dollar after the Wall Street Journal reported Bank of America Corp. and Citigroup Inc. are being told by regulators they need more capital as a result of so-called stress tests, signaling the financial crisis may be far from over. Trading Tactics Sell EUR/JPY on signs of a downtrend. The buying point is at 125.75; previous resistance is the take profit at 127.20; Pivot point is the stop loss at 124.50 The selling point is at 124.71; Pivot point is the take profit at 123.55; Fibonacci 23.6% is the stop loss at 125.65 Technical: Euro is in a clear downtrend against Japanese yen with a break of a strong Fibonacci level. A move back lower could set up a test of 123.55 The following analysis is for information only; Finotec is not responsible for any decisions or misinterpretations based on the given text. Finotec Group Inc. http://www.finotec.com/ Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.

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More News • Rising China Demand Means Asian Exporters May Be Past Worst of Trade Slump • Japan Retail Sales Drop for Seventh Month as Companies Cu

By Courtney Schlisserman

April 28 (Bloomberg) -- Home prices in 20 major U.S. metropolitan areas probably dropped in February at a slower pace, adding to evidence the market may be stabilizing, economists said before a private report today.

The S&P/Case-Shiller index decreased 18.7 percent from a year earlier after a record 19 percent decline in January, according to the median estimate of economists surveyed by Bloomberg News. Another report may show consumer confidence climbed in April for a second month.

Declining prices, Federal Reserve efforts to bring mortgage rates down, and government tax credits for first-time buyers may continue to support sales after an almost four-year slide. Still, mounting unemployment means purchases are unlikely to rebound quickly.

“Affordability is at a record high and you’re seeing first-time buyers come back into the market,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “That has the potential to put a floor under home sales.”

The S&P/Case-Shiller gauge is due at 9 a.m. New York time. Estimates in the Bloomberg News survey of 26 economists ranged from drops of 19.2 percent to 17 percent. A smaller decrease would be the first since the measure starting dropping in January 2007.

At 10 a.m., the New York-based Conference Board’s index of consumer confidence may rise to 29.9 in April from 26 in March, according to the median forecast. Estimates ranged from a high of 35 to a low of 26. The measure hit a record low of 25.3 in February.

For the home-price index, the figures aren’t adjusted for seasonal effects so economists prefer to focus on year-over-year changes instead of month-to-month.

Foreclosure Surge

Foreclosure-driven declines in prices have spurred home resales. Purchases in March stayed near a four-month average and prices rose from February, according to data from the National Association of Realtors. About half of the March existing-home sales were of distressed properties and first-time buyers accounted for about 51 percent, the group said last week.

A total of 803,489 properties received a default of auction notice or were seized in the first quarter of 2009, the highest since records began four years ago, according to RealtyTrac Inc., an Irvine, California-based seller of mortgage data.

Sales of new homes in March were higher than economists forecast, according to Commerce Department data released last week. They fell 0.6 percent to an annual pace of 356,000 after a revised 358,000 in February that was stronger than previously estimated. Inventories of new homes fell to a seven-year low.

First-Time Buyers

KB Home, the Los Angeles-based homebuilder that targets first-time buyers, is among those in the industry seeing an improvement. The company last month reported a narrower first- quarter loss as orders rose for the first time in three years.

Other reports indicate a let-up in the economy’s decline. The Fed said earlier this month that the U.S. contraction slowed across several of its biggest regions in March, with some industries “stabilizing at a low level.” Retail sales showed a “slight improvement” in some areas, and there was a “scattered pickup” in home buying, according to the central bank’s so-called beige book.

Fed officials will tomorrow announce their decision on the direction of the benchmark overnight lending rate between banks.

Mortgage Rates

Steps to lower borrowing costs and unclog lending have helped push mortgage rates down in recent months. The average rate on a 30-year fixed mortgage reached a record low of 4.78 percent in the week ended April 2, according to Freddie Mac.

The National Association of Realtors’s affordability index, which tracks mortgage rates, home prices and incomes, surged in February to the highest level in 20 years of data.

Still, the increase in foreclosures has had a negative spillover effect on some builders.

Lennar Corp., the fourth-biggest builder in the U.S., on March 31 reported a wider first-quarter loss and said orders fell 28 percent. The company also said orders tumbled in January and February.

“Despite historically low interest rates and some indicators pointing toward market stabilization, low consumer confidence, increased unemployment and growing foreclosure rates negatively impacted new home sales in most of our markets,” Chief Executive Officer Stuart Miller said in a statement.

                        Bloomberg Survey

================================================================
                        Case Shil Case Shil Consumer Richmond
                          Monthly   Monthly     Conf      Fed
                             YOY%     Index    Index    Index
================================================================

Date of Release              04/28    04/28    04/28    04/28
Observation Period            Feb.     Feb.    April    April
----------------------------------------------------------------
Median                      -18.7%    142.8     29.9      -17
Average                     -18.6%    143.2     29.8      -17
High Forecast               -17.0%    144.1     35.0      -14
Low Forecast                -19.2%    142.8     26.0      -20
Number of Participants          26        3       61        8
Previous                    -19.0%    146.4     26.0      -20
----------------------------------------------------------------
4CAST Ltd.                    ---      ---      29.0     ---
Action Economics              ---     142.8     30.0     ---
AIG Investments             -17.0%     ---      26.0      -14
Aletti Gestielle SGR          ---      ---      29.0     ---
Ameriprise Financial Inc      ---      ---      28.0      -18
Argus Research Corp.          ---      ---      30.0     ---
Bank of Tokyo- Mitsubishi     ---      ---      28.3     ---
Bantleon Bank AG              ---      ---      30.5     ---
Barclays Capital            -18.7%     ---      29.5     ---
BBVA                        -17.5%     ---      29.1     ---
BMO Capital Markets         -18.8%     ---      28.1     ---
BNP Paribas                   ---      ---      29.0     ---
Calyon                        ---      ---      29.0     ---
Citi                          ---      ---      28.0     ---
Commerzbank AG              -19.0%     ---      28.0     ---
Credit Suisse                 ---      ---      33.0     ---
Daiwa Securities America      ---      ---      28.0     ---
Danske Bank                   ---      ---      30.0     ---
DekaBank                      ---      ---      32.0     ---
Desjardins Group            -18.5%     ---      31.0     ---
Deutsche Bank Securities      ---      ---      29.0     ---
Deutsche Postbank AG          ---      ---      30.0     ---
DZ Bank                     -18.7%     ---      30.0     ---
First Trust Advisors          ---      ---      29.5     ---
Fortis                      -18.1%     ---      30.0     ---
Goldman, Sachs & Co.          ---      ---      30.0     ---
Helaba                        ---      ---      28.0     ---
Herrmann Forecasting        -18.1%    144.1     29.9      -20
High Frequency Economics    -18.6%     ---      29.0     ---
HSBC Markets                -18.5%     ---      31.0     ---
IDEAglobal                  -18.7%     ---      29.0     ---
IHS Global Insight            ---      ---      35.0     ---
Informa Global Markets        ---      ---      28.5     ---
ING Financial Markets       -19.1%     ---      31.0      -18
Intesa-SanPaulo             -18.5%     ---      29.0     ---
J.P. Morgan Chase           -18.6%     ---      29.0     ---
Janney Montgomery Scott L   -18.6%     ---      30.0     ---
Landesbank Berlin             ---      ---      30.0     ---
Maria Fiorini Ramirez Inc     ---      ---      33.0     ---
Merrill Lynch               -18.6%     ---      28.0     ---
Mizuho Securities           -19.0%     ---      27.0     ---
Moody’s Economy.com           ---      ---      26.5     ---
Morgan Stanley & Co.          ---      ---      28.0     ---
National Bank Financial       ---      ---      30.0     ---
Natixis                     -18.9%     ---      28.0     ---
Newedge                       ---      ---      30.0      -15
Nomura Securities Intl.       ---      ---      28.0     ---
Raymond James                 ---      ---      27.0     ---
RBS Securities Inc.           ---      ---      32.0     ---
Ried, Thunberg & Co.          ---      ---      35.0     ---
Schneider Foreign Exchang     ---      ---      33.0     ---
Scotia Capital              -18.8%     ---      30.0     ---
Societe Generale              ---      ---      31.0     ---
TD Securities               -18.8%     ---      ---       -15
UBS Securities LLC          -18.5%     ---      31.0     ---
Unicredit MIB               -19.2%     ---      30.0     ---
University of Maryland      -18.9%     ---      30.0     ---
Wachovia Corp.                ---      ---      32.0     ---
Wells Fargo & Co.             ---     142.8     29.0     ---
WestLB AG                   -18.7%     ---      28.5     ---
Westpac Banking Co.         -19.0%     ---      30.0      -15
Wrightson Associates          ---      ---      35.0      -20
================================================================

To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net

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Technical Analysis for Crosses

Daily Forex Technicals | Written by ecPulse.com | Apr 28 09 06:30 GMT |

GBP/JPY Sterling versus Japanese yen is still struggling to build the technical base to move towards its expected upside action while the (PRZ) of the bullish bat harmonic pattern is still in progress above 61.8% Fibonacci- valued at 139.15- of the rally started at 131.45 and was topped out at 151.50. Therefore we expect that the pair will be show an upside wave on the intraday basis depending on the hourly positive signals appearing on the Stockstick and RSI-currently valued at 30.00-above L5-strong support- of Camarilla hourly studies. Only a break of 138.20 will damage this bullish prediction. Trading range for today is among key support at 135.50 and key resistance at 145.70. The general trend is to the downside as far as 156.20.remains intact with target at 116.00. Support: 139.80, 139.15, 138.45, 137.35, 136.50 Resistance: 141.00, 141.70, 142.25, 143.00, 144.25 Recommendation: According to our analysis, buy the pair at 140.20 with targets at 143.00 and stop loss at 138.00. EUR/JPY The possibility of forming the medium term (A) leg of the previous discussed Elliott sequence of the rally started at 111.96 and was topped out at 137.50 zones is increasing gradually via 5 internal wave's structure inside the minor descending channel but actually the heavy positive divergence which is now under preparation as shown on the above chart is in need of long white candle to indicate that the reactionary 3 waves-will be treated as bigger (B) - of the whole anticipated Zigzag(5-3-5) correction. So that we expect an upside action on the intraday basis as far as far as 123.30 remains unbroken. Trading range for today is among key support at 121.50 and key resistance now at 128.30. The general trend is to the downside as far as 141.44 remains intact with targets at 100.00 followed by 88.97 levels. Support: 124.50, 123.80, 123.10, 122.75, 122.35 Resistance: 125.35, 126.00, 126.50, 127.30, 128.25 Recommendation: According to our analysis, buy the pair at 124.90 with targets at 127.30 and stop loss at 122.75. EUR/GBP The royal pair has respected all negative signs we mentioned in our yesterday's report reaching our target around 0.8900 zones- Check it here- from where it started to show a potentiality of upside correctional actions via forming a bullish candlestick formation that's pushing it above the previous consolidation area, De-Marker, CCI and AC confirm this highly expected re-action while Fractals indicates the possibility that the intraday low might have been already limited at 0.8890. Trading range is among the key support 0.8760 and key resistance now at 0.9130. The general trend is to the upside as far as 0.8020 area remains intact with targets at 1.0000 followed by 1.0400 levels. Support: 0.8900, 0.8865, 0.8815, 0.8765, 0.8720 Resistance: 0.8960, 0.9000, 0.9030, 0.9070, 0.9130 Recommendation: According to our analysis, buy the pair at 0.8930 with targets at 0.9020 and stop loss at 0.8850. Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk

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UBS Increases Yen Forecast, Targets 95 per Dollar in One Month

By Justin Carrigan

April 28 (Bloomberg) -- UBS AG, the world’s second-largest foreign-exchange trader, raised its one-month forecast for the yen versus the dollar.

The Japanese currency will trade at 95 per dollar in a month, strategists including London-based Geoff Kendrick wrote in a research note today. The bank’s previous prediction was 100 per dollar. The yen was at 96.10 as of 6:33 a.m. in London.

Improved conditions “could be yen-supportive amid the current economic cycle,” the team wrote.

To contact the reporter on this story: Justin Carrigan in London at jcarrigan@bloomberg.net

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Australian, N.Z. Dollars Fall a Second Day as Swine Flu Spreads

By Candice Zachariahs

April 28 (Bloomberg) -- The Australian and New Zealand dollars fell for a second day on concern the spread of swine flu from Mexico will hurt tourism and deepen the global recession, spurring investors to sell riskier assets.

Australia’s currency dropped below 70 U.S. cents for the first time in a week after a Wall Street Journal report said U.S. regulators told Bank of America Corp. and Citigroup Inc. that they need more capital. New Zealand’s dollar slid the most in a week versus the greenback and yen. Ten students suspected of having swine flu in New Zealand will likely be confirmed as having the virus, a person familiar with the tests said.

“Higher risk aversion is being prompted by persistent concern over swine flu,” said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney. “You’ve also got that Wall Street Journal article headlining that Citibank and Bank of America are being pushed by U.S. regulators to raise more capital. That’s definitely causing this next leg down.”

Australia’s currency slid 1.2 percent to 70.14 U.S. cents at 4:15 p.m. in Sydney and touched 69.98 cents, the lowest since April 21. It fell 2.2 percent to 67.19 yen from yesterday in New York. New Zealand’s dollar dropped 1.9 percent, the most in a week, to 55.49 U.S. cents, and fell to 53.17 yen from 54.74 yen.

The Australian dollar will likely find buyers at 69.50 U.S. cents and New Zealand’s currency should be supported at 54.80 cents, Trinh said.

Lower Rates

Demand for the currencies weakened after the World Health Organization raised its pandemic alert to an unprecedented level as the U.S. confirmed 40 cases of the flu and Mexico’s toll of flu-related deaths reached 152. New Zealand Health Minister Tony Ryall said officials are monitoring 56 people displaying symptoms indicating the possibility of swine flu after visiting Mexico or the U.S. in the past two weeks.

“The swine flu concerns are going to provide problems for countries like New Zealand and Australia that rely on tourism,” said Alex Sinton, a senior currency dealer at ANZ National Bank Ltd. in Auckland. “The currencies will stay under pressure.”

New Zealand’s currency also weakened on speculation the central bank will cut interest rates at a policy meeting this week. There is a 40 percent chance of a 50 basis point cut at the central bank’s next meeting on April 30, a Credit Suisse index based on swaps trading shows. A basis point is 0.01 percentage point.

Key interest rates are 3 percent in Australia and New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to assets in the two South Pacific nations.

‘Brutal Impact’

“What will be important is how the bank talks about the long-end of the curve,” Sinton said. “They are likely to make comments about keeping rates lower for longer.”

New Zealand’s dollar has lost 29 percent against the greenback over the past 12 months, the worst performance among major currencies, as central bank Governor Alan Bollard cut the benchmark rate six consecutive times.

The so-called Aussie also declined today after Treasurer Wayne Swan told Australian Broadcasting Corp. radio the economy would grow slowly for some time and the global recession will have a “brutal impact” on government revenue.

Gains in the Australian dollar have been limited by sellers at the 200-day moving average of 72.22 cents, New York-based Tom Fitzpatrick and London-based Shyam Devani, technical analysts at Citigroup, wrote in a research note yesterday. “The setup is bearish,” and Australia’s currency may drop to 68.50 cents in the days ahead, they wrote.

Australian government bonds advanced for a second day. The yield on the benchmark 10-year note fell five basis points to 4.42 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 gained 0.38, or A$3.80 per A$1,000 face amount, to 106.58.

New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose to 3.63 percent from 3.62 yesterday.

To contact the reporter on this story: Candice Zachariahs in Mumbai at czachariahs2@bloomberg.net

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Yen Climbs to Six-Week High on Swine Flu, Concern at U.S. Banks

By Yasuhiko Seki and Ron Harui

April 28 (Bloomberg) -- The yen advanced to a six-week high against the euro after the World Health Organization said the swine flu outbreak is no longer containable, triggering demand for safer assets.

Japan’s currency also gained for a fifth day versus the dollar after the Wall Street Journal reported that Bank of America Corp. and Citigroup Inc. are being told by regulators they need more capital, signaling the global financial crisis may be far from over. The South Korean won and Malaysian ringgit led Asian currencies lower on concern the swine flu will curb tourism and deepen the global recession.

“The spread of swine flu has sparked concern over global risk and strengthened risk aversion,” said Yousuke Hosokawa, a senior currency dealer in Tokyo at Chuo Mitsui Trust & Banking Co., a unit of Japan’s seventh-largest publicly traded bank. “Thus demand for the yen as a refuge will increase.”

Japan’s currency advanced to 124.56 per euro as of 7:44 a.m. in London, from 126.14 in New York yesterday. It earlier rose to 124.54, the strongest level since March 12. The yen climbed to 95.70 per dollar from 96.77, after reaching 95.68, the highest since March 23. Europe’s single currency declined to $1.3019 from $1.3036.

The won tumbled 1 percent to 1,356.95 per dollar, Indonesia’s rupiah dropped 0.7 percent to 10,875, and Malaysia’s ringgit weakened 0.7 percent to 3.6237.

Billions of Dollars

The yen rose for a third day against the euro after the Wall Street Journal said Bank of America’s capital shortfall comes to billions of dollars.

Both banks are objecting to the Federal Reserve’s preliminary report on the tests, and are expected to mount a detailed rebuttal, the Journal said, citing people familiar with the matter.

“The article shocked the market because it came after U.S. regulators gave an assurance that the vast majority of U.S. banks did not need a capital increase,” said Takashi Kudo, director of foreign-exchange sales in Tokyo at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp. “This is driving the yen higher across a broad front.”

Treasury Secretary Timothy Geithner indicated on April 21 that stress tests would show most of the 19 biggest U.S. banks have enough capital and said those needing more may convert government preference shares into common stock as well as seeking investments from private sources. Regulators are scheduled to release results of the tests on May 4.

A slide in Asian stocks also spurred demand for the yen. The MSCI Asia Pacific index of shares dropped 2 percent and the Nikkei 225 Stock Average slipped 2.7 percent.

Swine Flu

The yen advanced against all 16 of the most-traded currencies after the spread of swine flu beyond Mexico promoted the WHO to increase its global pandemic alert to the highest since it adopted the warning system in 2005. The number of cases in the U.S. has risen to 40 and Mexico’s toll of flu-related deaths reached 149. U.S. officials yesterday recommended citizens avoid nonessential travel to Mexico, and the European Union told travelers to avoid outbreak areas.

“The outbreak of the swine flu emerged at a bad time and threw cold water on investors who had just started to buy back riskier assets and currencies,” said Taisuke Tanaka, managing director and foreign-exchange strategist in Tokyo at Nomura Securities Co., a unit of Japan’s largest securities broker.

The euro climbed to a five-month high against the yen on April 6, having gained 11 percent between March 2 and April 6 on optimism the worst of the global financial turmoil may be over. The Australian dollar jumped nearly 19 percent against Japan’s currency between March 2 and April 13.

Mexican Peso

Mexico’s peso was little changed at 14.035 per dollar today in thin Asian trading from 14.0505 yesterday. It earlier fell to 14.1007, the weakest level since April 1. The peso slid against all of the other major currencies tracked by Bloomberg yesterday as the government shut schools until May 6 and close public events to contain swine flu.

The euro fell for a second day versus the dollar on speculation ECB policy makers will this week cut interest rates and signal they may pump additional money into the economy to push down borrowing costs and counter the recession.

The ECB stands “ready to use unconventional measures of quantitative easing” to increase the flow of credit, governing council member Ewald Nowotny said yesterday in New York. Executive board member Lorenzo Bini Smaghi will speak in Geneva today and fellow board member Juergen Stark will speak in Siegen, Germany tomorrow.

‘Downside Risk’

“The ECB is likely to take non-traditional monetary easing measures,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “There’s a large downside risk for the euro,” which may drop to $1.298 today, he said.

Investors in the past week added to bets the ECB will cut its 1.25 percent target lending rate at its next meeting on May 7. The implied yield on the three-month Euribor interest-rate futures contract for June delivery fell to 1.29 percent today from 1.335 percent a week ago.

The New Zealand dollar declined for a second day against the greenback and the yen on speculation the central bank will lower interest rates at a policy meeting this week.

There is a 40 percent chance of a half percentage point cut at the April 30 policy review, according to a Credit Suisse index based on swaps trading.

Benchmark rates are 3 percent in New Zealand and Australia, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ assets.

“What will be important is how the bank talks about the long-end of the curve,” said Alex Sinton, a senior currency dealer at ANZ National Bank Ltd. in Auckland. “They are likely to make comments about keeping rates lower for longer.”

New Zealand’s dollar dropped 2.1 percent to 55.38 U.S. cents from yesterday in New York. It declined 3.1 percent to 53.02 yen.

To contact the reporter on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net.

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Copper Drops for Second Day as Flu May Slow Economic Recovery

By Glenys Sim

April 28 (Bloomberg) -- Copper fell for a second day in Asia on concern that the swine flu outbreak may hamper efforts to revive the global economy and hurt demand for industrial metals.

The World Health Organization raised its global pandemic alert to the highest since it adopted a warning system in 2005, saying the swine flu is not containable. More than 140 people have died in Mexico, where the first cases of the disease were discovered. Commodities from oil to corn tumbled amid speculation economic activity may be curtailed.

“Nothing is spared from the anxiety that’s coming from the outbreak of the disease,” Shi Hai, an analyst at Shanghai Tonglian Futures Co., said today. “It’s still too soon to tell but investors are worried the swine flu may end up crippling the economy as activity such as travel slows.”

Copper for three-month delivery on the London Metal Exchange lost as much as 0.8 percent to $4,310 a metric ton and traded down 0.1 percent at $4,340 at 11:16 a.m. Singapore time. The metal has fallen 50 percent in the past year as the global recession curbed consumption.

August-delivery copper on the Shanghai Futures Exchange gained as much as 2.1 percent to 35,220 yuan ($5,158) a ton, before trading at 34,960 yuan, up 1.3 percent.

While it’s “too early to call” the severity of swine flu and its economic implications, the outbreak of Severe Acute Respiratory Disease, or SARS, in 2003 provides a useful recent guide to the potential parameters relating to a global outbreak, Standard Chartered Bank said in a report.

“The International Monetary Fund estimated that East and Southeast Asia lost almost $18 billion in demand and business revenue due to SARS,” the bank’s analysts led by chief economist Gerard Lyons wrote yesterday.

Among other LME metals, aluminum fell 0.2 percent to $1,443 a ton, zinc slid 0.6 percent to $1,380 a ton and lead lost 0.7 percent to $1,350 a ton. Nickel dropped 0.7 percent to $11,300 a ton and tin hadn’t traded as of 11:07 a.m. in Singapore.

-- Editors: Matthew Oakley, Wendy Pugh

To contact the reporter on this story: Glenys Sim in Singapore at Gsim4@bloomberg.net

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Wheat Gains as U.S. Spring Crop Planting Slowed by Wet Fields

By Jae Hur

April 28 (Bloomberg) -- Wheat advanced, a day after it fell the most in two months, as U.S. spring-wheat planting was delayed by rain in the past week. Corn and soybeans slid on speculation a swine flu outbreak may cut feed and pork demand.

About 15 percent of the spring-wheat crop was seeded as of April 26, versus 6 percent a week earlier and 32 percent a year earlier, the U.S. Department of Agriculture said yesterday in a report after the Chicago market closed. The average for the date for the previous five years was 36 percent.

“The plant delay has lent support for the wheat market,” said Toshimitsu Kawanabe, an analyst at Tokyo-based commodity broker Central Shoji Co. “We also saw some short-covering in the grains and oilseed complex after yesterday’s sharp drop.”

July-delivery wheat climbed as much as 1.1 percent to $5.25 a bushel in after-hours trading on the Chicago Board of Trade and was at $5.2075 by 10:47 a.m. Singapore time. The contract lost 4.4 percent yesterday, the biggest drop since March 25.

Fears of globally spreading swine flu cases spurred the World Health Organization to raise its pandemic alert to an unprecedented level as the U.S. confirmed 40 cases and Mexico’s death toll reached 149. Hog and pork-belly futures plunged the daily limit of 3 cents a pound on the Chicago Mercantile Exchange. Several nations banned pork from Mexico and the U.S.

Cases have been reported in the U.S., Canada, Spain, Mexico and New Zealand. The virus, normally contagious only among pigs, raised concerns that this outbreak may be similar to the spread of the H5N1 bird flu in Asia during the past few years. That disease killed several hundred people and led to the slaughter of millions of chickens and other poultry.

‘Over-React’

“We cannot ignore the flu scare not only on the grains market but an overall economy,” Kawanabe said. “The market over-reacted yesterday and we saw some short-covering today.”

Corn for July delivery was 0.5 percent lower at $3.7875 a bushel by 10:50 a.m. Singapore time. The contract declined 1.3 percent yesterday after touching a week low of $3.70.

July-delivery soybeans dropped 0.2 percent to $9.95 a bushel after trading between $9.915 and $10.1025. The price dropped 3.6 percent yesterday, the most since Feb. 17, after touching $9.7525, the lowest since April 3.

Soybean meal for July delivery added 0.2 percent to $307 a ton and soybean oil fell 1.1 percent to 35.45 cents per pound.

About 22 percent of the U.S. corn crop was planted as of April 26, compared with 5 percent a week earlier and 9 percent a year earlier, the USDA said. The average was 28 percent at this time of year from 2004 to 2008.

“The corn planting will be further delayed this week following rain forecast,” Kawanabe said.

Soybean planting was 3 percent complete compared with 2 percent a year earlier, the USDA said in its first estimate of planting progress. The five-year average was 5 percent.

To contact the reporter for this story: Jae Hur in Singapore at jhur1@bloomberg.net

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Gold Declines for Second Day, Trades Below $900 on Dollar Rally

By Glenys Sim

April 28 (Bloomberg) -- Gold fell for a second day in Asia, dropping below $900 an ounce as a rally in the dollar curbed investors’ demand for the metal as an alternative investment.

Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were at 1,104.45 metric tons for a third day yesterday. The Dollar Index, which tracks the greenback against six major trading partners, rose for a second day, after gaining as much as 1.3 percent yesterday, the most in a month.

“Investors flocked mainly into the U.S. dollar and other safe-haven currencies, rather than into gold,” HSBC Securities analyst James Steel wrote in an e-mailed note. “The subsequent rally in the U.S. dollar weighed on gold prices.”

Bullion for immediate delivery lost as much as 1.6 percent to $891.95 an ounce, and was at $898.47 at 1:41 p.m. in Singapore, extending yesterday’s 0.7 percent decline.

A retreat in crude oil also reduced gold’s appeal as a hedge against accelerating consumer prices. Crude fell for a second day on concern the swine-flu outbreak will curtail travel and stockpiles will climb as the U.S. economy contracts.

“The potential drop in air travel as nations around the world declared travel advisories against going to Mexico and even North America could reduce the demand for jet fuel, which in turn weighed on oil prices,” said Steel. “The drop in oil prices further undermined gold prices.”

The World Health Organization raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the swine flu is not containable. More than 150 people have died from flu in Mexico, where the first cases of the disease were discovered.

Among other precious metals for immediate delivery, silver dropped 1.6 percent to $12.71 an ounce, platinum lost 1.4 percent to $1,128.50 an ounce, and palladium was little changed at $226 an ounce at 1:43 p.m. in Singapore.

To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net

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Viterra May Buy ABB Grain for Up to A$1.6 Billion

By Rebecca Keenan

April 28 (Bloomberg) -- Viterra Inc., Canada’s largest grain handler, is in talks to buy Australia’s ABB Grain Ltd. for as much as A$1.6 billion ($1.1 billion) to add supply from the world’s second-largest barley exporter and No. 4 wheat shipper.

Viterra offered between A$9 and A$9.50 a share in a non- binding bid that includes cash, stock and dividends, Adelaide- based ABB Grain said today in a statement. The offer is as much as 36 percent more than its closing price yesterday. ABB Grain today jumped 20 percent to a five-month high.

Viterra is considering acquisitions in Australia, Europe and the U.S., Mayo Schmidt, the chief executive officer of the Regina, Saskatchewan-based company, said in January. Australia abandoned its monopoly wheat and barley export systems in the past two years, creating opportunities for international companies to ship grain from the nation.

The offer shows “the keenness by which international traders want to establish Southern Hemisphere” bases, Grant Saligari, research analyst at Credit Suisse Group AG, said by phone from Sydney. “It is a low point in the cycle and it’s a reasonably low point in equity markets.”

ABB Grain, Australia’s largest barley exporter, closed at A$8.43 at the 4:10 p.m. Sydney time close on the Australian stock exchange. Viterra closed down 1.8 percent on the Toronto stock exchange yesterday.

Viterra’s proposal follows Kirin Holdings Co.’s A$3.5 billion offer yesterday for the shares it doesn’t already own in Australia’s second-biggest brewer, signaling some renewal in appetite for mergers and acquisitions after the global recession slowed takeovers. Aluminum Corp. of China is seeking approval for a $19.5 billion investment in Rio Tinto Group.

Boost for Rivals

Rival grain exporters rose on speculation of further consolidation in the industry, Saligari said. AWB Ltd. climbed 14 percent to A$1.51 and Graincorp Ltd. gained 7.5 percent to A$7.59.

Agricultural companies worldwide are seeking acquisitions on optimism the global recession won’t curtail rising food demand. Cargill Inc., the second-largest U.S. beef processor, said last November it’s looking for acquisitions after the collapse in raw material and share prices reduced valuations.

“There is no assurance that agreement will be reached or that a transaction will take place at all or within the reported range,” ABB said in the statement. “The proposal is subject to a number of conditions.”

JPMorgan, Macquarie

ABB Grain appointed JPMorgan Chase & Co. as its adviser. Viterra named Macquarie Capital Advisers Ltd. and Genuity Capital Markets, Viterra spokeswoman Colleen Vancha said by e- mail.

ABB Grain’s annual profit may rise, the company said in February, after expanding its business in the Ukraine, New Zealand and locally to reduce its reliance on the Australian grain harvest. ABB has 111 inland storage terminals in Australia as well as seven export ports, according to its Web site.

Its Joe White Maltings division controls about 9 percent of the global market for the beer-making ingredient. ABB Grain’s range of rural services include fertilizer and agricultural chemical supply, wool and livestock activities.

Viterra, which has investments in animal feed and barley processing, raised C$441.1 million ($362 million) last May to fund acquisitions which may cost between C$500 million and C$2 billion, CEO Schmidt said at the time.

The company operates 253 retail facilities across Western Canada and grain handling accounted for 63 percent of its sales in its last financial year. It posted its first loss in five quarters in March after writing down the value of its fertilizer inventory as prices fell amid the global economic slowdown.

Talks End

ABB Grain ended talks with AWB Ltd., Australia’s former monopoly wheat exporter, about a possible merger in December after failing to agree on terms. The combination would have created the nation’s biggest grain exporter after industry deregulation.

Viterra has previously expanded through acquisitions, acquiring Winnipeg, Manitoba-based rival Agricore United in 2007. The C$1.76 billion deal increased Viterra’s share of Canadian grain handling. The company is also Canada’s largest exporter of canola seed. Viterra officially changed its name from Saskatchewan Wheat Pool Inc. in March 2008.

To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net

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Nippon Steel Has Fourth-Quarter Loss on Demand Slump

By Masumi Suga and Ichiro Suzuki

April 28 (Bloomberg) -- Nippon Steel Corp., the world’s second-largest producer, swung to a fourth-quarter loss as the global recession cut demand from carmakers, electronics companies and builders.

The net loss was 57 billion yen ($594 million) for the three months ended March 31, compared with a profit of 91.9 billion yen a year earlier, the Tokyo-based company said today in a statement filed to the city’s stock exchange. Nippon Steel forecast it will break even this fiscal year.

Nippon Steel and its rivals are cutting production as sales to customers including Toyota Motor Corp. plummet. JFE Holdings Inc., Japan’s second-largest steelmaker, last week posted a 12 percent drop in fourth-quarter net income and didn’t provide a full-year estimate, saying the outlook was “uncertain.” Luxembourg-based ArcelorMittal, the world’s biggest producer, will probably report a second straight quarterly loss tomorrow.

Sales fell to 939.6 billion yen from 1.32 trillion yen a year earlier in the quarter. The company reported an operating loss of 53.6 billion yen, compared with a 137.5 billion yen profit a year earlier.

The Japanese company will delay the planned resumption of a blast furnace in Oita, southern Japan at least until the end of June, President Shoji Muneoka said April 22. The furnace was scheduled to restart operations in mid-May. The company cut executive pay by 16 percent this month and plans to expand a reduction in working days to all its domestic factories from next month.

Nippon Steel shares fell 4.1 percent to 330 yen as of 1:43 p.m. on the Tokyo Stock Exchange. The stock has gained 14 percent this year, compared with a 2.7 percent decline in the benchmark Nikkei 225 Stock Average.

For the year, net income slid 56 percent to 155.1 billion yen, or 24.61 yen a share, compared with a profit of 355 billion yen, or 56.33 yen a share, a year earlier, the Tokyo-based company. Sales fell 1.2 percent to 4.77 trillion yen.

Sales are expected to drop 27 percent this year to 3.5 trillion yen, Nippon Steel said.

To contact the reporters on this story: Masumi Suga in Tokyo at msuga@bloomberg.net; Ichiro Suzuki in Tokyo at isuzuki@bloomberg.net.

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Aaron’s, Baidu.com, Parexel, U.S. Steel: U.S. Equity Preview

By Lu Wang

April 28 (Bloomberg) -- Shares of the following companies may have unusual moves in U.S. trading. Stock symbols are in parentheses.

Aaron’s Inc. (AAN US): The lease-to-own company operating in 48 U.S. states and Canada increased its 2009 earnings forecast, projecting profit of at least $1.90 a share. Analysts, on average, estimated the company will earn $1.81, according to a Bloomberg survey.

Baidu.com Inc. (BIDU US): The operator of China’s most-used Internet search engine reported first-quarter sales and profit that beat analysts’ estimates as Web usage continued to grow in the world’s third-biggest economy.

Parexel International Corp. (PRXL US): The tester of experimental medicines for drugmakers said it expects to earn at least 26 cents a share in the fiscal fourth quarter. That exceeded the average estimate of 25 cents from analysts in a Bloomberg survey.

Rent-A-Center Inc. (RCII US): The largest U.S. chain offering goods for consumers to rent with the intent to buy forecast profit of 56 cents at most in the second quarter. That’s short of the average estimate of 57 cents from analysts in a Bloomberg survey.

U.S. Steel Corp. (X US): The largest U.S.-based steelmaker by 2008 sales reported its first quarterly net loss in five years as demand and prices plunged. The company reduced its quarterly dividend by 83 percent to 5 cents a share.

To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net

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Deutsche Bank, DAB Bank, Daimler, SGL: German Equity Preview

By Nadja Brandt

April 28 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Germany. Stock symbols are in parentheses, and share prices are from the previous close.

The X-DAX Index added 0.9 percent to 4,674.15. The measure, derived from trading in DAX Index futures, provides an estimate of Germany’s benchmark index. The DAX climbed 0.4 percent to 4,694.07.

DAB Bank AG (DRN GY): The online broker controlled by Italy’s UniCredit SpA plans to release first-quarter results. The company in February said fourth-quarter profit rose 7.2 percent, helped by lower costs. The shares fell 0.3 percent to 2.90 euros.

Daimler AG (DAI GY): The world’s second-largest manufacturer of luxury cars plans to post first-quarter results. The carmaker may report a first-quarter loss of 790 million euros ($1.05 billion), based on analysts’ estimates. The shares increased 0.4 percent to 27.39 euros.

Deutsche Bank AG (DBK GY): Germany’s biggest bank is scheduled to report first-quarter results. The lender may post a profit after a rebound in trading income at its securities division, according to analysts surveyed by Bloomberg News.

Separately, the company plans to extend Chief Executive Officer Josef Ackermann’s contract by three years after he helped steer the bank through the financial crisis. The shares climbed 5.3 percent to 43.25 euros.

Duerr AG (DUE GY): The maker of painting robots for the automobile industry plans to report first-quarter results. The shares added 0.7 percent to 13.70 euros.

Escada AG (ESC GY): The maker of luxury women’s clothes is scheduled to hold its annual shareholders meeting. The shares dropped 7.4 percent to 3 euros.

SGL Carbon SE (SGL GY): The world’s largest maker of carbon and graphite products plans to report first-quarter results. The company in March said full-year earnings before interest and taxes rose to 305.8 million euros. The shares advanced 0.4 percent to 23 euros.

To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net

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Japan Stocks Slump on Shipping Fees, Yen; Nippon Steel Declines

By Masaki Kondo and Patrick Rial

April 28 (Bloomberg) -- Japanese stocks slumped, sending the Topix index to its biggest drop this month, after lower cargo fees drove down shipping lines and the stronger yen diminished the profit outlook for carmakers.

Nippon Yusen K.K., Japan’s No. 1 shipping company, lost 8.3 percent, adding to yesterday’s decline when it said net income would slump 68 percent this year. Toyota Motor Corp. lost 3.4 percent after the yen rose to the strongest this month. Nippon Electric Glass Co. and Nippon Steel Corp. tumbled after saying annual profit dropped by more than half. Daiwabo Co., which makes medical masks, soared 28 percent as the World Health Organization stepped up efforts to curb the spread of swine flu.

The Nikkei 225 Stock Average slid 232.57, or 2.7 percent, to close at 8,493.77 in Tokyo, reversing a 0.9 percent gain. The broader Topix index sank 21.11, or 2.5 percent, to 811.99, the sharpest decline since March 30

“A lot of forecasts for a profit recovery are predicated on an economic rebound in the latter half of the year, which is far from a certainty,” said Hideyuki Ookoshi, who helps oversee $365 million at Chiba-Gin Asset Management in Tokyo. “Now that we’ve had some substantial gains, there aren’t a lot of people willing to buy into the market at the moment until they’re given a fresh reason to do so.”

The Nikkei gained 7.6 percent since the end of March through yesterday, set for the best monthly performance in a year. Two-thirds of the gauge’s members are expected to provide higher dividend yields than the 1.45 percent return on 10-year government bonds, according to Bloomberg data.

To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net.

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China’s Stocks Fall for a Third Day Led by PetroChina, Ping An

By John Liu

April 28 (Bloomberg) -- China’s stocks fell for a third day, after PetroChina Co. and other companies posted lower profits, raising concerns the government’s stimulus may not be enough to boost corporate earnings amid the outbreak of swine flu.

PetroChina, the nation’s biggest oil company, and Ping An Insurance (Group) Co., China’s second-largest insurer, dropped at least 2 percent after posting decreases in first-quarter profit. Air China Ltd., the nation’s largest international carrier, slid 2.4 percent on concern the spread of swine flu will slow travel demand.

“The results have raised concerns whether earnings improvement can materialize in the coming quarters as expected,” said Zheng Tuo, a Shanghai-based fund manager at Bank of Communications Schroders Fund Management Co., which oversees the equivalent of about $6.5 billion.

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, fell 13.49, or 0.6 percent, to 2,391.86 as of 1:19 p.m. local time. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, declined 0.2 percent to 2,507.52.

The World Health Organization raised its global alert of swine flu, saying the disease is no longer containable. Swine flu cases in the U.S. doubled to 40, and Mexico’s toll of flu- related deaths reached 149. It has spread to Canada, Spain and the U.K.

Paring Gains

The decline pared the Shanghai Composite’s gain this year to 31 percent, still the second-best performer among 89 global stock gauges tracked by Bloomberg. The measure advanced earlier on optimism a 4 trillion yuan ($585 billion) stimulus package and record new loans will prevent a slump in the world’s third- largest economy.

PetroChina lost 2.1 percent to 11.47 yuan. The nation’s biggest oil company said first-quarter net income declined 35 percent to 18.96 billion yuan. That’s worse than a median estimate of 19.5 billion yuan in a Bloomberg survey of three analysts.

Ping An slid 3.7 percent to 37.53 yuan. The insurer said first-quarter profit dropped 72 percent from a year earlier to 1.99 billion yuan as expenses climbed and the nation’s interest rate cuts eroded returns on bond holdings.

Angang Steel Co., China’s second-largest steelmaker by market value, fell 3.7 percent to 8.19 yuan. The company said first-quarter profit dropped 99.7 percent to 8 million yuan because slowing global demand pushed down prices while costs rose on high raw material prices.

Lower Profits

Chinese listed companies posted a combined profit of 66.6 billion yuan in the first quarter, a decline of 26 percent from a year earlier, the China Securities Journal reported, citing data from Wind. The data was for the 1,000 companies that had reported first-quarter results as of April 27.

Air China dropped 2.4 percent to 6.12 yuan. China Eastern Airlines Corp., the nation’s third-largest carrier by fleet size, lost 4.4 percent to 4.58 yuan, after declining 3.4 percent yesterday. China Southern Airlines Co., the nation’s biggest carrier by fleet size, slid 6.5 percent to 5.29 yuan. It slumped 8.7 percent yesterday. The company said first-quarter profit fell 71 percent to 222 million yuan as currency fluctuations offset gains from higher traffic.

“Swine flu now poses a big threat to the economic recovery,” said Liu Xiangning, a strategist at United Securities Co. in Shenzhen. “Unless it’s contained, global trade and economic growth will be jeopardized, and that’s not good for equities.”

To contact the reporter on this story: John Liu in Shanghai at jliu42@bloomberg.net

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European, U.S. Stock Futures Decline on Bank Capital Concerns

By Sarah Jones

April 28 (Bloomberg) -- European and U.S. stock-index futures retreated and Asian shares declined amid concern that Bank of America Corp. and Citigroup Inc. will need more capital.

Barclays Plc and Credit Suisse Group AG may follow their U.S.-traded securities lower after the Wall Street Journal reported that Bank of America and Citigroup were told by regulators they will need to raise more capital following stress tests. Deutsche Bank AG might be active after posting earnings that beat analysts’ estimates. Total SA may lead energy shares lower after crude oil tumbled below $50 a barrel on speculation the swine-flu outbreak will curtail travel.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, dropped 2 percent to 2,218 at 7:17 a.m. in London. The U.K.’s FTSE 100 Index is set to open 52 points lower, according to CMC Markets.

“It’s very important to remember that we are still in a bear market and still have quite a lot of problems ahead of us,” said Philippe Gijsels, a senior structured equity strategist at Fortis Global Markets in Brussels. “Most of the banks have to pass the stress test because otherwise it will create a lot of anxiety in the market,” he said in a Bloomberg Television interview.

The MSCI Asia Pacific Index fell 1.9 percent, while futures on the Standard & Poor’s 500 Index declined 1.4 percent, indicating the benchmark index for U.S. equities may extend yesterday’s 1 percent retreat.

U.S. stocks dropped yesterday as concern the swine-flu outbreak will hurt travel, leisure and energy companies overshadowed gains in health-care shares.

Earnings Reports, Banks

Futures suggested that Europe’s Dow Jones Stoxx 600 Index will extend its 2009 drop of 0.9 percent. The regional gauge has rebounded 24 percent since March 9 as companies from American Express Co. and Ford Motor Co. to Italy’s Eni SpA posted earnings that beat analysts’ estimates.

American depositary receipts of Barclays, the U.K.’s third- largest bank, fell 1.8 percent from the London close, while ADRs of Credit Suisse, Switzerland’s biggest bank by market value, retreated 2.6 percent.

Bank of America’s shortfall comes to billions of dollars, the Journal said, while Wells Fargo & Co., Fifth Third Bancorp and Regions Financial Corp. are also likely to need more capital, according to the newspaper.

Stress Tests

Bank of America and Citigroup both plan to mount a detailed rebuttal to the Federal Reserve’s preliminary report following the tests conducted on 19 large financial companies, and Bank of America may appeal today, the Journal said.

Richard Tesvich, a spokesman for Citigroup in Hong Kong, declined to comment when contacted by Bloomberg News. Wells Fargo declined to comment, and representatives of Regions and Fifth Third didn’t respond to requests made late in the day, the newspaper said.

Deutsche Bank might move after Germany’s largest bank returned to profit in the first quarter as a recovery in credit markets led to a rebound in trading.

Net income was 1.19 billion euros ($1.55 billion), compared with a loss of 131 million euros a year earlier. The median estimate of 13 analysts surveyed by Bloomberg called for a profit of 773 million euros. Chief Executive Officer Josef Ackermann also agreed to extend his contract by three years.

Total and Royal Dutch Shell Plc may fall. Crude declined for a second day as the World Health Organization raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the disease is not containable.

Crude oil for June delivery fell as much as 1.7 percent to $49.27 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Air Liquide SA may fall after the world’s biggest maker of industrial gases cut its forecast for full-year sales and net income after first-quarter revenue declined.

Sales and earnings this year will be close to 2008 levels, the company said. It had earlier predicted growth in both measures.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

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Asian Stocks Fall, Yen Gains on Concern U.S. Banks Need Capital

By Jonathan Burgos and Shani Raja

April 28 (Bloomberg) -- Asian stocks and U.S. futures fell after the Wall Street Journal reported Bank of America Corp. and Citigroup Inc. were told by U.S. regulators that they need more capital. Treasuries erased losses and the yen gained.

The MSCI Asia Pacific Index lost 2.1 percent to 87.32 at 3:38 p.m. in Tokyo as the report, which cited people familiar with the situation, said both banks are challenging the findings. Standard Chartered Plc slumped 3.7 percent in Hong Kong. Ping An Insurance (Group) Co., China’s second-largest insurer, sank 10 percent on lower profit. JFE Holdings Ltd., Japan’s No. 2 steelmaker, fell 6.8 percent after U.S. Steel Corp. reported a larger-than-estimated loss.

Speculation the worst of the credit crisis had passed contributed to a 24 percent rally in the MSCI Asia Pacific Index from a more than five-year low on March 9. An index of finance companies on the gauge slumped 1.4 percent, contributing the most to the measure’s decline today.

“The world has changed, and the capital dependency of these financial institutions is a lot different now,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. “Perhaps we’ve been a bit too euphoric in re-rating these companies too quickly.”

Japan’s Nikkei 225 Stock Average lost 2.7 percent to 8,493.77. Hong Kong’s Hang Seng Index sank 2.4 percent. All Asian markets fell except New Zealand, Indonesia, Vietnam and Pakistan.

Futures on the Standard & Poor’s 500 Index lost 1.6 percent. The gauge dropped 1 percent in New York yesterday as concern the swine flu outbreak will hurt travel, energy and hotel companies overshadowed gains in health care stocks.

Treasuries, Yen

Chugai Pharmaceutical Co. rose 1.9 percent in Tokyo, gaining for a second day on speculation the swine flu outbreak will boost sales of its Tamiflu antiviral drug. Trend Micro Inc., the world’s third-biggest maker of security software, climbed 5 percent after first-quarter profit unexpectedly increased. East Japan Railway Co., the nation’s largest rail operator, jumped 8.6 percent after saying it will buy back shares.

Treasuries erased losses, while the yen advanced to a six- week high against the euro and a four-week high versus the dollar as the Journal report enhanced demand for the safest assets. The benchmark 10-year Treasury note traded at a price of 98 22/32, having earlier fallen to 98 16/32.

Wells Fargo & Co, Fifth Third Bancorp and Regions Financial Corp. are all expected to need more capital, the Wall Street Journal reported.

“The article shocked the market because it came after U.S. regulators gave an assurance that the vast majority of U.S. banks did not need a capital increase,” said Takashi Kudo, director of foreign-exchange sales in Tokyo at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp.

Steel Producers

U.S. Treasury Secretary Timothy Geithner indicated on April 21 that stress tests would show most of the 19 biggest U.S. banks have enough capital. Losses and writedowns from credit- related investments at the world’s biggest financial companies have swelled to more than $1.34 trillion since the start of 2007.

Standard Chartered, a British bank that makes 59 percent of its revenue in Asia, lost 3.7 percent to HK$105.60. National Australia Bank Ltd., the country’s biggest by assets, lost 3.4 percent to A$21.28 as first-half profit fell 0.9 percent on an increase in bad debts. Ping An dropped 10 percent to HK$44.75 after the company said first-quarter profit tumbled 72 percent as expenses climbed.

The rally in stocks since March has driven the average valuation of companies on the MSCI Asia Pacific Index to 19.5 times reported earnings, the highest since June 29, 2004, according to data compiled by Bloomberg.

Swine Flu

“The prevailing concern was whether the market had gone up too quickly,” said Pengana’s Schroders. “We’ve had swine flu as a dampener, and now this news about the stress tests has leaked out.”

JFE Holdings lost 6.8 percent to 2,615 yen. BlueScope Steel Ltd., Australia’s largest steelmaker, slumped 5 percent to A$2.49. U.S. Steel reported a first-quarter net loss that was more than twice analysts’ estimates and cut its dividend as prices plunged.

Chugai Pharmaceutical gained 1.9 percent to 1,880 yen, adding to yesterday’s 14 percent surge. Shikibo Ltd., a maker of antiviral textile materials, climbed a record 40 percent to 174 yen, extending the previous session’s 32 percent advance.

The World Health Organization raised its pandemic alert level for swine flu, spurring concern the spread of the disease will hurt government efforts to revive the global economy.

‘Silver Lining’

Korean Air Lines Co., South Korea’s largest airline, dropped 2.4 percent to 36,900 won. The company said yesterday it won’t cancel flights to Mexico, where flu-related deaths reached 149. Air China Ltd. slumped 7.4 percent to HK$3.23 in Hong Kong.

Trend Micro jumped 4.2 percent to 2,705 yen. Net income for the three months ended March 31 totaled 4.8 billion yen ($50 million), beating its forecast of 3.2 billion yen in profit, according to a preliminary earnings statement.

East Japan Railway jumped 7.6 percent to 5,500 yen after saying it will repurchase up to 30 billion yen ($311 million) of its own shares between April 30 and May 29.

“Investors are trying to find a silver lining even though there are still a lot of uncertainties surrounding the economy,” said Ivan Tham, Singapore-based head of funds management at the state-backed Kuwait Finance House, which has about $24 billion in assets.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.

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