By Paulo Winterstein and James Attwood
July 7 (Bloomberg) -- The following stocks may have significant gains or losses in Latin American markets. Symbols are in parentheses after company names, and stock prices are from the last session.
The MSCI index of Latin American shares rose 0.2 percent to 4,375.98 July 4. In Brazil, preferred shares are the most commonly traded class of stock.
Brazil
Banco do Brasil SA (BBAS3 BS), Cia. de Seguros Alianca do Brasil (CSAB3 BS) and Cia. de Participacoes Alianca da Bahia (PEAB3 BS): Latin America's biggest bank by assets agreed to buy the remaining shares in insurance company Cia. de Seguros Alianca do Brasil it doesn't already own. Banco do Brasil will buy 60 percent of Seguros Alianca's voting shares from holding company Cia. de Participacoes Alianca da Bahia, the bank said July 4 in a regulatory filing, without disclosing how much it would pay for the stake. Banco do Brasil added 0.8 percent to 23.80 reais, while Seguros Alianca fell 3.7 percent to 26 reais. Alianca da Bahia was unchanged at 34.50 reais when it last traded July 2.
Cia. Energetica de Minas Gerais (CMIG4 BS) and Light SA (LIGT3 BS): Cemig, as Brazil's biggest combined power producer and distributor is known, and Light, Brazil's second-biggest electricity distributor, plan to develop electricity-generating projects in Brazil. Light will control 51 percent of the projects and Cemig will own the rest, according to a statement posted July 4 on the Brazilian securities regulator's Web site. The projects will have the capacity to generate at least 300 megawatts of electricity, the companies said in the statement. Belo Horizonte, Brazil-based Cemig added 1 percent to 37.01 reais. Rio de Janeiro-based Light rose 6.3 percent to 21.92 reais.
Empresa Brasileira de Aeronautica SA (EMBR3 BS): The world's fourth-largest airplane maker received an order from India's government for three ERJ 145 planes equipped with surveillance equipment. The Airborne Early Warning & Control planes, used for intelligence, surveillance and reconnaissance, will be delivered beginning in 2011, the company known as Embraer said July 4 in an e-mailed statement. Sao Jose dos Campos, Brazil-based Embraer, which didn't disclose the value of the order, added 0.4 percent to 9.64 reais.
Colombia
Grupo Nacional de Chocolates SA (CHOCOLA CB): A unit of Colombia's biggest food company raised $40 million in 10-year bonds in Peru to restructure short-term debt, the company wrote in a July 4 regulatory filing. Chocolates rose 0.7 percent to 15,000 pesos.
Mexico
Vitro SAB (VITROA MM): Mexico's National Banking and Securities Commission ordered Citigroup Inc.'s Mexican unit to hand over information about shares of Mexico's largest glassmaker it may have bought. Banamex violated Vitro's bylaws that say foreign companies or foreigners can't own its shares by buying a 14.94 percent stake, Monterrey-based Vitro said July 4 in a statement, citing the commission's letter to both companies. Foreign companies and individuals are allowed to own its American depositary receipts, the company said June 26. Vitro fell 2.3 percent to 16.80 pesos.
To contact the reporters on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net; James Attwood in Santiago at jattwood3@bloomberg.net.
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Monday, July 7, 2008
TNK-BP, B&B, Deutsche Bank, Heineken: European Equity Preview
By Nadja Brandt
July 7 (Bloomberg) -- The following companies may have unusual price changes in European trading. Stock symbols are in parentheses, and share prices are from the previous close.
The Dow Jones Stoxx 600 fell 1.3 percent to 279.53.. The Dow Jones Stoxx 50 Index dropped 1.3 percent to 2,837.58. The Euro Stoxx 50 Index, a benchmark for the nations using the euro, declined 1.7 percent to 3,275.20.
Air Berlin Plc (AB1 GY): Europe's third-biggest low-cost carrier plans to release monthly passenger numbers. The shares increased 26 cents, or 6.3 percent, to 4.41 euros.
Alstom SA (ALO FP): The world's largest train maker is seeking acquisitions in Russia as the country's rail monopoly pursues its biggest modernization since the Soviet era. The stock fell 4.01 euros, or 2.63 percent, to 148.33.
Bradford & Bingley Plc (BB/ LN): Resolution Ltd.'s Clive Cowdery turned down approaches from four of Bradford & Bingley Plc's investors to return to the mortgage lender once its rights offer is underwritten, the Independent on Sunday reported. Bradford & Bingley fell 11 pence, or 18 percent, to 50 pence.
British Airways Plc (BAY LN): Europe's third-biggest carrier will likely announce a trans-Atlantic alliance with American Airlines and Spain's Iberia Lineas Aereas de Espana SA at its annual general meeting on July 15, the Observer reported, citing no-one. British Airways lost 12 pence, or 5.7 percent, to 197 pence.
Commerzbank AG (CBK GY): Germany's second-largest bank plans to cut jobs and abolish the brand name of Allianz SE's Dresdner Bank unit in a possible combination, Euro am Sonntag reported, citing an unidentified executive. The shares fell 85 cents, or 4.3 percent, to 18.74 euros.
Deutsche Bank AG (DBK GY): Josef Ackermann, chief executive officer of Germany's largest bank, said he doesn't want to speculate on full-year earnings, according to an interview with Die Welt. The Frankfurt-based company expects a profit in the current quarter, he said, reiterating a statement the bank made July 2. The shares dropped 1.58 euros, or 2.8 percent, to 54.23 euros.
Fastweb SpA (FWB IM): Italy's second-biggest fixed-line phone company will increase profit by almost 30 percent this year as sales rise 14 percent, Italian newspaper Il Sole 24 Ore said, citing company executives.
Earnings before interest, taxes, depreciation and amortization are expected to rise to 530 million euros ($832 million) from 410 million euros, Sole said. Sales are expected to rise to 1.64 billion euros.
The shares fell 22 percent or 1.07 percent to 20.37 euros.
Heineken NV (HEIA NA): The largest Dutch brewer will restate the accounts of newly acquired Scottish & Newcastle Plc to adopt a more conservative accounting policy, spokeswoman Veronique Schyns said by telephone. Heineken fell 66 cents, or 2 percent, to 31.91 euros.
Merck KGaA (MRK GY): The maker of the Erbitux cancer medicine is ``intensively'' thinking about possible purchases for its pharmaceuticals and chemicals divisions, Chief Executive Officer Karl-Ludwig Kley told Germany's Handelsblatt newspaper. The shares fell 1.56 euros, or 1.9 percent, to 80.63 euros.
Renault SA (RNO FP): Chief Executive Officer Carlos Ghosn said he expects mergers among automakers because car companies' stocks are ``undervalued.'' The stock fell 15 cents, or 0.29 percent, to 52.23 euros.
RWE AG (RWE GY): Germany's second-largest utility plans to double cost cuts in the next four years to shore up earnings hurt by rising commodity costs. RWE aims to cut costs by 1.2 billion euros ($1.9 billion) through 2012, instead of a previously announced 600 million, spokeswoman Annett Urbaczka said. The shares fell 1.28 euros, or 1.6 percent, to 79.71 euros.
SAS Group (SAS SS): The owner of Scandinavian Airlines is scheduled to release June traffic figures. The shares added 2 percent to 30.9 kronor.
TNK BP Holding (TNBP RU): The company will hold an extraordinary meeting of the board of directors to discuss dismissing Chief Executive Officer Robert Dudley as head of one of its subsidiaries.
AAR, the Russian partner in the TNK-BP oil venture in which BP Plc holds 50 percent, said it is being sued for 8.5 billion rubles ($362 million) by BP. TNK-BP rose 0.2 percent to $2.21.
To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net
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July 7 (Bloomberg) -- The following companies may have unusual price changes in European trading. Stock symbols are in parentheses, and share prices are from the previous close.
The Dow Jones Stoxx 600 fell 1.3 percent to 279.53.. The Dow Jones Stoxx 50 Index dropped 1.3 percent to 2,837.58. The Euro Stoxx 50 Index, a benchmark for the nations using the euro, declined 1.7 percent to 3,275.20.
Air Berlin Plc (AB1 GY): Europe's third-biggest low-cost carrier plans to release monthly passenger numbers. The shares increased 26 cents, or 6.3 percent, to 4.41 euros.
Alstom SA (ALO FP): The world's largest train maker is seeking acquisitions in Russia as the country's rail monopoly pursues its biggest modernization since the Soviet era. The stock fell 4.01 euros, or 2.63 percent, to 148.33.
Bradford & Bingley Plc (BB/ LN): Resolution Ltd.'s Clive Cowdery turned down approaches from four of Bradford & Bingley Plc's investors to return to the mortgage lender once its rights offer is underwritten, the Independent on Sunday reported. Bradford & Bingley fell 11 pence, or 18 percent, to 50 pence.
British Airways Plc (BAY LN): Europe's third-biggest carrier will likely announce a trans-Atlantic alliance with American Airlines and Spain's Iberia Lineas Aereas de Espana SA at its annual general meeting on July 15, the Observer reported, citing no-one. British Airways lost 12 pence, or 5.7 percent, to 197 pence.
Commerzbank AG (CBK GY): Germany's second-largest bank plans to cut jobs and abolish the brand name of Allianz SE's Dresdner Bank unit in a possible combination, Euro am Sonntag reported, citing an unidentified executive. The shares fell 85 cents, or 4.3 percent, to 18.74 euros.
Deutsche Bank AG (DBK GY): Josef Ackermann, chief executive officer of Germany's largest bank, said he doesn't want to speculate on full-year earnings, according to an interview with Die Welt. The Frankfurt-based company expects a profit in the current quarter, he said, reiterating a statement the bank made July 2. The shares dropped 1.58 euros, or 2.8 percent, to 54.23 euros.
Fastweb SpA (FWB IM): Italy's second-biggest fixed-line phone company will increase profit by almost 30 percent this year as sales rise 14 percent, Italian newspaper Il Sole 24 Ore said, citing company executives.
Earnings before interest, taxes, depreciation and amortization are expected to rise to 530 million euros ($832 million) from 410 million euros, Sole said. Sales are expected to rise to 1.64 billion euros.
The shares fell 22 percent or 1.07 percent to 20.37 euros.
Heineken NV (HEIA NA): The largest Dutch brewer will restate the accounts of newly acquired Scottish & Newcastle Plc to adopt a more conservative accounting policy, spokeswoman Veronique Schyns said by telephone. Heineken fell 66 cents, or 2 percent, to 31.91 euros.
Merck KGaA (MRK GY): The maker of the Erbitux cancer medicine is ``intensively'' thinking about possible purchases for its pharmaceuticals and chemicals divisions, Chief Executive Officer Karl-Ludwig Kley told Germany's Handelsblatt newspaper. The shares fell 1.56 euros, or 1.9 percent, to 80.63 euros.
Renault SA (RNO FP): Chief Executive Officer Carlos Ghosn said he expects mergers among automakers because car companies' stocks are ``undervalued.'' The stock fell 15 cents, or 0.29 percent, to 52.23 euros.
RWE AG (RWE GY): Germany's second-largest utility plans to double cost cuts in the next four years to shore up earnings hurt by rising commodity costs. RWE aims to cut costs by 1.2 billion euros ($1.9 billion) through 2012, instead of a previously announced 600 million, spokeswoman Annett Urbaczka said. The shares fell 1.28 euros, or 1.6 percent, to 79.71 euros.
SAS Group (SAS SS): The owner of Scandinavian Airlines is scheduled to release June traffic figures. The shares added 2 percent to 30.9 kronor.
TNK BP Holding (TNBP RU): The company will hold an extraordinary meeting of the board of directors to discuss dismissing Chief Executive Officer Robert Dudley as head of one of its subsidiaries.
AAR, the Russian partner in the TNK-BP oil venture in which BP Plc holds 50 percent, said it is being sued for 8.5 billion rubles ($362 million) by BP. TNK-BP rose 0.2 percent to $2.21.
To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net
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Bradford & Bingley, FBD Holdings: U.K., Irish Equity Preview
By Kari Lundgren
July 7 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in U.K. markets today. Stock symbols are in parentheses and prices are from the last market close.
The benchmark FTSE 100 Index fell 63.8, or 1.2 percent, to close at 5,412.8. The FTSE All-Share Index lost 32.7, or 1.2 percent, to 2,736.06.
Ireland's ISEQ Index declined 69.3, or 1.4 percent, to close at 4,863.23.
U.K. Companies:
Alliance & Leicester Plc (AL/ LN): The U.K. lender is considering cutting its dividend to save the mortgage lender about 80 million pounds ($159 million) a year, the Sunday Times reported, without saying where it got the information. Alliance retreated 36.3 pence, or 12 percent, to 255.5 pence.
BP Plc (BP/ LN): AAR, the Russian partner in the TNK-BP oil venture in which Europe's second-largest oil company holds 50 percent, said today it is being sued for 8.5 billion rubles ($362 million) by BP, in an escalation of the tensions between the parties. BP dropped 5.5 pence, or 1 percent, to 551.5 pence.
Bradford & Bingley Plc (BB/ LN): Resolution Ltd.'s Clive Cowdery turned down approaches from four of Bradford & Bingley Plc's investors to return to the mortgage lender once its rights offer is underwritten, the Independent on Sunday reported. Bradford & Bingley fell 11 pence, or 18 percent, to 50 pence.
British Airways Plc (BAY LN): Europe's third-biggest carrier will likely announce a trans-Atlantic alliance with American Airlines and Spain's Iberia Lineas Aereas de Espana SA at its annual general meeting on July 15, the Observer reported, citing no-one. British Airways lost 12 pence, or 5.7 percent, to 197 pence.
Inspired Gaming Group Plc (INGG LN): The U.K. maker of gambling machines is in talks with Danoptra Ltd. to sell its pubs unit, which has been losing revenue because of a smoking ban, the Sunday Times reported, without saying where it got the information. Inspired Gaming rose 0.25 pence, or 0.5 percent, to 49.25 pence.
Irish Companies:
FBD Holdings Plc (FBD ID): Irish builder Liam Carroll sold his stake in the only general insurer on the Irish stock exchange last week, the Sunday Times reported, without saying where it got the information. FBD lost 5 cents, or 0.3 percent, to 14.75 euros.
IAWS Group Plc (IAW ID): Irish-based investors in the baker of Delice de France bread will pay a higher withholding tax on future dividend payments when the company completes its takeover of Hiestand Holdings AG, the Sunday Business Post reported. IAWS gained 15 cents, or 1 percent, to 15.60 euros.
To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net
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July 7 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in U.K. markets today. Stock symbols are in parentheses and prices are from the last market close.
The benchmark FTSE 100 Index fell 63.8, or 1.2 percent, to close at 5,412.8. The FTSE All-Share Index lost 32.7, or 1.2 percent, to 2,736.06.
Ireland's ISEQ Index declined 69.3, or 1.4 percent, to close at 4,863.23.
U.K. Companies:
Alliance & Leicester Plc (AL/ LN): The U.K. lender is considering cutting its dividend to save the mortgage lender about 80 million pounds ($159 million) a year, the Sunday Times reported, without saying where it got the information. Alliance retreated 36.3 pence, or 12 percent, to 255.5 pence.
BP Plc (BP/ LN): AAR, the Russian partner in the TNK-BP oil venture in which Europe's second-largest oil company holds 50 percent, said today it is being sued for 8.5 billion rubles ($362 million) by BP, in an escalation of the tensions between the parties. BP dropped 5.5 pence, or 1 percent, to 551.5 pence.
Bradford & Bingley Plc (BB/ LN): Resolution Ltd.'s Clive Cowdery turned down approaches from four of Bradford & Bingley Plc's investors to return to the mortgage lender once its rights offer is underwritten, the Independent on Sunday reported. Bradford & Bingley fell 11 pence, or 18 percent, to 50 pence.
British Airways Plc (BAY LN): Europe's third-biggest carrier will likely announce a trans-Atlantic alliance with American Airlines and Spain's Iberia Lineas Aereas de Espana SA at its annual general meeting on July 15, the Observer reported, citing no-one. British Airways lost 12 pence, or 5.7 percent, to 197 pence.
Inspired Gaming Group Plc (INGG LN): The U.K. maker of gambling machines is in talks with Danoptra Ltd. to sell its pubs unit, which has been losing revenue because of a smoking ban, the Sunday Times reported, without saying where it got the information. Inspired Gaming rose 0.25 pence, or 0.5 percent, to 49.25 pence.
Irish Companies:
FBD Holdings Plc (FBD ID): Irish builder Liam Carroll sold his stake in the only general insurer on the Irish stock exchange last week, the Sunday Times reported, without saying where it got the information. FBD lost 5 cents, or 0.3 percent, to 14.75 euros.
IAWS Group Plc (IAW ID): Irish-based investors in the baker of Delice de France bread will pay a higher withholding tax on future dividend payments when the company completes its takeover of Hiestand Holdings AG, the Sunday Business Post reported. IAWS gained 15 cents, or 1 percent, to 15.60 euros.
To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net
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BMW, Freenet, Deutsche Bank, MAN, RWE: German Equity Preview
By Simone Meier
July 7 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Germany. Stock symbols are in parentheses after company names, and prices are from the most recent close.
DAX Index futures expiring in September fell 1.3 percent to 6,327.50. The DAX fell 81.53, or 1.3 percent, to 6,272.21.
Bayerische Motoren Werke AG (BMW GY): The world's largest maker of luxury vehicles expects U.S. demand for its top-end 7- series sedan to recover ``in the long term,'' management board member Ian Robertson told Euro am Sonntag newspaper. The shares shed 23 cents, or 0.8 percent, to 29.63 euros.
Commerzbank AG (CBK GY): Germany's second-largest bank plans to cut jobs and abolish the brand name of Allianz SE's Dresdner Bank unit in a possible combination, Euro am Sonntag reported, citing an unidentified executive. The shares fell 85 cents, or 4.3 percent, to 18.74 euros.
Deutsche Bank AG (DBK GY): Josef Ackermann, chief executive officer of Germany's largest bank, said he doesn't want to speculate on full-year earnings, according to an interview with Die Welt. The Frankfurt-based company expects a profit in the current quarter, he said, reiterating a statement the bank made July 2. The shares dropped 1.58 euros, or 2.8 percent, to 54.23 euros.
Deutsche Post AG (DPW GY): Europe's largest mail service may struggle to sell its Deutsche Postbank banking division as bidders are unwilling to match price expectations, WirtschaftsWoche reported, citing unidentified Finance Ministry officials. The shares fell 28 cents, or 1.7 percent, to 16.40 euros.
Freenet AG (FNT GY): The German mobile-phone provider said it completed the acquisition of rival Debitel AG to form the country's third-largest operator. The shares fell 26 cents, or 2.2 percent, to 11.79 euros.
MAN AG (MAN GY): Europe's third-largest truckmaker plans to turn itself into a European corporation by changing its legal form to a Societas Europaea, or SE, Euro am Sonntag reported, without saying from where it obtained the information. The shares fell 56 cents, or 0.8 percent, to 70.14 euros.
Merck KGaA (MRK GY): The maker of the Erbitux cancer medicine is ``intensively'' thinking about possible purchases for its pharmaceuticals and chemicals divisions, Chief Executive Officer Karl-Ludwig Kley told Germany's Handelsblatt newspaper. The shares fell 1.56 euros, or 1.9 percent, to 80.63 euros.
RWE AG (RWE GY): Germany's second-largest utility plans to double cost cuts in the next four years to shore up earnings hurt by rising commodity costs. RWE aims to cut costs by 1.2 billion euros ($1.9 billion) through 2012, instead of a previously announced 600 million, spokeswoman Annett Urbaczka said. The shares fell 1.28 euros, or 1.6 percent, to 79.71 euros.
To contact the reporter on this story: Simone Meier in Frankfurt at smeier@bloomberg.net.
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July 7 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Germany. Stock symbols are in parentheses after company names, and prices are from the most recent close.
DAX Index futures expiring in September fell 1.3 percent to 6,327.50. The DAX fell 81.53, or 1.3 percent, to 6,272.21.
Bayerische Motoren Werke AG (BMW GY): The world's largest maker of luxury vehicles expects U.S. demand for its top-end 7- series sedan to recover ``in the long term,'' management board member Ian Robertson told Euro am Sonntag newspaper. The shares shed 23 cents, or 0.8 percent, to 29.63 euros.
Commerzbank AG (CBK GY): Germany's second-largest bank plans to cut jobs and abolish the brand name of Allianz SE's Dresdner Bank unit in a possible combination, Euro am Sonntag reported, citing an unidentified executive. The shares fell 85 cents, or 4.3 percent, to 18.74 euros.
Deutsche Bank AG (DBK GY): Josef Ackermann, chief executive officer of Germany's largest bank, said he doesn't want to speculate on full-year earnings, according to an interview with Die Welt. The Frankfurt-based company expects a profit in the current quarter, he said, reiterating a statement the bank made July 2. The shares dropped 1.58 euros, or 2.8 percent, to 54.23 euros.
Deutsche Post AG (DPW GY): Europe's largest mail service may struggle to sell its Deutsche Postbank banking division as bidders are unwilling to match price expectations, WirtschaftsWoche reported, citing unidentified Finance Ministry officials. The shares fell 28 cents, or 1.7 percent, to 16.40 euros.
Freenet AG (FNT GY): The German mobile-phone provider said it completed the acquisition of rival Debitel AG to form the country's third-largest operator. The shares fell 26 cents, or 2.2 percent, to 11.79 euros.
MAN AG (MAN GY): Europe's third-largest truckmaker plans to turn itself into a European corporation by changing its legal form to a Societas Europaea, or SE, Euro am Sonntag reported, without saying from where it obtained the information. The shares fell 56 cents, or 0.8 percent, to 70.14 euros.
Merck KGaA (MRK GY): The maker of the Erbitux cancer medicine is ``intensively'' thinking about possible purchases for its pharmaceuticals and chemicals divisions, Chief Executive Officer Karl-Ludwig Kley told Germany's Handelsblatt newspaper. The shares fell 1.56 euros, or 1.9 percent, to 80.63 euros.
RWE AG (RWE GY): Germany's second-largest utility plans to double cost cuts in the next four years to shore up earnings hurt by rising commodity costs. RWE aims to cut costs by 1.2 billion euros ($1.9 billion) through 2012, instead of a previously announced 600 million, spokeswoman Annett Urbaczka said. The shares fell 1.28 euros, or 1.6 percent, to 79.71 euros.
To contact the reporter on this story: Simone Meier in Frankfurt at smeier@bloomberg.net.
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Asia Session Recap
Daily Forex Fundamentals | Written by Forex.com | Jul 07 08 05:22 GMT |
The new week began in Asia with some follow through of Dollar strength, and some people looking ahead to any possible effects the current G8 meeting may have on the FX markets. After last weeks signaling from the ECBs Trichet that the rate hike may be 'one and done' and the US employments data not looking as horrible as it could be, the dollar gained ground into a long holiday weekend.
The Greenback extended those gains in Asia as EUR/USD started the session near the 1.5706 high and over the course of the session hit some lows near 1.5632 before a 15 pip reversal to end the session. USD/JPY showed the same stamina by the Dollar as the pair opened the session near 106.75 and tapped a low of 106.66 before taking off to highs near 107.26. The USD lost a bit of steam though and exited the session close to 107.15. The EUR/JPY chart looked like a letter 'V' for the session as the pair hit 167.68 before the low of 167.13, and the following high of 167.74. The pair maintained the level as the session came to a close.
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The new week began in Asia with some follow through of Dollar strength, and some people looking ahead to any possible effects the current G8 meeting may have on the FX markets. After last weeks signaling from the ECBs Trichet that the rate hike may be 'one and done' and the US employments data not looking as horrible as it could be, the dollar gained ground into a long holiday weekend.
The Greenback extended those gains in Asia as EUR/USD started the session near the 1.5706 high and over the course of the session hit some lows near 1.5632 before a 15 pip reversal to end the session. USD/JPY showed the same stamina by the Dollar as the pair opened the session near 106.75 and tapped a low of 106.66 before taking off to highs near 107.26. The USD lost a bit of steam though and exited the session close to 107.15. The EUR/JPY chart looked like a letter 'V' for the session as the pair hit 167.68 before the low of 167.13, and the following high of 167.74. The pair maintained the level as the session came to a close.
The agenda of the 3 day G8 meeting which began today in Japan is to be rising oil and food costs as well as climate changes. It will remain to be seen if any talk of the weak dollar will be released from the summit, but the weak dollar and high oil prices seem to go hand-in-hand these days. As well, tonight's comments by US President Bush who once again restated the US believes in a 'strong dollar policy' seemed to ring hollow, much like the boy who cried wolf. With 'dollar' comments prior to the meeting, it can logically be assumed that their will be 'dollar' comments post G8 as well. Regardless, it will be of interest to see what the rhetoric is post meeting as a strong group of governments make a concerted effort to battle exorbitant energy and commodity prices. If the G8 fails to budge the FX markets, the US Fed's talking heads probably will, as there are a total of four Fed officials scheduled to speak this week, including Chairman Ben Bernanke and Treasury Secretary Paulson testifying at the House Financial Services Committee on Tuesday.
Upcoming Economic Data Releases (London Session):
| 7/7 | 5:45 | SZ | Unemployment Rate (sa) | JUN | 2.5% | 2.5% |
| 7/7 | 6:30 | AU | Foreign Reserves | JUN | A$35.3B | - - |
| 7/7 | 8:30 | EC | Sentix Investor Confidence | JUL | 5.2 | - - |
| 7/7 | 8:30 | UK | Industrial Production (MoM) | MAY | 0.2% | -0.1% |
| 7/7 | 8:30 | UK | Industrial Production (YoY) | MAY | 0.2% | -0.7% |
| 7/7 | 8:30 | UK | Manufacturing Production (MoM) | MAY | 0.1% | 0.0% |
| 7/7 | 8:30 | UK | Manufacturing Production (YoY) | MAY | 0.1% | -0.1% |
| 7/7 | 10:00 | GE | Industrial Prod. YoY (nsa wda) | MAY | 4.8% | 3.2% |
| 7/7 | 10:00 | GE | Industrial Production MoM (sa) | MAY | -0.8% | 0.2% |
Forex.com
http://www.forex.com
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Alstom, Renault, EADS, France Telecom: French Equity Preview
By Simon Kennedy
July 7 (Bloomberg) -- The following is a list of companies whose stocks may have unusual changes in Paris. Symbols are in parentheses after company names and prices are from the most recent close.
France's CAC 40 Index sank 77.99, or 1.8 percent, to 4,266 in Paris, for a weekly decline of 3 percent. That's the index's fifth straight weekly drop. The SBF 120 Index decreased 1.7 percent.
Alstom SA (ALO FP): The world's largest train maker is seeking acquisitions in Russia as the country's rail monopoly pursues its biggest modernization since the Soviet era. The stock fell 4.01 euros, or 2.63 percent, to 148.33.
Clarins SA (CLR FP): Shares in the maker of $70 skin-creams will resume trading on July 8, AMF said. They were suspended in Paris on June 26.
Electricite de France SA (EDF FP): The operator of 58 nuclear reactors in France will pursue projects in South Africa, China, the U.K. and the U.S., Chief Executive Officer Pierre Gadonneix said. The stock rose 26 cents, or 0.45 percent, to 58.09 euros.
European Aeronautic, Defence and Space Co. (EADS IX): The company said it's in talks to sell a controlling stake in its Socata light aircraft division to French aerospace-parts supplier Compagnie Daher SA. The stock fell 53 cents, or 4.39 percent, to 11.53 euros.
France Telecom SA (FTE FP): Europe's third-largest telephone company will seek an extra 0.5 percent revenue growth through medium-sized purchases in coming years after failing to buy TeliaSonera AB, Chief Executive Officer Didier Lombard said. The stock fell 30 cents, or 1.47 percent, to 19.82 euros.
Renault SA (RNO FP): Chief Executive Officer Carlos Ghosn said he expects mergers among automakers because car companies' stocks are ``undervalued.'' The stock fell 15 cents, or 0.29 percent, to 52.23 euros.
Societe Generale SA (GLE FP): The French bank stung by a record trading loss was fined 4 million euros ($6.3 million) by the country's Banking Commission for failing to comply with rules on internal controls. The stock fell 1.41 euros, or 2.51 percent, to 54.81 euros.
Total SA (FP FP): Europe's third-largest oil company wants to develop nuclear power partnerships, Chief Executive Officer Christophe de Margerie said. The stock fell 30 cents, or 0.55 percent, to 51.25 euros.
To contact the reporter on this story: Simon Kennedy in Paris at Skennedy4@bloomberg.net.
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By Simon Kennedy
July 7 (Bloomberg) -- The following is a list of companies whose stocks may have unusual changes in Paris. Symbols are in parentheses after company names and prices are from the most recent close.
France's CAC 40 Index sank 77.99, or 1.8 percent, to 4,266 in Paris, for a weekly decline of 3 percent. That's the index's fifth straight weekly drop. The SBF 120 Index decreased 1.7 percent.
Alstom SA (ALO FP): The world's largest train maker is seeking acquisitions in Russia as the country's rail monopoly pursues its biggest modernization since the Soviet era. The stock fell 4.01 euros, or 2.63 percent, to 148.33.
Clarins SA (CLR FP): Shares in the maker of $70 skin-creams will resume trading on July 8, AMF said. They were suspended in Paris on June 26.
Electricite de France SA (EDF FP): The operator of 58 nuclear reactors in France will pursue projects in South Africa, China, the U.K. and the U.S., Chief Executive Officer Pierre Gadonneix said. The stock rose 26 cents, or 0.45 percent, to 58.09 euros.
European Aeronautic, Defence and Space Co. (EADS IX): The company said it's in talks to sell a controlling stake in its Socata light aircraft division to French aerospace-parts supplier Compagnie Daher SA. The stock fell 53 cents, or 4.39 percent, to 11.53 euros.
France Telecom SA (FTE FP): Europe's third-largest telephone company will seek an extra 0.5 percent revenue growth through medium-sized purchases in coming years after failing to buy TeliaSonera AB, Chief Executive Officer Didier Lombard said. The stock fell 30 cents, or 1.47 percent, to 19.82 euros.
Renault SA (RNO FP): Chief Executive Officer Carlos Ghosn said he expects mergers among automakers because car companies' stocks are ``undervalued.'' The stock fell 15 cents, or 0.29 percent, to 52.23 euros.
Societe Generale SA (GLE FP): The French bank stung by a record trading loss was fined 4 million euros ($6.3 million) by the country's Banking Commission for failing to comply with rules on internal controls. The stock fell 1.41 euros, or 2.51 percent, to 54.81 euros.
Total SA (FP FP): Europe's third-largest oil company wants to develop nuclear power partnerships, Chief Executive Officer Christophe de Margerie said. The stock fell 30 cents, or 0.55 percent, to 51.25 euros.
To contact the reporter on this story: Simon Kennedy in Paris at Skennedy4@bloomberg.net.
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Daily Technical Analysis
EURUSD Outlook
After slumped against Greenback on Thursday, Euro made a indecisive movement on Friday due to US market holiday. My model is mixed with downside bias. Eyes on the key level 1.5650 today. A break to the downside could give us short opportunity targeting 1.5515, while a rejection could bring EURUSD chasing 1.5750 area and continue the bullish scenario. CCI in neutral area on daily chart.
EURUSD Daily Supports and Resistances:
S1= 1.5663
S2= 1.5621
S3= 1.5589
R1= 1.5737
R2= 1.5769
R3= 1.5811
GBPUSD Outlook
Similar to EURUSD, the GBPUSD made an indecisive movement on Friday. My model is mixed with downside bias. The key level is 1.9780. A break to the downside could give us short opportunity targeting 1.9710, while a rejection could bring GBPUSD in a further bullish view targeting 1.9850. CCI in neutral area on daily chart.
GBPUSD Daily Supports and Resistances:
S1= 1.9795
S2= 1.9767
S3= 1.9741
R1= 1.9849
R2= 1.9875
R3= 1.9903
USDJPY Outlook
After failed to break 105.50 key level to the downside and pushed higher on Thursday, the USDJPY should make another bullish scenario. My model is long, targeting 107.50. Immediate support is seen at 106.25. CCI heading up towards 100 line on daily chart.
USDJPY Daily Supports and Resistances:
S1= 106.64
S2= 106.48
S3= 106.36
R1= 106.92
R2= 107.04
R3= 107.20
USDCHF Outlook
Like other major pairs, the USDCHF made an indecisive market movement due to US holiday on Friday. My model is mixed with upside bias. Immediate support is seen at 1.0228. Initial resistance at 1.0320. CCI in neutral area on daily chart.
USDCHF Daily Supports and Resistances:
S1= 1.0229
S2= 1.0207
S3= 1.0184
R1= 1.0274
R2= 1.0297
R3= 1.0319
FX Instructor LLC
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After slumped against Greenback on Thursday, Euro made a indecisive movement on Friday due to US market holiday. My model is mixed with downside bias. Eyes on the key level 1.5650 today. A break to the downside could give us short opportunity targeting 1.5515, while a rejection could bring EURUSD chasing 1.5750 area and continue the bullish scenario. CCI in neutral area on daily chart.
EURUSD Daily Supports and Resistances:
S1= 1.5663
S2= 1.5621
S3= 1.5589
R1= 1.5737
R2= 1.5769
R3= 1.5811
GBPUSD Outlook
Similar to EURUSD, the GBPUSD made an indecisive movement on Friday. My model is mixed with downside bias. The key level is 1.9780. A break to the downside could give us short opportunity targeting 1.9710, while a rejection could bring GBPUSD in a further bullish view targeting 1.9850. CCI in neutral area on daily chart.
GBPUSD Daily Supports and Resistances:
S1= 1.9795
S2= 1.9767
S3= 1.9741
R1= 1.9849
R2= 1.9875
R3= 1.9903
USDJPY Outlook
After failed to break 105.50 key level to the downside and pushed higher on Thursday, the USDJPY should make another bullish scenario. My model is long, targeting 107.50. Immediate support is seen at 106.25. CCI heading up towards 100 line on daily chart.
USDJPY Daily Supports and Resistances:
S1= 106.64
S2= 106.48
S3= 106.36
R1= 106.92
R2= 107.04
R3= 107.20
USDCHF Outlook
Like other major pairs, the USDCHF made an indecisive market movement due to US holiday on Friday. My model is mixed with upside bias. Immediate support is seen at 1.0228. Initial resistance at 1.0320. CCI in neutral area on daily chart.
USDCHF Daily Supports and Resistances:
S1= 1.0229
S2= 1.0207
S3= 1.0184
R1= 1.0274
R2= 1.0297
R3= 1.0319
FX Instructor LLC
www.fxinstructor.com
Read more...
Daily Technical Analysis
EURUSD Outlook
After slumped against Greenback on Thursday, Euro made a indecisive movement on Friday due to US market holiday. My model is mixed with downside bias. Eyes on the key level 1.5650 today. A break to the downside could give us short opportunity targeting 1.5515, while a rejection could bring EURUSD chasing 1.5750 area and continue the bullish scenario. CCI in neutral area on daily chart.
EURUSD Daily Supports and Resistances:
S1= 1.5663
S2= 1.5621
S3= 1.5589
R1= 1.5737
R2= 1.5769
R3= 1.5811
GBPUSD Outlook
Similar to EURUSD, the GBPUSD made an indecisive movement on Friday. My model is mixed with downside bias. The key level is 1.9780. A break to the downside could give us short opportunity targeting 1.9710, while a rejection could bring GBPUSD in a further bullish view targeting 1.9850. CCI in neutral area on daily chart.
GBPUSD Daily Supports and Resistances:
S1= 1.9795
S2= 1.9767
S3= 1.9741
R1= 1.9849
R2= 1.9875
R3= 1.9903
USDJPY Outlook
After failed to break 105.50 key level to the downside and pushed higher on Thursday, the USDJPY should make another bullish scenario. My model is long, targeting 107.50. Immediate support is seen at 106.25. CCI heading up towards 100 line on daily chart.
USDJPY Daily Supports and Resistances:
S1= 106.64
S2= 106.48
S3= 106.36
R1= 106.92
R2= 107.04
R3= 107.20
USDCHF Outlook
Like other major pairs, the USDCHF made an indecisive market movement due to US holiday on Friday. My model is mixed with upside bias. Immediate support is seen at 1.0228. Initial resistance at 1.0320. CCI in neutral area on daily chart.
USDCHF Daily Supports and Resistances:
S1= 1.0229
S2= 1.0207
S3= 1.0184
R1= 1.0274
R2= 1.0297
R3= 1.0319
FX Instructor LLC
www.fxinstructor.com
Read more...
EURUSD Outlook
After slumped against Greenback on Thursday, Euro made a indecisive movement on Friday due to US market holiday. My model is mixed with downside bias. Eyes on the key level 1.5650 today. A break to the downside could give us short opportunity targeting 1.5515, while a rejection could bring EURUSD chasing 1.5750 area and continue the bullish scenario. CCI in neutral area on daily chart.
EURUSD Daily Supports and Resistances:
S1= 1.5663
S2= 1.5621
S3= 1.5589
R1= 1.5737
R2= 1.5769
R3= 1.5811
GBPUSD Outlook
Similar to EURUSD, the GBPUSD made an indecisive movement on Friday. My model is mixed with downside bias. The key level is 1.9780. A break to the downside could give us short opportunity targeting 1.9710, while a rejection could bring GBPUSD in a further bullish view targeting 1.9850. CCI in neutral area on daily chart.
GBPUSD Daily Supports and Resistances:
S1= 1.9795
S2= 1.9767
S3= 1.9741
R1= 1.9849
R2= 1.9875
R3= 1.9903
USDJPY Outlook
After failed to break 105.50 key level to the downside and pushed higher on Thursday, the USDJPY should make another bullish scenario. My model is long, targeting 107.50. Immediate support is seen at 106.25. CCI heading up towards 100 line on daily chart.
USDJPY Daily Supports and Resistances:
S1= 106.64
S2= 106.48
S3= 106.36
R1= 106.92
R2= 107.04
R3= 107.20
USDCHF Outlook
Like other major pairs, the USDCHF made an indecisive market movement due to US holiday on Friday. My model is mixed with upside bias. Immediate support is seen at 1.0228. Initial resistance at 1.0320. CCI in neutral area on daily chart.
USDCHF Daily Supports and Resistances:
S1= 1.0229
S2= 1.0207
S3= 1.0184
R1= 1.0274
R2= 1.0297
R3= 1.0319
FX Instructor LLC
www.fxinstructor.com
Read more...
Asian Stocks Advance, Led by China Merchants Bank; BHP Declines
By Chen Shiyin and Chua Kong Ho
July 7 (Bloomberg) -- Asian stocks rose, led by Chinese banks and developers, after China Merchants Bank Co. forecast higher profits and a newspaper reported the government may act to stabilize the property market.
China Merchants, the nation's most profitable bank, rose the most in three months. Guangzhou R&F Properties Co. had its biggest gain since February. BHP Billiton Ltd., the world's largest mining company, declined along with metal prices.
``Fundamentals are very strong in China compared to any other Asian nation,'' Liu Yang, managing director at Atlantis Investment Management Ltd. in Hong Kong, which oversees about $4 billion in assets, said in a Bloomberg Television interview.
The MSCI Asia-Pacific Index gained 0.5 percent to 133.43 at 12:57 p.m. Tokyo time, after earlier dropping 0.6 percent. Nine of the benchmark's 10 industry groups advanced. The measure has tumbled 16 percent this year.
Japan's Nikkei 225 added 0.9 percent to 13,355.70, halting a 12-day, 8.4 percent decline that was the longest retreat since 1954, when the end of the Korean War caused a decrease in Japanese industrial sales to the U.S. military.
To contact the reporter for this story: Chua Kong Ho at in Shanghai or kchua6@bloomberg.net; Chen Shiyin in Singapore at schen37@bloomberg.net.
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Asian Market Update
Credit markets brace for more bad news
Credit markets brace for more bad news: Most Asian financial stocks traded lower after the Swiss paper SonntagsZeitung referenced a 'confidential' study by the hedge fund Bridgewater, which suggests that the losses for banks holding risky assets could be four times greater than the $400B previously estimated. Bridgewater calculates that the losses would amount to $1.6T if they were marked to market rather than valued in the form of securitization, raising doubts whether financial institutions can raise enough cash to absorb losses of such a magnitude. Another Swiss newspaper reported that UBS and Credit Suisse may need to raise $68 billion more in capital to meet new demands from their bank supervisor. Citing a parliamentarian, the Sonntag paper said that the banks would likely have to sell equity to raise the capital.
Forex: The USD started the week on a solid footing ahead of the G8 meeting. Bernanke's speech on Tuesday is expected to be a market mover, and many analysts think the USD can take a big knock if his comments do not support market expectations for rate tightening. EUR/USD dipped below hourly support at 1.5690 early on, with Euro-Bund redemptions and EUR/JPY selling weighing on the pair. EUR/USD continues to weaken ahead of the European session, with support seen at 1.5605/10 (the 20-day MA). GBP/USD also traded lower, spooked by several pieces of negative news over the weekend. The Telegraph newspaper reports that the threat of rising unemployment in Britain will be driven home this week by news that the number of permanent jobs available has fallen for the first time in five years. In addition, the Sunday Express is reporting that U.K. lender Bradford & Bingley is set to issue more profit warnings, while Alliance and Leicester is planning a savage dividend cut to shore up its finances. The broad USD strength at the start of the week pushed USD/JPY back above 107, the highest level since June 27. USD/JPY now approaches an important resistance level at 107.30 (a resistance that lies on the previous uptrend support line from the March 17 low of 95.71). The USD/JPY's 200-day moving average is seen at 107.62. Weak economic data, coupled with a resurgent greenback, dragged down the AUD/USD. Hourly support has formed around 0.9610/15, and a break below will target Friday's low at 0.9590. USD/KRW dipped sharply on the back of verbal intervention by Korean authorities,
Australia's construction sector contracts for the fourth consecutive month: (AU AIG PERFORMANCE OF CONSTRUCTION INDEX FOR JUNE: 40.3 V 36.9 prior) 'The findings confirm the intense and on-going pressures on the major construction sectors from higher interest rates and tighter liquidity,' said AiGs director of economics and research, Tony Pensabene. 'We are continuing to see weakness on a broad industry front, with falling demand, weaker economic conditions, and increased competition for work, cited as key factors by firms for the continued fall-off in activity,' he added.
Aussie job ads decline for the second straight month in June: (AU JUNE ANZ JOB ADVERTISEMENTS M/M: -3.0% V -1.7% prior) ANZ co-head of Australian economics Sally Auld said the survey was consistent with the trend in easing employment growth since the start of the year. Howveer, she added that she does not expect a significant slowing in labor market activity. 'Indeed, the risk may be that persistent skill shortages could encourage firms to hoard labor,' she argues. 'This should ensure that while labor market conditions soften, the slowdown in employment growth and the rise in the unemployment rate will be reasonably measured.'
Abu Dhabi has reignited speculation that the United Arab Emirates may break its fixed peg to the U.S. dollar: 'Although the U.A.E. has officially made it clear that it would not de-peg its currency from the flagging U.S. dollar, international financial institutions as well as experts and analysts have maintained that the U.A.E. would do well (to float) its currency as a means (of) curbing inflation,' said the Abu Dhabi department of planning and economy over the weekend.
Equities: At 23:45 EDT Japan's Nikkei is +0.83%, the S&P/ASX200 is -1.72% and the Shanghai composite index is +3.98%. The Nikkei index recovered from session lows on short-covering, with banking stocks leading the rebound after 12 straight days of losses. Trading in Tokyo was subdued in the absence of cues from Wall Street, which was closed on Friday for a holiday. Aussie stocks extended their losses at the start of the week, with resource stocks and property issues performing poorly. Aussie financials traded sharply lower on lingering credit market concerns, pushing the benchmark index below 5,000. Equities listed in South Korea, the world's fifth-largest oil importer, traded sharply lower as investors wait to see how Korean authorities will respond to surging energy prices. Bargain hunting lifted Chinese and Philippine shares.
Commodities: The firming USD took down oil prices, despite OPEC President Chakib Khelil warning over the weekend that oil prices will continue to go higher. In the first session since the 4th of July celebrations, Nymex crude oil lost -1.05% between 18:00 EDT and 23:43 EDT, last trading at $143.77/bbl. The National Hurricane Center said that Tropical Storm Bertha is strengthening over the Atlantic and could become a hurricane during the next day or two. The storm is moving toward the west but it's still too early to say where or even if it will hit land. Spot gold lost -0.81%, last trading at $927.90/oz.
Trade The News Staff
Trade The News, Inc.
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Credit markets brace for more bad news: Most Asian financial stocks traded lower after the Swiss paper SonntagsZeitung referenced a 'confidential' study by the hedge fund Bridgewater, which suggests that the losses for banks holding risky assets could be four times greater than the $400B previously estimated. Bridgewater calculates that the losses would amount to $1.6T if they were marked to market rather than valued in the form of securitization, raising doubts whether financial institutions can raise enough cash to absorb losses of such a magnitude. Another Swiss newspaper reported that UBS and Credit Suisse may need to raise $68 billion more in capital to meet new demands from their bank supervisor. Citing a parliamentarian, the Sonntag paper said that the banks would likely have to sell equity to raise the capital.
Forex: The USD started the week on a solid footing ahead of the G8 meeting. Bernanke's speech on Tuesday is expected to be a market mover, and many analysts think the USD can take a big knock if his comments do not support market expectations for rate tightening. EUR/USD dipped below hourly support at 1.5690 early on, with Euro-Bund redemptions and EUR/JPY selling weighing on the pair. EUR/USD continues to weaken ahead of the European session, with support seen at 1.5605/10 (the 20-day MA). GBP/USD also traded lower, spooked by several pieces of negative news over the weekend. The Telegraph newspaper reports that the threat of rising unemployment in Britain will be driven home this week by news that the number of permanent jobs available has fallen for the first time in five years. In addition, the Sunday Express is reporting that U.K. lender Bradford & Bingley is set to issue more profit warnings, while Alliance and Leicester is planning a savage dividend cut to shore up its finances. The broad USD strength at the start of the week pushed USD/JPY back above 107, the highest level since June 27. USD/JPY now approaches an important resistance level at 107.30 (a resistance that lies on the previous uptrend support line from the March 17 low of 95.71). The USD/JPY's 200-day moving average is seen at 107.62. Weak economic data, coupled with a resurgent greenback, dragged down the AUD/USD. Hourly support has formed around 0.9610/15, and a break below will target Friday's low at 0.9590. USD/KRW dipped sharply on the back of verbal intervention by Korean authorities,
Australia's construction sector contracts for the fourth consecutive month: (AU AIG PERFORMANCE OF CONSTRUCTION INDEX FOR JUNE: 40.3 V 36.9 prior) 'The findings confirm the intense and on-going pressures on the major construction sectors from higher interest rates and tighter liquidity,' said AiGs director of economics and research, Tony Pensabene. 'We are continuing to see weakness on a broad industry front, with falling demand, weaker economic conditions, and increased competition for work, cited as key factors by firms for the continued fall-off in activity,' he added.
Aussie job ads decline for the second straight month in June: (AU JUNE ANZ JOB ADVERTISEMENTS M/M: -3.0% V -1.7% prior) ANZ co-head of Australian economics Sally Auld said the survey was consistent with the trend in easing employment growth since the start of the year. Howveer, she added that she does not expect a significant slowing in labor market activity. 'Indeed, the risk may be that persistent skill shortages could encourage firms to hoard labor,' she argues. 'This should ensure that while labor market conditions soften, the slowdown in employment growth and the rise in the unemployment rate will be reasonably measured.'
Abu Dhabi has reignited speculation that the United Arab Emirates may break its fixed peg to the U.S. dollar: 'Although the U.A.E. has officially made it clear that it would not de-peg its currency from the flagging U.S. dollar, international financial institutions as well as experts and analysts have maintained that the U.A.E. would do well (to float) its currency as a means (of) curbing inflation,' said the Abu Dhabi department of planning and economy over the weekend.
Equities: At 23:45 EDT Japan's Nikkei is +0.83%, the S&P/ASX200 is -1.72% and the Shanghai composite index is +3.98%. The Nikkei index recovered from session lows on short-covering, with banking stocks leading the rebound after 12 straight days of losses. Trading in Tokyo was subdued in the absence of cues from Wall Street, which was closed on Friday for a holiday. Aussie stocks extended their losses at the start of the week, with resource stocks and property issues performing poorly. Aussie financials traded sharply lower on lingering credit market concerns, pushing the benchmark index below 5,000. Equities listed in South Korea, the world's fifth-largest oil importer, traded sharply lower as investors wait to see how Korean authorities will respond to surging energy prices. Bargain hunting lifted Chinese and Philippine shares.
Commodities: The firming USD took down oil prices, despite OPEC President Chakib Khelil warning over the weekend that oil prices will continue to go higher. In the first session since the 4th of July celebrations, Nymex crude oil lost -1.05% between 18:00 EDT and 23:43 EDT, last trading at $143.77/bbl. The National Hurricane Center said that Tropical Storm Bertha is strengthening over the Atlantic and could become a hurricane during the next day or two. The storm is moving toward the west but it's still too early to say where or even if it will hit land. Spot gold lost -0.81%, last trading at $927.90/oz.
Trade The News Staff
Trade The News, Inc.
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Japan's Stocks Advance, Led by Real-Estate Companies, Banks
The Nikkei 225 added 124.71, or 0.9 percent, to 13,362.60 as of 1:57 p.m. in Tokyo, breaking a 12-day slide, the longest since 1954. The broader Topix index rose 13.76, or 1.1 percent, to 1,311.64. Almost two stocks advanced for every one that fell on the Topix.
``Japanese stocks have been sold excessively, and they have become cheap relative to their asset values or earnings,'' said Yoshihiro Ito, senior strategist at Okasan Asset Management Co. in Tokyo, which oversees the equivalent of $9.3 billion.
As of July 4, shares on the Nikkei traded at 16.5 times earnings for the past business year, the lowest since May 13 and below the 20.8 ratio for China's CSI 300 Index, based on Bloomberg data. The Nikkei fell 8.4 percent in the 12 days through July 4, reaching the lowest since April 16.
Sumitomo Realty, Japan's third-biggest developer, soared 4.3 percent to 2,165 yen. Smaller rival Tokyu Land Corp. surged 7.5 percent to 575 yen and Tokyo Tatemono Co. rose 7.3 percent to 591 yen. The stocks were among the biggest winners on the MSCI World Index.
The relative strength index, a moving average based on gains and losses, for a gauge of real-estate shares on the Topix fell to 31.6 on July 4, close to the 30 threshold some traders use as a signal to buy.
Chinese Market
In China, the CSI 300 Index leapt 4.5 percent today, headed for the biggest advance since June 18, after China Merchants Bank Co. and China Citic Bank Corp. said first-half earnings probably more than doubled.
Orix advanced 5.9 percent to 15,480 yen, set for the biggest gain since May 12. Mizuho, the Japanese bank most heavily hit by the collapse of the U.S. mortgage market, rose 4.6 percent to 505,000 yen and was most actively traded on the bourse. Aioi Insurance Co. climbed 4.1 percent to 562 yen.
Developers and financial companies were among the biggest gainers among industry groups on the Topix.
Nikkei futures expiring in September added 0.7 percent to 13,370 in Osaka and gained 0.6 percent to 13,375 in Singapore.
To contact the reporters on this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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By Makiko Kitamura and Masaki Kondo
July 7 (Bloomberg) -- Japanese stocks rose, set to break the Nikkei 225 Stock Average's longest losing streak in 54 years, as investors swept in to buy shares that had become relatively cheap.
Sumitomo Realty & Development Co. sent developers to their biggest gain in two weeks. Orix Corp., Japan's largest non-bank financial company, rose the most in eight weeks, while Mizuho Financial Group Inc. headed for the sharpest jump in a month.
The Nikkei 225 added 124.71, or 0.9 percent, to 13,362.60 as of 1:57 p.m. in Tokyo, breaking a 12-day slide, the longest since 1954. The broader Topix index rose 13.76, or 1.1 percent, to 1,311.64. Almost two stocks advanced for every one that fell on the Topix.
``Japanese stocks have been sold excessively, and they have become cheap relative to their asset values or earnings,'' said Yoshihiro Ito, senior strategist at Okasan Asset Management Co. in Tokyo, which oversees the equivalent of $9.3 billion.
As of July 4, shares on the Nikkei traded at 16.5 times earnings for the past business year, the lowest since May 13 and below the 20.8 ratio for China's CSI 300 Index, based on Bloomberg data. The Nikkei fell 8.4 percent in the 12 days through July 4, reaching the lowest since April 16.
Sumitomo Realty, Japan's third-biggest developer, soared 4.3 percent to 2,165 yen. Smaller rival Tokyu Land Corp. surged 7.5 percent to 575 yen and Tokyo Tatemono Co. rose 7.3 percent to 591 yen. The stocks were among the biggest winners on the MSCI World Index.
The relative strength index, a moving average based on gains and losses, for a gauge of real-estate shares on the Topix fell to 31.6 on July 4, close to the 30 threshold some traders use as a signal to buy.
Chinese Market
In China, the CSI 300 Index leapt 4.5 percent today, headed for the biggest advance since June 18, after China Merchants Bank Co. and China Citic Bank Corp. said first-half earnings probably more than doubled.
Orix advanced 5.9 percent to 15,480 yen, set for the biggest gain since May 12. Mizuho, the Japanese bank most heavily hit by the collapse of the U.S. mortgage market, rose 4.6 percent to 505,000 yen and was most actively traded on the bourse. Aioi Insurance Co. climbed 4.1 percent to 562 yen.
Developers and financial companies were among the biggest gainers among industry groups on the Topix.
Nikkei futures expiring in September added 0.7 percent to 13,370 in Osaka and gained 0.6 percent to 13,375 in Singapore.
To contact the reporters on this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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China Stocks Advance Most in Three Weeks; Merchants Bank Rises
By Zhang Shidong and Chua Kong Ho
July 7 (Bloomberg) -- China's stocks rose the most in almost three weeks, led by banking stocks, after China Merchants Bank Co. and China Citic Bank Corp. said first-half earnings probably more than doubled.
Merchants Bank, the country's most profitable bank, rose by the most in more than two months. Citic Bank, the banking unit of the nation's largest investment company, gained for a fourth day. Beijing North Star Co. jumped on speculation next month's Olympic Games will lure more tourists to the capital city.
``Fundamentals are very strong in China compared to any other Asian nation,'' said Liu Yang, managing director at Atlantis Investment Management Ltd. in Hong Kong, which oversees about $4 billion in assets, in a Bloomberg Television interview. ``Chinese stocks are trading at crisis valuations. Do they deserve to trade at crisis valuations? The answer is no. The market deserves a very good rebound from here.''
The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, climbed 123.43, or 4.5 percent, to 2,865.28 at the 11:30 a.m. local-time break. The increase was the most since June 18. All of the measure's 10 industry groups gained today, with just two of its 300 constituents falling.
The CSI 300 has dropped 46 percent so far this year, the second-worst performing major stock index tracked by Bloomberg, on concern rising fuel prices and inflation running at a decade- high will slow corporate earnings growth.
Merchants Bank gained 6.2 percent to 22.60 yuan, set for the biggest gain since April 24. Citic Bank rose 5.2 percent to 5.50 yuan, extending a three-day, 4.6 percent advance.
Olympic Games
Merchants Bank said first-half profit may have more than doubled as the company extended more loans while Citic Bank expected first-half profit to rise more than 150 percent on higher interest revenue.
Industrial & Commercial Bank of China Ltd., the nation's biggest listed lender, added 2.9 percent to 4.94 yuan. The company last week forecast its first-half profit to rise by more than 50 percent. China Construction Bank Corp., the country's second-largest bank, rose 4 percent to 5.94 yuan.
Beijing North Star, the city government's property arm, advanced 7.9 percent to 8.19 yuan. Beijing Urban Construction Investment & Development Co., a property developer, soared 10 percent to 13.46 yuan. Beijing Capital Co., an operator of facilities and hotels, gained 6 percent to 9.54 yuan.
``The Beijing Olympic Games have given a boost particularly to those Beijing-based companies,'' said Zhang Ling, who manages the equivalent of $1.1 billion at ICBC Credit Suisse Asset Management Co. in Beijing.
The city is expecting 1.5 million visitors, including 500,000 from overseas, 22,000 journalists, and 16,000 athletes and officials for China's first Olympics, according to official estimates.
The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, rose 4 percent to 2,776.28. The Shenzhen Composite Index added 4 percent to 839.19.
The following stocks rose or fell and the stock symbols are in brackets after companies' names.
Property developers: China's government is likely to take measures to ease property developers' funding difficulties caused by loan curbs and falling sales, the Economic Observer reported over the week-end, citing a person it didn't identify.
China Vanke Co. (000002 CH), the nation's biggest listed property developer, climbed 0.45 yuan, or 5.1 percent, to 9.32, a third consecutive day of gains. Poly Real Estate Group Co. (600048 CH), China's second-largest developer by market value, surged 1.05 yuan, or 7.4 percent, to 15.17.
China Eastern Airlines Corp. (600115 CH), the nation's third-largest carrier by fleet size, jumped 0.58 yuan, or 8.7 percent, to 7.28. China Eastern agreed to sell three Airbus SAS A340s for 1.29 billion yuan ($188 million) to ICBC Financing Leasing Co, a unit of Industrial and Commercial Bank of China Ltd., and then lease them back, the airline said in a statement to Hong Kong Stock Exchange on June 4 after markets closed.
China Petroleum & Chemical Corp. (600028 CH), Asia's biggest oil refiner, also known as Sinopec, rose 0.48 yuan, or 5.1 percent, to 9.90, set for the biggest advance since June 18. Sinopec received 2.51 billion yuan in rebates on value-added taxes levied on gasoline and diesel imports in the second quarter, the Xinhua News Agency said on July 4, citing the finance ministry.
China Railway Group Ltd. (601390 CH): Asia's largest construction company, added 0.22 yuan, or 4.2 percent, to 5.48, set for the steepest gain since June 18. The company said two of its subsidiaries won orders worth 951.6 million yuan.
To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net
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July 7 (Bloomberg) -- China's stocks rose the most in almost three weeks, led by banking stocks, after China Merchants Bank Co. and China Citic Bank Corp. said first-half earnings probably more than doubled.
Merchants Bank, the country's most profitable bank, rose by the most in more than two months. Citic Bank, the banking unit of the nation's largest investment company, gained for a fourth day. Beijing North Star Co. jumped on speculation next month's Olympic Games will lure more tourists to the capital city.
``Fundamentals are very strong in China compared to any other Asian nation,'' said Liu Yang, managing director at Atlantis Investment Management Ltd. in Hong Kong, which oversees about $4 billion in assets, in a Bloomberg Television interview. ``Chinese stocks are trading at crisis valuations. Do they deserve to trade at crisis valuations? The answer is no. The market deserves a very good rebound from here.''
The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, climbed 123.43, or 4.5 percent, to 2,865.28 at the 11:30 a.m. local-time break. The increase was the most since June 18. All of the measure's 10 industry groups gained today, with just two of its 300 constituents falling.
The CSI 300 has dropped 46 percent so far this year, the second-worst performing major stock index tracked by Bloomberg, on concern rising fuel prices and inflation running at a decade- high will slow corporate earnings growth.
Merchants Bank gained 6.2 percent to 22.60 yuan, set for the biggest gain since April 24. Citic Bank rose 5.2 percent to 5.50 yuan, extending a three-day, 4.6 percent advance.
Olympic Games
Merchants Bank said first-half profit may have more than doubled as the company extended more loans while Citic Bank expected first-half profit to rise more than 150 percent on higher interest revenue.
Industrial & Commercial Bank of China Ltd., the nation's biggest listed lender, added 2.9 percent to 4.94 yuan. The company last week forecast its first-half profit to rise by more than 50 percent. China Construction Bank Corp., the country's second-largest bank, rose 4 percent to 5.94 yuan.
Beijing North Star, the city government's property arm, advanced 7.9 percent to 8.19 yuan. Beijing Urban Construction Investment & Development Co., a property developer, soared 10 percent to 13.46 yuan. Beijing Capital Co., an operator of facilities and hotels, gained 6 percent to 9.54 yuan.
``The Beijing Olympic Games have given a boost particularly to those Beijing-based companies,'' said Zhang Ling, who manages the equivalent of $1.1 billion at ICBC Credit Suisse Asset Management Co. in Beijing.
The city is expecting 1.5 million visitors, including 500,000 from overseas, 22,000 journalists, and 16,000 athletes and officials for China's first Olympics, according to official estimates.
The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, rose 4 percent to 2,776.28. The Shenzhen Composite Index added 4 percent to 839.19.
The following stocks rose or fell and the stock symbols are in brackets after companies' names.
Property developers: China's government is likely to take measures to ease property developers' funding difficulties caused by loan curbs and falling sales, the Economic Observer reported over the week-end, citing a person it didn't identify.
China Vanke Co. (000002 CH), the nation's biggest listed property developer, climbed 0.45 yuan, or 5.1 percent, to 9.32, a third consecutive day of gains. Poly Real Estate Group Co. (600048 CH), China's second-largest developer by market value, surged 1.05 yuan, or 7.4 percent, to 15.17.
China Eastern Airlines Corp. (600115 CH), the nation's third-largest carrier by fleet size, jumped 0.58 yuan, or 8.7 percent, to 7.28. China Eastern agreed to sell three Airbus SAS A340s for 1.29 billion yuan ($188 million) to ICBC Financing Leasing Co, a unit of Industrial and Commercial Bank of China Ltd., and then lease them back, the airline said in a statement to Hong Kong Stock Exchange on June 4 after markets closed.
China Petroleum & Chemical Corp. (600028 CH), Asia's biggest oil refiner, also known as Sinopec, rose 0.48 yuan, or 5.1 percent, to 9.90, set for the biggest advance since June 18. Sinopec received 2.51 billion yuan in rebates on value-added taxes levied on gasoline and diesel imports in the second quarter, the Xinhua News Agency said on July 4, citing the finance ministry.
China Railway Group Ltd. (601390 CH): Asia's largest construction company, added 0.22 yuan, or 4.2 percent, to 5.48, set for the steepest gain since June 18. The company said two of its subsidiaries won orders worth 951.6 million yuan.
To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net
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Hong Kong Stocks Rise the Most in 3 Weeks; Merchants Bank Gains
By Ian C. Sayson and Iris Leung
July 7 (Bloomberg) -- Hong Kong stocks rose the most in three weeks, led by China's lenders, after China Merchants Bank Co. and China Citic Bank Corp. forecast higher earnings.
New World Development Ltd. led a climb among builders as some investors judged a two-week sell off in real estate stocks as excessive. China Power International Development Ltd., the unit of the nation's fifth-largest Chinese electricity producer, advanced after saying first-half output rose.
``Chinese banks will have assured earnings growth for the first-half and the third quarter,'' said Mona Chung, a Hong Kong- based fund manager at Daiwa Asset Management Ltd., which oversees more than $2 billion. ``Property stocks were oversold and their valuation has now come to a more reasonable level.''
The Hang Seng Index added 346.53, or 1.6 percent, to 21,770.35 at 12:07 p.m. local time, with six stocks advancing for each that dropped. The measure has gained 2.5 percent the past two days since closing at a 15-week low. The gauge is heading for its biggest gain since June 16.
The Hang Seng China Enterprises Index, which tracks so- called H shares of mainland Chinese companies, climbed 2.8 percent to 11,544.39.
China Merchants Bank, the nation's most profitable lender, jumped 6.1 percent to HK$24.25. First-half net income may have more than doubled as the company extended more loans. China Citic, the banking unit of the nation's largest investment firm, gained 3.5 percent to HK$4.43, set for its biggest gain since May 28.
``Loan growth will provide banks with upside,'' said Henry Chan, Hong Kong-based head of Asian investments at Baring Asset Management (Asia) Ltd., which manages more than $10 billion of equities.
Property Stocks Rebound
The Hang Seng Property Index gained 4.3 percent to 25,997.80. The measure had lost 10 percent in the previous two weeks, sending its 14-day relative strength index, which shows how rapidly prices have advanced or dropped in that period, to 22. Some investors use readings below 30 as a signal to buy.
New World Development jumped 4.8 percent to HK$15.16, on course for its biggest gain since May 2. Sino Land Co. increased 3.9 percent to HK$14.84, after posting its fifth straight weekly slump. Sun Hung Kai Properties Ltd., Hong Kong's largest developer by market value, gained 5.1 percent to HK$110.20.
China Power International, the unit of the nation's fifth- largest Chinese electricity producer, advanced 2.9 percent to HK$2.15, set for its biggest gain since June 18. The company said it boosted electricity output in the first half of 2008 by 37 percent to 16.9 million megawatt-hours from a year ago.
To contact the reporter on this story: Ian C. Sayson in Manila at isayson@bloomberg.net; Iris Leung in Hong Kong at Ileung7@bloomberg.net;
Read more...
By Ian C. Sayson and Iris Leung
July 7 (Bloomberg) -- Hong Kong stocks rose the most in three weeks, led by China's lenders, after China Merchants Bank Co. and China Citic Bank Corp. forecast higher earnings.
New World Development Ltd. led a climb among builders as some investors judged a two-week sell off in real estate stocks as excessive. China Power International Development Ltd., the unit of the nation's fifth-largest Chinese electricity producer, advanced after saying first-half output rose.
``Chinese banks will have assured earnings growth for the first-half and the third quarter,'' said Mona Chung, a Hong Kong- based fund manager at Daiwa Asset Management Ltd., which oversees more than $2 billion. ``Property stocks were oversold and their valuation has now come to a more reasonable level.''
The Hang Seng Index added 346.53, or 1.6 percent, to 21,770.35 at 12:07 p.m. local time, with six stocks advancing for each that dropped. The measure has gained 2.5 percent the past two days since closing at a 15-week low. The gauge is heading for its biggest gain since June 16.
The Hang Seng China Enterprises Index, which tracks so- called H shares of mainland Chinese companies, climbed 2.8 percent to 11,544.39.
China Merchants Bank, the nation's most profitable lender, jumped 6.1 percent to HK$24.25. First-half net income may have more than doubled as the company extended more loans. China Citic, the banking unit of the nation's largest investment firm, gained 3.5 percent to HK$4.43, set for its biggest gain since May 28.
``Loan growth will provide banks with upside,'' said Henry Chan, Hong Kong-based head of Asian investments at Baring Asset Management (Asia) Ltd., which manages more than $10 billion of equities.
Property Stocks Rebound
The Hang Seng Property Index gained 4.3 percent to 25,997.80. The measure had lost 10 percent in the previous two weeks, sending its 14-day relative strength index, which shows how rapidly prices have advanced or dropped in that period, to 22. Some investors use readings below 30 as a signal to buy.
New World Development jumped 4.8 percent to HK$15.16, on course for its biggest gain since May 2. Sino Land Co. increased 3.9 percent to HK$14.84, after posting its fifth straight weekly slump. Sun Hung Kai Properties Ltd., Hong Kong's largest developer by market value, gained 5.1 percent to HK$110.20.
China Power International, the unit of the nation's fifth- largest Chinese electricity producer, advanced 2.9 percent to HK$2.15, set for its biggest gain since June 18. The company said it boosted electricity output in the first half of 2008 by 37 percent to 16.9 million megawatt-hours from a year ago.
To contact the reporter on this story: Ian C. Sayson in Manila at isayson@bloomberg.net; Iris Leung in Hong Kong at Ileung7@bloomberg.net;
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Economic Calendar Eco Data 7/7/08
Eco Data 7/7/08
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| GMT | Ccy | Events | Actual | Consensus | Previous | Revised |
|---|---|---|---|---|---|---|
| 05:45 | CHF | Swiss Unemployment rate Jun | 2.30% | 2.40% | | |
| 08:30 | GBP | U.K. Industrial prod'n M/M May | -0.10% | 0.20% | | |
| 08:30 | GBP | U.K. Industrial prod'n Y/Y May | -0.80% | 0.20% | | |
| 08:30 | GBP | U.K. Manufacturing prod'n M/M May | -0.10% | 0.10% | | |
| 08:30 | GBP | U.K. Manufacturing prod'n Y/Y May | -0.20% | 0.10% | | |
| GBP | U.K. Halifax hse prices 3m Y/Y | -5.90% | -3.80% | | ||
| 10:00 | EUR | Germany Industrial prod'n M/M May | 0.40% | -0.80% | | |
| 10:00 | EUR | Germany Industrial prod'n Y/Y May | 3.20% | 4.80% | | |
| 1230 | CAD | Canada Building permits May | -5.80% | 14.50% | | |
| 14:30 | CAD | BOC Business Outlook Survey | | |||
| 15:00 | USD | Fed's Yellen speaks |
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Economic Calendar 7/7 - 7/11
Economic Calendar |
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Monday, Jul 7, 2008
| GMT | Ccy | Events | Consensus | Previous |
|---|---|---|---|---|
| 0:30 | JPY | BOJ Governor Shirakawa Speaks at Quarterly Branch Meeting | -- | -- |
| 1:30 | AUD | ANZ Job Advertisements (MoM) (JUN) | -- | -1.7% |
| 5:45 | CHF | Unemployment Rate (JUN) | 2.3% | 2.4% |
| 5:45 | CHF | Unemployment Rate s.a. (JUN) | 2.5% | 2.5% |
| 6:30 | AUD | Foreign Reserves (Australian dollar) (JUN) | -- | 35.3B |
| 8:30 | GBP | Industrial Production (MoM) (MAY) | -0.1% | 0.2% |
| 8:30 | GBP | Industrial Production (YoY) (MAY) | -0.7% | 0.2% |
| 8:30 | GBP | Manufacturing Production (MoM) (MAY) | 0.0% | 0.1% |
| 8:30 | GBP | Manufacturing Production (YoY) (MAY) | -0.1% | 0.1% |
| 8:30 | EUR | Euro Zone Sentix Investor Confidence (JUL) | -- | 5.2 |
| 10:00 | EUR | German Industrial Production s.a. (MoM) (MAY) | 0.2% | -0.8% |
| 10:00 | EUR | German Industrial Production n.s.a. and w.d.a. (YoY) (MAY) | 3.2% | 4.8% |
| 12:30 | CAD | Building Permits (MoM) (MAY) | -6.5% | 14.5% |
| 14:30 | CAD | Business Outlook Future Sales (2Q) | -- | -1.96 |
| 15:00 | USD | Fed's Yellen Speaks in San Diego on U.S. Economic Outlook | -- | -- |
| 15:00 | USD | Yellen of Fed Speaks About U.S. Economic Outlook | -- | -- |
| 22:00 | NZD | NZIER Business Opinion Survey (2Q) | -- | -64 |
| 23:01 | GBP | NIESR Gross Domestic Product Estimate (JUN) | -- | 0.2% |
| 23:50 | JPY | Japan Money Stock M2 (YoY) (JUN) | 2.1% | 2.0% |
| 23:50 | JPY | Japan Money Stock M3 (YoY) (JUN) | 0.7% | 0.7% |
| 23:50 | JPY | Bank Lending Banks Adjust (YoY) (JUN) | -- | 2.1% |
| 23:50 | JPY | Bank Lending incl. Trusts (YoY) (JUN) | -- | 1.5% |
| 23:50 | JPY | Bank Lending Banks ex-Trust (YoY) (JUN) | -- | 1.6% |
Tuesday, Jul 8, 2008
| GMT | Ccy | Events | Consensus | Previous |
|---|---|---|---|---|
| 1:30 | AUD | NAB Business Confidence (JUN) | -- | -4 |
| 1:30 | AUD | NAB Business Conditions (JUN) | -- | 7 |
| 4:30 | JPY | Bankruptcies (YoY) (JUN) | -- | -1.5% |
| 5:00 | JPY | Eco Watchers Survey: Current (JUN) | -- | 32.1 |
| 5:00 | JPY | Eco Watchers Survey: Outlook (JUN) | -- | 35.1 |
| 8:30 | GBP | DCLG UK House Prices (YoY) (MAY) | -- | 4.9% |
| 12:30 | USD | Bernanke Speaks at FDIC Forum on Mortgage Lending | -- | -- |
| 14:00 | USD | Pending Home Sales (MoM) (MAY) | -2.5% | 6.3% |
| 14:00 | USD | Wholesale Inventories (MAY) | 0.7% | 1.3% |
| 16:30 | USD | Richmond Fed's Lacker Speaks on Economic Outlook in Washington | -- | -- |
| 19:00 | USD | Consumer Credit (MAY) | $7.0B | $8.9B |
| 21:00 | USD | ABC Consumer Confidence (JUL 6) | -- | -43 |
| 23:01 | GBP | Nationwide Consumer Confidence (JUN) | -- | 69 |
| 23:50 | JPY | Machine Orders (MoM) (MAY) | 1.5% | 5.5% |
| 23:50 | JPY | Machine Orders (YoY) (MAY) | -6.0% | 0.5% |
Wednesday, Jul 9, 2008
| GMT | Ccy | Events | Consensus | Previous |
|---|---|---|---|---|
| 0:30 | AUD | Westpac Consumer Confidence (JUL) | -- | -5.6% |
| 1:30 | AUD | Home Loans (MAY) | -- | -3.0% |
| 1:30 | AUD | Investment Lending (MAY) | -- | 1.4% |
| 1:30 | AUD | Value of Loans (MoM) (MAY) | -- | -- |
| 6:00 | JPY | Machine Tool Orders (YoY) (JUN P) | -- | 1.4% |
| 6:00 | EUR | German Trade Balance (euros) (MAY) | 18.0B | 18.7B |
| 6:00 | EUR | German Current Account (euros) (MAY) | 12.5B | 14.5B |
| 6:00 | EUR | German Imports s.a (MoM) (MAY) | 0.3% | -2.1% |
| 6:00 | EUR | German Exports s.a. (MoM) (MAY) | 0.0% | 1.2% |
| 6:45 | EUR | French Costs of Construction (1Q) (JUL 9) | -- | -- |
| 6:45 | EUR | French Trade Balance (euros) (MAY) | -4.0B | -3.7B |
| 8:30 | GBP | Visible Trade Balance (British pounds) (MAY) | -7.400B | -7.594B |
| 8:30 | GBP | Trade Balance Non-EU (British pounds) (MAY) | -4.000B | -4.185B |
| 8:30 | GBP | Total Trade Balance (British pounds) (MAY) | -4.000B | -4.325B |
| 9:00 | EUR | Euro Zone Gross Domestic Product s.a. (QoQ) (1Q F) | 0.8% | 0.8% |
| 9:00 | EUR | Euro Zone Gross Domestic Product s.a. (YoY) (1Q F) | 2.2% | 2.2% |
| 9:00 | EUR | Euro Zone Gross Fixed Capital (QoQ) (1Q F) | 1.6% | 1.6% |
| 9:00 | EUR | Euro Zone Government Expenditure (QoQ) (1Q F) | 0.4% | 0.4% |
| 9:00 | EUR | Euro Zone Household Consumption (QoQ) (1Q F) | 0.2% | 0.2% |
| 9:30 | GBP | BRC Shop Price Index (JUN) | -- | -- |
| 11:00 | USD | MBA Mortgage Applications (JUL 4) | -- | 3.6% |
| 12:15 | CAD | Housing Starts (JUN) | 217.5K | 221.3K |
| 18:00 | USD | Fed Staff Economist Parkinson Testifies on Derivatives | -- | -- |
| 23:50 | JPY | Current Account Total (yen) (MAY) | 1960.9B | 1380.9B |
| 23:50 | JPY | Adjusted Current Account Total (yen) (MAY) | 2052.6B | 1510.7B |
| 23:50 | JPY | Trade Balance - BOP Basis (yen) (MAY) | 487.0B | 634.7B |
| 23:50 | JPY | Domestic Corporate Goods Price Index (MoM) (JUN) | 0.6% | 1.1% |
| 23:50 | JPY | Domestic Corporate Goods Price Index (YoY) (JUN) | 5.3% | 4.7% |
| 23:50 | JPY | Foreign Buying Japan Stocks (yen) (JUL 9) | -- | -516.3B |
| 23:50 | JPY | Foreign Buying Japan Bonds (yen) (JUL 9) | -- | -422.1B |
| 23:50 | JPY | Japan Buying Foreign Stocks (yen) (JUL 9) | -- | 65.0B |
| 23:50 | JPY | Japan Buying Foreign Bonds (yen) (JUL 9) | -- | 496.9B |
Thursday, Jul 10, 2008
| GMT | Ccy | Events | Consensus | Previous |
|---|---|---|---|---|
| 0:00 | NZD | Business NZ Purchasing Manager Index (JUN) | -- | 49.3 |
| 1:00 | AUD | Consumer Inflation Expectation (JUL) | -- | 5.9% |
| 1:30 | AUD | Employment Change (JUN) | -- | -19.7K |
| 1:30 | AUD | Unemployment Rate (JUN) | -- | 4.3% |
| 1:30 | AUD | Participation Rate (JUN) | -- | 65.2% |
| 6:45 | EUR | French Industrial Production (MoM) (MAY) | -0.4% | 1.4% |
| 6:45 | EUR | French Industrial Production (YoY) (MAY) | 1.9% | 3.2% |
| 8:00 | EUR | Italian Industrial Production s.a. (MoM) (MAY) | -0.4% | 0.7% |
| 8:00 | EUR | Italian Industrial Production w.d.a. (YoY) (MAY) | -- | 2.0% |
| 8:00 | EUR | Italian Industrial Production n.s.a. (YoY) (MAY) | -- | 8.0% |
| 8:00 | EUR | European Central Bank Publishes Monthly Report (JUL) | -- | -- |
| 11:00 | GBP | Bank of England Rate Decision | 5.00% | 5.00% |
| 12:30 | USD | Initial Jobless Claims (JUL 5) | -- | 404K |
| 12:30 | USD | Continuing Claims (JUL 28) | -- | 3116K |
| 14:00 | USD | Bernanke; Paulson Testify on Markets Before House Committee | -- | -- |
| 17:30 | USD | ICSC Chain Store Sales (YoY) (JUN) | -- | 3.0% |
| 19:30 | USD | Fed's Yellen Speaks in Portland at Community Luncheon | -- | -- |
Friday, Jul 11, 2008
| GMT | Ccy | Events | Consensus | Previous |
|---|---|---|---|---|
| 4:30 | JPY | Industrial Production (MoM) (MAY F) | -- | 2.9% |
| 4:30 | JPY | Industrial Production (YoY) (MAY F) | -- | 1.2% |
| 4:30 | JPY | Capacity Utilization (MoM) (MAY F) | -- | -0.7% |
| 5:00 | JPY | Consumer Confidence (JUN) | -- | 34.1 |
| 5:00 | JPY | Consumer Confidence Households (JUN) | -- | 33.9 |
| 11:00 | CAD | Net Change in Employment (JUN) | 10.0K | 8.4K |
| 11:00 | CAD | Unemployment Rate (JUN) | 6.1% | 6.1% |
| 12:30 | CAD | International Merchandise Trade (Canadian dollar) (MAY) | 5.0B | 5.1B |
| 12:30 | CAD | New Housing Price Index (MoM) (MAY) | 0.1% | 0.0% |
| 12:30 | USD | Trade Balance (MAY) | -$62.2B | -$60.9B |
| 12:30 | USD | Import Price Index (MoM) (JUN) | 1.9% | 2.3% |
| 12:30 | USD | Import Price Index (YoY) (JUN) | -- | 17.8% |
| 14:00 | USD | U. of Michigan Confidence (JUL P) | 55.8 | 56.4 |
| 18:00 | USD | Monthly Budget Statement (JUN) | $33.0B | $27.5B |
| 1:30 | AUD | CBA/HIA House Affordability (2Q) | -- | 103.1 |
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Sunday, July 6, 2008
Trade Gap Probably Widened, Import Prices Rose: Economy Preview
By Courtney Schlisserman
July 6 (Bloomberg) -- The U.S. trade deficit probably widened and the cost of imported goods jumped, underscoring how the surge in oil prices is hurting growth and igniting inflation, economists said before reports this week.
The gap between imports and exports grew to $62.4 billion in May, the widest in almost two years, according to the median estimate of economists surveyed by Bloomberg News. The import- price index climbed 2 percent last month, the poll showed.
Increasing fuel expenses indicate companies will keep cutting payrolls and trimming equipment purchases to maintain profits. At the same time, more expensive foreign goods will open the way for U.S. businesses to also raise prices, signaling inflation may not ebb as the Federal Reserve projects.
``It is becoming untenable for policy makers to ignore the mounting threat of rising prices at home,'' Joseph Carson, director of global economic research at AllianceBernstein in New York, said in a note to clients. Inflation from overseas ``gives U.S. firms the added flexibility of passing along cost increases to consumers without undermining their competitive position.''
The Commerce Department is scheduled to release the trade report on July 11. The Labor Department will issue June import- price figures at the same time.
The price of crude oil futures has risen 50 percent this year and reached a record $145.85 a barrel on July 3.
The increase in petroleum was a primary reason for the widening of the trade gap in April. After eliminating the influence of prices, the trade deficit shrank that month to the lowest level since August 2003, as exports grew. The after- inflation trade numbers are the figures used to calculate gross domestic product.
`Elevated' Prices
``The improvement in the trade balance has been one of the few factors keeping the economy from contracting,'' said Ryan Sweet, an economist at Moody's Economy.com in West Chester, Pennsylvania. This week's data are ``going to show that inflationary pressures remain elevated.''
The U.S. economy expanded at a 1 percent annual pace in the first quarter, capping the weakest six months of growth in five years. Trade contributed 0.8 percentage point to the quarter's growth rate.
Employers cut payrolls for a sixth month in June, bringing the total number of jobs lost so far this year to 438,000, according to a Labor Department report last week. The jobless rate was 5.5 percent, matching May's reading as the highest in almost four years.
The jump in fuel costs and loss of jobs have contributed to a slump in consumer confidence that threatens to undermine spending, which accounts for more than two-thirds of the economy. A temporary boost from the government's tax rebates has helped to keep Americans shopping.
Record Rise
The import-price index is the first of three monthly inflation gauges released by the Labor Department. Economists projected the measure would be up 18.6 percent from June 2007, according to the survey median. It would be the biggest 12-month gain since records began in 1982.
The government is scheduled to report wholesale prices on July 15 and consumer prices the following day.
On June 25, Fed policy makers kept the benchmark overnight lending rate at 2 percent and warned that the risk of inflation was rising. Still, they forecast prices would ``moderate later this year.''
``Tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters,'' the Federal Open Market Committee also said in a statement in Washington after its two- day meeting.
'No Easy Task'
``For the Fed, navigating through this inflationary environment will be no easy task as it seeks to balance between conflicting goals of reviving growth and restraining price pressures,'' said AllianceBernstein's Carson.
Other reports this week may signal the risks to growth aren't letting up. Pending home resales fell 2.5 percent in May, economists project a report from the National Association of Realtors on July 8 will show. The figures are based on contract signings, making them a leading indicator of actual purchases, which are tabulated when a deal is closed a month or two later.
Bloomberg Survey
================================================================
Release Period Prior Median
Indicator Date Value Forecast
================================================================
Pending Homes MOM% 7/8 May 6.3% -2.5%
Whlsale Inv. MOM% 7/8 May 1.3% 0.7%
Cons. Credit $ Blns 7/8 May 8.9 7.5
Trade Balance $ Blns 7/11 May -60.9 -62.4
Import Prices MOM% 7/11 June 2.3% 2.0%
Import Prices YOY% 7/11 June 17.8% 18.6%
U of Mich Conf. Index 7/11 July P 56.4 55.5
Federal Budget $ Blns 7/11 June 27.5 30.0
============================================================================
To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net
Last Updated: July 6, 2008 00:01 EDT
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July 6 (Bloomberg) -- The U.S. trade deficit probably widened and the cost of imported goods jumped, underscoring how the surge in oil prices is hurting growth and igniting inflation, economists said before reports this week.
The gap between imports and exports grew to $62.4 billion in May, the widest in almost two years, according to the median estimate of economists surveyed by Bloomberg News. The import- price index climbed 2 percent last month, the poll showed.
Increasing fuel expenses indicate companies will keep cutting payrolls and trimming equipment purchases to maintain profits. At the same time, more expensive foreign goods will open the way for U.S. businesses to also raise prices, signaling inflation may not ebb as the Federal Reserve projects.
``It is becoming untenable for policy makers to ignore the mounting threat of rising prices at home,'' Joseph Carson, director of global economic research at AllianceBernstein in New York, said in a note to clients. Inflation from overseas ``gives U.S. firms the added flexibility of passing along cost increases to consumers without undermining their competitive position.''
The Commerce Department is scheduled to release the trade report on July 11. The Labor Department will issue June import- price figures at the same time.
The price of crude oil futures has risen 50 percent this year and reached a record $145.85 a barrel on July 3.
The increase in petroleum was a primary reason for the widening of the trade gap in April. After eliminating the influence of prices, the trade deficit shrank that month to the lowest level since August 2003, as exports grew. The after- inflation trade numbers are the figures used to calculate gross domestic product.
`Elevated' Prices
``The improvement in the trade balance has been one of the few factors keeping the economy from contracting,'' said Ryan Sweet, an economist at Moody's Economy.com in West Chester, Pennsylvania. This week's data are ``going to show that inflationary pressures remain elevated.''
The U.S. economy expanded at a 1 percent annual pace in the first quarter, capping the weakest six months of growth in five years. Trade contributed 0.8 percentage point to the quarter's growth rate.
Employers cut payrolls for a sixth month in June, bringing the total number of jobs lost so far this year to 438,000, according to a Labor Department report last week. The jobless rate was 5.5 percent, matching May's reading as the highest in almost four years.
The jump in fuel costs and loss of jobs have contributed to a slump in consumer confidence that threatens to undermine spending, which accounts for more than two-thirds of the economy. A temporary boost from the government's tax rebates has helped to keep Americans shopping.
Record Rise
The import-price index is the first of three monthly inflation gauges released by the Labor Department. Economists projected the measure would be up 18.6 percent from June 2007, according to the survey median. It would be the biggest 12-month gain since records began in 1982.
The government is scheduled to report wholesale prices on July 15 and consumer prices the following day.
On June 25, Fed policy makers kept the benchmark overnight lending rate at 2 percent and warned that the risk of inflation was rising. Still, they forecast prices would ``moderate later this year.''
``Tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters,'' the Federal Open Market Committee also said in a statement in Washington after its two- day meeting.
'No Easy Task'
``For the Fed, navigating through this inflationary environment will be no easy task as it seeks to balance between conflicting goals of reviving growth and restraining price pressures,'' said AllianceBernstein's Carson.
Other reports this week may signal the risks to growth aren't letting up. Pending home resales fell 2.5 percent in May, economists project a report from the National Association of Realtors on July 8 will show. The figures are based on contract signings, making them a leading indicator of actual purchases, which are tabulated when a deal is closed a month or two later.
Bloomberg Survey
================================================================
Release Period Prior Median
Indicator Date Value Forecast
================================================================
Pending Homes MOM% 7/8 May 6.3% -2.5%
Whlsale Inv. MOM% 7/8 May 1.3% 0.7%
Cons. Credit $ Blns 7/8 May 8.9 7.5
Trade Balance $ Blns 7/11 May -60.9 -62.4
Import Prices MOM% 7/11 June 2.3% 2.0%
Import Prices YOY% 7/11 June 17.8% 18.6%
U of Mich Conf. Index 7/11 July P 56.4 55.5
Federal Budget $ Blns 7/11 June 27.5 30.0
============================================================================
To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net
Last Updated: July 6, 2008 00:01 EDT
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Steel Urges Caution on Expanding Safety Net for Banks
By Rebecca Christie
July 5 (Bloomberg) -- U.S. Treasury Undersecretary Robert Steel urged caution when it comes to expanding the federal safety net to financial firms that don't take consumer deposits.
``I think to pull too many other institutions into that arena is a mistake,'' Steel said today during a panel discussion at an Aspen Institute conference in Colorado.
The remarks illustrate Treasury concerns about any regulation that might encourage reckless behavior as it considers proposals that would allow for an orderly dissolution of non-deposit taking financial firms that run into trouble.
Treasury Secretary Henry Paulson, in a speech earlier this week in London, called for regulatory changes in the U.S. that would allow financial firms to go out of business without threatening market stability. He identified a legal gap that leaves unspecified how to deal with failures of companies that don't take deposits, such as investment banks.
Federal Deposit Insurance Corp. Chairman Sheila Bair has urged that an agency be given power to take over and liquidate investment banks in an orderly manner. The FDIC has that power over lenders whose deposits it insures.
``If we over-prescribe regulation, we're going to reduce market discipline, which has the moral-hazard effect of encouraging people to take risk because they think they'll be bailed out,'' Steel said today.
U.S. regulators and legislators are debating plans to alleviate the yearlong credit crisis that has caused $402 billion of writedowns and credit losses worldwide. Paulson has proposed giving the Federal Reserve broader powers as a ``macro- stability regulator.''
House Testimony
Paulson and Fed Chairman Ben S. Bernanke are scheduled to testify July 10 before the House Financial Services Committee on financial-market regulation. The two officials will also respond to lawmakers' questions about the Fed's decision in March to agree to take on about $30 billion in illiquid Bear Stearns Cos. debt and open lending to investment banks.
Other speakers on today's panel said regulators should be careful about spelling out what types of institutions they will bail out and when.
``It is a good idea to have it be really unclear as to whether the Fed is going to save something or not,'' said William Mayer, who was CEO of First Boston until 1990 and is now a partner at Park Avenue Equity Partners in New York. ``The worst thing we could do is say here are the commandments, and right here is where we stop. I don't believe you'd want to do that.''
`Uneven' Progress
Steel said he expects financial markets to make ``uneven'' progress as they recover from the subprime mortgage crisis.
``My instinct is that while we'll continue to make progress from here, that not everything is functioning normally, it'll be uneven,'' he said.
Steel said so-called monoline insurance companies, which expanded their traditional business of underwriting municipal bonds to include more complex securities, underestimated the risk associated with structured credit products.
``They basically sold insurance at what looks to be too cheap a price,'' Steel said. ``The jury isn't completely out on this and the monoline insurance companies still have positive cash flow, and they're going into, basically pulling off the road and letting this unwind.''
To contact the reporters on this story: Rebecca Christie in Aspen, Colorado at Rchristie4@bloomberg.net;
Read more...
July 5 (Bloomberg) -- U.S. Treasury Undersecretary Robert Steel urged caution when it comes to expanding the federal safety net to financial firms that don't take consumer deposits.
``I think to pull too many other institutions into that arena is a mistake,'' Steel said today during a panel discussion at an Aspen Institute conference in Colorado.
The remarks illustrate Treasury concerns about any regulation that might encourage reckless behavior as it considers proposals that would allow for an orderly dissolution of non-deposit taking financial firms that run into trouble.
Treasury Secretary Henry Paulson, in a speech earlier this week in London, called for regulatory changes in the U.S. that would allow financial firms to go out of business without threatening market stability. He identified a legal gap that leaves unspecified how to deal with failures of companies that don't take deposits, such as investment banks.
Federal Deposit Insurance Corp. Chairman Sheila Bair has urged that an agency be given power to take over and liquidate investment banks in an orderly manner. The FDIC has that power over lenders whose deposits it insures.
``If we over-prescribe regulation, we're going to reduce market discipline, which has the moral-hazard effect of encouraging people to take risk because they think they'll be bailed out,'' Steel said today.
U.S. regulators and legislators are debating plans to alleviate the yearlong credit crisis that has caused $402 billion of writedowns and credit losses worldwide. Paulson has proposed giving the Federal Reserve broader powers as a ``macro- stability regulator.''
House Testimony
Paulson and Fed Chairman Ben S. Bernanke are scheduled to testify July 10 before the House Financial Services Committee on financial-market regulation. The two officials will also respond to lawmakers' questions about the Fed's decision in March to agree to take on about $30 billion in illiquid Bear Stearns Cos. debt and open lending to investment banks.
Other speakers on today's panel said regulators should be careful about spelling out what types of institutions they will bail out and when.
``It is a good idea to have it be really unclear as to whether the Fed is going to save something or not,'' said William Mayer, who was CEO of First Boston until 1990 and is now a partner at Park Avenue Equity Partners in New York. ``The worst thing we could do is say here are the commandments, and right here is where we stop. I don't believe you'd want to do that.''
`Uneven' Progress
Steel said he expects financial markets to make ``uneven'' progress as they recover from the subprime mortgage crisis.
``My instinct is that while we'll continue to make progress from here, that not everything is functioning normally, it'll be uneven,'' he said.
Steel said so-called monoline insurance companies, which expanded their traditional business of underwriting municipal bonds to include more complex securities, underestimated the risk associated with structured credit products.
``They basically sold insurance at what looks to be too cheap a price,'' Steel said. ``The jury isn't completely out on this and the monoline insurance companies still have positive cash flow, and they're going into, basically pulling off the road and letting this unwind.''
To contact the reporters on this story: Rebecca Christie in Aspen, Colorado at Rchristie4@bloomberg.net;
Read more...
Ukraine Lifts Inflation Forecast; Economic Growth Behind Target
By Kateryna Choursina
July 5 (Bloomberg) -- Ukraine increased its forecast of inflation for 2008 and said the country's economic growth in the first half lagged behind its projection for the year.
The inflation rate will be 15.9 percent at the end of the year, more than a previous forecast of 15.3 percent, Justice Minister Mykola Onishchuk told journalists today after a government meeting to approve changes to the 2008 state budget.
Ukraine's cabinet has rejected demands by President Viktor Yushchenko to trim this year's budget deficit to tackle inflation, which was 31.1 percent in May. Yushchenko disagrees with Prime Minister Yulia Timoshenko on policies including how to fight inflation and the sale of state assets.
The country's economy grew 6.4 percent in the first half of 2008, Timoshenko said before today's meeting, which was held to ensure that the legislature adopts the 2008 budget before its summer recess, which starts on July 14. The cabinet has forecast growth of 6.8 percent in gross domestic product for the year.
Timoshenko said today that a ``significant'' amount of this year's 30.4 billion hryvnia ($6.61 billion) budget surplus will be used to develop the agricultural and energy industries, shipbuilding, aviation and the upgrading of roads.
The government will continue with planned social spending and increase financing to prepare for the Euro 2012 soccer tournament, which will be co-hosted by Ukraine, Timoshenko said.
Yushchenko had invited Timoshenko, the head of central bank and the Ukrainian parliament speaker to meet on July 7 to agree on budget changes.
To contact the reporter on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net.
Last Updated: July 5, 2008 11:40 EDT
Read more...
July 5 (Bloomberg) -- Ukraine increased its forecast of inflation for 2008 and said the country's economic growth in the first half lagged behind its projection for the year.
The inflation rate will be 15.9 percent at the end of the year, more than a previous forecast of 15.3 percent, Justice Minister Mykola Onishchuk told journalists today after a government meeting to approve changes to the 2008 state budget.
Ukraine's cabinet has rejected demands by President Viktor Yushchenko to trim this year's budget deficit to tackle inflation, which was 31.1 percent in May. Yushchenko disagrees with Prime Minister Yulia Timoshenko on policies including how to fight inflation and the sale of state assets.
The country's economy grew 6.4 percent in the first half of 2008, Timoshenko said before today's meeting, which was held to ensure that the legislature adopts the 2008 budget before its summer recess, which starts on July 14. The cabinet has forecast growth of 6.8 percent in gross domestic product for the year.
Timoshenko said today that a ``significant'' amount of this year's 30.4 billion hryvnia ($6.61 billion) budget surplus will be used to develop the agricultural and energy industries, shipbuilding, aviation and the upgrading of roads.
The government will continue with planned social spending and increase financing to prepare for the Euro 2012 soccer tournament, which will be co-hosted by Ukraine, Timoshenko said.
Yushchenko had invited Timoshenko, the head of central bank and the Ukrainian parliament speaker to meet on July 7 to agree on budget changes.
To contact the reporter on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net.
Last Updated: July 5, 2008 11:40 EDT
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France's Sarkozy Questions If ECB Rate Increase `Reasonable'
By Simon Kennedy
July 5 (Bloomberg) -- French President Nicolas Sarkozy recommenced his criticism of the European Central Bank today, asking it was ``reasonable'' for it to have raised the region's key interest rate this past week.
The ECB lifted its benchmark rate to 4.25 percent, its highest in seven years, on July 3 after inflation accelerated to a 16 year high in the 15 nations that use the euro.
Sarkozy, who has repeatedly attacked the Frankfurt-based bank for focusing too much on inflation and not enough on growth, asked delegates at a Paris meeting of his Union for a Popular Movement party ``if it was reasonable to raise rates, while the Americans have rates at 2 percent.''
The U.S. Federal Reserve has cut its key rate seven times since September to 2 percent in a bid to avert recession, while the ECB left its unchanged until the past week amid surging consumer prices.
Sarkozy's comments carry greater weight after France on July 1 became the president of the 27-nation European Union, meaning it will help shape the EU's agenda and policies for the rest of this year. ECB President Jean-Claude Trichet has brushed aside the criticism, telling reporters on July 3 that his central bank is ``an independent institution.''
The French president repeated his call for the Group of Eight nations to increase its ranks to include China and India. He and other leaders from the group are scheduled to meet in the coming week for their annual summit, this year in Japan.
``It's not reasonable to continue to meet as eight to solve the big questions of the world,'' he said.
To contact the reporter on this story: Simon Kennedy in Paris at Skennedy4@bloomberg.net.
Last Updated: July 5, 2008 14:01 EDT
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July 5 (Bloomberg) -- French President Nicolas Sarkozy recommenced his criticism of the European Central Bank today, asking it was ``reasonable'' for it to have raised the region's key interest rate this past week.
The ECB lifted its benchmark rate to 4.25 percent, its highest in seven years, on July 3 after inflation accelerated to a 16 year high in the 15 nations that use the euro.
Sarkozy, who has repeatedly attacked the Frankfurt-based bank for focusing too much on inflation and not enough on growth, asked delegates at a Paris meeting of his Union for a Popular Movement party ``if it was reasonable to raise rates, while the Americans have rates at 2 percent.''
The U.S. Federal Reserve has cut its key rate seven times since September to 2 percent in a bid to avert recession, while the ECB left its unchanged until the past week amid surging consumer prices.
Sarkozy's comments carry greater weight after France on July 1 became the president of the 27-nation European Union, meaning it will help shape the EU's agenda and policies for the rest of this year. ECB President Jean-Claude Trichet has brushed aside the criticism, telling reporters on July 3 that his central bank is ``an independent institution.''
The French president repeated his call for the Group of Eight nations to increase its ranks to include China and India. He and other leaders from the group are scheduled to meet in the coming week for their annual summit, this year in Japan.
``It's not reasonable to continue to meet as eight to solve the big questions of the world,'' he said.
To contact the reporter on this story: Simon Kennedy in Paris at Skennedy4@bloomberg.net.
Last Updated: July 5, 2008 14:01 EDT
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Saturday, July 5, 2008
U.S. Apartment Vacancy Unchanged at 5.9 Percent, Rents Increase
By Dan Levy
July 5 (Bloomberg) -- The vacancy rate for U.S. rental apartment buildings was unchanged at 5.9 percent in the second quarter as the housing slump and a weakening economy deterred people from buying homes, Reis Inc. reported.
The average monthly U.S. asking rent rose 1 percent to $1,047, the 25th consecutive quarter that rents increased or stayed the same, according to Reis, a New York-based research firm.
Home prices in 20 U.S. metropolitan areas declined in April by the most on record and new home sales fell 40 percent in May from a year ago. The slumping housing market means apartment rents should remain steady even as gasoline prices rise and U.S. companies cut jobs, Sam Chandan, chief economist for Reis, said in an interview. Payrolls fell by 62,000 in June and 438,000 in the first half, the Labor Department said July 3.
``Our projection is rent growth will moderate through 2009, but we don't think it will turn negative as it did in the early 2000s,'' Chandan said. ``The bias will be weighted toward rental, in our view. People fear home prices will fall further.''
The last time U.S. rents fell was the first quarter of 2002, when they declined by 0.2 percent, according to Reis.
The five-year housing boom that ended in 2006 attracted investment to homebuilding, so fewer apartment buildings were constructed, Chandan said.
``There has been very little apartment development because all the money was made in housing development,'' he said. ``We don't have a strong pipeline of apartments.''
San Francisco
San Francisco asking rents grew the most in the second quarter from the previous 12 months, increasing 9.4 percent. New York gained 7.7 percent, Seattle rose 7.4 percent, San Jose, California increased 7.3 percent and Salt Lake City increased 6.1 percent, according to Reis.
New York had the highest average U.S. rent at $2,847 a month, followed by San Francisco at $1,825, Fairfield County, Connecticut at $1,757, Boston at $1,646 and Long Island, New York at $1,521, Reis said.
Orange County, California, ranked sixth at $1,520, followed by San Jose at $1,504, Northern New Jersey at $1,460, Ventura County, California at $1,409 and Los Angeles at $1,408, according to Reis.
New York had the lowest vacancy rate at 2.2 percent, followed by Long Island at 2.9 percent, Central New Jersey at 3 percent, San Jose at 3.2 percent and New Haven, Connecticut at 3.3 percent, Northern New Jersey at 3.5 percent, Syracuse, New York at 3.6 percent, San Diego and San Francisco at 3.8 percent and Minneapolis at 3.0 percent, Reis said.
To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net
Read more...
July 5 (Bloomberg) -- The vacancy rate for U.S. rental apartment buildings was unchanged at 5.9 percent in the second quarter as the housing slump and a weakening economy deterred people from buying homes, Reis Inc. reported.
The average monthly U.S. asking rent rose 1 percent to $1,047, the 25th consecutive quarter that rents increased or stayed the same, according to Reis, a New York-based research firm.
Home prices in 20 U.S. metropolitan areas declined in April by the most on record and new home sales fell 40 percent in May from a year ago. The slumping housing market means apartment rents should remain steady even as gasoline prices rise and U.S. companies cut jobs, Sam Chandan, chief economist for Reis, said in an interview. Payrolls fell by 62,000 in June and 438,000 in the first half, the Labor Department said July 3.
``Our projection is rent growth will moderate through 2009, but we don't think it will turn negative as it did in the early 2000s,'' Chandan said. ``The bias will be weighted toward rental, in our view. People fear home prices will fall further.''
The last time U.S. rents fell was the first quarter of 2002, when they declined by 0.2 percent, according to Reis.
The five-year housing boom that ended in 2006 attracted investment to homebuilding, so fewer apartment buildings were constructed, Chandan said.
``There has been very little apartment development because all the money was made in housing development,'' he said. ``We don't have a strong pipeline of apartments.''
San Francisco
San Francisco asking rents grew the most in the second quarter from the previous 12 months, increasing 9.4 percent. New York gained 7.7 percent, Seattle rose 7.4 percent, San Jose, California increased 7.3 percent and Salt Lake City increased 6.1 percent, according to Reis.
New York had the highest average U.S. rent at $2,847 a month, followed by San Francisco at $1,825, Fairfield County, Connecticut at $1,757, Boston at $1,646 and Long Island, New York at $1,521, Reis said.
Orange County, California, ranked sixth at $1,520, followed by San Jose at $1,504, Northern New Jersey at $1,460, Ventura County, California at $1,409 and Los Angeles at $1,408, according to Reis.
New York had the lowest vacancy rate at 2.2 percent, followed by Long Island at 2.9 percent, Central New Jersey at 3 percent, San Jose at 3.2 percent and New Haven, Connecticut at 3.3 percent, Northern New Jersey at 3.5 percent, Syracuse, New York at 3.6 percent, San Diego and San Francisco at 3.8 percent and Minneapolis at 3.0 percent, Reis said.
To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net
Read more...
Merrill nears deal to sell Bloomberg stake: report
Fri Jul 4, 2008 2:26pm EDT
NEW YORK (Reuters) - Merrill Lynch & Co may sell its 20 percent stake in financial news and data provider Bloomberg LP to a blind trust controlled by New York City Mayor Michael Bloomberg, The New York Post reported on Friday.
Details about the terms of a sale remain sketchy, the Post said, and sources warned that a deal could still fall apart.
The sale is part of a broader plan by cash-strapped Merrill to raise about $50 billion through various asset sales, the Post said, citing bankers who have looked at marketing materials.
Merrill in 1981 provided seed money for Bloomberg to launch the business. Analysts have valued Merrill's stake at between $5 billion and $10 billion, the Post said.
Last month, John Thain, Merrill's chief executive hinted to Wall Street that his firm might sell one of its more treasured assets following a deterioration in the value of its balance sheet from mortgage-related losses, the Post said.
A Merrill representative could not be reached for immediate comment.
Michael Bloomberg, who became New York's mayor in January 2002, retains a majority stake in the company, but has said he has given up day-to-day control.
Privately-held Bloomberg LP is a competitor of Thomson Reuters.
Read more...
NEW YORK (Reuters) - Merrill Lynch & Co may sell its 20 percent stake in financial news and data provider Bloomberg LP to a blind trust controlled by New York City Mayor Michael Bloomberg, The New York Post reported on Friday.
Details about the terms of a sale remain sketchy, the Post said, and sources warned that a deal could still fall apart.
The sale is part of a broader plan by cash-strapped Merrill to raise about $50 billion through various asset sales, the Post said, citing bankers who have looked at marketing materials.
Merrill in 1981 provided seed money for Bloomberg to launch the business. Analysts have valued Merrill's stake at between $5 billion and $10 billion, the Post said.
Last month, John Thain, Merrill's chief executive hinted to Wall Street that his firm might sell one of its more treasured assets following a deterioration in the value of its balance sheet from mortgage-related losses, the Post said.
A Merrill representative could not be reached for immediate comment.
Michael Bloomberg, who became New York's mayor in January 2002, retains a majority stake in the company, but has said he has given up day-to-day control.
Privately-held Bloomberg LP is a competitor of Thomson Reuters.
Read more...
BCE, Ontario Teachers' Reach Final Agreement on Sale
By Chris Fournier and Frederic Tomesco
July 4 (Bloomberg) -- BCE Inc., Canada's biggest phone company, signed a final agreement with a group led by the Ontario Teachers' Pension Plan to complete the world's largest leveraged buyout after scrapping its quarterly dividend. The stock had its biggest gain in more than six years.
The C$52 billion ($51 billion) purchase of BCE, first announced a year ago, will be done by Dec. 11 at the original price of C$42.75 a share, the Montreal-based company said in a statement today. BCE won't pay dividends on its common shares, preserving as much as C$900 million to appease the banks financing the purchase.
BCE's financing accord is an exception in a leveraged buyout market that's been stalled by the subprime mortgage crisis and rising borrowing costs. Buyout loan defaults may be ``significantly higher'' than ratings companies' estimates as about $500 billion of debt used to fund the takeovers comes due, the Bank for International Settlements said in a report today.
``BCE's release is uplifting news, signaling the ability to close transactions with big funding requirements, at least for highly cash-generative assets,'' said Edward Nash, managing director and head of mergers at CIBC World Markets in Toronto.
BCE rose C$4.49, or 13 percent, to C$39.64 in 4:10 p.m. trading on the Toronto Stock Exchange, the biggest gain since April 2002.
Bank Financing
BCE shares last month traded as much as 25 percent below the offer price on concern that banks funding the purchase, including Citigroup Inc. and Deutsche Bank AG, may back out or reduce the price as financing costs rise and the U.S. economy slows.
``It's a morale booster,'' said Ian Nakamoto, research director at MacDougall, MacDougall and MacTier Inc. in Toronto, which manages about $4.8 billion, including BCE shares. ``People were pessimistic after all the talk of, `It won't get done' or `only at a lower price.'''
The buyout group and BCE made several changes to the agreement to win the backing of the bankers, who will provide C$34 billion in financing. The closing was pushed back almost three months from Sept. 30, giving the bankers more time to sell debt to pay for the purchase.
The common share dividend, which had been deferred last week, won't be paid, though preferred shareholders will get a dividend. The buyers must also pay a break fee of C$1.2 billion, or 20 percent more than in the original agreement, if the purchase doesn't get done.
Concession to Banks
Scrapping the dividend ``is obviously a concession, but in light of current market conditions, it's not unexpected,'' said Jim Hall, who manages about $1 billion, including 400,000 BCE shares, at Mawer Investment Management in Calgary. ``This is the way the world is supposed to work, and the 12 months of nonsense before this was trying.''
Toronto-based Ontario Teachers', Canada's third-largest pension manager, and Providence, Rhode Island-based Providence Equity agreed a year ago to pay C$42.75 a share, or C$34.2 billion, to take BCE private. Madison Dearborn Partners LLC in Chicago and New York-based Merrill Lynch & Co. joined the deal.
The Supreme Court of Canada on June 20 approved the takeover, reversing a lower court ruling that said the deal didn't treat bondholders fairly.
Funding Risk
Today's agreement ``largely eliminates the funding risk for the deal,'' National Bank Financial analyst Greg MacDonald said in a note to clients. Retaining the dividend for two to three quarters may be worth C$588 million to C$882 million to BCE, and was a ``concession for the banks to close the deal,'' he said.
The dividend cut reduces the cost to the buyers by as much as C$1.10 a share, MacDonald said.
George Cope, 46, chief operating officer of BCE's Bell Canada phone business, will succeed Michael Sabia as chief executive officer on July 11. Sabia had said he would step down when the sale closes.
``Work is now largely done,'' Sabia, 54, said in the statement. ``We have been planning this transition for some time. Now is the time to get on with it.''
BCE's priority will be to hang on to its customers, former Teachers' Chief Executive Officer Claude Lamoureux said last week. Lamoureux will join the BCE board.
The company lost 511,000 local-phone subscribers in 2007, compared with 463,000 in 2006 and 297,000 in 2005, according to last year's annual report.
``Rule No. 1 is, let's make sure everybody is happy,'' Lamoureux, 65, said when asked about BCE. ``If the clients are happy, then the owners are going to make some money.''
In addition to New York-based Citigroup and Deutsche Bank of Frankfurt, lenders on the BCE deal are Royal Bank of Scotland Group Plc and Toronto-Dominion Bank in Toronto.
To contact the reporters on this story: Chris Fournier in Montreal Cfournier3@bloomberg.net. Frederic Tomesco in Montreal at tomesco@bloomberg.net.
Read more...
July 4 (Bloomberg) -- BCE Inc., Canada's biggest phone company, signed a final agreement with a group led by the Ontario Teachers' Pension Plan to complete the world's largest leveraged buyout after scrapping its quarterly dividend. The stock had its biggest gain in more than six years.
The C$52 billion ($51 billion) purchase of BCE, first announced a year ago, will be done by Dec. 11 at the original price of C$42.75 a share, the Montreal-based company said in a statement today. BCE won't pay dividends on its common shares, preserving as much as C$900 million to appease the banks financing the purchase.
BCE's financing accord is an exception in a leveraged buyout market that's been stalled by the subprime mortgage crisis and rising borrowing costs. Buyout loan defaults may be ``significantly higher'' than ratings companies' estimates as about $500 billion of debt used to fund the takeovers comes due, the Bank for International Settlements said in a report today.
``BCE's release is uplifting news, signaling the ability to close transactions with big funding requirements, at least for highly cash-generative assets,'' said Edward Nash, managing director and head of mergers at CIBC World Markets in Toronto.
BCE rose C$4.49, or 13 percent, to C$39.64 in 4:10 p.m. trading on the Toronto Stock Exchange, the biggest gain since April 2002.
Bank Financing
BCE shares last month traded as much as 25 percent below the offer price on concern that banks funding the purchase, including Citigroup Inc. and Deutsche Bank AG, may back out or reduce the price as financing costs rise and the U.S. economy slows.
``It's a morale booster,'' said Ian Nakamoto, research director at MacDougall, MacDougall and MacTier Inc. in Toronto, which manages about $4.8 billion, including BCE shares. ``People were pessimistic after all the talk of, `It won't get done' or `only at a lower price.'''
The buyout group and BCE made several changes to the agreement to win the backing of the bankers, who will provide C$34 billion in financing. The closing was pushed back almost three months from Sept. 30, giving the bankers more time to sell debt to pay for the purchase.
The common share dividend, which had been deferred last week, won't be paid, though preferred shareholders will get a dividend. The buyers must also pay a break fee of C$1.2 billion, or 20 percent more than in the original agreement, if the purchase doesn't get done.
Concession to Banks
Scrapping the dividend ``is obviously a concession, but in light of current market conditions, it's not unexpected,'' said Jim Hall, who manages about $1 billion, including 400,000 BCE shares, at Mawer Investment Management in Calgary. ``This is the way the world is supposed to work, and the 12 months of nonsense before this was trying.''
Toronto-based Ontario Teachers', Canada's third-largest pension manager, and Providence, Rhode Island-based Providence Equity agreed a year ago to pay C$42.75 a share, or C$34.2 billion, to take BCE private. Madison Dearborn Partners LLC in Chicago and New York-based Merrill Lynch & Co. joined the deal.
The Supreme Court of Canada on June 20 approved the takeover, reversing a lower court ruling that said the deal didn't treat bondholders fairly.
Funding Risk
Today's agreement ``largely eliminates the funding risk for the deal,'' National Bank Financial analyst Greg MacDonald said in a note to clients. Retaining the dividend for two to three quarters may be worth C$588 million to C$882 million to BCE, and was a ``concession for the banks to close the deal,'' he said.
The dividend cut reduces the cost to the buyers by as much as C$1.10 a share, MacDonald said.
George Cope, 46, chief operating officer of BCE's Bell Canada phone business, will succeed Michael Sabia as chief executive officer on July 11. Sabia had said he would step down when the sale closes.
``Work is now largely done,'' Sabia, 54, said in the statement. ``We have been planning this transition for some time. Now is the time to get on with it.''
BCE's priority will be to hang on to its customers, former Teachers' Chief Executive Officer Claude Lamoureux said last week. Lamoureux will join the BCE board.
The company lost 511,000 local-phone subscribers in 2007, compared with 463,000 in 2006 and 297,000 in 2005, according to last year's annual report.
``Rule No. 1 is, let's make sure everybody is happy,'' Lamoureux, 65, said when asked about BCE. ``If the clients are happy, then the owners are going to make some money.''
In addition to New York-based Citigroup and Deutsche Bank of Frankfurt, lenders on the BCE deal are Royal Bank of Scotland Group Plc and Toronto-Dominion Bank in Toronto.
To contact the reporters on this story: Chris Fournier in Montreal Cfournier3@bloomberg.net. Frederic Tomesco in Montreal at tomesco@bloomberg.net.
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Japanese Bonds Complete Biggest Gain in a Week on ECB Comments
By Theresa Barraclough
July 5 (Bloomberg) -- Japan's bonds advanced yesterday after European Central Bank President Jean-Claude Trichet's comments eased speculation the Bank of Japan will increase borrowing costs this year.
Benchmark debt yesterday completed its biggest gain in a week after Trichet on July 3 said he isn't ``pre-committed'' to lifting interest rates to combat inflation, after the central bank boosted borrowing costs for the first time in a year. Bonds also gained on a report that showed U.S. employers cut jobs for the sixth consecutive month in June.
``The Bank of Japan is now under less pressure for a coordinated effort by central banks,'' said Takashi Nishimura, an analyst at Mitsubishi UFJ Securities Co. in Tokyo. ``Investors are focusing more on fundamentals.''
The yield on 10-year securities auctioned on June 3 with a 1.7 percent coupon fell 3 basis points yesterday, the biggest decline since June 27, to 1.64 percent in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker. A basis point is 0.01 percentage point.
Ten-year yields may decline to as low as 1.55 percent by the end of September, Nishimura said. Should his predictions prove accurate, investors would stand to make a 1.1 percent return, according to Bloomberg calculations.
Ten-year bond futures for September delivery yesterday rose 0.32 to 135.18 as of the afternoon close at the Tokyo Stock Exchange.
Weekly Decline
Bonds completed a weekly decline on speculation a government report on July 10 will show wholesale prices rose last month. Ten-year yields added 3 basis points this week.
``Inflation remains a concern in the long run,'' said Tatsuo Ichikawa, a fixed-income strategist at ABN Amro Securities Japan Ltd. in Tokyo. ``Inflation-linked bonds are a good investment. It has limited downside.''
Japan's producer-price inflation accelerated to 5.3 percent in June from 4.7 percent in May, according to the median estimate of 26 economists surveyed by Bloomberg News.
Consumer prices, excluding fresh food, rose 1.5 percent in May from a year earlier, the statistics bureau said in Tokyo on June 27. Crude oil for August delivery rose to a record $145.85 a barrel yesterday. Accelerating inflation reduces the value of the fixed interest debt pays.
The extra yield paid by 10-year conventional government debt compared with similar-maturity inflation-linked bonds was about 59 basis points yesterday from 46 basis points a week ago, according to data compiled by Bloomberg.
The so-called breakeven inflation rate reflects investors' expectations for average annual increases in consumer prices over the next decade.
Bunds Versus JGBs
German two-year bunds on July 3 rallied the most in 3 1/2 months after Trichet's comments, dropping about 19 basis points to 4.45 percent. The spread between two-year German and Japanese yields shrunk to about 3.60 percentage points that day, the narrowest since June 12, according Bloomberg data.
``Japan's yield curve will be under pressure to steepen,'' Mitsubishi UFJ's Nishimura said. A yield curve is a chart that plots the yields of bonds with different maturities.
The difference in yields between two- and 10-year debt was about 80 basis points yesterday, compared with 77 basis points three months ago, according to data compiled by Bloomberg. The spread will probably widen to 83 basis points by September, according to a Bloomberg News survey of economists and analysts. The estimate puts a heavier weighting on more recent forecasts.
There was a 27 percent chance yesterday the Bank of Japan will raise its target rate by a quarter-percentage point to 0.75 percent by Dec. 31, according to calculations by JPMorgan Chase & Co., using overnight interest-rate swaps. The odds were 31 percent on July 3 and as high as 92 percent on June 11.
U.S. employers cut 62,000 jobs in June, the Labor Department said on June 3, larger than a 60,000 drop estimated by economists. The U.S. is Japan's largest export market.
To contact the reporter on this story: Theresa Barraclough in Tokyo at tbarraclough@bloomberg.net.
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July 5 (Bloomberg) -- Japan's bonds advanced yesterday after European Central Bank President Jean-Claude Trichet's comments eased speculation the Bank of Japan will increase borrowing costs this year.
Benchmark debt yesterday completed its biggest gain in a week after Trichet on July 3 said he isn't ``pre-committed'' to lifting interest rates to combat inflation, after the central bank boosted borrowing costs for the first time in a year. Bonds also gained on a report that showed U.S. employers cut jobs for the sixth consecutive month in June.
``The Bank of Japan is now under less pressure for a coordinated effort by central banks,'' said Takashi Nishimura, an analyst at Mitsubishi UFJ Securities Co. in Tokyo. ``Investors are focusing more on fundamentals.''
The yield on 10-year securities auctioned on June 3 with a 1.7 percent coupon fell 3 basis points yesterday, the biggest decline since June 27, to 1.64 percent in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker. A basis point is 0.01 percentage point.
Ten-year yields may decline to as low as 1.55 percent by the end of September, Nishimura said. Should his predictions prove accurate, investors would stand to make a 1.1 percent return, according to Bloomberg calculations.
Ten-year bond futures for September delivery yesterday rose 0.32 to 135.18 as of the afternoon close at the Tokyo Stock Exchange.
Weekly Decline
Bonds completed a weekly decline on speculation a government report on July 10 will show wholesale prices rose last month. Ten-year yields added 3 basis points this week.
``Inflation remains a concern in the long run,'' said Tatsuo Ichikawa, a fixed-income strategist at ABN Amro Securities Japan Ltd. in Tokyo. ``Inflation-linked bonds are a good investment. It has limited downside.''
Japan's producer-price inflation accelerated to 5.3 percent in June from 4.7 percent in May, according to the median estimate of 26 economists surveyed by Bloomberg News.
Consumer prices, excluding fresh food, rose 1.5 percent in May from a year earlier, the statistics bureau said in Tokyo on June 27. Crude oil for August delivery rose to a record $145.85 a barrel yesterday. Accelerating inflation reduces the value of the fixed interest debt pays.
The extra yield paid by 10-year conventional government debt compared with similar-maturity inflation-linked bonds was about 59 basis points yesterday from 46 basis points a week ago, according to data compiled by Bloomberg.
The so-called breakeven inflation rate reflects investors' expectations for average annual increases in consumer prices over the next decade.
Bunds Versus JGBs
German two-year bunds on July 3 rallied the most in 3 1/2 months after Trichet's comments, dropping about 19 basis points to 4.45 percent. The spread between two-year German and Japanese yields shrunk to about 3.60 percentage points that day, the narrowest since June 12, according Bloomberg data.
``Japan's yield curve will be under pressure to steepen,'' Mitsubishi UFJ's Nishimura said. A yield curve is a chart that plots the yields of bonds with different maturities.
The difference in yields between two- and 10-year debt was about 80 basis points yesterday, compared with 77 basis points three months ago, according to data compiled by Bloomberg. The spread will probably widen to 83 basis points by September, according to a Bloomberg News survey of economists and analysts. The estimate puts a heavier weighting on more recent forecasts.
There was a 27 percent chance yesterday the Bank of Japan will raise its target rate by a quarter-percentage point to 0.75 percent by Dec. 31, according to calculations by JPMorgan Chase & Co., using overnight interest-rate swaps. The odds were 31 percent on July 3 and as high as 92 percent on June 11.
U.S. employers cut 62,000 jobs in June, the Labor Department said on June 3, larger than a 60,000 drop estimated by economists. The U.S. is Japan's largest export market.
To contact the reporter on this story: Theresa Barraclough in Tokyo at tbarraclough@bloomberg.net.
Read more...
Toronto-Dominion Error to Cut Profit by C$96 Million
By Sean B. Pasternak
July 4 (Bloomberg) -- Toronto-Dominion Bank, Canada's second-largest lender, said one of its traders in London incorrectly priced credit derivatives, costing the bank about C$96 million ($94.3 million) in pretax earnings.
The employee linked to the pricing error, a senior male trader, left TD Securities on June 23 when the mistake was discovered, bank spokeswoman Simone Philogène said today in a telephone interview from Toronto. She declined to name the employee.
``We are very disappointed that this has occurred,'' Chief Executive Officer Ed Clark said in a statement. ``Our company has a strong risk culture, and we deeply regret this incident.''
Toronto-Dominion has avoided debt writedowns in the last year, while its five biggest competitors in Canada have recorded combined costs of about C$10 billion related to the U.S. subprime mortgage market.
``It's too bad; it's such a small amount yet it sort of spoils the track record,'' said Blackmont Capital Inc. analyst Brad Smith. ``It's got to be a disappointment to management, who've rightfully pointed to their ability to sidestep a lot of these problems.''
The Toronto-based bank reported the incident to the Financial Services Authority in the U.K. and Canada's Office of the Superintendent of Financial Institutions, Philogène said. The bank is cooperating with authorities.
Toronto-Dominion's estimated charge is equal to about 11 percent of its C$852 million in second-quarter net income. The lender is scheduled to release third-quarter earnings on Aug. 28.
Toronto-Dominion fell 25 cents to C$63.09 at 4:10 p.m. in trading on the Toronto Stock Exchange.
To contact the reporter on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net.
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July 4 (Bloomberg) -- Toronto-Dominion Bank, Canada's second-largest lender, said one of its traders in London incorrectly priced credit derivatives, costing the bank about C$96 million ($94.3 million) in pretax earnings.
The employee linked to the pricing error, a senior male trader, left TD Securities on June 23 when the mistake was discovered, bank spokeswoman Simone Philogène said today in a telephone interview from Toronto. She declined to name the employee.
``We are very disappointed that this has occurred,'' Chief Executive Officer Ed Clark said in a statement. ``Our company has a strong risk culture, and we deeply regret this incident.''
Toronto-Dominion has avoided debt writedowns in the last year, while its five biggest competitors in Canada have recorded combined costs of about C$10 billion related to the U.S. subprime mortgage market.
``It's too bad; it's such a small amount yet it sort of spoils the track record,'' said Blackmont Capital Inc. analyst Brad Smith. ``It's got to be a disappointment to management, who've rightfully pointed to their ability to sidestep a lot of these problems.''
The Toronto-based bank reported the incident to the Financial Services Authority in the U.K. and Canada's Office of the Superintendent of Financial Institutions, Philogène said. The bank is cooperating with authorities.
Toronto-Dominion's estimated charge is equal to about 11 percent of its C$852 million in second-quarter net income. The lender is scheduled to release third-quarter earnings on Aug. 28.
Toronto-Dominion fell 25 cents to C$63.09 at 4:10 p.m. in trading on the Toronto Stock Exchange.
To contact the reporter on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net.
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Asian Stocks Fall for Fourth Week as Oil Prices Surge to Record
By Hanny Wan and Shani Raja
July 5 (Bloomberg) -- Asian stocks fell for a fourth week, on concern record crude oil prices will slow global economic growth and erode earnings. Japan's Nikkei 225 Stock Average posted its longest losing streak in 54 years.
BHP Billiton Ltd., the world's largest mining company, led declines on concern metals demand will drop. Toyota Motor Corp., the world's second-largest automaker, dropped after its U.S. sales slumped last month. Posco led steelmakers lower on speculation lower vehicle sales will reduce demand for the metal.
``The world has definitely turned bearish and sentiment is very negative,'' said Prasad Patkar, who helps manage the equivalent of about $1.8 billion at Platypus Asset Management in Sydney. ``The price of oil at this time is choking demand. That's what the world's equity markets are reacting to.''
The MSCI Asia Pacific Index dropped 3.1 percent to 132.78 in the past five days, with a gauge tracking material producers posting the biggest losses among 10 industry groups. The four weeks of declines were the most since a six-week losing streak that ended Feb. 8.
Japan's Nikkei 225 Stock Average retreated 2.3 percent this week to 13,237.89. The measure has fallen for 12 straight days, the longest losing streak since 1954.
Malaysia's Kuala Lumpur Composite Index dropped 4.7 percent this week to the lowest since March 6, 2007 on concern rising political tension will hurt investments. Trading on the country's stock market was suspended July 3 due to a systems failure.
Biggest Threat
The MSCI Asia Pacific has slumped 16 percent this year amid mounting credit losses at the biggest financial institutions and as central banks across Asia raised borrowing costs to curb inflation. Finance ministers from the Group of Eight nations said last month surging food and fuel prices have replaced the credit squeeze as the biggest threat to the world economy.
BHP retreated 5.1 percent to A$40.70 this week. Rio Tinto Group, the world's third-biggest mining company, declined 4.8 percent to A$125.70. Jiangxi Copper Co., China's largest publicly traded producer of the metal, dropped 5.6 percent to HK$14.26 in Hong Kong.
BHP, the world's sixth-largest producer of primary aluminum, also fell after Credit Suisse Group cut its earnings estimate for Alcoa Inc. and Century Aluminum Co. Analysts said profits will be hurt by higher energy and materials costs and a lower average price for the metal.
Toyota, which derives a third of its revenue from North America, dropped 3 percent to 4,920 yen this week. Its U.S. sales slumped 21 percent in June, the company said this week. Honda Motor Co., Japan's second-largest automaker, lost 1.9 percent to 3,580 yen. Vehicle sales plunged 18 percent in the U.S. last month, the steepest slump in almost six years.
`Disappointing' Earnings
General Motors Corp. yesterday tumbled to the lowest price since 1954 after Merrill Lynch & Co. said the largest U.S. automaker may face bankruptcy as U.S. auto demand slows.
Posco, Asia's third-biggest steelmaker, fell 9.6 percent this week to 482,000 won. BlueScope Steel Ltd., Australia's No. 1 steelmaker, tumbled 12 percent to A$9.76. JSW Steel Ltd., India's third-largest steelmaker, slumped 23 percent to 753 rupees.
Cathay Pacific Airways Ltd., Hong Kong's largest airline, lost 5.4 percent to HK$13.98 this week after saying on July 2 that earnings will be ``disappointing'' because of rising fuel prices. Jet fuel has more than doubled in the past year, reflecting the surge in oil. Oil futures climbed to a record $145.85 a barrel yesterday on speculation tension in the Middle East may worsen.
``Nobody wants to hold on to stocks right now,'' said Choi Min Jai, who helps manage about $5 billion at KTB Asset Management Co. in Seoul. ``The slowdown in the global economy is being felt. There is rising concern higher oil prices will mean higher inflation, which means lower demand.''
To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net
Read more...
July 5 (Bloomberg) -- Asian stocks fell for a fourth week, on concern record crude oil prices will slow global economic growth and erode earnings. Japan's Nikkei 225 Stock Average posted its longest losing streak in 54 years.
BHP Billiton Ltd., the world's largest mining company, led declines on concern metals demand will drop. Toyota Motor Corp., the world's second-largest automaker, dropped after its U.S. sales slumped last month. Posco led steelmakers lower on speculation lower vehicle sales will reduce demand for the metal.
``The world has definitely turned bearish and sentiment is very negative,'' said Prasad Patkar, who helps manage the equivalent of about $1.8 billion at Platypus Asset Management in Sydney. ``The price of oil at this time is choking demand. That's what the world's equity markets are reacting to.''
The MSCI Asia Pacific Index dropped 3.1 percent to 132.78 in the past five days, with a gauge tracking material producers posting the biggest losses among 10 industry groups. The four weeks of declines were the most since a six-week losing streak that ended Feb. 8.
Japan's Nikkei 225 Stock Average retreated 2.3 percent this week to 13,237.89. The measure has fallen for 12 straight days, the longest losing streak since 1954.
Malaysia's Kuala Lumpur Composite Index dropped 4.7 percent this week to the lowest since March 6, 2007 on concern rising political tension will hurt investments. Trading on the country's stock market was suspended July 3 due to a systems failure.
Biggest Threat
The MSCI Asia Pacific has slumped 16 percent this year amid mounting credit losses at the biggest financial institutions and as central banks across Asia raised borrowing costs to curb inflation. Finance ministers from the Group of Eight nations said last month surging food and fuel prices have replaced the credit squeeze as the biggest threat to the world economy.
BHP retreated 5.1 percent to A$40.70 this week. Rio Tinto Group, the world's third-biggest mining company, declined 4.8 percent to A$125.70. Jiangxi Copper Co., China's largest publicly traded producer of the metal, dropped 5.6 percent to HK$14.26 in Hong Kong.
BHP, the world's sixth-largest producer of primary aluminum, also fell after Credit Suisse Group cut its earnings estimate for Alcoa Inc. and Century Aluminum Co. Analysts said profits will be hurt by higher energy and materials costs and a lower average price for the metal.
Toyota, which derives a third of its revenue from North America, dropped 3 percent to 4,920 yen this week. Its U.S. sales slumped 21 percent in June, the company said this week. Honda Motor Co., Japan's second-largest automaker, lost 1.9 percent to 3,580 yen. Vehicle sales plunged 18 percent in the U.S. last month, the steepest slump in almost six years.
`Disappointing' Earnings
General Motors Corp. yesterday tumbled to the lowest price since 1954 after Merrill Lynch & Co. said the largest U.S. automaker may face bankruptcy as U.S. auto demand slows.
Posco, Asia's third-biggest steelmaker, fell 9.6 percent this week to 482,000 won. BlueScope Steel Ltd., Australia's No. 1 steelmaker, tumbled 12 percent to A$9.76. JSW Steel Ltd., India's third-largest steelmaker, slumped 23 percent to 753 rupees.
Cathay Pacific Airways Ltd., Hong Kong's largest airline, lost 5.4 percent to HK$13.98 this week after saying on July 2 that earnings will be ``disappointing'' because of rising fuel prices. Jet fuel has more than doubled in the past year, reflecting the surge in oil. Oil futures climbed to a record $145.85 a barrel yesterday on speculation tension in the Middle East may worsen.
``Nobody wants to hold on to stocks right now,'' said Choi Min Jai, who helps manage about $5 billion at KTB Asset Management Co. in Seoul. ``The slowdown in the global economy is being felt. There is rising concern higher oil prices will mean higher inflation, which means lower demand.''
To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net
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