By William Freebairn and Paulo Winterstein
July 15 (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 1 percent to 4,387.42 yesterday. In Brazil, preferred shares are the most commonly traded class of stock.
Brazil
Gol Linhas Aereas Inteligentes SA (GOLL4 BS): Brazil's second-biggest airline signed an agreement with Emirates Airline's cargo division allowing the companies to deliver cargo to all locations served by the two companies, Gol said yesterday in a statement distributed by PR Newswire. Gol fell 4.8 percent to 12.97 reais.
Lupatech SA (LUPA3 BS): The Brazilian maker of parts for oil and gas industries agreed to pay about 61.7 million reais ($38.7 million) for valve maker Tecval SA Valvulas Industriais. Caxias do Sul, Brazil-based Lupatech expects to add about 18 million reais in earnings before interest, taxes, depreciation and amortization after the acquisition, the company said yesterday in a regulatory filing. Lupatech fell 0.3 percent to 57.24 reais.
Petroleo Brasileiro SA (PETR4 BS): Brazil's state-controlled oil company said yesterday output in the Campos Basin has returned to 96 percent of capacity as an oil-platform worker strike continues. The strike, which began yesterday, has reduced output by 63,000 barrels a day. Petrobras added 0.7 percent to 40.88 reais.
Chile
Colbun SA (COLBUN CC): The electricity generator controlled by Chile's Matte group was raised to ``buy'' from ``hold'' by Banco Santander SA. Colbun plans to increase its generating capacity by 90 percent and recent rains have reduced costs, analysts Diego Celedon and Marcio Prado wrote in a research report sent yesterday. Colbun rose 1.6 percent to 96.50 pesos.
Empresa Nacional de Electricidad SA (ENDESA CC): Chile's biggest electricity producer is Banco Santander SA's preferred utility in the country. Endesa, as the company is known, is expanding capacity and will have the best earnings in the industry, Santander said in a report e-mailed yesterday. Endesa fell 0.4 percent to 694.51 pesos.
Mexico
Grupo Modelo SAB (GMODELOC MM): Controlling shareholders of Mexico's largest brewer may have missed an opportunity to sell their stake at ``a significant premium'' Credit Suisse analysts including Tufic Salem wrote in a research note e-mailed yesterday. InBev NV agreed yesterday to buy Anheuser Busch Cos., the U.S. brewer that has about a 50 percent non-controlling stake in Modelo. The transaction may have happened too quickly for Modelo to respond, Credit Suisse said. Modelo fell 0.9 percent to 51.07 pesos.
Grupo TMM SA (TMMA MM): The Mexican transportation company's offer to lease five tankers to a unit of government-owned Petroleos Mexicanos was rejected. The contract will be bid again ``shortly,'' the oil company said in a statement e-mailed yesterday. TMM fell 5.4 percent to 17.60 pesos when it last traded July 11.
To contact the reporters on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net; Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.
Read more...
Tuesday, July 15, 2008
Alimentation Couche-Tard, Scotiabank: Canadian Equity Preview
By John Kipphoff
July 15 (Bloomberg) -- The following companies may have unusual price changes in Canada trading. Stock symbols are in parentheses, and share prices are from the previous close.
The Standard & Poor's/TSX Composite Index rose 0.2 percent to 13,741.29.
Alimentation Couche-Tard Inc. (ATD/B CN): The second-biggest North American convenience-store operator may report fourth- quarter profit of 13 cents a share before some items, the average estimate of nine analysts in a Bloomberg survey. The shares fell 0.8 percent to C$11.80.
Bank of Nova Scotia (BNS CN): Canada's third-biggest bank agreed to pay $442 million for E*Trade Financial Corp.'s (ETFC US) Canadian unit to double its online-brokerage business. The shares fell 3.6 percent to C$43.82.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
Read more...
July 15 (Bloomberg) -- The following companies may have unusual price changes in Canada trading. Stock symbols are in parentheses, and share prices are from the previous close.
The Standard & Poor's/TSX Composite Index rose 0.2 percent to 13,741.29.
Alimentation Couche-Tard Inc. (ATD/B CN): The second-biggest North American convenience-store operator may report fourth- quarter profit of 13 cents a share before some items, the average estimate of nine analysts in a Bloomberg survey. The shares fell 0.8 percent to C$11.80.
Bank of Nova Scotia (BNS CN): Canada's third-biggest bank agreed to pay $442 million for E*Trade Financial Corp.'s (ETFC US) Canadian unit to double its online-brokerage business. The shares fell 3.6 percent to C$43.82.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
Read more...
Intel Sales Slowdown May Signal End of Growth-Company Status
By Ian King
July 15 (Bloomberg) -- Intel Corp.'s quarterly sales gain may slow to its lowest level in a year, signaling the world's largest chipmaker is losing its status as a growth company.
Intel probably will report sales increased 7 percent for the second quarter, according to a Bloomberg survey of 28 analysts, down from an average of 12 percent for the previous three quarters. Sales will rise an estimated 4 percent for the year, half the rate in 2007, the survey showed.
Prices for personal-computer processors, the source of most of Santa Clara, California-based Intel's sales, dropped 20 percent between 2004 and 2007, according to Mercury Research. That curbed sales growth, which had averaged about 25 percent a year from 1990 to 2000 as PCs became household items.
``Going back to double-digit growth is going to be difficult,'' said Tristan Gerra, an analyst at Robert W. Baird & Co. in Milwaukee. He has a neutral rating on the stock, which he doesn't own.
Chief Executive Officer Paul Otellini boosted profitability 38 percent last year after taking market share from Advanced Micro Devices Inc. and saving more than $1 billion in annual costs by cutting jobs and selling off businesses. The stock has fallen 23 percent this year as investors wait for him to reignite growth by breaking into new businesses.
The drop compares with a 16 percent decline by the 18-member Philadelphia Semiconductor Index and a 17 percent loss by the Dow Jones Industrial Average.
Analysts anticipate a profit of 26 cents a share on sales of $9.33 billion when Intel announces results after the market closes today, according to the Bloomberg survey.
Tom Beermann, an Intel spokesman, declined to comment.
Four Targets
Otellini, 57, said at the company's shareholder meeting in May that Intel is banking on advanced mobile phones, cheaper computers, industrial and automotive machinery, and home electronics to revive growth. Each will generate $10 billion a year for processor makers by 2011, he said.
Intel plans to create a new market for inexpensive PCs with a processor called Atom. In June, the chip began appearing in laptops that sell for as little as $250. Reaching lower-income buyers may be Otellini's best chance to fuel sales, said Bill Gorman, an analyst at PNC Institutional Investments in Pittsburgh.
``The PC market isn't stale yet,'' said Gorman, whose firm owns 10.9 million Intel shares, according to data compiled by Bloomberg. ``That market still has some legs to it, and they could maybe grow a little at the edges.''
Dominant Share
Global PC shipments will rise 15 percent to 310 million units this year, according to research firm IDC. The Framingham, Massachusetts-based company expects percentage growth to remain above 10 percent until 2010.
Intel ended the first quarter with 78.5 percent of PC processor sales, according to Cave Creek, Arizona-based Mercury Research. AMD accounted for most of the rest of the market.
Increases in unit sales have been offset by a 6 percent annual decline in the average selling price of chips, Otellini told investors at a Sanford C. Bernstein conference in May, suggesting that Intel needs new markets to revive revenue.
Otellini is spending 20 percent of Intel's $6 billion research and development budget to move into new businesses. After this year's 4 percent increase, revenue will rise 7 percent in 2009 and 5 percent in 2010, according to analysts' estimates.
``They haven't made any material progress'' in boosting sales growth, said Gus Richard, a San Francisco-based analyst at Piper Jaffray Cos. who has a neutral rating on the stock.
Failed Attempts
Intel's attempt to challenge Texas Instruments Inc. and Qualcomm Inc. in telecommunications chips cost about $5 billion and ended in the sale of the unit for about a 10th of that amount in 2006.
A venture with Micron Technology Inc. in flash chips, which store data in portable devices, is entering full production just as the industry reels from a product glut. Boise, Idaho-based Micron reported a wider quarterly loss last month and said prices of so-called Nand flash memory, used inside music players and cameras, have dropped 20 percent.
``They've been in telecom, and that didn't work,'' Gorman said. ``Now they're in Nand flash, and that isn't working.''
Intel isn't interested in becoming a mature company that only attracts investors with dividends and stock buybacks, Otellini said at the Bernstein conference. He said he spends less than an hour a year wondering if he should reduce spending aimed at spurring sales.
``Our focus is on growth,'' he said.
The Atom chip may be the breakthrough the company needs to cultivate a new market, said Highmark Capital Management Chief Investment Officer David Goerz, who manages $22 billion, including Intel shares. The product lets the company tap booming sales of inexpensive portable devices overseas, he said.
``Intel's been a one-trick pony for a long time and now I see them with an opportunity to be a two-trick pony,'' said Goerz, who is based in San Francisco. ``They are one of the best positioned technology companies to profit from global growth.''
To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net
Read more...
Credit Agricole SA, EADS, H&M, Roche: European Equity Preview
By Nadja Brandt
July 15 (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 climbed 0.8 percent to 272.47. The Dow Jones Stoxx 50 Index added 0.5 percent to 2,770.39. The Euro Stoxx 50 Index, a benchmark for the nations using the euro, increased 0.6 percent to 3,216.24.
Credit Agricole SA (ACA FP): The board of France's second- largest bank will meet to discuss whether to remove Georges Pauget from the chief executive officer post, which he has held since September 2005, four people with knowledge of the meeting said. Credit Agricole rose 29 cents, or 2.5 percent, to 11.86 euros.
European Aeronautic, Defence & Space Co. (EAD FP): EADS's Airbus SAS, the world's biggest planemaker, won an order for 55 airliners, including A380 superjumbos, from Gulf carrier Etihad Airways worth about $11 billion at list prices. EADS rose 66 cents, or 6.2 percent, to 11.40 euros.
Finmeccanica SpA (FNC IM): The Italian state-controlled defense company said banks offered to loan it more than twice the amount it needs to complete the acquisition of U.S.-based DRS Technologies Inc. The stock rose 34 cents, or 2 percent, to 16.77 euros.
Gerresheimer AG (GXI GY): The medical packaging company that sold shares for the first time last year plans to post second- quarter results. The company in April reported a first-quarter profit after sales at its life science and pharmaceuticals units rose. The shares added 56 cents, or 1.8 percent, to 32.20 euros.
Hennes & Mauritz AB (HMB SS): Europe's second-biggest clothing retailer may say total June sales gained 5.3 percent, while revenue from comparable stores declined 5.6 percent, according to the average analyst estimates collected by SME Direkt. H&M advanced 1.1 percent to 287 kronor.
Iberia Lineas Aereas de Espana SA (IBLA SM): Spain's biggest airline said passenger traffic fell 2.3 percent in June as demand fell on routes in Spain and to South America. The shares slipped 3 cents, or 2.2 percent, to 1.33 euros.
Jelmoli Holding AG (JEL SW): The Swiss department-store and real-estate owner reports sales for the first half of the year. The shares rose 10 francs, or 0.4 percent, to 2,519 francs.
Micronas Semiconductor Holding AG (MASN SW): Switzerland's biggest maker of computer chips reports second-quarter earnings. The shares were unchanged at 6.45 francs.
Roche Holding AG (ROG VX): Roche's Genentech Inc., the biggest U.S. maker of cancer drugs, raised its 2008 forecast and said second-quarter profit increased 4.7 percent on higher sales of its Avastin treatment for colon, lung and breast tumors. Also, Roche's U.K. unit was suspended by the Association of the British Pharmaceutical Industry for at least six months for violating the group's code of practice. The shares rose 1.7 francs, or 0.9 percent, to 182 francs.
Sulzer AG (SUN SW): The world's second-biggest maker of pumps may say first-half order intake rose 7.5 percent to 2.29 billion Swiss francs ($2.24 billion), according to the median estimate of four analysts surveyed by Bloomberg. The shares rose 3.6 francs, or 3 percent, to 125.6 francs.
Union Fenosa SA (UNF SM): Spain's third-largest power company may say second-quarter profit rose 2.1 percent to 188 million euros ($299 million), according to the median estimate of five analysts surveyed by Bloomberg News. The shares added 1.7 cents, or 0.2 percent, to 11.05 euros.
To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net.
Read more...
July 15 (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 climbed 0.8 percent to 272.47. The Dow Jones Stoxx 50 Index added 0.5 percent to 2,770.39. The Euro Stoxx 50 Index, a benchmark for the nations using the euro, increased 0.6 percent to 3,216.24.
Credit Agricole SA (ACA FP): The board of France's second- largest bank will meet to discuss whether to remove Georges Pauget from the chief executive officer post, which he has held since September 2005, four people with knowledge of the meeting said. Credit Agricole rose 29 cents, or 2.5 percent, to 11.86 euros.
European Aeronautic, Defence & Space Co. (EAD FP): EADS's Airbus SAS, the world's biggest planemaker, won an order for 55 airliners, including A380 superjumbos, from Gulf carrier Etihad Airways worth about $11 billion at list prices. EADS rose 66 cents, or 6.2 percent, to 11.40 euros.
Finmeccanica SpA (FNC IM): The Italian state-controlled defense company said banks offered to loan it more than twice the amount it needs to complete the acquisition of U.S.-based DRS Technologies Inc. The stock rose 34 cents, or 2 percent, to 16.77 euros.
Gerresheimer AG (GXI GY): The medical packaging company that sold shares for the first time last year plans to post second- quarter results. The company in April reported a first-quarter profit after sales at its life science and pharmaceuticals units rose. The shares added 56 cents, or 1.8 percent, to 32.20 euros.
Hennes & Mauritz AB (HMB SS): Europe's second-biggest clothing retailer may say total June sales gained 5.3 percent, while revenue from comparable stores declined 5.6 percent, according to the average analyst estimates collected by SME Direkt. H&M advanced 1.1 percent to 287 kronor.
Iberia Lineas Aereas de Espana SA (IBLA SM): Spain's biggest airline said passenger traffic fell 2.3 percent in June as demand fell on routes in Spain and to South America. The shares slipped 3 cents, or 2.2 percent, to 1.33 euros.
Jelmoli Holding AG (JEL SW): The Swiss department-store and real-estate owner reports sales for the first half of the year. The shares rose 10 francs, or 0.4 percent, to 2,519 francs.
Micronas Semiconductor Holding AG (MASN SW): Switzerland's biggest maker of computer chips reports second-quarter earnings. The shares were unchanged at 6.45 francs.
Roche Holding AG (ROG VX): Roche's Genentech Inc., the biggest U.S. maker of cancer drugs, raised its 2008 forecast and said second-quarter profit increased 4.7 percent on higher sales of its Avastin treatment for colon, lung and breast tumors. Also, Roche's U.K. unit was suspended by the Association of the British Pharmaceutical Industry for at least six months for violating the group's code of practice. The shares rose 1.7 francs, or 0.9 percent, to 182 francs.
Sulzer AG (SUN SW): The world's second-biggest maker of pumps may say first-half order intake rose 7.5 percent to 2.29 billion Swiss francs ($2.24 billion), according to the median estimate of four analysts surveyed by Bloomberg. The shares rose 3.6 francs, or 3 percent, to 125.6 francs.
Union Fenosa SA (UNF SM): Spain's third-largest power company may say second-quarter profit rose 2.1 percent to 188 million euros ($299 million), according to the median estimate of five analysts surveyed by Bloomberg News. The shares added 1.7 cents, or 0.2 percent, to 11.05 euros.
To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net.
Read more...
BP, Burberry, Speedy Hire, Xstrata: U.K., Irish Equity Preview
By Lenka Ponikelska
July 15 (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 added 38.8, or 0.74 percent, to 5,300.4. The FTSE All-Share Index rose 21.16, or 0.8 percent, to 2,682.02. Ireland's ISEQ Index advanced 84.31, or 1.9 percent, to 4,499.11.
U.K. Companies:
Alliance & Leicester Plc (AL/ LN): The company's shareholders sought a rival bid after the lender agreed to be bought by Banco Santander SA for 1.26 billion pounds ($2.5 billion), seven months after it gave up a deal with the Spanish bank that valued it at more than twice as much, the Financial Times reported. The stock added 115.75 pence, or 52.8 percent, to 335.
BP Plc (BP/ LN): A group of Russian shareholders said they are willing to buy BP's 50 percent stake in TNK-BP Holding, as the two sides battle for control of the Russian oil producer. The shares rose 0.25 pence, or less than 0.1 percent, to 539.
Burberry Group Plc (BRBY LN): The maker of $2,195 metal- studded Warrior handbags may report an increase in first-quarter sales tomorrow after shoppers bought more of its luxury bags and new stores opened. The shares advanced 5.75 pence, or 1.5 percent, to 397.
Premier Foods Plc (PFD LN): The second-largest U.K. bread baker is reporting results. The shares added 3 pence, or 4.1 percent, to 76.
Speedy Hire Plc (SDY LN): The U.K.'s largest tool-rental company is releasing results. The stock fell 20 pence, or 4.6 percent, to 415.75.
Taylor Nelson Sofres (TNS LN): GfK AG, a German market- research company, has been in talks with Cinven Ltd., the private-equity firm behind Gala Coral Group Ltd. and Axel Springer AG, about financing a joint bid for Taylor Nelson Sofres, the Daily Telegraph said, citing an unidentified person familiar with the matter. The stock declined 6.5 pence, or 2.4 percent, to 269.25.
Trikona Capital (TRC LN): The U.K.-based fund that invests in Indian property is releasing results. The shares remained unchanged at 74.5.
Xstrata Plc (XTA LN): Teck Cominco Ltd. and Xstrata will close the joint-venture Lennard Shelf Pillara zinc mine in Western Australia earlier than planned because of a decline in zinc prices and the rising Australian dollar. The shares rose 101 pence, or 2.7 percent, to 3,880.
To contact the reporter on this story: Lenka Ponikelska in London lponikelska1@bloomberg.net
Read more...
July 15 (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 added 38.8, or 0.74 percent, to 5,300.4. The FTSE All-Share Index rose 21.16, or 0.8 percent, to 2,682.02. Ireland's ISEQ Index advanced 84.31, or 1.9 percent, to 4,499.11.
U.K. Companies:
Alliance & Leicester Plc (AL/ LN): The company's shareholders sought a rival bid after the lender agreed to be bought by Banco Santander SA for 1.26 billion pounds ($2.5 billion), seven months after it gave up a deal with the Spanish bank that valued it at more than twice as much, the Financial Times reported. The stock added 115.75 pence, or 52.8 percent, to 335.
BP Plc (BP/ LN): A group of Russian shareholders said they are willing to buy BP's 50 percent stake in TNK-BP Holding, as the two sides battle for control of the Russian oil producer. The shares rose 0.25 pence, or less than 0.1 percent, to 539.
Burberry Group Plc (BRBY LN): The maker of $2,195 metal- studded Warrior handbags may report an increase in first-quarter sales tomorrow after shoppers bought more of its luxury bags and new stores opened. The shares advanced 5.75 pence, or 1.5 percent, to 397.
Premier Foods Plc (PFD LN): The second-largest U.K. bread baker is reporting results. The shares added 3 pence, or 4.1 percent, to 76.
Speedy Hire Plc (SDY LN): The U.K.'s largest tool-rental company is releasing results. The stock fell 20 pence, or 4.6 percent, to 415.75.
Taylor Nelson Sofres (TNS LN): GfK AG, a German market- research company, has been in talks with Cinven Ltd., the private-equity firm behind Gala Coral Group Ltd. and Axel Springer AG, about financing a joint bid for Taylor Nelson Sofres, the Daily Telegraph said, citing an unidentified person familiar with the matter. The stock declined 6.5 pence, or 2.4 percent, to 269.25.
Trikona Capital (TRC LN): The U.K.-based fund that invests in Indian property is releasing results. The shares remained unchanged at 74.5.
Xstrata Plc (XTA LN): Teck Cominco Ltd. and Xstrata will close the joint-venture Lennard Shelf Pillara zinc mine in Western Australia earlier than planned because of a decline in zinc prices and the rising Australian dollar. The shares rose 101 pence, or 2.7 percent, to 3,880.
To contact the reporter on this story: Lenka Ponikelska in London lponikelska1@bloomberg.net
Read more...
Ahlers, Continental, Gerresheimer: German Equity Market Preview
By Nadja Brandt
July 15 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Germany. Stock symbols are in parentheses, and share prices are from the previous close.
The X-DAX Index lost 0.6 percent to 6,159.01. The measure, derived from trading in DAX Index futures, provides an estimate of Germany's benchmark index. The DAX climbed 0.8 percent to 6,200.25.
Ahlers AG (AAH GR): Germany's second-largest menswear maker is scheduled to release second-quarter results. The company in April said first-quarter profit increased 35 percent on higher sales in its home market. The shares climbed 5 cents, or 0.6 percent, to 8.05 euros in Frankfurt floor trading.
Continental AG (CON GY): Europe's second-largest tiremaker hired Goldman Sachs Group Inc. to help defend against a potential hostile takeover attempt from Schaeffler Group, Die Welt reported, citing unidentified people in the financial industry. The shares climbed 11.84 euros, or 22 percent, to 65.80 euros.
Gerresheimer AG (GXI GY): The medical packaging company that sold shares for the first time last year plans to post second- quarter results. The company in April reported a first-quarter profit after sales at its life science and pharmaceuticals units rose. The shares added 56 cents, or 1.8 percent, to 32.20 euros.
To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net.
Read more...
July 15 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Germany. Stock symbols are in parentheses, and share prices are from the previous close.
The X-DAX Index lost 0.6 percent to 6,159.01. The measure, derived from trading in DAX Index futures, provides an estimate of Germany's benchmark index. The DAX climbed 0.8 percent to 6,200.25.
Ahlers AG (AAH GR): Germany's second-largest menswear maker is scheduled to release second-quarter results. The company in April said first-quarter profit increased 35 percent on higher sales in its home market. The shares climbed 5 cents, or 0.6 percent, to 8.05 euros in Frankfurt floor trading.
Continental AG (CON GY): Europe's second-largest tiremaker hired Goldman Sachs Group Inc. to help defend against a potential hostile takeover attempt from Schaeffler Group, Die Welt reported, citing unidentified people in the financial industry. The shares climbed 11.84 euros, or 22 percent, to 65.80 euros.
Gerresheimer AG (GXI GY): The medical packaging company that sold shares for the first time last year plans to post second- quarter results. The company in April reported a first-quarter profit after sales at its life science and pharmaceuticals units rose. The shares added 56 cents, or 1.8 percent, to 32.20 euros.
To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net.
Read more...
Credit Agricole and EADS May Move: French Equity Preview
By Heather Smith
July 15 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Paris. Stock symbols are in parentheses after company names. Share prices are from the last close.
France's CAC 40 Index added 41.89, or 1 percent, to close at 4142.53 in Paris, after dropping 3.9 percent last week. The SBF 120 Index climbed 1 percent to 2992.31.
Credit Agricole SA (ACA FP): The board of France's second largest bank will meet tomorrow to discuss whether to remove Georges Pauget from the chief executive officer post, which he has held since September 2005, four people with knowledge of the meeting said. The shares rose 29 cents, or 2.5 percent, to 11.86 euros.
European Aeronautic, Defence & Space Co. (EAD FP): EADS's Airbus SAS, the world's biggest planemaker, won an order for 55 airlines from Gulf carrier Etihad Airways worth about $11 billion at list prices, the Toulouse, France-based unit said today at the Farnborough International Air Show outside London. Shares rose 66 cents, or 6.2 percent, to 11.40 euros.
To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net
Read more...
July 15 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Paris. Stock symbols are in parentheses after company names. Share prices are from the last close.
France's CAC 40 Index added 41.89, or 1 percent, to close at 4142.53 in Paris, after dropping 3.9 percent last week. The SBF 120 Index climbed 1 percent to 2992.31.
Credit Agricole SA (ACA FP): The board of France's second largest bank will meet tomorrow to discuss whether to remove Georges Pauget from the chief executive officer post, which he has held since September 2005, four people with knowledge of the meeting said. The shares rose 29 cents, or 2.5 percent, to 11.86 euros.
European Aeronautic, Defence & Space Co. (EAD FP): EADS's Airbus SAS, the world's biggest planemaker, won an order for 55 airlines from Gulf carrier Etihad Airways worth about $11 billion at list prices, the Toulouse, France-based unit said today at the Farnborough International Air Show outside London. Shares rose 66 cents, or 6.2 percent, to 11.40 euros.
To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net
Read more...
Asian Stocks Drop, Led by Banks, as Credit Concerns Increase
By Chen Shiyin and Chua Kong Ho
July 15 (Bloomberg) -- Asian stocks fell, dragging the region's benchmark index to the lowest since November 2006, on concern widening credit market losses will slow economic growth.
Mitsubishi UFJ Financial Group Inc. dropped after Japan's top three banks said they held $44 billion of debt issued by U.S. mortgage lenders including Fannie Mae and Freddie Mac, which the Treasury Department has pledged to support. Cathay Financial Holding Co. tumbled after disclosing $6.6 billion of debt in the two embattled U.S. companies. Matsushita Electric Industrial Co. fell after Nikko Citigroup Ltd. said earnings may decline.
The MSCI Asia-Pacific Index lost 2.2 percent to 129.53 at 1:40 p.m. Tokyo time. All of its 10 industry groups fell, with financial stocks accounting for 42 percent of the drop. Twelve stocks declined for each one that rose.
``Freddie and Fannie are basically quasi-sovereigns and many Asian governments and banks hold their debt,'' said Leslie Phang, the Singapore-based head of investments at the private-client unit of Schroders Plc, which oversees about $260 billion globally. ``Nobody expected them to blow up and it's shaken the foundations.''
Taiwan's Taiex Index slumped 3.3 percent, the biggest drop in the region. Japan's Nikkei 225 Stock Average declined 1.8 percent to 12,776.52, on course for its lowest close since April 1. Benchmark indexes fell in most of the region's markets.
U.S. stocks dropped yesterday, sending the Standard & Poor's 500 Index 0.9 percent lower. Financial shares slumped after last week's collapse of IndyMac Bancorp Inc. spurred speculation regional banks are short of capital.
Financial Stocks Slump
MSCI's Asian index has dropped 17 percent this year, led by financials, as the world's largest banks and securities firms reported more than $414 billion of writedowns and credit losses.
Mitsubishi UFJ, Japan's largest bank by market value, dropped 4.8 percent to 931 yen. Sumitomo Mitsui Financial Group Inc., the second-biggest, lost 4.8 percent to 795,000 yen, while smaller rival Mizuho Financial dropped 4.5 percent to 514,000 yen.
The three Japanese banks held a total of 4.7 trillion yen ($44 billion) in debt securities issued by U.S. government-backed mortgage finance companies including Fannie Mae and Freddie Mac, and by U.S. federal agency Ginnie Mae, as of March 31, according to the banks.
Yoshimi Watanabe, the head of Japan's financial regulator, today urged caution about holding Fannie Mae and Freddie Mac debt. Investor Jim Rogers said in an interview yesterday that a U.S. Treasury Department's plan to shore up the two companies is an ``unmitigated disaster.''
Cathay Financial, Taiwan's biggest listed financial services company, dropped 7 percent to NT$58.70, set for its lowest close since April 2006. The company said it hasn't incurred any losses from its investments in Fannie Mae and Freddie Mac.
Credit Crisis
Commonwealth Bank of Australia, the country's biggest mortgage provider, dropped 3.3 percent to A$38.82, poised for its largest retreat since June 10. JPMorgan Chase & Co. lowered its rating to ``neutral'' from ``overweight,'' because of a ``cautionary'' outlook for the company's 2008 earnings.
``Investor confidence is taking a hit from the state of the U.S. financial system,'' said John Padilla, who helps manage the equivalent of about $3.4 billion Metropolitan Bank & Trust Co. in Manila. ``Banks will stay out of favor as long as investors don't see an end to credit-market losses in the U.S.''
Australia & New Zealand Banking Group Ltd. lost 2.8 percent to A$17.31 after the Sydney Morning Herald said the bank recorded a A$275 million ($267 million) loss from selling shares it seized from collapsed margin lender Opes Prime Group Ltd.
Matsushita, the world's biggest consumer-electronics maker, lost 1.8 percent to 2,235 yen. The stock's rating was cut to ``hold'' from ``buy'' at Nikko Citigroup.
LG Electronics Inc., the world's fourth-largest maker of mobile phones, dropped 4.4 percent to 107,500 won in Seoul. CJ Investment & Securities Co. lowered its share-price estimate by 13 percent, citing lower earnings prospects in the third quarter.
To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Chua Kong Ho in Shanghai at Kchua6@bloomberg.net.
Read more...
China's Stocks Fall Most in Two Weeks; Ping An Leads Decline
By Chua Kong Ho
July 15 (Bloomberg) -- China's stocks fell the most in two weeks, led by banks and insurers, on concern they are holding debt issued by Fannie Mae and Freddie Mac, the two U.S. mortgage- finance companies that lost half their market value last week on concern about their ability to refinance.
Ping An Insurance (Group) Co. and Shanghai Pudong Development Bank Co. led declines, tracking losses by financial shares globally. U.S. financial stocks slumped yesterday after initially rallying on the Treasury Department's bailout plan for Fannie Mae and Freddie Mac. Asian banks declined after Taiwan's Cathay Financial Holding Co. said it held more than $6 billion in debt issued by the two U.S. companies and the Nikkei reported the three-largest Japanese banks held $44 billion.
``Freddie and Fannie are basically quasi-sovereigns and many Asian governments and banks hold their debt,'' said Leslie Phang, the Singapore-based head of investments at the private-clients unit of Schroders Plc, which oversees about $260 billion globally. ``Nobody expected them to blow up and it's shaken the foundations. The question is not whether you're holding them, it's a matter of how much.''
The CSI 300 Index, which tracks stocks on both the Shanghai and Shenzhen exchanges, lost 89.22, of 3 percent, to 2,886.66 at the 11:30 a.m. local-time break, the most since July 1. All 10 industry groups declined, with financial shares contributing the most to the retreat.
Fannie Mae and Freddie Mac, the two U.S. government-backed mortgage-finance companies, lost about half of their market value last week on concerns about their ability to refinance debt. U.S. Treasury Secretary Henry Paulson has asked Congress for authority to buy unlimited stakes in the two companies that buy or finance almost half the $12 trillion of U.S. mortgages, and provide loans to them.
Banks Slide
Ping An, the nation's second-largest insurer, lost 4.9 percent to 41.09 yuan, while rival China Life Insurance Co. dropped 5.6 percent to 23.93 yuan. Shanghai Pudong, part-owned by Citigroup Inc., declined 6.2 percent to 22.05 yuan.
Industrial & Commercial Bank of China Ltd., the country's largest, retreated 2.2 percent to 4.94 yuan. The bank's spokesman said he couldn't immediately comment when reached by Bloomberg News.
China Construction Bank Corp. declined 2.6 percent, while Bank of China Ltd. slid 2.4 percent.
Citic Securities Co., the nation's biggest brokerage, dropped 4.3 percent to 23.42 yuan, after its competitor Guoyuan Securities Co. joined Hong Yuan Securities Co. in posting a plunge in first-half profit. Beijing-based Guoyuan slumped 5.1 percent to 16.78 yuan.
The benchmark CSI 300 Index has slumped 51 percent from its Oct. 16 record. The value of securities transactions in June was 62 percent lower compared to a year earlier. A measure of financial stocks contributed to more than half of the index's decline today.
The Shanghai Composite Index, a measure of shares traded in the city, lost 2.5 percent to 2,805.92. The Shenzhen Composite Index dropped 2.1 percent.
The following shares also rose or fell in China. Stock symbols are in parentheses after company names.
Chongqing Iron & Steel Co. (601005 CH), a steelmaker, gained 4.1 percent to 5.63 yuan, after saying first-half profit will rise more than 60 percent.
Shandong Gold Mining Co. (600547 CH), the third-largest Chinese bullion producer, added 3.4 percent to 66.48 yuan. First- half profit probably jumped more than fivefold because of higher output and lower costs, it said.
To contact the reporter responsible for this story: Chua Kong Ho in Shanghai at Kchua6@bloomberg.net
Read more...
July 15 (Bloomberg) -- China's stocks fell the most in two weeks, led by banks and insurers, on concern they are holding debt issued by Fannie Mae and Freddie Mac, the two U.S. mortgage- finance companies that lost half their market value last week on concern about their ability to refinance.
Ping An Insurance (Group) Co. and Shanghai Pudong Development Bank Co. led declines, tracking losses by financial shares globally. U.S. financial stocks slumped yesterday after initially rallying on the Treasury Department's bailout plan for Fannie Mae and Freddie Mac. Asian banks declined after Taiwan's Cathay Financial Holding Co. said it held more than $6 billion in debt issued by the two U.S. companies and the Nikkei reported the three-largest Japanese banks held $44 billion.
``Freddie and Fannie are basically quasi-sovereigns and many Asian governments and banks hold their debt,'' said Leslie Phang, the Singapore-based head of investments at the private-clients unit of Schroders Plc, which oversees about $260 billion globally. ``Nobody expected them to blow up and it's shaken the foundations. The question is not whether you're holding them, it's a matter of how much.''
The CSI 300 Index, which tracks stocks on both the Shanghai and Shenzhen exchanges, lost 89.22, of 3 percent, to 2,886.66 at the 11:30 a.m. local-time break, the most since July 1. All 10 industry groups declined, with financial shares contributing the most to the retreat.
Fannie Mae and Freddie Mac, the two U.S. government-backed mortgage-finance companies, lost about half of their market value last week on concerns about their ability to refinance debt. U.S. Treasury Secretary Henry Paulson has asked Congress for authority to buy unlimited stakes in the two companies that buy or finance almost half the $12 trillion of U.S. mortgages, and provide loans to them.
Banks Slide
Ping An, the nation's second-largest insurer, lost 4.9 percent to 41.09 yuan, while rival China Life Insurance Co. dropped 5.6 percent to 23.93 yuan. Shanghai Pudong, part-owned by Citigroup Inc., declined 6.2 percent to 22.05 yuan.
Industrial & Commercial Bank of China Ltd., the country's largest, retreated 2.2 percent to 4.94 yuan. The bank's spokesman said he couldn't immediately comment when reached by Bloomberg News.
China Construction Bank Corp. declined 2.6 percent, while Bank of China Ltd. slid 2.4 percent.
Citic Securities Co., the nation's biggest brokerage, dropped 4.3 percent to 23.42 yuan, after its competitor Guoyuan Securities Co. joined Hong Yuan Securities Co. in posting a plunge in first-half profit. Beijing-based Guoyuan slumped 5.1 percent to 16.78 yuan.
The benchmark CSI 300 Index has slumped 51 percent from its Oct. 16 record. The value of securities transactions in June was 62 percent lower compared to a year earlier. A measure of financial stocks contributed to more than half of the index's decline today.
The Shanghai Composite Index, a measure of shares traded in the city, lost 2.5 percent to 2,805.92. The Shenzhen Composite Index dropped 2.1 percent.
The following shares also rose or fell in China. Stock symbols are in parentheses after company names.
Chongqing Iron & Steel Co. (601005 CH), a steelmaker, gained 4.1 percent to 5.63 yuan, after saying first-half profit will rise more than 60 percent.
Shandong Gold Mining Co. (600547 CH), the third-largest Chinese bullion producer, added 3.4 percent to 66.48 yuan. First- half profit probably jumped more than fivefold because of higher output and lower costs, it said.
To contact the reporter responsible for this story: Chua Kong Ho in Shanghai at Kchua6@bloomberg.net
Read more...
Australia's S&P/ASX Slumps to 2 1/2 Year Low on Bank Concerns
By Shani Raja
July 15 (Bloomberg) -- Australia's S&P/ASX 200 Index fell to its lowest in almost 2 1/2 years on concern bank losses will widen after the collapse of U.S. lender IndyMac Bancorp Inc.
National Australia Bank Ltd., which last week said it may have to increase provisions for $1.1 billion of debt investments, tumbled to its lowest since September 2001, while Australia & New Zealand Banking Group Ltd. fell to its lowest since Dec. 2003. U.S. financial shares yesterday slumped to their lowest level in almost a decade.
Australia's benchmark index lost 107.60, or 2.2 percent, to 4,813.40, its lowest since Feb. 17, 2006, at 2:25 p.m. in Sydney, extending its loss this month to 7.7 percent. The S&P/ASX 200 has tumbled 29 percent since its record on Nov. 1, 2007, as banks pay more for credit in the wake of the U.S. subprime rout.
In the U.S., the Standard & Poor's 500 Financials Index tumbled 5 percent after the collapse of IndyMac spurred speculation regional banks are short of capital. The S&P 500 slid 0.9 percent to 1,228.3.
The following companies were among the biggest losers and gainers on the Australian stock exchange.
Gold producers: Sino Gold Mining Ltd. (SGX AU), owner of China's second-largest gold mine, advanced 38 cents, or 7.6 percent, to A$5.41, the index's third-biggest gainer. Newcrest Mining Ltd. (NCM AU), owner of Australia's largest, rose 43 cents, or 1.3 percent, to A$32.90, the highest since June 3.
Gold rose to the highest in more than three months on heightened speculation the U.S. or Israel is preparing to attack Iran, boosting demand for the metal as a haven.
Alchemy Resources Ltd. (ALY AU), an Australian gold explorer, soared 3 cents, or 20 percent, to 18 cents, the highest since Dec. 17, 2007. The company said it discovered high-grade hematite iron ore at the recently acquired Three Rivers Gold Project in Western Australia.
Allco Finance Group Ltd. (AFG AU), the Australian asset manager that's lost more than 90 percent of its value this year, rallied 6 cents, or 16 percent, to 44 cents, the biggest gainer on the index. The company said it will cut senior debt to A$400 million ($389 million) by June 2009 after refinancing loans with bankers.
Centro Properties Group (CNP AU), the shopping mall owner facing a deadline to repay as much as A$6.6 billion ($6.3 billion) of debt, was the benchmark's second-biggest gainer. Its shares rose 4 cents, or 15 percent, to 27 cents, the most since April 3, after raising $714 million selling a stake in its unlisted Centro America Fund.
CP1 Ltd. (CPK AU), an Australian property developer, fell 2 cents, or 17 percent, to a record low 10 cents. The company placed four of its Victoria waterfront developments on the market, the Australian Financial Review reported today, citing sales agent Colliers International.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
Read more...
July 15 (Bloomberg) -- Australia's S&P/ASX 200 Index fell to its lowest in almost 2 1/2 years on concern bank losses will widen after the collapse of U.S. lender IndyMac Bancorp Inc.
National Australia Bank Ltd., which last week said it may have to increase provisions for $1.1 billion of debt investments, tumbled to its lowest since September 2001, while Australia & New Zealand Banking Group Ltd. fell to its lowest since Dec. 2003. U.S. financial shares yesterday slumped to their lowest level in almost a decade.
Australia's benchmark index lost 107.60, or 2.2 percent, to 4,813.40, its lowest since Feb. 17, 2006, at 2:25 p.m. in Sydney, extending its loss this month to 7.7 percent. The S&P/ASX 200 has tumbled 29 percent since its record on Nov. 1, 2007, as banks pay more for credit in the wake of the U.S. subprime rout.
In the U.S., the Standard & Poor's 500 Financials Index tumbled 5 percent after the collapse of IndyMac spurred speculation regional banks are short of capital. The S&P 500 slid 0.9 percent to 1,228.3.
The following companies were among the biggest losers and gainers on the Australian stock exchange.
Gold producers: Sino Gold Mining Ltd. (SGX AU), owner of China's second-largest gold mine, advanced 38 cents, or 7.6 percent, to A$5.41, the index's third-biggest gainer. Newcrest Mining Ltd. (NCM AU), owner of Australia's largest, rose 43 cents, or 1.3 percent, to A$32.90, the highest since June 3.
Gold rose to the highest in more than three months on heightened speculation the U.S. or Israel is preparing to attack Iran, boosting demand for the metal as a haven.
Alchemy Resources Ltd. (ALY AU), an Australian gold explorer, soared 3 cents, or 20 percent, to 18 cents, the highest since Dec. 17, 2007. The company said it discovered high-grade hematite iron ore at the recently acquired Three Rivers Gold Project in Western Australia.
Allco Finance Group Ltd. (AFG AU), the Australian asset manager that's lost more than 90 percent of its value this year, rallied 6 cents, or 16 percent, to 44 cents, the biggest gainer on the index. The company said it will cut senior debt to A$400 million ($389 million) by June 2009 after refinancing loans with bankers.
Centro Properties Group (CNP AU), the shopping mall owner facing a deadline to repay as much as A$6.6 billion ($6.3 billion) of debt, was the benchmark's second-biggest gainer. Its shares rose 4 cents, or 15 percent, to 27 cents, the most since April 3, after raising $714 million selling a stake in its unlisted Centro America Fund.
CP1 Ltd. (CPK AU), an Australian property developer, fell 2 cents, or 17 percent, to a record low 10 cents. The company placed four of its Victoria waterfront developments on the market, the Australian Financial Review reported today, citing sales agent Colliers International.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
Read more...
Gold Shines As The Financial Storm Continues
Daily Forex Fundamentals | Written by Easy Forex | Jul 15 08 01:26 GMT |
U.S. Dollar Trading (USD) staged a minor recovery during the Asian and European sessions as the markets digested the latest plan from the Treasury to stabilize the Government Sponsored Entities (GSE) Freddie Mac and Fannie May. Gains were reversed in the US session as equities turned south on doubts about the viability of the government GSE backstop. In the U.S. share markets, the NASDAQ was down 26 points (0.90%) and the Dow Jones was down 45 points (0.41%). Crude Oil closed up $0.20 ending the New York session at $145.18 per barrel. Looking ahead, June PPI is expected to rise 1.3% slightly slower than 1.4% in May while the Core PPI is seen at 0.3%. Markets will be paying attention to Fed Chief Bernanke as he gives his semiannual monetary policy testimony.
The Euro (EUR) was able to pare losses sustained from the GSE’s rescue plan as the market focused on regional banks when the FIDC commented that more banks are expected to fail in the US. May Industrial Production came in weak at -1.9% confirming the slowdown in the Eurozone. Overall the EUR/USD traded with a low of 1.5842 and a high of 1.5971 before closing the day at 1.5908 in the New York session. Looking ahead, the July German Zew survey is seen at -55 from -52.4 in June.
The Japanese Yen (JPY) was sold as stocks recovered and risk taking came back into the market but as equities turned south in the US session the USD/JPY gave up all of its gains. EUR/JPY came off new year highs of 169.67 early in the Asian session as the EUR/USD came off highs. Overall the USDJPY traded with a low of 106.06 and a high of 106.81 before closing the day around 106.16 in the New York session. Looking ahead, Bank of Japan interest rate announcement and the BOJ monthly report released during the Asian session.
The Sterling (GBP) took advantage of USD weakness during the US session regaining the 1.9900 level. June PPI input was slightly lower than expected at 2.1% contributing to a more dovish stance the BoE is expected to take on interest rates into the future. The BoE”s Kate Barker was reported as saying that the central bank is concerned about keeping rates too tight allowing the economy to weaken more than is necessary. Overall the GBP/USD traded with a low of 1.9816 and a high of 1.9962 before closing the day at 1.9941 in the New York session. Looking ahead, June CPI seen at 0.4% down slightly form 0.6% in May but year on year is expected to jump to 3.6% from 3.3%.
The Australian Dollar (AUD) was able to sustain the new levels above .9700 as gold continued to make solid gains. AUD/NZD reached new record highs trading above 1.2750. In NZD data we had the 2nd Quarter CPI coming in at 4.0% year on year and May Core Retail Sales rising 0.7%. Overall the AUD/USD traded with a low of 0.9665 and a high of 0.9735 before closing the day at 0.9721. Looking ahead, the RBA meeting minutes will be scrutinized for future rate movement.
Gold (XAU) had another good day as investors flocked to the precious metal seen as a safe haven and inflation hedge. Overall trading with a low of USD$954.40 and high of USD$974.65 ending the New York session at USD$972 an ounce.
Easy Forex
http://www.easy-forex.com
Read more...
U.S. Dollar Trading (USD) staged a minor recovery during the Asian and European sessions as the markets digested the latest plan from the Treasury to stabilize the Government Sponsored Entities (GSE) Freddie Mac and Fannie May. Gains were reversed in the US session as equities turned south on doubts about the viability of the government GSE backstop. In the U.S. share markets, the NASDAQ was down 26 points (0.90%) and the Dow Jones was down 45 points (0.41%). Crude Oil closed up $0.20 ending the New York session at $145.18 per barrel. Looking ahead, June PPI is expected to rise 1.3% slightly slower than 1.4% in May while the Core PPI is seen at 0.3%. Markets will be paying attention to Fed Chief Bernanke as he gives his semiannual monetary policy testimony.
The Euro (EUR) was able to pare losses sustained from the GSE’s rescue plan as the market focused on regional banks when the FIDC commented that more banks are expected to fail in the US. May Industrial Production came in weak at -1.9% confirming the slowdown in the Eurozone. Overall the EUR/USD traded with a low of 1.5842 and a high of 1.5971 before closing the day at 1.5908 in the New York session. Looking ahead, the July German Zew survey is seen at -55 from -52.4 in June.
The Japanese Yen (JPY) was sold as stocks recovered and risk taking came back into the market but as equities turned south in the US session the USD/JPY gave up all of its gains. EUR/JPY came off new year highs of 169.67 early in the Asian session as the EUR/USD came off highs. Overall the USDJPY traded with a low of 106.06 and a high of 106.81 before closing the day around 106.16 in the New York session. Looking ahead, Bank of Japan interest rate announcement and the BOJ monthly report released during the Asian session.
The Sterling (GBP) took advantage of USD weakness during the US session regaining the 1.9900 level. June PPI input was slightly lower than expected at 2.1% contributing to a more dovish stance the BoE is expected to take on interest rates into the future. The BoE”s Kate Barker was reported as saying that the central bank is concerned about keeping rates too tight allowing the economy to weaken more than is necessary. Overall the GBP/USD traded with a low of 1.9816 and a high of 1.9962 before closing the day at 1.9941 in the New York session. Looking ahead, June CPI seen at 0.4% down slightly form 0.6% in May but year on year is expected to jump to 3.6% from 3.3%.
The Australian Dollar (AUD) was able to sustain the new levels above .9700 as gold continued to make solid gains. AUD/NZD reached new record highs trading above 1.2750. In NZD data we had the 2nd Quarter CPI coming in at 4.0% year on year and May Core Retail Sales rising 0.7%. Overall the AUD/USD traded with a low of 0.9665 and a high of 0.9735 before closing the day at 0.9721. Looking ahead, the RBA meeting minutes will be scrutinized for future rate movement.
Gold (XAU) had another good day as investors flocked to the precious metal seen as a safe haven and inflation hedge. Overall trading with a low of USD$954.40 and high of USD$974.65 ending the New York session at USD$972 an ounce.
Easy Forex
http://www.easy-forex.com
Read more...
FX Technical Commentary
Daily Forex Technicals | Written by Easy Forex | Jul 15 08 01:32 GMT |
Euro 1.5890
Initial support at 1.5765 (July 11 low) followed by 1.5692 (July 10 low). Initial resistance is now located 1.5972 (July 11 high) at followed by 1.6019 (Apr 22 high).
Yen 106.20
Initial support is located at 105.66 (July 11 low) followed by 104.99 (Jun 30 low). Initial resistance is now at 107.30 (July 11 high) followed by 107.76 (July 7 high).
Pound 1.9955
Initial support at 1.9754 (July 11 low) followed by 1.9673 (July 9 low). Initial resistance is now at 1.9959 (July 14 high) followed by 2.0008 (July 1 high)
Australian Dollar 0.9720
Initial support at 0.9597 (July 11 low) followed by 0.9546 (July 10 low). Initial resistance is now at 0.9737 (July 14 high) followed by 0.9792 (July open + June range* 0.618).
Gold 972
Initial support at 942 (Jul 11 low) followed by 926 (Jul 10 low). Initial resistance is now at 975.3 (July 14 high) followed by 988.49 (76.4% retracement of the 1032.50-846.00 decline).
Currency Sup 2 Sup 1 Spot Res 1 Res 2
EUR/USD 1.5692 1.5765 1.5890 1.5972 1.6019
USD/JPY 104.99 105.66 106.20 107.30 107.76
GBP/USD 1.9673 1.9754 1.9955 1.9959 2.0008
AUD/USD 0.9546 0.9597 0.9720 0.9737 0.9792
XAU/USD 926.00 942.00 972.00 975.30 988.49
Easy Forex
http://www.easy-forex.com
Read more...
Euro 1.5890
Initial support at 1.5765 (July 11 low) followed by 1.5692 (July 10 low). Initial resistance is now located 1.5972 (July 11 high) at followed by 1.6019 (Apr 22 high).
Yen 106.20
Initial support is located at 105.66 (July 11 low) followed by 104.99 (Jun 30 low). Initial resistance is now at 107.30 (July 11 high) followed by 107.76 (July 7 high).
Pound 1.9955
Initial support at 1.9754 (July 11 low) followed by 1.9673 (July 9 low). Initial resistance is now at 1.9959 (July 14 high) followed by 2.0008 (July 1 high)
Australian Dollar 0.9720
Initial support at 0.9597 (July 11 low) followed by 0.9546 (July 10 low). Initial resistance is now at 0.9737 (July 14 high) followed by 0.9792 (July open + June range* 0.618).
Gold 972
Initial support at 942 (Jul 11 low) followed by 926 (Jul 10 low). Initial resistance is now at 975.3 (July 14 high) followed by 988.49 (76.4% retracement of the 1032.50-846.00 decline).
Currency Sup 2 Sup 1 Spot Res 1 Res 2
EUR/USD 1.5692 1.5765 1.5890 1.5972 1.6019
USD/JPY 104.99 105.66 106.20 107.30 107.76
GBP/USD 1.9673 1.9754 1.9955 1.9959 2.0008
AUD/USD 0.9546 0.9597 0.9720 0.9737 0.9792
XAU/USD 926.00 942.00 972.00 975.30 988.49
Easy Forex
http://www.easy-forex.com
Read more...
Thailand, Philippines May Raise Key Rates to Contain Inflation
By Shamim Adam and Michael J. Munoz
July 15 (Bloomberg) -- Policy makers in Thailand and the Philippines may increase interest rates this week, joining central banks across the region in raising borrowing costs to contain inflation that's at the fastest in at least a decade.
The Bank of Thailand will raise the one-day bond repurchase rate for the first time in two years tomorrow, according to all 19 economists surveyed by Bloomberg News. Bangko Sentral ng Pilipinas, meeting a day later, will increase the rate it pays banks for overnight deposits a second straight month, according to all 20 economists in a separate survey.
Surging oil and food costs are forcing central banks from Vietnam to Pakistan to raise borrowing costs to tame inflation, even as a U.S. slowdown hurts demand for Asian exports and erodes growth in the region. That's leaving governments and policy makers torn between the need to control inflation and maintaining economic expansion.
``Asian central banks are shifting towards a more hawkish bias, and those deemed not to be hawkish enough risk inflation expectations becoming unanchored,'' said Vishnu Varathan, a regional economist at Forecast Singapore Pte. ``We can expect higher interest rates in the weeks and months ahead.''
Indonesia raised its benchmark rate for a third straight month in July, while India boosted borrowing costs twice in June. In Vietnam, the central bank raised its base rate to 14 percent last month, the highest in Asia.
The Bank of Thailand, which has held the policy rate at 3.25 percent since August, last raised it in June 2006. The central bank may raise the rate by 25 basis points to 3.5 percent tomorrow, according to 16 of 19 economists surveyed by Bloomberg News. The remaining three expect a half-a-percentage- point increase.
Transport, Labor
Thai consumer prices gained 8.9 percent last month, the fastest in a decade.
Inflationary pressures are increasing in Thailand amid expectations of higher transportation and labor costs. The government will gradually remove subsidies on gas used to fuel vehicles and industry, and for households, Finance Minister Surapong Suebwonglee said last month. The minimum wage was increased in provinces across Thailand in June.
Higher rates in Thailand would come at a time when consumer confidence is at the lowest level this year amid intensifying anti-government protests. Thai Prime Minister Samak Sundaravej's ruling People Power Party faces legal challenges that may force it to disband, and the five-month old government has been the target of street protests since May 25.
Inflation Threat
``The hike probably will worsen the economic situation, but high and persistent inflation is worse,'' said Dwyfor Evans, a strategist at State Street Global Markets in Hong Kong. ``Allowing political volatility to overrule policy credibility sends a very poor signal to investors and they should avoid this at all costs.''
A quarter-point increase by the Bank of Thailand would be insufficient and wouldn't stem a decline in the currency, said Tim Condon, chief Asia economist at ING Groep NV in Singapore. The Thai baht is the worst-performing currency in Asia this year.
``The way things are now, I don't think a 25 basis-point rate hike is going to assuage the baht selling pressure,'' Condon said. ``To get inflation back under control, it will really require a tightening of policies. Much higher interest rates is what it will need.''
Bangko Sentral ng Pilipinas raised its key interest rate in June for the first time in more than two years. Deputy Governor Diwa Guinigundo said last week the central bank's ``bias is towards tightening.'' The authority is considering increasing its 2008 inflation forecast for a second time this year.
Philippine Inflation
The central bank will increase the benchmark rate by a quarter percentage point to 5.5 percent, according to 16 of 20 economists surveyed. Four expect a 50 basis-point gain.
Bangko Sentral last month lifted its estimate for inflation in 2008 to a range of 7 percent to 9 percent, from the original forecast of 4 percent to 5 percent. Consumer prices rose 11.4 percent in June from a year earlier, the steepest climb in 14 years.
Prices are set to increase further as transportation and fuel costs rise. The Philippine government approved higher transport fares last week to allow drivers and vehicle owners to cope with rising fuel prices.
``While some key food sectors like rice seem to have stabilized, the risks that broad commodity prices, especially energy prices, would stay stubbornly high have increased,'' said Simon Wong, an economist at Standard Chartered Bank in Hong Kong. ``We now expect more aggressive tightening.''
The following tables show economists' estimates for Thai and Philippine interest rates:
Thailand Benchmark Interest Rate
------------------------------------------------------
July Aug. Oct. End of
Firm 16 27 8 2008
------------------------------------------------------
Median 3.50% 3.75% 4.00% 4.00%
% Estimates at Median 84% 100% 83% 67%
High 3.75% 3.75% 4.00% 4.25%
Low 3.50% 3.75% 3.75% 3.75%
Number of Estimates 19 7 6 6
------------------------------------------------------
Action Economics 3.50% -- -- --
ATR-Kim Eng Capital 3.50% 3.75% 4.00% 4.00%
Brown Brothers Harriman 3.50% 3.75% 4.00% 4.00%
Capital Economics Ltd. 3.50% -- -- --
Capital Nomura Securities 3.50% 3.75% 3.75% 3.75%
Citi 3.75% -- -- --
Credit Suisse 3.50% -- -- --
HSBC 3.50% 3.75% 4.00% 4.00%
Ideaglobal 3.50% 3.75% -- --
ING Groep NV 3.50% -- -- --
JP Morgan Chase 3.50% -- -- --
Lehman Brothers 3.75% -- -- --
Moody's Economy.com 3.50% 3.75% 4.00% 4.25%
Morgan Stanley 3.50% -- -- --
SCB Securities 3.50% -- -- --
Standard Chartered Bank 3.50% -- -- --
Tisco Securities 3.50% 3.75% 4.00% 4.00%
UBS 3.75% -- -- --
UOB Group 3.50% -- -- --
------------------------------------------------------
Philippines Overnight Borrowing Rate
-------------------------------------------
Policy Meeting July Aug. Oct.
Dates 17 28 9
-------------------------------------------
Median 5.50% 5.75% 6.00%
% forecasts at Median 80% 69% 55%
High 5.75% 6.25% 6.25%
Low 5.50% 5.50% 5.50%
Number of Estimates 20 13 11
-------------------------------------------
Action Economics 5.50% 5.75% 6.00%
ANZ Banking Group 5.50% 5.75% 5.75%
ATR-Kim Eng Capital 5.50% 5.75% 5.75%
BDO Unibank 5.50% 5.75% 6.00%
Brown Brothers Harrima 5.50% 5.75% 6.00%
Capital Economics 5.50% -- --
CIMB-GK Research 5.50% 5.75% --
Citi 5.75% -- --
Credit Suisse 5.50% -- --
DBS Group 5.50% 5.75% 6.00%
Forecast Singapore 5.75% -- --
Fortis Bank 5.50% 5.75% 6.00%
HSBC 5.50% 5.75% 6.00%
Ideaglobal 5.50% 5.50% 5.75%
ING Groep NV 5.50% -- --
Lehman Brothers 5.50% -- --
Moody's Economy.com 5.50% 5.50% 5.50%
Standard Chartered 5.75% 6.00% 6.25%
Thomson IFR 5.75% 6.25% --
UBS 5.50% -- --
-------------------------------------------
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
Read more...
China's Economic Growth Probably Slowed on Exports
By Nipa Piboontanasawat
July 15 (Bloomberg) -- China's economic expansion probably slowed for a fourth straight quarter as exports cooled, raising the possibility that the government will switch focus to sustaining growth from fighting inflation.
Gross domestic product grew 10.3 percent in the second quarter from a year earlier, according to the median estimate of 18 economists surveyed by Bloomberg News, after gaining 10.6 percent in the previous three months. June's inflation may have eased to 7.3 percent from 7.7 percent in May.
Premier Wen Jiabao pledged this month efforts to maintain ``sound and fast'' economic growth and Chinese leaders visited exporters to hear their concerns. Policies to stimulate the economy and to help domestic manufacturers, such as slowing the yuan's appreciation and deferring interest-rate increases, would risk fanning inflation just as price gains begin to slow.
``Policy makers are increasingly worried about the threats to economic growth,'' said Peng Wensheng, head of China research at Barclays Capital in Hong Kong. ``Inflation is not the only priority -- they definitely don't want to see growth sliding to below 10 percent.''
The GDP announcement is due July 17 in Beijing. China's economy may expand 10.1 percent this year, down from the 11.9 percent growth in 2007 that was the fastest in 13 years, the survey showed. Inflation has slowed this quarter from a 12-year high in February on smaller food-price gains.
`Crunch Time'
To cool prices, the government has let the yuan gain 6.7 percent versus the U.S. dollar this year, cutting import costs. It has also imposed lending quotas and ordered banks to set aside a record 17.5 percent of deposits as reserves. It hasn't raised interest rates, to avoid attracting overseas capital to an economy flooded with cash.
``It's crunch time for decisions on monetary policy,'' said Stephen Green, the Shanghai-based head of China research for Standard Chartered Bank Plc. ``But loosening could see inflation sweeping back as a bigger problem next year.''
Export growth slowed to 21.9 percent in the first half from 25.7 percent in all of 2007. Leaders at the Group of Eight summit warned last week that climbing food and oil prices threaten global economic growth, forecast by the World Bank to slow to 2.7 percent in 2008 from 3.7 percent last year.
The Ministry of Commerce has suggested China's cabinet slow the pace of the yuan's gains and increase some export rebates to help exporters as global demand falters, an official who declined to be named said yesterday.
Policy Priorities
Chinese leaders' rhetoric ``suggests inflation is slipping down the list of policy priorities,'' said Glenn Maguire, chief Asia-Pacific economist at Societe Generale in Hong Kong. Weakening exports ``threaten to curtail the pace of yuan appreciation and may even lead to a reversal of some recent credit-rationing initiatives,'' Maguire said.
Black Peony (Group) Co., a jeans and cotton-cloth exporter in Jiangsu province, forecasts a six-month loss because of the yuan's gains, reduced export incentives and higher costs.
Manufacturers face rising commodity prices and power shortages. Producer prices may have jumped 8.5 percent last month, the fastest pace since Bloomberg data began in 1999 and quicker than the pace of inflation, according to the survey.
The government ``has little room to ease monetary policy'' because it needs to raise energy prices again to encourage fuel and power production, said Liang Hong, a Hong Kong-based economist with Goldman Sachs Group Inc. China increased fuel and electricity prices last month.
Company Profit
Profit growth at Chinese industrial companies slowed in the first five months to half the pace of a year earlier on record oil and coal prices.
Still, investment, the main driver of the world's fastest- growing major economy, is staying close to last year's pace. Urban fixed-assed spending may have climbed 25.4 percent in the first half, after increasing 25.8 percent for all of 2007, the survey showed.
Retail sales may have climbed 21.3 percent in June from a year earlier, after rising 21.6 percent in May.
The following table shows economists' estimates of economic growth in the second quarter and in 2008 from a year earlier.
----------------------------------------------
2Q 2008
----------------------------------------------
Median 10.3% 10.1%
Average 10.2% 10.1%
High 10.9% 10.5%
Low 9.0% 9.7%
Number of Estimates 18 9
----------------------------------------------
BNP Paribas 10.2% 10.1%
Bank of China (Hong Kong) 10.0% 10.0%
CFC Seymour 10.2% 10.0%
Citic Ka Wah Bank 10.4% 10.2%
Daiwa Institute of Research 10.6% --
Deutsche Bank 10.5% --
High Frequency Economics 9.0% --
HSBC 9.9% 9.7%
Industrial Bank 10.9% 10.4%
ING Groep NV 10.5% 10.5%
JPMorgan Chase 10.1% --
Lehman Brothers 10.1% --
Macroecon Global Advisors 9.5% --
Mitsubishi UFJ Securities 10.6% --
Moody's Economy.com 10.3% 10.0%
Natixis 10.3% 10.3%
Okasan Securities 10.5% --
Royal Bank of Scotland 10.2% --
----------------------------------------------
To contact the reporter on this story: Nipa Piboontanasawat in Hong Kong at npiboontanas@bloomberg.net
Read more...
New Zealand Inflation Accelerates to 18-Year-High
By Tracy Withers
July 15 (Bloomberg) -- New Zealand's consumer prices rose at the fastest pace in 18 years in the second quarter, fanned by fuel and food costs, adding to signs the economy is facing stagflation as it slips into recession.
The consumer prices index rose 1.6 percent from the first quarter, Statistics New Zealand said in Wellington today. The median estimate of 12 economists surveyed by Bloomberg was for 1.4 percent. From a year earlier, prices rose 4 percent.
Rising prices are combining with record-high interest rates, a drought and a slumping housing market to stall New Zealand's $104 billion economy. Reserve Bank Governor Alan Bollard said last month he couldn't rule out the possibility of a recession as household spending slows and companies invest less.
``It's certainly stagflation in the sense that the economy isn't growing and it's got an inflation problem,'' said Matthew Johnson, an economist at ICAP Australia Ltd. in Sydney. ``It's a tough situation for the central bank to be in. If they cut in the face of accelerating inflation, they are risking a policy error, which could be very expensive in the long run.''
New Zealand's dollar bought 76.28 U.S. cents at 11:25 a.m. in Wellington trading from 76.40 cents immediately before the report. The chance of a rate cut at the next review on July 24 fell to 52 percent from 58 percent, according to an index calculated by Credit Suisse based on swaps trading.
Recession Risk
Bollard said on June 5 that slowing growth will return inflation below the 3 percent limit of his target range by mid- 2010 and it is likely he will cut the benchmark interest rate from 8.25 percent this year.
Three of 13 economists surveyed by Bloomberg expect a rate reduction on July 24. Ten expect a cut in September.
The economy contracted 0.3 percent in the first quarter. Eight of 13 economists surveyed by Bloomberg say it also shrank in the second quarter, putting the economy in its first recession since 1998.
A net 23 percent of companies say sales will slow in the next three months, the most pessimistic outlook since 1990, suggesting the economy will also contract in the third quarter, according to a July 8 report from the New Zealand Institute of Economic Research.
Bollard expects annual inflation will accelerate to 4.7 percent in the year ending September, the highest since 1990, as fuel and food costs rise.
Retail Sales
Bollard is under pressure from companies and home-owners to cut interest rates as drought, international credit turmoil and a slump in the housing market weigh on consumer spending.
Hallenstein Glasson Holdings Ltd. said last week that full- year profit will fall at least 28 percent as sales drop, the third retailer to cut earnings forecasts in the past two weeks.
Retail spending in May had the biggest slump in four years, Statistics New Zealand said yesterday. House sales fell for a fourth month in June, dropping to a 16-year low.
Bollard's primary focus is on non-tradable inflation, a core measure of prices that are not influenced by currency fluctuations and fuel, say economists.
Non-tradable prices rose 0.9 percent from the first quarter when they increased 1.1 percent. The result matched economists' forecasts. Prices gained 3.4 percent from a year earlier, the slowest annual pace since early 2003.
Fuel and food prices, plus the cost of owning a home, made the biggest contributions to second-quarter inflation.
Gasoline Prices
Gasoline prices rose 13 percent in the quarter and 26 percent from a year earlier. Excluding gasoline, consumer prices gained 1 percent in the quarter and 2.7 percent over the year, the agency said. Diesel prices jumped 29 percent.
Fanned by jet fuel costs, domestic airfares rose 3.9 percent and international fares also increased.
Food prices rose 2.2 percent led by bread, snack foods, fish and vegetables.
A 3.6 percent increase in electricity prices led to an increase in the cost of owning a home. Rentals rose 0.7 percent. The cost of buying and building a new house gained 1.1 percent.
The price of new cars, computers and overseas holidays declined as a rising currency curbed the cost of imports.
Air New Zealand Ltd., the nation's biggest airline, raised fares by an average 10 percent between March and June, citing record-high jet fuel prices.
Electricity prices have increased as a drought depleted the levels of lakes and rivers that account for 60 percent of the nation's generation.
To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.
Read more...
Korea's Won Declines for Second Day as Global Funds Dump Shares
By Kim Kyoungwha
July 15 (Bloomberg) -- South Korea's won fell for a second day as oil prices above $140 a barrel increased importers' bills and global funds offloaded the nation's equities, fanning demand for the dollar.
Traders may test the government's resolve to strengthen the currency and curb inflation as an advance in the dollar near 1,010 is likely to invite the authorities to intervene, said Kim Sung Soon, a dealer with Industrial Bank of Korea.
``The external conditions are still for a rise in the dollar,'' Seoul-based Kim said. ``The caution against intervention is likely to keep players on their toes this week despite demand for the dollar.''
South Korea's currency fell 0.2 percent to 1,006.20 against the dollar at 9:20 a.m. in Seoul, compared with 1,004.60 yesterday, according to Seoul Money Brokerage Services Ltd. The won slumped 7.4 percent this year.
Investors abroad sold more Korean shares than they bought every day except two since June, according to Korea Exchange. Vice Finance Minister Kim Dong Soo said today consumer prices may become more unstable in the second half.
To help spur inflows of foreign exchange, South Korea will ease controls on non-deliverable forward deals made by domestic banks this month, Sohn Byung Doo, an official at the finance ministry's international bureau, said yesterday.
The decision is expected to ``boost inflows of foreign funds,'' Sohn said. ``It is also in response to mounting calls from banks to remove controls.''
A ceiling imposed in 2004 on banks that built up dollar positions in non-deliverable forward deals with overseas investors will be scrapped this month, Sohn said in a telephone interview. The curbs have limited the ability of South Korean banks to take long NDF positions, a trade that investors use to benefit from a rising currency.
To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
Read more...
July 15 (Bloomberg) -- South Korea's won fell for a second day as oil prices above $140 a barrel increased importers' bills and global funds offloaded the nation's equities, fanning demand for the dollar.
Traders may test the government's resolve to strengthen the currency and curb inflation as an advance in the dollar near 1,010 is likely to invite the authorities to intervene, said Kim Sung Soon, a dealer with Industrial Bank of Korea.
``The external conditions are still for a rise in the dollar,'' Seoul-based Kim said. ``The caution against intervention is likely to keep players on their toes this week despite demand for the dollar.''
South Korea's currency fell 0.2 percent to 1,006.20 against the dollar at 9:20 a.m. in Seoul, compared with 1,004.60 yesterday, according to Seoul Money Brokerage Services Ltd. The won slumped 7.4 percent this year.
Investors abroad sold more Korean shares than they bought every day except two since June, according to Korea Exchange. Vice Finance Minister Kim Dong Soo said today consumer prices may become more unstable in the second half.
To help spur inflows of foreign exchange, South Korea will ease controls on non-deliverable forward deals made by domestic banks this month, Sohn Byung Doo, an official at the finance ministry's international bureau, said yesterday.
The decision is expected to ``boost inflows of foreign funds,'' Sohn said. ``It is also in response to mounting calls from banks to remove controls.''
A ceiling imposed in 2004 on banks that built up dollar positions in non-deliverable forward deals with overseas investors will be scrapped this month, Sohn said in a telephone interview. The curbs have limited the ability of South Korean banks to take long NDF positions, a trade that investors use to benefit from a rising currency.
To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
Read more...
Australian, N.Z. Dollars Advance on U.S. Credit-Market Concerns
By Ron Harui and Candice Zachariahs
July 15 (Bloomberg) -- The Australian dollar climbed to a 25-year high and the New Zealand dollar advanced to the highest in five weeks on speculation the nations' assets will lure investors as losses at U.S. financial institutions deepen.
Australia's currency, known as the Aussie, rose for a fourth day and New Zealand's gained for a fifth as an index of U.S. financial companies posted its largest drop in eight years on speculation regional banks are short of capital. The New Zealand dollar was supported after a government report showed consumer prices rose at the fastest pace in 18 years.
``The Aussie is showing itself to be resilient in the face of financial turmoil in the U.S.,'' said Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp., Australia's fourth-biggest bank. ``The grave concerns over the U.S. financial sector are playing out as a net negative for the dollar.''
Australia's currency rose 0.4 percent to 97.26 U.S. cents at 11:20 a.m. in Sydney, compared with 96.85 cents in late Asian trading yesterday. It earlier touched 97.36 cents, the strongest level since 1983. The currency bought 103.14 yen from 103.31.
New Zealand's currency increased 0.4 percent to 76.43 U.S. cents from 76.14 cents late in Asia yesterday. It earlier touched 76.69 cents, the highest since June 10. The currency bought 81.04 yen from 81.21 yen.
The Australian dollar extended the past five days of gains to 2.1 percent, the best performance among the 16 most-active currencies, before Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson address U.S. lawmakers on their response to widening credit-market losses.
`Well Placed'
Global banks and securities firms have reported losses of about $400 billion as the subprime-mortgage market collapsed. Australia's five largest lenders shunned investments linked to the subprime market, helping them avoid the losses reported by firms on Wall Street and in Europe.
Reserve Bank of Australia Governor Glenn Stevens said July 9 that Australia's main institutions were ``well placed'' to withstand the current environment.
The Aussie also was supported as the price of gold, Australia's third-most valuable commodity export, rose to its highest in three months on concern that the U.S. or Israel is preparing to attack Iran.
Israeli warplanes held maneuvers over Iraq, possibly preparing for a strike against Iran, the Jerusalem Post reported on July 11. Israel denied the report. Gold futures for August delivery rose to $973.70 an ounce, the highest since March 19, on the Comex division of the New York Mercantile Exchange.
Gains in the Aussie may be curbed should minutes of the Reserve Bank of Australia's July meeting focus on growth over inflation, wrote David Watt, a senior currency strategist in Toronto at RBC Capital Markets, a unit of Canada's largest bank, in a research note yesterday. The minutes are released at 11:30 a.m. in Sydney.
`Still Very Attractive'
The New Zealand dollar strengthened after a government report showed inflation quickened at the fastest pace in 18 years in the second quarter, prompting traders to pare bets that the central bank will lower interest rates.
``The yield is still very attractive in New Zealand,'' said Boris Schlossberg, a senior currency strategist with currency trader DailyFX.com in New York. ``We're seeing a broad anti- dollar move and the kiwi is benefiting as being part of the group of high-yielders.''
New Zealand's benchmark interest rate of 8.25 percent is the highest of any AAA-rated nation. Reserve Bank of New Zealand Governor Alan Bollard has left borrowing costs at a record high since July last year, betting the slowing economy will curb inflation.
The consumer prices index rose 1.6 percent from the first quarter, Statistics New Zealand said in Wellington today. The median estimate of 12 economists surveyed by Bloomberg was for 1.4 percent. From a year earlier, prices rose 4 percent.
RBNZ Rate Bets
Traders see a 50 percent chance the RBNZ will cut its benchmark rate by a quarter-percentage point at its next meeting on July 24, compared with 59 percent odds yesterday, according to a Credit Suisse Group index based on interest-rate swaps.
Australian government bonds gained, pushing the yield on the 10-year security down 7 basis points, or 0.07 percentage point, to 6.34 percent. The price of the 5.25 percent bond maturing in March 2019 rose 0.522, or A$5.22 per A$1,000 face amount, to 91.637.
New Zealand 10-year government bonds gained for a ninth day. The yield on the 10-year note dropped 2 basis points to 6.06 percent. Bond yields move inversely to prices.
To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net; Candice Zachariahs in New York at czachariahs1@bloomberg.net.
Read more...
July 15 (Bloomberg) -- The Australian dollar climbed to a 25-year high and the New Zealand dollar advanced to the highest in five weeks on speculation the nations' assets will lure investors as losses at U.S. financial institutions deepen.
Australia's currency, known as the Aussie, rose for a fourth day and New Zealand's gained for a fifth as an index of U.S. financial companies posted its largest drop in eight years on speculation regional banks are short of capital. The New Zealand dollar was supported after a government report showed consumer prices rose at the fastest pace in 18 years.
``The Aussie is showing itself to be resilient in the face of financial turmoil in the U.S.,'' said Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp., Australia's fourth-biggest bank. ``The grave concerns over the U.S. financial sector are playing out as a net negative for the dollar.''
Australia's currency rose 0.4 percent to 97.26 U.S. cents at 11:20 a.m. in Sydney, compared with 96.85 cents in late Asian trading yesterday. It earlier touched 97.36 cents, the strongest level since 1983. The currency bought 103.14 yen from 103.31.
New Zealand's currency increased 0.4 percent to 76.43 U.S. cents from 76.14 cents late in Asia yesterday. It earlier touched 76.69 cents, the highest since June 10. The currency bought 81.04 yen from 81.21 yen.
The Australian dollar extended the past five days of gains to 2.1 percent, the best performance among the 16 most-active currencies, before Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson address U.S. lawmakers on their response to widening credit-market losses.
`Well Placed'
Global banks and securities firms have reported losses of about $400 billion as the subprime-mortgage market collapsed. Australia's five largest lenders shunned investments linked to the subprime market, helping them avoid the losses reported by firms on Wall Street and in Europe.
Reserve Bank of Australia Governor Glenn Stevens said July 9 that Australia's main institutions were ``well placed'' to withstand the current environment.
The Aussie also was supported as the price of gold, Australia's third-most valuable commodity export, rose to its highest in three months on concern that the U.S. or Israel is preparing to attack Iran.
Israeli warplanes held maneuvers over Iraq, possibly preparing for a strike against Iran, the Jerusalem Post reported on July 11. Israel denied the report. Gold futures for August delivery rose to $973.70 an ounce, the highest since March 19, on the Comex division of the New York Mercantile Exchange.
Gains in the Aussie may be curbed should minutes of the Reserve Bank of Australia's July meeting focus on growth over inflation, wrote David Watt, a senior currency strategist in Toronto at RBC Capital Markets, a unit of Canada's largest bank, in a research note yesterday. The minutes are released at 11:30 a.m. in Sydney.
`Still Very Attractive'
The New Zealand dollar strengthened after a government report showed inflation quickened at the fastest pace in 18 years in the second quarter, prompting traders to pare bets that the central bank will lower interest rates.
``The yield is still very attractive in New Zealand,'' said Boris Schlossberg, a senior currency strategist with currency trader DailyFX.com in New York. ``We're seeing a broad anti- dollar move and the kiwi is benefiting as being part of the group of high-yielders.''
New Zealand's benchmark interest rate of 8.25 percent is the highest of any AAA-rated nation. Reserve Bank of New Zealand Governor Alan Bollard has left borrowing costs at a record high since July last year, betting the slowing economy will curb inflation.
The consumer prices index rose 1.6 percent from the first quarter, Statistics New Zealand said in Wellington today. The median estimate of 12 economists surveyed by Bloomberg was for 1.4 percent. From a year earlier, prices rose 4 percent.
RBNZ Rate Bets
Traders see a 50 percent chance the RBNZ will cut its benchmark rate by a quarter-percentage point at its next meeting on July 24, compared with 59 percent odds yesterday, according to a Credit Suisse Group index based on interest-rate swaps.
Australian government bonds gained, pushing the yield on the 10-year security down 7 basis points, or 0.07 percentage point, to 6.34 percent. The price of the 5.25 percent bond maturing in March 2019 rose 0.522, or A$5.22 per A$1,000 face amount, to 91.637.
New Zealand 10-year government bonds gained for a ninth day. The yield on the 10-year note dropped 2 basis points to 6.06 percent. Bond yields move inversely to prices.
To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net; Candice Zachariahs in New York at czachariahs1@bloomberg.net.
Read more...
Dollar Trades Near 2-Week Low Before Bernanke, Paulson Testify
By Kosuke Goto and Stanley White
July 15 (Bloomberg) -- The dollar traded near a two-week low against the yen before Federal Reserve Chairman Ben S. Bernanke and U.S. Treasury Secretary Henry Paulson address U.S. lawmakers on their response to widening credit-market losses.
The currency fell to a 25-year low versus the Australian dollar on speculation losses at Fannie Mae and Freddie Mac will deepen even after the U.S. government pledged support for the two-largest buyers of home loans. Gains in the yen may be limited by speculation the Bank of Japan will keep interest rates unchanged at 0.5 percent today, the lowest among major economies, eroding the allure of yen-denominated assets.
``The situation in the U.S. financial sector has become very serious,'' said Yuji Saito, head of foreign-exchange sales at Societe Generale SA in Tokyo, France's second-largest bank by market value. ``Even if Bernanke and Paulson announce possible support measures, it's not easy to buoy the dollar.''
The dollar traded at 106.12 yen at 9:35 a.m. in Tokyo from 106.14 yen in New York yesterday. It was also at $1.5896 per euro from $1.5908 in New York. It dropped last week to within a cent of the record low of $1.6019 reached April 22. The yen traded at 168.68 per euro from 168.89 yesterday, when it fell to 169.75, the lowest since the 15-nation currency debuted in 1999.
The U.S. currency may fall to 105 yen and $1.5950 a euro today, Saito forecast.
Against Australia's currency, the U.S. currency fell to 97.36 cents, the lowest level since 1983, before trading at 97.20 cents, compared with 96.85 cents in late Asian trading yesterday.
The Bank of Japan will keep the benchmark overnight lending rate unchanged today, according to all 39 economists surveyed by Bloomberg News. Governor Masaaki Shirakawa will hold a press conference in Tokyo at 3:30 p.m.
100 Yen
The yen may rise as high as 100 per dollar this year as the Bank of Japan is more likely to raise interest rates than the Federal Reserve, said Toyoo Gyohten, former currency-policy chief at Japan's Ministry of Finance.
The Bank of Japan may lift borrowing costs should inflation accelerate and the economy sustain growth of at least 1 percent, Gyohten said.
``The Fed is most likely to maintain its current level of interest rates,'' Gyohten, president for the Institute of International Monetary Affairs in Tokyo, said in an interview yesterday. ``The BOJ is more likely to raise rates. The medium- term trend is for a weaker dollar and a stronger yen.''
`Tangible Actions'
U.S. stocks fell yesterday, led by financial shares, after the government's seizure of Pasadena, California-based IndyMac Bancorp Inc. and predictions of wider credit losses overshadowed Paulson's pledge to shore up Fannie and Freddie. The Standard & Poor's 500 Index declined 0.9 percent.
Bernanke will give his semiannual testimony on monetary policy and the economy before the Senate Banking Committee at 10 a.m. Washington time.
``Bernanke will avoid saying anything that could potentially weaken confidence in the dollar,'' said Takuma Kurosawa, global markets treasurer in Tokyo at HSBC Bank, a unit of Europe's biggest lender. ``But the reality is the U.S. housing market and credit squeeze haven't hit bottom yet. That's discouraging investors from holding dollar assets.''
The U.S. currency may fall to 105.50 yen today, he said.
Global banks and securities firms have reported losses of about $400 billion as the subprime-mortgage market collapsed.
Dollar Index
The Dollar Index traded on ICE futures in New York, which tracks the greenback against the currencies of six U.S. trading partners, traded at 71.990 today from 71.915 yesterday.
``The market is clearly concerned about a round of mortgage and regional bank failures in the U.S. in the coming months,'' said Dustin Reid, a senior currency strategist at ABN Amro Bank NV in Chicago. ``People want to see the congressional plan to help Fannie and Freddie come together before they ratchet up risk appetite.''
Any gains in the euro may be limited on speculation investor confidence in Germany, Europe's largest economy, fell to an almost 16-year low, weakening the case for higher rates.
The ZEW Center for European Economic Research in Mannheim will say its index of investor and analyst expectations fell to minus 55 in July from minus 52.4 in the previous month, according to a Bloomberg News survey. The ZEW will release the data today.
`Euro is a Sell'
``We're seeing the euro zone economy beginning to slow,'' Greg Salvaggio, vice president of capital markets at Tempus Consulting Inc. in Washington, said in a Bloomberg Television interview. ``Longer run, the euro is a sell. We remain bullish on the dollar and we're looking for levels year-end close to $1.35 to $1.40.''
Losses in the dollar may be limited by speculation reports will show inflation accelerated, spurring traders to add to bets the Fed will raise its benchmark interest rate from 2 percent.
U.S. producer prices increased 8.7 percent from a year earlier in June, the most since 1981, according to a Bloomberg News survey of economists before a Labor Department report due today. A report tomorrow will show consumer prices rose 4.5 percent in June, the most since September 2005, according to a separate survey.
-- With reporting by Ron Harui in Singapore and Catherine Yang in Hong Kong. Editor: Sandy Hendry, Chris Young
To contact the reporters on this story: Kosuke Goto in Tokyo at kgoto2@bloomberg.net; Stanley White in Tokyo at swhite28@bloomberg.net
Read more...
July 15 (Bloomberg) -- The dollar traded near a two-week low against the yen before Federal Reserve Chairman Ben S. Bernanke and U.S. Treasury Secretary Henry Paulson address U.S. lawmakers on their response to widening credit-market losses.
The currency fell to a 25-year low versus the Australian dollar on speculation losses at Fannie Mae and Freddie Mac will deepen even after the U.S. government pledged support for the two-largest buyers of home loans. Gains in the yen may be limited by speculation the Bank of Japan will keep interest rates unchanged at 0.5 percent today, the lowest among major economies, eroding the allure of yen-denominated assets.
``The situation in the U.S. financial sector has become very serious,'' said Yuji Saito, head of foreign-exchange sales at Societe Generale SA in Tokyo, France's second-largest bank by market value. ``Even if Bernanke and Paulson announce possible support measures, it's not easy to buoy the dollar.''
The dollar traded at 106.12 yen at 9:35 a.m. in Tokyo from 106.14 yen in New York yesterday. It was also at $1.5896 per euro from $1.5908 in New York. It dropped last week to within a cent of the record low of $1.6019 reached April 22. The yen traded at 168.68 per euro from 168.89 yesterday, when it fell to 169.75, the lowest since the 15-nation currency debuted in 1999.
The U.S. currency may fall to 105 yen and $1.5950 a euro today, Saito forecast.
Against Australia's currency, the U.S. currency fell to 97.36 cents, the lowest level since 1983, before trading at 97.20 cents, compared with 96.85 cents in late Asian trading yesterday.
The Bank of Japan will keep the benchmark overnight lending rate unchanged today, according to all 39 economists surveyed by Bloomberg News. Governor Masaaki Shirakawa will hold a press conference in Tokyo at 3:30 p.m.
100 Yen
The yen may rise as high as 100 per dollar this year as the Bank of Japan is more likely to raise interest rates than the Federal Reserve, said Toyoo Gyohten, former currency-policy chief at Japan's Ministry of Finance.
The Bank of Japan may lift borrowing costs should inflation accelerate and the economy sustain growth of at least 1 percent, Gyohten said.
``The Fed is most likely to maintain its current level of interest rates,'' Gyohten, president for the Institute of International Monetary Affairs in Tokyo, said in an interview yesterday. ``The BOJ is more likely to raise rates. The medium- term trend is for a weaker dollar and a stronger yen.''
`Tangible Actions'
U.S. stocks fell yesterday, led by financial shares, after the government's seizure of Pasadena, California-based IndyMac Bancorp Inc. and predictions of wider credit losses overshadowed Paulson's pledge to shore up Fannie and Freddie. The Standard & Poor's 500 Index declined 0.9 percent.
Bernanke will give his semiannual testimony on monetary policy and the economy before the Senate Banking Committee at 10 a.m. Washington time.
``Bernanke will avoid saying anything that could potentially weaken confidence in the dollar,'' said Takuma Kurosawa, global markets treasurer in Tokyo at HSBC Bank, a unit of Europe's biggest lender. ``But the reality is the U.S. housing market and credit squeeze haven't hit bottom yet. That's discouraging investors from holding dollar assets.''
The U.S. currency may fall to 105.50 yen today, he said.
Global banks and securities firms have reported losses of about $400 billion as the subprime-mortgage market collapsed.
Dollar Index
The Dollar Index traded on ICE futures in New York, which tracks the greenback against the currencies of six U.S. trading partners, traded at 71.990 today from 71.915 yesterday.
``The market is clearly concerned about a round of mortgage and regional bank failures in the U.S. in the coming months,'' said Dustin Reid, a senior currency strategist at ABN Amro Bank NV in Chicago. ``People want to see the congressional plan to help Fannie and Freddie come together before they ratchet up risk appetite.''
Any gains in the euro may be limited on speculation investor confidence in Germany, Europe's largest economy, fell to an almost 16-year low, weakening the case for higher rates.
The ZEW Center for European Economic Research in Mannheim will say its index of investor and analyst expectations fell to minus 55 in July from minus 52.4 in the previous month, according to a Bloomberg News survey. The ZEW will release the data today.
`Euro is a Sell'
``We're seeing the euro zone economy beginning to slow,'' Greg Salvaggio, vice president of capital markets at Tempus Consulting Inc. in Washington, said in a Bloomberg Television interview. ``Longer run, the euro is a sell. We remain bullish on the dollar and we're looking for levels year-end close to $1.35 to $1.40.''
Losses in the dollar may be limited by speculation reports will show inflation accelerated, spurring traders to add to bets the Fed will raise its benchmark interest rate from 2 percent.
U.S. producer prices increased 8.7 percent from a year earlier in June, the most since 1981, according to a Bloomberg News survey of economists before a Labor Department report due today. A report tomorrow will show consumer prices rose 4.5 percent in June, the most since September 2005, according to a separate survey.
-- With reporting by Ron Harui in Singapore and Catherine Yang in Hong Kong. Editor: Sandy Hendry, Chris Young
To contact the reporters on this story: Kosuke Goto in Tokyo at kgoto2@bloomberg.net; Stanley White in Tokyo at swhite28@bloomberg.net
Read more...
Yen May Rise as BOJ More Likely to Act Than Fed, Gyohten Says
By Kosuke Goto and Shigeki Nozawa
July 15 (Bloomberg) -- The yen may rise as high as 100 per dollar this year as the Bank of Japan is more likely to raise interest rates than the Federal Reserve, said Toyoo Gyohten, former currency-policy chief at Japan's Ministry of Finance.
The Bank of Japan, which ends its monthly policy meeting today, may lift borrowing costs should inflation accelerate and the economy sustain growth of at least 1 percent, Gyohten said. Futures traders have ruled out the chance of a Fed increase next month following a collapse in the share prices of Fannie Mae and Freddie Mac, the biggest U.S. mortgage finance companies.
``The Fed is most likely to maintain its current level of interest rates,'' Gyohten, president for the Institute of International Monetary Affairs in Tokyo, said in an interview yesterday. ``The BOJ is more likely to raise rates. The medium- term trend is for a weaker dollar and a stronger yen.''
The yen has gained 14.8 percent against the U.S. currency in the past year, trading at 106.16 per dollar at 8:27 a.m. in Tokyo from 106.14 in New York yesterday. Gyohten predicts the yen, which touched an almost 13-year high of 95.76 per dollar on March 17, will stay between 100 and 110 for the rest of 2008.
Gyohten, 77, presided over Japan's currency policy in his role as vice finance minister for international affairs between 1986 and 1989. He is also senior adviser of the Bank of Tokyo- Mitsubishi UFJ Ltd., Japan's biggest publicly traded lender by assets. Gyohten, in an interview in November, correctly predicted the collapse of an ``asset bubble'' in China. China's benchmark stock index has fallen 47 percent since Nov. 1.
`Monetary Hawk'
Bank of Japan Governor Masaaki Shirakawa and his six policy board colleagues will leave the overnight lending rate at 0.5 percent at a two-day meeting ending today, according to all 39 economists surveyed by Bloomberg. Shirakawa was appointed by parliament in April, replacing Toshihiko Fukui.
``They have a new governor, who is in my view basically more of a monetary hawk, even compared with his predecessor,'' Gyohten said. ``He has a very strong view about the need for monetary normalization.''
The Bank of Japan is reluctant to keep interest rates at a negative level, after accounting for inflation, he said. In April, BOJ board members predicted the economy would expand 1.5 percent in the year ending March 2009 and core consumer prices, which exclude fresh food, would climb 1.1 percent. Inflation accelerated to 1.5 percent in May, the fastest pace since 1998.
The central bank will probably say in a report due at 3 p.m. that the economy won't expand as much as it predicted in April, while consumer inflation will be faster than projected, economists said.
Bank of Japan Odds
There is a 16 percent chance the Bank of Japan will raise its key 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 Federal Reserve has left its target lending rate at 2 percent since the end of April, after reducing borrowing costs seven times from 5.25 percent since September to prevent a housing slump from dragging the U.S. economy into a recession.
Futures on the Chicago Board of Trade show 88 percent odds policy makers will keep borrowing costs unchanged at 2 percent at their next meeting on Aug. 5, compared with a 23 percent chance a month ago.
``Just like the BOJ, the Fed is also faced with dual enemies, one in the front, one at the back,'' Gyohten said. ``In their case, the greater enemy is a recession.''
To contact the reporters on this story: Kosuke Goto in Tokyo at kgoto2@bloomberg.net; Shigeki Nozawa in Tokyo at snozawa1@bloomberg.net
Read more...
Crude Oil Is Steady on Brazil Supply Concern, Dollar's Rally
By Margot Habiby
July 15 (Bloomberg) -- Crude oil was little changed amid concern that supplies from Brazil may be disrupted and as the dollar strengthened against the euro, reducing the appeal of commodities as a currency hedge for investors.
Oil rose as high as $146.37 a barrel yesterday as employees of Petroleo Brasileiro SA, Brazil's state oil company, began a five-day strike in an area home to more than 80 percent of the country's output. The dollar rallied on U.S. measures to restore confidence in mortgage companies Fannie Mae and Freddie Mac.
A strike would have ``a pretty meaningful impact, especially given that it's a source of crude from the Western Hemisphere from a regime that has a fairly friendly relationship with us,'' said Jeff Spittel, an analyst at Natixis Bleichroeder Inc. in Houston. He said the dollar's gain pressured prices.
Crude oil for August delivery rose 1 cent to $145.19 a barrel at 8 a.m. Sydney time on the New York Mercantile Exchange. Yesterday, it rose 10 cents to settle at $145.18 a barrel. Futures reached a record $147.27 a barrel on July 11 and have risen 96 percent in the past year.
The dollar climbed to $1.5902 per euro at 7:55 a.m. in Sydney from $1.5938 in New York on July 11.
Petrobras has lost about 400,000 barrels a day of output because of the strike in the Campos Basin, the source of about 82 percent of Brazil's production of 1.8 million barrels a day, the country's main oil union said yesterday. The company said it's pumping crude from all but two of 38 offshore platforms affected by the strike.
Brazil Strike
Petrobras exports some of the heavy crude oil from Campos because its refineries aren't fully equipped to handle these grades. It uses the proceeds to buy lighter oil from abroad.
July 13, the company sought and won an injunction from a Brazilian Labor Court preventing strikers from taking control of platforms or preventing management from doing work to maintain platforms and the integrity of wells during the labor action.
U.S. Treasury Secretary Henry Paulson announced measures July 13 to restore confidence in mortgage companies Fannie Mae and Freddie Mac. Oil rose 50 percent this year as a weaker dollar and falling U.S. equities prompted investors to buy commodities.
``The dollar has stabilized against the euro and rebounded somewhat, because the prospects for U.S. financial markets don't look as dire as they did'' last week, said Addison Armstrong, director of market research at TFS Energy LLC in Stamford, Connecticut. ``We still have some considerable uncertainty out there.''
Atlantic Storm
A low-pressure system over the central Atlantic Ocean may strengthen into a tropical depression ``at any time during the next day or two,'' the U.S. National Hurricane Center said in a statement on its Web site at 2 p.m. New York time. A tropical depression is an organized system of winds with a well-defined center, and maximum sustained winds of 38 miles per hour.
The system, about 1,200 miles (1,930 kilometers) east of the Caribbean's Lesser Antilles islands, is moving west- northwest at 15 miles per hour.
Brent crude oil for August settlement fell 57 cents, or 0.4 percent, yesterday to close at $143.92 a barrel on London's ICE Futures Europe exchange. The August contract, which expires tomorrow, reached a record $147.50 on July 11. The more-widely held September contract fell 24 cents yesterday to $145.33 a barrel.
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
Read more...
July 15 (Bloomberg) -- Crude oil was little changed amid concern that supplies from Brazil may be disrupted and as the dollar strengthened against the euro, reducing the appeal of commodities as a currency hedge for investors.
Oil rose as high as $146.37 a barrel yesterday as employees of Petroleo Brasileiro SA, Brazil's state oil company, began a five-day strike in an area home to more than 80 percent of the country's output. The dollar rallied on U.S. measures to restore confidence in mortgage companies Fannie Mae and Freddie Mac.
A strike would have ``a pretty meaningful impact, especially given that it's a source of crude from the Western Hemisphere from a regime that has a fairly friendly relationship with us,'' said Jeff Spittel, an analyst at Natixis Bleichroeder Inc. in Houston. He said the dollar's gain pressured prices.
Crude oil for August delivery rose 1 cent to $145.19 a barrel at 8 a.m. Sydney time on the New York Mercantile Exchange. Yesterday, it rose 10 cents to settle at $145.18 a barrel. Futures reached a record $147.27 a barrel on July 11 and have risen 96 percent in the past year.
The dollar climbed to $1.5902 per euro at 7:55 a.m. in Sydney from $1.5938 in New York on July 11.
Petrobras has lost about 400,000 barrels a day of output because of the strike in the Campos Basin, the source of about 82 percent of Brazil's production of 1.8 million barrels a day, the country's main oil union said yesterday. The company said it's pumping crude from all but two of 38 offshore platforms affected by the strike.
Brazil Strike
Petrobras exports some of the heavy crude oil from Campos because its refineries aren't fully equipped to handle these grades. It uses the proceeds to buy lighter oil from abroad.
July 13, the company sought and won an injunction from a Brazilian Labor Court preventing strikers from taking control of platforms or preventing management from doing work to maintain platforms and the integrity of wells during the labor action.
U.S. Treasury Secretary Henry Paulson announced measures July 13 to restore confidence in mortgage companies Fannie Mae and Freddie Mac. Oil rose 50 percent this year as a weaker dollar and falling U.S. equities prompted investors to buy commodities.
``The dollar has stabilized against the euro and rebounded somewhat, because the prospects for U.S. financial markets don't look as dire as they did'' last week, said Addison Armstrong, director of market research at TFS Energy LLC in Stamford, Connecticut. ``We still have some considerable uncertainty out there.''
Atlantic Storm
A low-pressure system over the central Atlantic Ocean may strengthen into a tropical depression ``at any time during the next day or two,'' the U.S. National Hurricane Center said in a statement on its Web site at 2 p.m. New York time. A tropical depression is an organized system of winds with a well-defined center, and maximum sustained winds of 38 miles per hour.
The system, about 1,200 miles (1,930 kilometers) east of the Caribbean's Lesser Antilles islands, is moving west- northwest at 15 miles per hour.
Brent crude oil for August settlement fell 57 cents, or 0.4 percent, yesterday to close at $143.92 a barrel on London's ICE Futures Europe exchange. The August contract, which expires tomorrow, reached a record $147.50 on July 11. The more-widely held September contract fell 24 cents yesterday to $145.33 a barrel.
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
Read more...
Asian Stocks Drop, Led by Banks, on Growing Financial Concerns
By Chen Shiyin and Patrick Rial
July 15 (Bloomberg) -- Asian stocks fell for a second day, led by financial companies, as concern mounted credit-market losses will widen after a report said Japan's top three banks hold more than $40 billion in Fannie Mae and Freddie Mac debt.
Mizuho Financial Group Inc. led declines in Tokyo following the Nikkei newspaper report. U.S. financial shares dropped the most in eight years yesterday after investor Jim Rogers said the Treasury Department's plan to shore up Fannie Mae and Freddie Mac is an ``unmitigated disaster'' and Goldman Sachs Group Inc. predicted the shares would resume falling.
``Even with the U.S. government working to resolve the problems among financial companies, we are not going to see any quick resolution,'' Mamoru Shimode, Tokyo-based chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television. ``The banks' holdings of Fannie and Freddie debt are a concern.''
The MSCI Asia-Pacific Index lost 0.3 percent to 132.01 at 9:03 a.m. Tokyo time, following a 0.9 percent retreat yesterday. About five stocks declined for each that rose on the index.
The regional benchmark has dropped 17 percent this year. A measure of financial shares has posted the largest slump among 10 industry groups as the world's largest banks and securities firms reported more than $414 billion of writedowns and credit losses.
Japan's Nikkei 225 Stock Average declined 1.2 percent to 12,849.90, on course for its lowest close since April 1. Benchmarks also fell in Australia, New Zealand and South Korea.
U.S. stocks dropped yesterday, sending the Standard & Poor's 500 Index 0.9 percent lower. Washington Mutual Inc. and National City Corp. slumped after last week's collapse of IndyMac Bancorp Inc. spurred speculation regional banks are short of capital.
To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net.
Read more...
July 15 (Bloomberg) -- Asian stocks fell for a second day, led by financial companies, as concern mounted credit-market losses will widen after a report said Japan's top three banks hold more than $40 billion in Fannie Mae and Freddie Mac debt.
Mizuho Financial Group Inc. led declines in Tokyo following the Nikkei newspaper report. U.S. financial shares dropped the most in eight years yesterday after investor Jim Rogers said the Treasury Department's plan to shore up Fannie Mae and Freddie Mac is an ``unmitigated disaster'' and Goldman Sachs Group Inc. predicted the shares would resume falling.
``Even with the U.S. government working to resolve the problems among financial companies, we are not going to see any quick resolution,'' Mamoru Shimode, Tokyo-based chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television. ``The banks' holdings of Fannie and Freddie debt are a concern.''
The MSCI Asia-Pacific Index lost 0.3 percent to 132.01 at 9:03 a.m. Tokyo time, following a 0.9 percent retreat yesterday. About five stocks declined for each that rose on the index.
The regional benchmark has dropped 17 percent this year. A measure of financial shares has posted the largest slump among 10 industry groups as the world's largest banks and securities firms reported more than $414 billion of writedowns and credit losses.
Japan's Nikkei 225 Stock Average declined 1.2 percent to 12,849.90, on course for its lowest close since April 1. Benchmarks also fell in Australia, New Zealand and South Korea.
U.S. stocks dropped yesterday, sending the Standard & Poor's 500 Index 0.9 percent lower. Washington Mutual Inc. and National City Corp. slumped after last week's collapse of IndyMac Bancorp Inc. spurred speculation regional banks are short of capital.
To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net.
Read more...
Australia's Centro sells U.S. malls for $714 mln
MELBOURNE, July 15 (Reuters) - Centro Properties Group , a high-profile Australian victim of the global credit crunch, is selling almost all of the shopping malls in its Centro America Fund for $714 million, using the cash to pay down debt.
Centro shares jumped as much as 35 percent after it said on Tuesday it was selling 29 of the fund's 31 malls to a private real-estate investment adviser which it did not name.
Centro, which owned about 700 U.S. malls before Tuesday's deal, has received several extensions on about A$2.8 billion ($2.7 billion) in debt which now falls due in December, and is selling assets to help reduce its debt load.
The sale was at a 10 percent discount to the properties' pervious book value, Centro said. On its website, Centro put the value of the Centro America Fund (CAF) assets at about A$1.2 billion.
Centro will continue to provide management and leasing services for the 29 malls for at least a year, maintaining a valuable source of fees.
"The sale of the CAF portfolio is a key step in providing liquidity to our balance sheet," Chief Executive Glenn Rufrano said in a statement.
A spokesman for Centro told Reuters that talks were continuing with potential buyers of another Centro wholesale fund, the Centro Australia Wholesale Fund, with A$2.6 billion in local shopping centre assets.
The group has had to sell assets in a tough market to meet banks' conditions on the loan extensions.
Centro and its affiliate, Centro Retail Trust , borrowed heavily last year to fund a rapid expansion in the United States, but ran into trouble in December when it was unable to refinance maturing debt after credit markets dried up.
Centro holds a 45.1 percent direct stake in CAF, and its managed funds own another 49.9 percent stake.
Centro and its affiliates have a total of some A$5.3 billion in debt which now falls due Dec. 15. Its shares have fallen about 90 percent since it revealed its debt problems.
($1=A$1.03) (Reporting by Victoria Thieberger; editing by)
Read more...
Centro shares jumped as much as 35 percent after it said on Tuesday it was selling 29 of the fund's 31 malls to a private real-estate investment adviser which it did not name.
Centro, which owned about 700 U.S. malls before Tuesday's deal, has received several extensions on about A$2.8 billion ($2.7 billion) in debt which now falls due in December, and is selling assets to help reduce its debt load.
The sale was at a 10 percent discount to the properties' pervious book value, Centro said. On its website, Centro put the value of the Centro America Fund (CAF) assets at about A$1.2 billion.
Centro will continue to provide management and leasing services for the 29 malls for at least a year, maintaining a valuable source of fees.
"The sale of the CAF portfolio is a key step in providing liquidity to our balance sheet," Chief Executive Glenn Rufrano said in a statement.
A spokesman for Centro told Reuters that talks were continuing with potential buyers of another Centro wholesale fund, the Centro Australia Wholesale Fund, with A$2.6 billion in local shopping centre assets.
The group has had to sell assets in a tough market to meet banks' conditions on the loan extensions.
Centro and its affiliate, Centro Retail Trust , borrowed heavily last year to fund a rapid expansion in the United States, but ran into trouble in December when it was unable to refinance maturing debt after credit markets dried up.
Centro holds a 45.1 percent direct stake in CAF, and its managed funds own another 49.9 percent stake.
Centro and its affiliates have a total of some A$5.3 billion in debt which now falls due Dec. 15. Its shares have fallen about 90 percent since it revealed its debt problems.
($1=A$1.03) (Reporting by Victoria Thieberger; editing by)
Read more...
Japanese Stocks Tumble as Concerns About U.S. Financials Mount
By Patrick Rial
July 15 (Bloomberg) -- Japanese stocks fell on concern U.S. banks will collapse amid mounting credit market losses and after a newspaper report Japan's top three lenders hold more than $40 billion in Fannie Mae and Freddie Mac debt.
Mizuho Financial Group Inc., the country's third-biggest bank by market value, fell for the first time in five days. Mitsubishi UFJ Financial Group Inc., the biggest, was untraded with the shares offered lower.
U.S. financial shares posted their steepest slide in eight years yesterday, and Fannie Mae and Freddie Mac fell in spite of a rescue plan from the Treasury Department. The Nikkei newspaper said today Japan's three largest lenders hold 4.7 trillion yen ($44.2 billion) in debt securities of the mortgage lenders.
The Nikkei 225 Stock Average declined 181.10, or 1.4 percent, to 12,829.06 as of 9:08 a.m. in Tokyo. The broader Topix index slumped 17.61, or 1.4 percent, to 1,263.11.
``Even with the U.S. government working to resolve the problems among financial companies, we are not going to see any quick resolution,'' Mamoru Shimode, Tokyo-based chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television. ``The banks' holdings of Fannie and Freddie debt are a concern.''
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.
Read more...
July 15 (Bloomberg) -- Japanese stocks fell on concern U.S. banks will collapse amid mounting credit market losses and after a newspaper report Japan's top three lenders hold more than $40 billion in Fannie Mae and Freddie Mac debt.
Mizuho Financial Group Inc., the country's third-biggest bank by market value, fell for the first time in five days. Mitsubishi UFJ Financial Group Inc., the biggest, was untraded with the shares offered lower.
U.S. financial shares posted their steepest slide in eight years yesterday, and Fannie Mae and Freddie Mac fell in spite of a rescue plan from the Treasury Department. The Nikkei newspaper said today Japan's three largest lenders hold 4.7 trillion yen ($44.2 billion) in debt securities of the mortgage lenders.
The Nikkei 225 Stock Average declined 181.10, or 1.4 percent, to 12,829.06 as of 9:08 a.m. in Tokyo. The broader Topix index slumped 17.61, or 1.4 percent, to 1,263.11.
``Even with the U.S. government working to resolve the problems among financial companies, we are not going to see any quick resolution,'' Mamoru Shimode, Tokyo-based chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television. ``The banks' holdings of Fannie and Freddie debt are a concern.''
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.
Read more...
Japanese stocks may fall as banks pressure market
TOKYO, July 15 (Reuters) - Big Japanese lenders such as
Mitsubishi UFJ Financial Group are likely to put Tokyo
shares under pressure on Tuesday, as worries about the health of
U.S. banking sector continue to weigh.
"Banks are likely to lead the market lower," said Yoku Ihara,
manager of the investment information department at Retela Crea
Securities.
"In March, it was Bear Stearns only, but this time, the
entire U.S. financial sector has been hurt," he said, referring
to the near-collapse of the U.S. securities firm that fanned
fears of a financial crisis.
The benchmark Nikkei average .N225 will likely trade
between 12,800 and 13,100, market participants said. The Nikkei
fell 0.2 percent on Monday to close at 13,010.16.
Nikkei futures 2NKc1 closed at 12,970 in Chicago trading,
80 points below the Osaka close JNIc1.
The Bank of Japan is expected to keep interest rates on hold
on Tuesday and warn that Japan's growth will likely be slower
than it had anticipated a few months ago due to skyrocketing oil
and raw materials prices.[ID:nT70058]
----------------------MARKET SNAPSHOT @ 2301 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1228.3 -0.9% -11.190
USD/JPY 106.2 -0% 0.000
10-YR US TSY YLD 3.8629 -- 0.000
SPOT GOLD 970.3 -0.14% -1.400
US CRUDE CLc1 145.01 -0.12% -0.170
DOW JONES .DJI 11055.19 -0.41% -45.35
-------------------------------------------------------------
> Wall St sags as bank fear offsets Fannie, Freddie aid [.N]
> Dollar up vs euro on Fannie, Freddie rescue plan [USD/]
> Bonds gain on safety bid amid bank worries [US/]
> Financial market jitters boost safe-haven gold [GOL/]
> Oil firms over $145 on Brazil, demand worries weigh [O/R]
STOCKS TO WATCH
-- Tokyo Electron Ltd , other chip equipment makers
U.S.-based chip equipment maker Novellus Systems Inc (NVLS.O: Quote, Profile, Research, Stock Buzz)
posted a quarterly net loss on Monday due to charges and a
persistent slump in the semiconductor equipment manufacturing
industry.
-- Sony Corp
Microsoft Corp said on Monday its Xbox 360 console
will sell better than Sony's rival PlayStation 3 over the
lifetime of the machines.
-- Square Enix Co
Microsoft also said on Monday that Square Enix would launch
the "Final Fantasy XIII" for its Xbox 360 video game console,
sharing the upcoming version of the blockbuster role-playing game
with Sony's PlayStation3.
Square Enix had so far only said it was developing the next
installment of the "Final Fantasy" series for the Sony console.
-- Hokkaido Electric Power Co
The regional utility said on Monday it expected to post
losses for the year ending in March 2009, hit by surging fuel
prices and an outage work at a nuclear power plant.
The company said it expected to post an operating loss of 38
billion yen, down from a 21 billion yen operating profit in its
previous forecast, but it kept its annual dividend forecast of 60
yen per share.
-- Matsui Securities Co
The online broker will be added to the Nikkei 225 stock
average on July 28, replacing credit card firm Mitsubishi UFJ
Nicos after it is delisted, the publisher of the
benchmark share average said on Monday.
Epson Toyocom Corp , a maker of crystal devices, will
take the place of Mitsubishi UFJ Nicos in the Nikkei 500 Stock
Average, the Nikkei said on its website.
-- Electric Power Development Co (J-Power)
British activist fund TCI said on Monday it will heed the
Japanese government's order not to buy more shares in electricity
wholesaler J-Power.
-- Mitsubishi UFJ Financial Group and other megabanks
Japan's three megabanks held about 4.7 trillion yen in debt
securities issued by Fannie Mae and Freddie Mac as of March 31,
while major insurers' exposure came to more than 4 trillion yen,
the Nikkei business daily reported on Tuesday.
MUFG had the biggest exposure among the three megabanks,
holding 3.3 trillion yen in bonds, compared with Mizuho Financial
Group Inc's 1.2 trillion yen and Sumitomo Mitsui
Financial Group Inc's 200 billion yen, the paper said.
(Reporting by Taiga Uranaka; Editing by Hugh Lawson)
Read more...
Mitsubishi UFJ Financial Group are likely to put Tokyo
shares under pressure on Tuesday, as worries about the health of
U.S. banking sector continue to weigh.
"Banks are likely to lead the market lower," said Yoku Ihara,
manager of the investment information department at Retela Crea
Securities.
"In March, it was Bear Stearns only, but this time, the
entire U.S. financial sector has been hurt," he said, referring
to the near-collapse of the U.S. securities firm that fanned
fears of a financial crisis.
The benchmark Nikkei average .N225 will likely trade
between 12,800 and 13,100, market participants said. The Nikkei
fell 0.2 percent on Monday to close at 13,010.16.
Nikkei futures 2NKc1 closed at 12,970 in Chicago trading,
80 points below the Osaka close JNIc1.
The Bank of Japan is expected to keep interest rates on hold
on Tuesday and warn that Japan's growth will likely be slower
than it had anticipated a few months ago due to skyrocketing oil
and raw materials prices.[ID:nT70058]
----------------------MARKET SNAPSHOT @ 2301 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1228.3 -0.9% -11.190
USD/JPY
10-YR US TSY YLD
SPOT GOLD
US CRUDE CLc1 145.01 -0.12% -0.170
DOW JONES .DJI 11055.19 -0.41% -45.35
-------------------------------------------------------------
> Wall St sags as bank fear offsets Fannie, Freddie aid [.N]
> Dollar up vs euro on Fannie, Freddie rescue plan [USD/]
> Bonds gain on safety bid amid bank worries [US/]
> Financial market jitters boost safe-haven gold [GOL/]
> Oil firms over $145 on Brazil, demand worries weigh [O/R]
STOCKS TO WATCH
-- Tokyo Electron Ltd , other chip equipment makers
U.S.-based chip equipment maker Novellus Systems Inc (NVLS.O: Quote, Profile, Research, Stock Buzz)
posted a quarterly net loss on Monday due to charges and a
persistent slump in the semiconductor equipment manufacturing
industry.
-- Sony Corp
Microsoft Corp said on Monday its Xbox 360 console
will sell better than Sony's rival PlayStation 3 over the
lifetime of the machines.
-- Square Enix Co
Microsoft also said on Monday that Square Enix would launch
the "Final Fantasy XIII" for its Xbox 360 video game console,
sharing the upcoming version of the blockbuster role-playing game
with Sony's PlayStation3.
Square Enix had so far only said it was developing the next
installment of the "Final Fantasy" series for the Sony console.
-- Hokkaido Electric Power Co
The regional utility said on Monday it expected to post
losses for the year ending in March 2009, hit by surging fuel
prices and an outage work at a nuclear power plant.
The company said it expected to post an operating loss of 38
billion yen, down from a 21 billion yen operating profit in its
previous forecast, but it kept its annual dividend forecast of 60
yen per share.
-- Matsui Securities Co
The online broker will be added to the Nikkei 225 stock
average on July 28, replacing credit card firm Mitsubishi UFJ
Nicos after it is delisted, the publisher of the
benchmark share average said on Monday.
Epson Toyocom Corp , a maker of crystal devices, will
take the place of Mitsubishi UFJ Nicos in the Nikkei 500 Stock
Average, the Nikkei said on its website.
-- Electric Power Development Co (J-Power)
British activist fund TCI said on Monday it will heed the
Japanese government's order not to buy more shares in electricity
wholesaler J-Power.
-- Mitsubishi UFJ Financial Group and other megabanks
Japan's three megabanks held about 4.7 trillion yen in debt
securities issued by Fannie Mae and Freddie Mac as of March 31,
while major insurers' exposure came to more than 4 trillion yen,
the Nikkei business daily reported on Tuesday.
MUFG had the biggest exposure among the three megabanks,
holding 3.3 trillion yen in bonds, compared with Mizuho Financial
Group Inc's 1.2 trillion yen and Sumitomo Mitsui
Financial Group Inc's 200 billion yen, the paper said.
(Reporting by Taiga Uranaka; Editing by Hugh Lawson)
Read more...
Economic Calendar Eco Data 7/15/08
| GMT | Ccy | Events | Actual | Consensus | Previous | Revised |
|---|---|---|---|---|---|---|
| 22:45 | NZD | New Zealand CPI Q/Q Q2 | 1.40% | 0.70% | | |
| 22:45 | NZD | New Zealand CPI Y/Y Q2 | 3.80% | 0.70% | ||
| 23:01 | GBP | U.K. RICS House Price Balance | -94.00% | -92.90% | ||
| 23:01 | GBP | U.K. BRC retail sales Jun | N/A | 1.90% | ||
| 01:30 | AUD | RBA Board Meeting Minutes | ||||
| JPY | BOJ rate decision Jul | 0.50% | 0.50% | |||
| 06:00 | JPY | BOJ Monthly report | ||||
| 08:30 | GBP | U.K. CPI M/M Jun | 0.40% | 0.50% | ||
| 08:30 | GBP | U.K. CPI Y/Y Jun | 3.80% | 3.60% | ||
| 08:30 | GBP | U.K. RPI M/M Jun | 0.50% | 0.50% | ||
| 08:30 | GBP | U.K. RPI Y/Y Jun | 4.30% | 4.30% | ||
| 08:30 | GBP | U.K. RPI - X M/M Jun | 0.40% | 0.70% | ||
| 08:30 | GBP | U.K. RPI - X Y/Y Jun | 4.40% | 4.40% | ||
| 09:00 | EUR | Germany ZEW Economic Sentiment Jul | -55 | -52.4 | ||
| 09:00 | EUR | Eurozone ZEW Economic Sentiment Jul | -56 | -52.7 | ||
| 12:30 | USD | U.S. Empire state mfg Jul | -8 | -8.68 | ||
| 12:30 | USD | U.S. PPI M/M Jun | 1.30% | 1.40% | ||
| 12:30 | USD | U.S. PPI Y/Y Jun | 8.50% | 7.20% | ||
| 12:30 | USD | U.S. PPI core M/M Jun | 0.30% | 0.20% | ||
| 12:30 | USD | U.S. PPI core Y/Y Jun | 3.20% | 3.00% | ||
| 12:30 | USD | U.S. Retail sales M/M Jun | 0.50% | 0.50% | ||
| 12:30 | USD | U.S. Retail sales less auto M/MJun | 1.00% | 1.20% | ||
| 13:00 | CAD | BOC rate decision Jul | 3.00% | 3.00% | ||
| 14:00 | USD | U.S. Business inventories May | 0.50% | 0.50% | ||
| 14:00 | USD | Fed Bernanke Semi-annual Monetary Policy Testimony at Senate |
Read more...
Subscribe to:
Posts (Atom)
Posts
