By Christian Schmollinger
Aug. 15 (Bloomberg) -- Crude oil fell for a second day on signs the decline in U.S. fuel demand will spread to Europe and Asia.
Crude oil for September delivery dropped as much as $1.23, or 1.1 percent, to $113.78 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $113.95 at 8:53 a.m. Singapore time. Yesterday, futures fell 99 cents, or 0.9 percent, to settle at $115.01 a barrel.
Prices have tumbled 23 percent from a record $147.27 reached on July 11.
To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net.
Read more...
Friday, August 15, 2008
Forex Exchange Morning Report
Daily Forex Fundamentals | Written by Westpac Institutional Bank | Aug 15 08 01:17 GMT |
News And Views
USD/majors traded quietly in London until the US data. The combination of higher inflation and elevated jobless claims sparked a bout of dollar selling on stagflation fears, as equity futures swung into the red. However, this proved fleeting, with renewed weakness in commodity prices and a bullish report from Goldman Sachs helping restore confidence that the USD recovery is not spent. NYMEX oil fell as much as $4/bbl at one point, partly undermined by oil billionaire Boone Pickens' prediction of $100-110/bbl near term (previously he was very bullish). The New Zealand dollar squeezed as high as 0.7059 10min after the US data but had retreated to 0.6990 by late NY.
The Australian dollar followed the pattern of most others, rebuffed ahead of AUD/USD 0.8800 and bumping around 0.8710 in late NY.
EUR/USD flickered to a 1.4952 high but by NY lunchtime hit lows around 1.4780, despite ECB's Stark's attempts to play down Eurozone recession fears.
USD/JPY mostly pushed higher from 109.50 but ran out of steam ahead of 110 as the US equity rally cooled from as much as +180pts on the DJIA to about +65pts late NY.
US CPI up 0.8% in July. The CPI posted another sharp jump in July, mostly due to a further 4.1% jump in gasoline prices and a well above trend 0.9% rise in food prices. The 5.6% yr annual rate was stronger than expected and is the highest since late 1990 but it will fall sharply in the last five months of this year. Food and gasoline prices started to fall in July but the survey timing missed much of that. More concerning was the second consecutive solid 0.3% rise in the core CPI. In July rents slowed but auto prices rose further, and education posted another above trend gain, and was joined by recreation. These two normally benign components make up 15% of the core CPI. On top of these factors, apparel prices roared up 1.1% (very strong given that annual apparel price inflation is only 0.8% yr). Some of these gains are probably a function of the weaker US dollar boosting import prices. On the soft side, medical care was once again below trend with a minimal 0.1% gain.
US initial jobless claims fell 10k to 450k last week but yet again we can't draw firm conclusions from the data about what's really happening in the job market because the Labor Dept has not been able to quantify the impact of changed claiming rules that have been well publicised and so taken advantage of by new and existing claimants. That said, the recent run-up in continuing claims looks to be at least partially genuine and the Labor Dept spokesman did say that 'an increase in firings' was a contributory factor. But we just can't be precise about it.
Japanese tertiary activity index falls 0.8% in June, underscoring yesterday's weak Q2 GDP figures. The result followed a 0.2% decline in May and was against market expectations of a 0.3% contraction.
Euroland GDP fell only 0.2% in Q2 but national data suggest Q1 will be revised lower when the more detailed report is published on September 3. Leading indicators point to at best flat growth in Q3. Also, July CPI inflation was revised down from the 4.1% flash estimate to 4.0%, and core inflation eased to 1.7% yr. This combination of stalled/slipping growth and peaking inflation will help pave the way for an eventual rate cut from the ECB. We don't expect a move before Q1 next year but do expect Trichet's tone in the September 4 press conference to be slightly more dovish.
Outlook
We see some further downside for NZD TWI but will re-assess after New Zealand's June retail sales data today.
Events Today
Country Release Last Forecast
NZ Q2 Real Retail Sales –1.2% –2.4%
Jun Retail Sales –1.2% –0.2%
US Aug NY Fed Empire State Index –4.9 –3.0
Jun Net Long Term TIC Flows $bn 67 52.5
Jul Industrial Production 0.50% –0.1%
Aug UoM Consumer Sentiment (Prelim) 61.2 59
Fedspeak
Can Jun Auto Sales 1.10% flat
Jun Manufacturing Shipments 2.70% 1.50%
Westpac Institutional Bank
http://www.wib.westpac.co.nz/
Disclaimer
All customers please note that this information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. Australian customers can obtain Westpac's financial services guide by calling +612 9284 8372, visiting www.westpac.com.au or visiting any Westpac Branch. The information may contain material provided directly by third parties, and while such material is published with permission, Westpac accepts no responsibility for the accuracy or completeness of any such material. Except where contrary to law, Westpac intends by this notice to exclude liability for the information. The information is subject to change without notice and Westpac is under no obligation to update the information or correct any inaccuracy which may become apparent at a later date. Westpac Banking Corporation is regulated for the conduct of investment business in the United Kingdom by the Financial Services Authority. © 2004 Westpac Banking Corporation. Past performance is not a reliable indicator of future performance. The forecasts given in this document are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from these forecasts.
Read more...
News And Views
USD/majors traded quietly in London until the US data. The combination of higher inflation and elevated jobless claims sparked a bout of dollar selling on stagflation fears, as equity futures swung into the red. However, this proved fleeting, with renewed weakness in commodity prices and a bullish report from Goldman Sachs helping restore confidence that the USD recovery is not spent. NYMEX oil fell as much as $4/bbl at one point, partly undermined by oil billionaire Boone Pickens' prediction of $100-110/bbl near term (previously he was very bullish). The New Zealand dollar squeezed as high as 0.7059 10min after the US data but had retreated to 0.6990 by late NY.
The Australian dollar followed the pattern of most others, rebuffed ahead of AUD/USD 0.8800 and bumping around 0.8710 in late NY.
EUR/USD flickered to a 1.4952 high but by NY lunchtime hit lows around 1.4780, despite ECB's Stark's attempts to play down Eurozone recession fears.
USD/JPY mostly pushed higher from 109.50 but ran out of steam ahead of 110 as the US equity rally cooled from as much as +180pts on the DJIA to about +65pts late NY.
US CPI up 0.8% in July. The CPI posted another sharp jump in July, mostly due to a further 4.1% jump in gasoline prices and a well above trend 0.9% rise in food prices. The 5.6% yr annual rate was stronger than expected and is the highest since late 1990 but it will fall sharply in the last five months of this year. Food and gasoline prices started to fall in July but the survey timing missed much of that. More concerning was the second consecutive solid 0.3% rise in the core CPI. In July rents slowed but auto prices rose further, and education posted another above trend gain, and was joined by recreation. These two normally benign components make up 15% of the core CPI. On top of these factors, apparel prices roared up 1.1% (very strong given that annual apparel price inflation is only 0.8% yr). Some of these gains are probably a function of the weaker US dollar boosting import prices. On the soft side, medical care was once again below trend with a minimal 0.1% gain.
US initial jobless claims fell 10k to 450k last week but yet again we can't draw firm conclusions from the data about what's really happening in the job market because the Labor Dept has not been able to quantify the impact of changed claiming rules that have been well publicised and so taken advantage of by new and existing claimants. That said, the recent run-up in continuing claims looks to be at least partially genuine and the Labor Dept spokesman did say that 'an increase in firings' was a contributory factor. But we just can't be precise about it.
Japanese tertiary activity index falls 0.8% in June, underscoring yesterday's weak Q2 GDP figures. The result followed a 0.2% decline in May and was against market expectations of a 0.3% contraction.
Euroland GDP fell only 0.2% in Q2 but national data suggest Q1 will be revised lower when the more detailed report is published on September 3. Leading indicators point to at best flat growth in Q3. Also, July CPI inflation was revised down from the 4.1% flash estimate to 4.0%, and core inflation eased to 1.7% yr. This combination of stalled/slipping growth and peaking inflation will help pave the way for an eventual rate cut from the ECB. We don't expect a move before Q1 next year but do expect Trichet's tone in the September 4 press conference to be slightly more dovish.
Outlook
We see some further downside for NZD TWI but will re-assess after New Zealand's June retail sales data today.
Events Today
Country Release Last Forecast
NZ Q2 Real Retail Sales –1.2% –2.4%
Jun Retail Sales –1.2% –0.2%
US Aug NY Fed Empire State Index –4.9 –3.0
Jun Net Long Term TIC Flows $bn 67 52.5
Jul Industrial Production 0.50% –0.1%
Aug UoM Consumer Sentiment (Prelim) 61.2 59
Fedspeak
Can Jun Auto Sales 1.10% flat
Jun Manufacturing Shipments 2.70% 1.50%
Westpac Institutional Bank
http://www.wib.westpac.co.nz/
Disclaimer
All customers please note that this information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. Australian customers can obtain Westpac's financial services guide by calling +612 9284 8372, visiting www.westpac.com.au or visiting any Westpac Branch. The information may contain material provided directly by third parties, and while such material is published with permission, Westpac accepts no responsibility for the accuracy or completeness of any such material. Except where contrary to law, Westpac intends by this notice to exclude liability for the information. The information is subject to change without notice and Westpac is under no obligation to update the information or correct any inaccuracy which may become apparent at a later date. Westpac Banking Corporation is regulated for the conduct of investment business in the United Kingdom by the Financial Services Authority. © 2004 Westpac Banking Corporation. Past performance is not a reliable indicator of future performance. The forecasts given in this document are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from these forecasts.
Read more...
Daily Forex Market Commentary
Daily Forex Technicals | Written by Global Forex Trading | Aug 15 08 01:41 GMT |
The dollar was all over the place again on Wednesday, up against the pound and down versus the yen, which suggests further weakness in the yen crosses. Keep an eye on the US CPI report, which is important. On Friday, all eyes will be on the US industrial production and University of Michigan reports.
Euro/dollar
The euro/dollar sank to a new low for the downtrend and reached the 73.6% Fibonacci retracement level of the move between February and July. The inability to make even a mild recovery adds even further confidence in the strong downtrend. My model remains short since July 22, so stay with it unless proven wrong.
Initial support is at 1.4780 from the Fibonacci retracement level mentioned above. Below 1.4735, further support is at 1.4670 and 1.4595. Distant support remains at 1.4440.
Immediate resistance is now seen at 1.4865. Above 1.4955, the next levels remain at 1.5000, 1.5065 and 1.5110. Distant resistance is at 1.5200.
Oscillators are declining.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/yen
Dollar/yen reversed early losses on Thursday and the rally turned my model long. Expect choppy trading today, but the risk is on the upside. 109.15 remains the new key Gann pivot that rules in the short term.
Immediate resistance is at 110.00. The next key level is 110.35 from another 50-point pivot, which targets 109.85 and 110.85.
Support is now pegged at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Next support follows at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.
Oscillators are mixed.
NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar consolidated near the lowest levels since October 2006 amid ongoing concern of stagflation. The selling pressure should continue at a reduced pace. Again, cable remains on track for the target of a long-term head-and-shoulders pattern that targets the 1.7550 area.
Immediate support is at 1.8620. Further support remains at 1.8510. Strong support follows at 1.8450. Distant support follows at 1.8130.
Initial resistance remains at 1.8925. Above 1.9035, further resistance comes at 1.9225.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss climbed to a new high for the uptrend after closing above the top of the rising channel. My model remains long since July 22, so stay with it unless you have a confirmation for a bearish reversal.
Immediate resistance moved up to 1.0990. Above it, key resistance remains at 1.1055. This is followed by 1.120o.
Initial support is pegged at 1.0905. This is followed by 1.0830 and 1.0790. Below 1.0725, support is now seen at 1.0620 and 1.0505.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Cornelius Luca
Global Forex Trading
http://www.gftforex.com
DISCLAIMER: This forum and the information provided here should not be relied on as a substitute for extensive independent research before making your investment decisions. Global Forex Trading is merely providing this column for your general information. The views of the author are not necessarily those of Global Forex Trading, its owners, officers, agents or employees. In addition, any projections or views of the market provided by the author may not prove to be accurate. Global Forex Trading and Cornelius Luca will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Global Forex Trading and Cornelius Luca do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.
Read more...
The dollar was all over the place again on Wednesday, up against the pound and down versus the yen, which suggests further weakness in the yen crosses. Keep an eye on the US CPI report, which is important. On Friday, all eyes will be on the US industrial production and University of Michigan reports.
Euro/dollar
The euro/dollar sank to a new low for the downtrend and reached the 73.6% Fibonacci retracement level of the move between February and July. The inability to make even a mild recovery adds even further confidence in the strong downtrend. My model remains short since July 22, so stay with it unless proven wrong.
Initial support is at 1.4780 from the Fibonacci retracement level mentioned above. Below 1.4735, further support is at 1.4670 and 1.4595. Distant support remains at 1.4440.
Immediate resistance is now seen at 1.4865. Above 1.4955, the next levels remain at 1.5000, 1.5065 and 1.5110. Distant resistance is at 1.5200.
Oscillators are declining.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/yen
Dollar/yen reversed early losses on Thursday and the rally turned my model long. Expect choppy trading today, but the risk is on the upside. 109.15 remains the new key Gann pivot that rules in the short term.
Immediate resistance is at 110.00. The next key level is 110.35 from another 50-point pivot, which targets 109.85 and 110.85.
Support is now pegged at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Next support follows at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.
Oscillators are mixed.
NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar consolidated near the lowest levels since October 2006 amid ongoing concern of stagflation. The selling pressure should continue at a reduced pace. Again, cable remains on track for the target of a long-term head-and-shoulders pattern that targets the 1.7550 area.
Immediate support is at 1.8620. Further support remains at 1.8510. Strong support follows at 1.8450. Distant support follows at 1.8130.
Initial resistance remains at 1.8925. Above 1.9035, further resistance comes at 1.9225.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss climbed to a new high for the uptrend after closing above the top of the rising channel. My model remains long since July 22, so stay with it unless you have a confirmation for a bearish reversal.
Immediate resistance moved up to 1.0990. Above it, key resistance remains at 1.1055. This is followed by 1.120o.
Initial support is pegged at 1.0905. This is followed by 1.0830 and 1.0790. Below 1.0725, support is now seen at 1.0620 and 1.0505.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Cornelius Luca
Global Forex Trading
http://www.gftforex.com
DISCLAIMER: This forum and the information provided here should not be relied on as a substitute for extensive independent research before making your investment decisions. Global Forex Trading is merely providing this column for your general information. The views of the author are not necessarily those of Global Forex Trading, its owners, officers, agents or employees. In addition, any projections or views of the market provided by the author may not prove to be accurate. Global Forex Trading and Cornelius Luca will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Global Forex Trading and Cornelius Luca do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.
Read more...
Chart of the Day - Usd/Jpy
| Daily Forex Technicals | Written by TheLFB-Forex.com | Aug 15 08 01:39 GMT | | |
Usd/Jpy Swing Change?Momentum on USDJPY has turned strongly bearish, providing a high-probability setup for short-term, swing, and position trades:
Look to the emerging w.5 to signal that the market has sold this short, at that time there may be a pullback to test the resistance at 109.05-109.30. The main area above that to hold is 110.50, with downside support in three areas, 107.10, 103.15, and 101.78. Larger-time-frame support looks to be at 99.55, 97.86, 95.90, 92.90, 86.80. If it does move lower the market may be looking to trail their stops at the previous session's swing high, that will be interesting to monitor
This Elliott Wave theory as presented by William Sims. William brings his view of wave counting and applications to the major pairs using the weekly, daily and sixty minutes charts combined with a Stochastic Oscillator. The end result being a clear read on market momentum. Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174. The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC. | |
Read more...
Japan's Nikkei Futures Little Changed; Toyota Positive on U.S.
By Patrick Rial
Aug. 15 (Bloomberg) -- Japan stock futures were little changed in Chicago trading after Toyota Motor Corp. expressed confidence in the U.S. truck market, while banks took additional loss reserves stemming from Urban Corp.'s bankruptcy.
U.S.-traded receipts of Toyota, Japan's biggest automaker, added 0.8 percent from the closing share price in Tokyo yesterday after saying the outlook remains strong for the U.S. truck market. Sumitomo Mitsui Financial Group Inc. lost 0.1 percent. Shikoku Bank Ltd. lowered its profit forecast to reflect probable losses on loans to condominium builder Urban.
``Bankruptcies have taken a sudden jump here, and that makes it hard for developers and the banks that provide their funds to eke out any gains,'' Seiji Arai, a strategist at Mitsubishi UFJ Securities Co., said in an interview with Bloomberg Television.
Nikkei 225 Stock Average futures expiring in September closed in Chicago yesterday at 12,955, little changed from 12,950 earlier in Osaka and 12,960 in Singapore. The Bank of New York Japan ADR Index, which tracks the nation's American depositary receipts, lost 0.7 percent.
Japanese companies got a boost after Goldman Sachs Group Inc. said the U.S. dollar has bottomed, indicating exporters will generate higher profits on U.S. sales as the currency strengthens. The Baltic Dry Index of freight costs for commodities posted its biggest gain since January, improving the outlook for shippers including Mitsui O.S.K. Lines Ltd.
Yesterday, the Nikkei slipped 0.5 percent to 12,956.80 and the Topix index declined 0.6 percent to 1,238.93.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.
Read more...
Aug. 15 (Bloomberg) -- Japan stock futures were little changed in Chicago trading after Toyota Motor Corp. expressed confidence in the U.S. truck market, while banks took additional loss reserves stemming from Urban Corp.'s bankruptcy.
U.S.-traded receipts of Toyota, Japan's biggest automaker, added 0.8 percent from the closing share price in Tokyo yesterday after saying the outlook remains strong for the U.S. truck market. Sumitomo Mitsui Financial Group Inc. lost 0.1 percent. Shikoku Bank Ltd. lowered its profit forecast to reflect probable losses on loans to condominium builder Urban.
``Bankruptcies have taken a sudden jump here, and that makes it hard for developers and the banks that provide their funds to eke out any gains,'' Seiji Arai, a strategist at Mitsubishi UFJ Securities Co., said in an interview with Bloomberg Television.
Nikkei 225 Stock Average futures expiring in September closed in Chicago yesterday at 12,955, little changed from 12,950 earlier in Osaka and 12,960 in Singapore. The Bank of New York Japan ADR Index, which tracks the nation's American depositary receipts, lost 0.7 percent.
Japanese companies got a boost after Goldman Sachs Group Inc. said the U.S. dollar has bottomed, indicating exporters will generate higher profits on U.S. sales as the currency strengthens. The Baltic Dry Index of freight costs for commodities posted its biggest gain since January, improving the outlook for shippers including Mitsui O.S.K. Lines Ltd.
Yesterday, the Nikkei slipped 0.5 percent to 12,956.80 and the Topix index declined 0.6 percent to 1,238.93.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.
Read more...
New Zealand's June Retail Sales: Summary (Table)
By Daniel Petrie
Aug. 15 (Bloomberg) -- Following is a summary of New Zealand's June retail sales figures from Statistics New Zealand in Wellington.
============================================================================
June May April March Feb. Jan. Dec.
2008 2008 2008 2008 2008 2008 2007
============================================================================
-------------------- MoM% ----------------------
[bn:WBTKR=NZRREXIN:IND] All industries [] 0.9% -1.1% 1.2% -1.1% -0.7% 0.3% 0.0%
[bn:WBTKR=NZRRSUBQ:IND] ex motor vehicles [] 0.0% 0.8% -0.2% -0.4% 0.1% 0.5% 0.2%
By Industry
Supermarket 0.6% 2.7% -3.2% -0.8% 1.3% 3.0% -0.1%
Fresh produce 2.3% 2.4% 1.5% 3.3% -2.5% 0.9% -0.7%
Liquor -0.3% 2.1% -2.1% 0.4% -0.3% -1.5% 2.7%
Other food -1.1% -0.3% 2.5% 0.0% -1.6% -0.6% -2.3%
Takeaway food 0.0% 0.7% 0.8% 2.2% 2.8% -6.7% 1.5%
Department stores -8.7% 6.6% -0.9% 0.4% 1.0% -1.7% 2.9%
Furniture/Floor coverings 7.5% -16.0% 8.9% -2.5% 0.9% -2.7% 0.1%
Hardware -2.9% 4.1% -1.1% 0.9% -1.2% -0.4% -3.7%
============================================================================
June May April March Feb. Jan. Dec.
2008 2008 2008 2008 2008 2008 2007
============================================================================
-------------------- MoM% ----------------------
Appliance retailing 4.4% 2.0% -0.3% -1.7% -2.3% -3.5% 3.0%
Recreational goods 0.9% -5.3% 2.2% -2.8% -2.4% 1.3% 2.6%
Clothing/softgoods -3.9% -1.0% 3.2% -2.4% -1.1% -1.5% -0.7%
Footwear -1.9% -0.1% 6.1% -0.6% 1.1% -3.9% 4.2%
Pharmacies -1.3% 2.0% -1.2% 2.9% 0.1% 0.1% -1.8%
Repairs -1.1% -2.2% 9.7% 0.7% 1.1% 0.7% -5.3%
Other retailing 6.7% -1.4% 2.8% 0.0% -0.3% -0.9% -0.5%
Accommodation -3.6% 2.9% -0.5% 1.6% 0.4% -1.9% 1.2%
Bars/Clubs 1.9% -2.8% 1.8% 1.1% -5.6% 7.7% 3.8%
Cafes/Restaurants 3.5% -0.3% -0.3% -1.3% 0.9% 2.2% -2.8%
Personal/goods hiring -1.8% 1.0% -2.9% -4.3% 6.7% -6.6% 5.9%
Other personal -1.3% 0.5% 1.2% -1.1% -0.6% 3.0% -1.1%
ex motor vehicles 0.0% 0.8% -0.2% -0.4% 0.1% 0.5% 0.2%
Motor vehicles 5.2% -14.6% 8.1% -4.1% -4.6% -1.1% -2.7%
Fuel retailing 2.6% 3.6% -1.5% 0.8% -0.8% 0.8% 2.2%
Smash repair/tires 1.6% -7.1% 16.7% -8.7% 0.0% -0.2% -2.6%
Other vehicle repairs 0.1% -2.2% 8.9% -4.7% -2.8% 1.5% 1.6%
============================================================================
Note: Figures are seasonally adjusted.
Source: Statistics New Zealand
To contact the reporter on this story: Daniel Petrie in Sydney at dpetrie5@bloomberg.net
Read more...
Shenhua Energy Wins Australia Coal Exploration Permit
By Angela Macdonald-Smith
Aug. 15 (Bloomberg) -- China Shenhua Energy Co., the nation's biggest coal producer, agreed to pay A$300 million ($261 million) for a coal exploration license in Australia as it expands overseas to boost output.
The 190-square kilometer area near Gunnedah in New South Wales state is expected to contain shallow resources of power- station coal suitable for the Australian and export markets, New South Wales Minister for Mineral Resources Ian Macdonald said today in an e-mailed statement. The project could be worth more than A$670 million to the state, he said.
China's coal producers are adding capacity to meet the rising energy needs of the world's fastest-growing major economy. The nation burns coal to generate about 80 percent of its power. Shenhua said in April it intended to buy overseas assets, including mines in Australia, Indonesia or Mongolia.
The Watermark license will be awarded to Shenhua on the recommendation of an expert assessment panel, Macdonald said in the statement. The government invited initial bids for the permit in October and final bids closed in February, he said.
The license is for exploration only, not mining, Macdonald said. The exploration phase will last ``several years,'' he said.
Shenhua beat Anglo American Plc's coal unit, Griffin Coal Mining Co., Xstrata Plc, Donaldson Coal Pty and White Mining Ltd. for the license, the Australian Financial Review said today, without citing anyone.
Prices for power-station coal shipped from Newcastle port in New South Wales reached a record $194.79 a metric ton in the week ended July 4, according to the globalCOAL NEWC index.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
Read more...
Aug. 15 (Bloomberg) -- China Shenhua Energy Co., the nation's biggest coal producer, agreed to pay A$300 million ($261 million) for a coal exploration license in Australia as it expands overseas to boost output.
The 190-square kilometer area near Gunnedah in New South Wales state is expected to contain shallow resources of power- station coal suitable for the Australian and export markets, New South Wales Minister for Mineral Resources Ian Macdonald said today in an e-mailed statement. The project could be worth more than A$670 million to the state, he said.
China's coal producers are adding capacity to meet the rising energy needs of the world's fastest-growing major economy. The nation burns coal to generate about 80 percent of its power. Shenhua said in April it intended to buy overseas assets, including mines in Australia, Indonesia or Mongolia.
The Watermark license will be awarded to Shenhua on the recommendation of an expert assessment panel, Macdonald said in the statement. The government invited initial bids for the permit in October and final bids closed in February, he said.
The license is for exploration only, not mining, Macdonald said. The exploration phase will last ``several years,'' he said.
Shenhua beat Anglo American Plc's coal unit, Griffin Coal Mining Co., Xstrata Plc, Donaldson Coal Pty and White Mining Ltd. for the license, the Australian Financial Review said today, without citing anyone.
Prices for power-station coal shipped from Newcastle port in New South Wales reached a record $194.79 a metric ton in the week ended July 4, according to the globalCOAL NEWC index.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
Read more...
China Goes Milli Vanilli as Japan Tries Old Ways: William Pesek
Commentary by William Pesek
Aug. 15 (Bloomberg) -- It was China's Milli Vanilli moment.
Beijing officials got caught in a lip-synching act of Olympian proportions. Communist Party officials put a cuter girl before the cameras at the opening ceremony instead of the real singer, whose imperfect teeth reportedly didn't make the grade.
No one doubted China would put on its best face for the Olympics -- it just acted too literally. New York Times columnist Gail Collins called the girl the ``Potemkin performer.'' Headline writers connected the dots to the downfall of a 1980s pop group whose Grammy Awards were revoked when similar truths came out.
Olympics organizers in Beijing also can't be happy that some other moments came to light. The opening-ceremony broadcast used computer-generated images of fireworks, including a fake shake to simulate helicopter filming, because of the city's hazy skies.
What's interesting, though, is what all this says about the world's fourth-biggest economy.
Some might say the Olympics are China's big coming-out party and why not go the extra mile to make them perfect? Why not do everything possible to obscure the haze surrounding the Chinese capital and keep protesters from spoiling the fun?
Instead, it hints at China's reluctance to allow the free flow of information and essentially to trust reality. Not to overdo the haze metaphor, but China wants you to see a certain image, whether it's the Olympics or its economy. What can investors see through the smog?
Haze Metaphor
There is what China wants you to see and what the data show. China presents a picture of a harmonious and increasingly prosperous people. That image, it's hoped, will distract financiers from risks, including slowing global growth, social instability, a widening gap between rich and poor, and pollution that's far worse than the overly positive categorizations that officials are using.
There's enough haze to go around, of course. Foreign executives partying it up in Beijing -- and lavishing untold millions on the International Olympic Committee -- don't seem to care about their role in polluting China and exploiting workers. It's all good, so long as prices at Wal-Mart Stores Inc. don't rise. We'll save a discussion of hazy corporate disclosure for another column.
The connection between sports and markets is tenuous, yet economists such as Jim O'Neill of Goldman Sachs Group Inc. in London often publish reports around events, including the soccer World Cup. The basic idea is that successes in sports and economics often go hand in hand.
Events at the Beijing Games may be offering other hints about trends around the globe.
On the Mat
Take Japan. As it struggles to remain a global force amid China's rise, Japan is trying to hang on to native sports at which foreigners are increasingly excelling. Sumo wrestling, for example, is being dominated by Bulgarians, Mongolians and Russians as much as Japanese.
Then there's judo. While Japan racked up some big wins this week, there was a bit of soul-searching as its judo team got off to a rocky start. Particular attention was on two-time Olympics champion and media darling Ryoko Tani, who was upset by Alina Dumitru of Romania. Dumitru won the gold in the extra-lightweight event; Tani won the bronze.
Tani, 32, secured a place on the Olympic team even though she lost to a younger athlete in the Japan championship final. She made the team largely because of her previous successes. It would seem to be a symptom of the seniority-based employment system that's making Japan less competitive globally.
Global Forces
Also, a new generation of judo from Europe and elsewhere is changing the sport. Many Japanese competitors, such as Tani, still focus on decisively tossing opponents over their shoulder onto the mat. Non-Japanese are focusing more and more on scoring easier points and then running out the clock until they win.
In a sense, it may be a failure to adapt to global forces, and it's not unlike what's ailing Japan's economy. It shrank an annualized 2.4 percent in the three months ended June 30. If Japan had done more to wean itself off exports and an undervalued yen it might be faring better as global growth wanes.
Abhinav Bindra, meanwhile, fired himself into sporting history by ending India's 108-year wait for an individual Olympic gold medal. Yet the shooting victory also served as a reminder of how the world's second-most-populous country has one of the worst Olympic legacies, winning just 17 medals since 1900.
Olympic medals aren't everything, and it's hard to argue India's economy isn't destined for great things. Some will claim a deeper significance in China's pursuit of topping the medal count and India's lack of focus on that goal.
On that score, perhaps China's medal tally should have investors rushing into its economy. Just keep in mind that things aren't always what they seem with Asia's sights and sounds.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
Read more...
Aug. 15 (Bloomberg) -- It was China's Milli Vanilli moment.
Beijing officials got caught in a lip-synching act of Olympian proportions. Communist Party officials put a cuter girl before the cameras at the opening ceremony instead of the real singer, whose imperfect teeth reportedly didn't make the grade.
No one doubted China would put on its best face for the Olympics -- it just acted too literally. New York Times columnist Gail Collins called the girl the ``Potemkin performer.'' Headline writers connected the dots to the downfall of a 1980s pop group whose Grammy Awards were revoked when similar truths came out.
Olympics organizers in Beijing also can't be happy that some other moments came to light. The opening-ceremony broadcast used computer-generated images of fireworks, including a fake shake to simulate helicopter filming, because of the city's hazy skies.
What's interesting, though, is what all this says about the world's fourth-biggest economy.
Some might say the Olympics are China's big coming-out party and why not go the extra mile to make them perfect? Why not do everything possible to obscure the haze surrounding the Chinese capital and keep protesters from spoiling the fun?
Instead, it hints at China's reluctance to allow the free flow of information and essentially to trust reality. Not to overdo the haze metaphor, but China wants you to see a certain image, whether it's the Olympics or its economy. What can investors see through the smog?
Haze Metaphor
There is what China wants you to see and what the data show. China presents a picture of a harmonious and increasingly prosperous people. That image, it's hoped, will distract financiers from risks, including slowing global growth, social instability, a widening gap between rich and poor, and pollution that's far worse than the overly positive categorizations that officials are using.
There's enough haze to go around, of course. Foreign executives partying it up in Beijing -- and lavishing untold millions on the International Olympic Committee -- don't seem to care about their role in polluting China and exploiting workers. It's all good, so long as prices at Wal-Mart Stores Inc. don't rise. We'll save a discussion of hazy corporate disclosure for another column.
The connection between sports and markets is tenuous, yet economists such as Jim O'Neill of Goldman Sachs Group Inc. in London often publish reports around events, including the soccer World Cup. The basic idea is that successes in sports and economics often go hand in hand.
Events at the Beijing Games may be offering other hints about trends around the globe.
On the Mat
Take Japan. As it struggles to remain a global force amid China's rise, Japan is trying to hang on to native sports at which foreigners are increasingly excelling. Sumo wrestling, for example, is being dominated by Bulgarians, Mongolians and Russians as much as Japanese.
Then there's judo. While Japan racked up some big wins this week, there was a bit of soul-searching as its judo team got off to a rocky start. Particular attention was on two-time Olympics champion and media darling Ryoko Tani, who was upset by Alina Dumitru of Romania. Dumitru won the gold in the extra-lightweight event; Tani won the bronze.
Tani, 32, secured a place on the Olympic team even though she lost to a younger athlete in the Japan championship final. She made the team largely because of her previous successes. It would seem to be a symptom of the seniority-based employment system that's making Japan less competitive globally.
Global Forces
Also, a new generation of judo from Europe and elsewhere is changing the sport. Many Japanese competitors, such as Tani, still focus on decisively tossing opponents over their shoulder onto the mat. Non-Japanese are focusing more and more on scoring easier points and then running out the clock until they win.
In a sense, it may be a failure to adapt to global forces, and it's not unlike what's ailing Japan's economy. It shrank an annualized 2.4 percent in the three months ended June 30. If Japan had done more to wean itself off exports and an undervalued yen it might be faring better as global growth wanes.
Abhinav Bindra, meanwhile, fired himself into sporting history by ending India's 108-year wait for an individual Olympic gold medal. Yet the shooting victory also served as a reminder of how the world's second-most-populous country has one of the worst Olympic legacies, winning just 17 medals since 1900.
Olympic medals aren't everything, and it's hard to argue India's economy isn't destined for great things. Some will claim a deeper significance in China's pursuit of topping the medal count and India's lack of focus on that goal.
On that score, perhaps China's medal tally should have investors rushing into its economy. Just keep in mind that things aren't always what they seem with Asia's sights and sounds.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
Read more...
New Zealand's June Retail Sales Increase 0.9% on Fuel
By Tracy Withers
Aug. 15 (Bloomberg) -- New Zealand's retail sales unexpectedly increased in June as consumers paid more for fuel and food.
Sales rose 0.9 percent from May, when they declined 1.1 percent, Statistics New Zealand said in Wellington today, citing seasonally adjusted figures. The median estimate of 12 economists surveyed by Bloomberg News was for no change.
Spending, adjusted to remove inflation, dropped over the second quarter, today's report also showed, marking the first time in a decade that sales have fallen for consecutive quarters. The Treasury Department forecasts the economy is in a recession, and the central bank lowered interest rates for the first time in five years in July and said further cuts are likely.
``Anything to do with the household sector remains down in the dumps at the moment,'' Craig Ebert, senior markets economist at Bank of New Zealand Ltd. in Wellington, said before the report was released. ``The Reserve Bank is on a clear and sustained easing course.''
New Zealand's dollar traded at 70.05 U.S. cents at 11:10 a.m. in Wellington trading from 69.76 cents before the report was released. The currency has slumped almost 10 percent against the U.S. dollar this year on signs of a slowdown in the economy.
Retail sales excluding inflation, a measure of volumes, fell a record 1.5 percent in the second quarter following a 1.2 percent drop in the three months to March. Economists expected a 1.8 percent decline.
It was the first time sales volumes fell in two successive quarters since 1998, the statistics agency said. The series began in 1995.
Mortgages, Fuel
Curbing consumer spending, home-loan costs have jumped while the price of gasoline has accelerated, leaving less money for discretionary goods.
Briscoe Group Ltd., which sells home-ware and sporting goods, said Aug. 4 that sales at its Rebel Sports stores fell 9.2 percent in the three months ended July 27.
``Trading conditions continued to be challenging during the second quarter,'' said Managing Director Rod Duke. Profit margins were squeezed by a high level of discounting, he said.
Slowing consumer spending and a slump in the housing market probably pushed the $105 billion economy into a recession in the first half, the Treasury Department said Aug. 4.
The interest rate on a two-year fixed mortgage was 8.69 percent in June from 7.98 percent a year earlier, according to central bank figures. Gasoline prices jumped 35 percent in the same period, according to government figures.
Rate Cuts
Reserve Bank Governor Alan Bollard last month cut the official cash rate a quarter-point from a record 8.25 percent, where he had kept it since July 2007. He said spending is likely to remain weak amid a slumping housing market and high gasoline prices.
Consumer confidence dropped to a 17-year low in the second quarter, according to an index calculated by Westpac Banking Corp. House sales plunged 42 percent to a 16-year low in June, the Real Estate Institute said July 11
Sales rose at 13 of the 24 store categories in June from the previous month, today's report showed.
Supermarket and grocery sales, which make up a fifth of all retailing, gained 0.6 percent. Department store sales fell as did purchases at furniture and clothing stores. Sales at vehicle dealers rose 5.2 percent from May, when they declined 15 percent.
Core retail sales, excluding spending on gasoline and at auto dealers and workshops, were unchanged. Economists expected a 0.8 percent decline.
To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.
Read more...
Aug. 15 (Bloomberg) -- New Zealand's retail sales unexpectedly increased in June as consumers paid more for fuel and food.
Sales rose 0.9 percent from May, when they declined 1.1 percent, Statistics New Zealand said in Wellington today, citing seasonally adjusted figures. The median estimate of 12 economists surveyed by Bloomberg News was for no change.
Spending, adjusted to remove inflation, dropped over the second quarter, today's report also showed, marking the first time in a decade that sales have fallen for consecutive quarters. The Treasury Department forecasts the economy is in a recession, and the central bank lowered interest rates for the first time in five years in July and said further cuts are likely.
``Anything to do with the household sector remains down in the dumps at the moment,'' Craig Ebert, senior markets economist at Bank of New Zealand Ltd. in Wellington, said before the report was released. ``The Reserve Bank is on a clear and sustained easing course.''
New Zealand's dollar traded at 70.05 U.S. cents at 11:10 a.m. in Wellington trading from 69.76 cents before the report was released. The currency has slumped almost 10 percent against the U.S. dollar this year on signs of a slowdown in the economy.
Retail sales excluding inflation, a measure of volumes, fell a record 1.5 percent in the second quarter following a 1.2 percent drop in the three months to March. Economists expected a 1.8 percent decline.
It was the first time sales volumes fell in two successive quarters since 1998, the statistics agency said. The series began in 1995.
Mortgages, Fuel
Curbing consumer spending, home-loan costs have jumped while the price of gasoline has accelerated, leaving less money for discretionary goods.
Briscoe Group Ltd., which sells home-ware and sporting goods, said Aug. 4 that sales at its Rebel Sports stores fell 9.2 percent in the three months ended July 27.
``Trading conditions continued to be challenging during the second quarter,'' said Managing Director Rod Duke. Profit margins were squeezed by a high level of discounting, he said.
Slowing consumer spending and a slump in the housing market probably pushed the $105 billion economy into a recession in the first half, the Treasury Department said Aug. 4.
The interest rate on a two-year fixed mortgage was 8.69 percent in June from 7.98 percent a year earlier, according to central bank figures. Gasoline prices jumped 35 percent in the same period, according to government figures.
Rate Cuts
Reserve Bank Governor Alan Bollard last month cut the official cash rate a quarter-point from a record 8.25 percent, where he had kept it since July 2007. He said spending is likely to remain weak amid a slumping housing market and high gasoline prices.
Consumer confidence dropped to a 17-year low in the second quarter, according to an index calculated by Westpac Banking Corp. House sales plunged 42 percent to a 16-year low in June, the Real Estate Institute said July 11
Sales rose at 13 of the 24 store categories in June from the previous month, today's report showed.
Supermarket and grocery sales, which make up a fifth of all retailing, gained 0.6 percent. Department store sales fell as did purchases at furniture and clothing stores. Sales at vehicle dealers rose 5.2 percent from May, when they declined 15 percent.
Core retail sales, excluding spending on gasoline and at auto dealers and workshops, were unchanged. Economists expected a 0.8 percent decline.
To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.
Read more...
OPEC Revenue Exceeds U.S. Income Tax Receipts: Chart of Day
By Peter Robison
Aug. 15 (Bloomberg) -- OPEC is pulling in more money from oil sales than the U.S. government is raising from individual taxpayers.
The CHART OF THE DAY shows the Organization of Petroleum Exporting Countries' export revenue will surpass what the U.S. raised last year in individual income taxes. The cartel's revenue may reach $1.174 trillion this year, edging U.S. personal income tax receipts for the first time since 1980, when gasoline shortages and the Iranian hostage crisis transfixed the country.
The scale of wealth at stake helps explain why offshore oil drilling is the subject of renewed debate in Congress, while business leaders including oil billionaire T. Boone Pickens back crash courses in renewable energy. As rising gasoline prices hobble U.S. companies from General Motors Corp. to Starbucks Corp., Middle East investors are accumulating stakes in global banks and purchasing icons like the Chrysler Building in New York.
``This is potentially an empire-ending problem,'' said Robert Zubrin, author of ``Energy Victory,'' a prescription for achieving U.S. energy independence. ``We're being brought low, and at the same time, someone else is being built up.''
Over three years, the 13 OPEC members, including Saudi Arabia, Iran and Venezuela, might bring in $3.5 trillion. That's almost equal to the market value of the Dow Jones Industrial Average, the benchmark U.S. stock index. U.S. drivers paid an average of $3.78 for a gallon of gas as of yesterday, 37 percent more than a year ago, according to AAA, the nation's largest motorist group.
To contact the reporter on this story: Peter Robison in Seattle at robison@bloomberg.net
Read more...
Aug. 15 (Bloomberg) -- OPEC is pulling in more money from oil sales than the U.S. government is raising from individual taxpayers.
The CHART OF THE DAY shows the Organization of Petroleum Exporting Countries' export revenue will surpass what the U.S. raised last year in individual income taxes. The cartel's revenue may reach $1.174 trillion this year, edging U.S. personal income tax receipts for the first time since 1980, when gasoline shortages and the Iranian hostage crisis transfixed the country.
The scale of wealth at stake helps explain why offshore oil drilling is the subject of renewed debate in Congress, while business leaders including oil billionaire T. Boone Pickens back crash courses in renewable energy. As rising gasoline prices hobble U.S. companies from General Motors Corp. to Starbucks Corp., Middle East investors are accumulating stakes in global banks and purchasing icons like the Chrysler Building in New York.
``This is potentially an empire-ending problem,'' said Robert Zubrin, author of ``Energy Victory,'' a prescription for achieving U.S. energy independence. ``We're being brought low, and at the same time, someone else is being built up.''
Over three years, the 13 OPEC members, including Saudi Arabia, Iran and Venezuela, might bring in $3.5 trillion. That's almost equal to the market value of the Dow Jones Industrial Average, the benchmark U.S. stock index. U.S. drivers paid an average of $3.78 for a gallon of gas as of yesterday, 37 percent more than a year ago, according to AAA, the nation's largest motorist group.
To contact the reporter on this story: Peter Robison in Seattle at robison@bloomberg.net
Read more...
BOJ May Keep Key Rate at 0.5% After Economy Shrank, Prices Rose
By Mayumi Otsuma
Aug. 15 (Bloomberg) -- The Bank of Japan will probably keep interest rates at the lowest level in the industrialized world next week after the economy shrank and inflation accelerated to a decade high.
Governor Masaaki Shirakawa and his six colleagues will leave the overnight lending rate at 0.5 percent at a two-day meeting ending Aug. 19, according to all 29 economists surveyed by Bloomberg News. The rate was last raised in February 2007.
The world's second-largest economy contracted an annualized 2.4 percent last quarter, a report showed this week, as higher prices deterred spending and a global slowdown caused a drop in exports. The central bank in April shelved a policy of raising rates, and with Japan on the verge of a recession, economists say borrowing costs will stay on hold until next year at least.
``The period the Bank of Japan has to adopt a wait-and-see stance is being prolonged further,'' said Yasunari Ueno, chief market economist at Mizuho Securities Co. in Tokyo. ``It's become difficult to raise rates even by the end of 2009.''
The decline in consumer spending in the three months ended June was the first since 2006, the gross domestic product report showed on Aug. 13. Exports fell the most since the 2001-2002 recession, robbing Japan of the engine that drove its longest postwar expansion.
`Weakening' Economy
The government last week described the economy as ``weakening,'' language it hadn't used since 2001. The Bank of Japan is likely to follow suit next week by downgrading its assessment for the second straight month, said Mari Iwashita, chief market economist at Daiwa Securities SMBC Co. in Tokyo.
``The central bank will probably use an expression like `stagnating' to describe the economy, after saying it was `slowing further' last month,'' said Iwashita, who this week pushed her forecast for a rate increase to the third quarter of 2009 at the earliest from the first quarter. ``There's no chance for a rate hike, at least until the economy starts to pick up.''
Inflation driven by higher energy and commodity costs is eroding households' purchasing power and companies' profits.
Consumer prices excluding fresh food climbed 1.9 percent in June from a year earlier, the fastest pace in a decade. Prices businesses pay for fuel and materials surged 7.1 percent in July, the most since the wake of the second oil crisis 27 years ago.
Still, economic growth trumps inflation as the bank's chief concern, and analysts expect price increases will ease later this year. Oil has declined $30 since climbing to a record $147 a barrel last month. Wages fell in June, indicating there's little risk of a salary-price spiral in Asia's biggest economy.
Inflation Contained
``There's no concern about the second-round effects of inflation in Japan,'' said Kazuhiko Sano, chief strategist at Nikko Citigroup Ltd. in Tokyo. ``The bank will put more weight on the risk of the economy's deterioration as time goes by.''
Consumer price gains will probably peak at 1.8 percent in the third quarter before slowing to 1.3 percent by the second three months of 2009, according to economists surveyed. The central bank considers prices to be stable within a range of zero to 2 percent.
At the same time, the central bank isn't about to reduce interest rates because any recession will be ``mild'' and Shirakawa is wary that keeping borrowing costs low may eventually stimulate the economy too much, said Tomoko Fujii.
``Despite the recession, the BOJ will probably be reluctant to cut rates in view of potentially adverse future side effects of too much monetary stimulus,'' said Fujii, head of economics and strategy at Bank of America N.A. in Tokyo. Japan ``should be able to enter a modest recovery phase in early 2009.''
Better Shape
Japan may be better equipped to recover from the current downturn than in the three recessions since 1990 because companies have shed excess workers, factories and debt, economists said.
``Given that there is not the same excess as in the past, I don't think it's going to be one of those extended deep recessions we've typically seen in Japan,'' said Glenn Maguire, chief Asia-Pacific economist at Societe Generale in Hong Kong.
The bank will probably announce the interest-rate decision, along with a statement explaining the reasons for its judgment, by early afternoon on Aug. 19. Shirakawa will speak at a press conference at 3:30 p.m.
To contact the reporter on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net
Read more...
Aug. 15 (Bloomberg) -- The Bank of Japan will probably keep interest rates at the lowest level in the industrialized world next week after the economy shrank and inflation accelerated to a decade high.
Governor Masaaki Shirakawa and his six colleagues will leave the overnight lending rate at 0.5 percent at a two-day meeting ending Aug. 19, according to all 29 economists surveyed by Bloomberg News. The rate was last raised in February 2007.
The world's second-largest economy contracted an annualized 2.4 percent last quarter, a report showed this week, as higher prices deterred spending and a global slowdown caused a drop in exports. The central bank in April shelved a policy of raising rates, and with Japan on the verge of a recession, economists say borrowing costs will stay on hold until next year at least.
``The period the Bank of Japan has to adopt a wait-and-see stance is being prolonged further,'' said Yasunari Ueno, chief market economist at Mizuho Securities Co. in Tokyo. ``It's become difficult to raise rates even by the end of 2009.''
The decline in consumer spending in the three months ended June was the first since 2006, the gross domestic product report showed on Aug. 13. Exports fell the most since the 2001-2002 recession, robbing Japan of the engine that drove its longest postwar expansion.
`Weakening' Economy
The government last week described the economy as ``weakening,'' language it hadn't used since 2001. The Bank of Japan is likely to follow suit next week by downgrading its assessment for the second straight month, said Mari Iwashita, chief market economist at Daiwa Securities SMBC Co. in Tokyo.
``The central bank will probably use an expression like `stagnating' to describe the economy, after saying it was `slowing further' last month,'' said Iwashita, who this week pushed her forecast for a rate increase to the third quarter of 2009 at the earliest from the first quarter. ``There's no chance for a rate hike, at least until the economy starts to pick up.''
Inflation driven by higher energy and commodity costs is eroding households' purchasing power and companies' profits.
Consumer prices excluding fresh food climbed 1.9 percent in June from a year earlier, the fastest pace in a decade. Prices businesses pay for fuel and materials surged 7.1 percent in July, the most since the wake of the second oil crisis 27 years ago.
Still, economic growth trumps inflation as the bank's chief concern, and analysts expect price increases will ease later this year. Oil has declined $30 since climbing to a record $147 a barrel last month. Wages fell in June, indicating there's little risk of a salary-price spiral in Asia's biggest economy.
Inflation Contained
``There's no concern about the second-round effects of inflation in Japan,'' said Kazuhiko Sano, chief strategist at Nikko Citigroup Ltd. in Tokyo. ``The bank will put more weight on the risk of the economy's deterioration as time goes by.''
Consumer price gains will probably peak at 1.8 percent in the third quarter before slowing to 1.3 percent by the second three months of 2009, according to economists surveyed. The central bank considers prices to be stable within a range of zero to 2 percent.
At the same time, the central bank isn't about to reduce interest rates because any recession will be ``mild'' and Shirakawa is wary that keeping borrowing costs low may eventually stimulate the economy too much, said Tomoko Fujii.
``Despite the recession, the BOJ will probably be reluctant to cut rates in view of potentially adverse future side effects of too much monetary stimulus,'' said Fujii, head of economics and strategy at Bank of America N.A. in Tokyo. Japan ``should be able to enter a modest recovery phase in early 2009.''
Better Shape
Japan may be better equipped to recover from the current downturn than in the three recessions since 1990 because companies have shed excess workers, factories and debt, economists said.
``Given that there is not the same excess as in the past, I don't think it's going to be one of those extended deep recessions we've typically seen in Japan,'' said Glenn Maguire, chief Asia-Pacific economist at Societe Generale in Hong Kong.
The bank will probably announce the interest-rate decision, along with a statement explaining the reasons for its judgment, by early afternoon on Aug. 19. Shirakawa will speak at a press conference at 3:30 p.m.
To contact the reporter on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net
Read more...
LNG Price May Gain 80% as Plant Delays, Export Cuts Curb Supply
By Dinakar Sethuraman and Angela Macdonald-Smith
Aug. 15 (Bloomberg) -- Liquefied natural gas prices in Asia may climb about 80 percent this year as new projects get delayed and countries from Indonesia to Egypt curb exports.
Cargoes of LNG, which is gas chilled into liquid for transportation by tankers, may rise to as much as $25 per million British thermal units in the Northern Hemisphere winter, said John Harris, a director at Cambridge Energy Research Associates Inc. in Beijing. Japan, the world's biggest buyer, paid an average $14.10 in June in the spot market for immediate delivery, according to the finance ministry, while China paid a record $14.35, customs figures show.
Production at plants in Russia, Yemen and Indonesia, with a combined capacity of about 24 million metric tons, will be delayed until next year instead of starting in the second half. Supplies will be limited just as South Korea increases imports 3.5 percent and Japan boosts purchases after an earthquake shut down its largest nuclear plant.
``This winter can be very tight,'' said Andy Flower, a London-based industry consultant and former executive at BP Plc's LNG business. ``There's not going to be much supply available.''
Cambridge Energy and Edinburgh-based Wood Mackenzie Consultants Ltd. say natural gas will reach parity with oil this year. Oil is forecast to average $124 a barrel in the fourth quarter, according to the median estimate of 31 analysts in a Bloomberg survey. That equates to a gas price of around $21 per million Btu.
Oil Alternative
U.K. gas futures for winter are trading at about $18 per million Btu, according to data compiled by Bloomberg. A British thermal unit is equivalent to the heat generated by a lighted match.
Supplies of the fuel, which pollutes less than oil-based alternatives, could be constrained because plants in Egypt, Nigeria and Norway operated at about 60 percent of capacity in the first half of 2008 after equipment failures and inadequate pipeline capacity, according to estimates compiled by Flower.
The StatoilHydro ASA-led Snohvit project shut twice this year because of mechanical difficulties, and may operate at 60 percent capacity for the rest of this year.
The BP Plc-led Tangguh venture in Indonesia, the OAO Gazprom-led Sakhalin-2 project in eastern Russia and a Total SA- led development in Yemen may start in 2009 instead of this year, said Frank Harris, global head of LNG at Wood Mackenzie.
Indonesia, Egypt, Qatar
Indonesia will divert fuel to fertilizer makers. The Bontang plant in the Kalimantan region will produce about 320 cargoes this year, lagging behind its contracted volume of 350, Daniel Purba, head of LNG market development at PT Pertamina, said in May. The plant can produce about 400 a year, he said. A cargo is typically 50,000 to 60,000 tons.
Pertamina, Indonesia's state oil company, will cut supplies to a group in Japan by 75 percent after its contract expires in 2010, Vice President Iin Arifin Takhyan said in October.
Egypt produced about 5.2 million tons in the first six months of 2008, compared with a potential 6.1 million, to meet domestic demand, Flower estimates. Nigeria supplied about 8 million, or about 72 percent of its first half capacity.
Qatargas Operating Co.'s fourth LNG unit and a fifth unit at the North West Shelf venture in Australia will probably be the only new production coming onto the market this half, Wood Mackenzie's Harris said. Most of the supply added in the first half of 2009 is designated for long-term agreements, or is being marketed under shorter contracts, rather than left for spot sales, he said.
Double Purchases
Global LNG trade rose 7.3 percent to the equivalent to 165.3 million metric tons last year, according to the BP Plc Statistical Review of World Energy June 2008. Consumption will increase 10 percent a year through 2015, more than five times as fast as crude oil, Citigroup Inc. analysts led by James Neale said in an April report.
China, the world's second-biggest energy user after the U.S., may double spot-market purchases this year, Cambridge Energy's Harris said. China may import as many as 15 cargoes from producers including Egypt, Nigeria, Algeria and Trinidad, he said.
Korea Gas Corp., which imports about 95 percent of South Korea's needs, plans to increase purchases to 26.4 million tons this year, Kim Sang Gil, an investor relations official, said in an Aug. 12 interview. The country relies on LNG for its gas requirements.
Japan's imports rose 6.2 percent to 34.67 million tons in the first six months, according to data compiled by the Finance Ministry. The country, which imports almost all its gas, bought 66.8 million tons of LNG in 2007.
Tokyo Electric Power Co., Asia's largest utility, increased consumption by about 18 percent to 19.9 million tons in the year ended March 31 after an earthquake last July shut its Kashiwazaki Kariwa nuclear plant, the world's biggest. LNG use in July grew 7.4 percent to 1.75 million tons from a year earlier, the company said Aug. 12.
``Japan and South Korea will pay whatever it takes to get the fuel,'' Cambridge Energy's Harris said. ``They do not have access to pipeline gas and the alternative is oil-based fuel.''
To contact the reporters on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net; Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
Read more...
Aug. 15 (Bloomberg) -- Liquefied natural gas prices in Asia may climb about 80 percent this year as new projects get delayed and countries from Indonesia to Egypt curb exports.
Cargoes of LNG, which is gas chilled into liquid for transportation by tankers, may rise to as much as $25 per million British thermal units in the Northern Hemisphere winter, said John Harris, a director at Cambridge Energy Research Associates Inc. in Beijing. Japan, the world's biggest buyer, paid an average $14.10 in June in the spot market for immediate delivery, according to the finance ministry, while China paid a record $14.35, customs figures show.
Production at plants in Russia, Yemen and Indonesia, with a combined capacity of about 24 million metric tons, will be delayed until next year instead of starting in the second half. Supplies will be limited just as South Korea increases imports 3.5 percent and Japan boosts purchases after an earthquake shut down its largest nuclear plant.
``This winter can be very tight,'' said Andy Flower, a London-based industry consultant and former executive at BP Plc's LNG business. ``There's not going to be much supply available.''
Cambridge Energy and Edinburgh-based Wood Mackenzie Consultants Ltd. say natural gas will reach parity with oil this year. Oil is forecast to average $124 a barrel in the fourth quarter, according to the median estimate of 31 analysts in a Bloomberg survey. That equates to a gas price of around $21 per million Btu.
Oil Alternative
U.K. gas futures for winter are trading at about $18 per million Btu, according to data compiled by Bloomberg. A British thermal unit is equivalent to the heat generated by a lighted match.
Supplies of the fuel, which pollutes less than oil-based alternatives, could be constrained because plants in Egypt, Nigeria and Norway operated at about 60 percent of capacity in the first half of 2008 after equipment failures and inadequate pipeline capacity, according to estimates compiled by Flower.
The StatoilHydro ASA-led Snohvit project shut twice this year because of mechanical difficulties, and may operate at 60 percent capacity for the rest of this year.
The BP Plc-led Tangguh venture in Indonesia, the OAO Gazprom-led Sakhalin-2 project in eastern Russia and a Total SA- led development in Yemen may start in 2009 instead of this year, said Frank Harris, global head of LNG at Wood Mackenzie.
Indonesia, Egypt, Qatar
Indonesia will divert fuel to fertilizer makers. The Bontang plant in the Kalimantan region will produce about 320 cargoes this year, lagging behind its contracted volume of 350, Daniel Purba, head of LNG market development at PT Pertamina, said in May. The plant can produce about 400 a year, he said. A cargo is typically 50,000 to 60,000 tons.
Pertamina, Indonesia's state oil company, will cut supplies to a group in Japan by 75 percent after its contract expires in 2010, Vice President Iin Arifin Takhyan said in October.
Egypt produced about 5.2 million tons in the first six months of 2008, compared with a potential 6.1 million, to meet domestic demand, Flower estimates. Nigeria supplied about 8 million, or about 72 percent of its first half capacity.
Qatargas Operating Co.'s fourth LNG unit and a fifth unit at the North West Shelf venture in Australia will probably be the only new production coming onto the market this half, Wood Mackenzie's Harris said. Most of the supply added in the first half of 2009 is designated for long-term agreements, or is being marketed under shorter contracts, rather than left for spot sales, he said.
Double Purchases
Global LNG trade rose 7.3 percent to the equivalent to 165.3 million metric tons last year, according to the BP Plc Statistical Review of World Energy June 2008. Consumption will increase 10 percent a year through 2015, more than five times as fast as crude oil, Citigroup Inc. analysts led by James Neale said in an April report.
China, the world's second-biggest energy user after the U.S., may double spot-market purchases this year, Cambridge Energy's Harris said. China may import as many as 15 cargoes from producers including Egypt, Nigeria, Algeria and Trinidad, he said.
Korea Gas Corp., which imports about 95 percent of South Korea's needs, plans to increase purchases to 26.4 million tons this year, Kim Sang Gil, an investor relations official, said in an Aug. 12 interview. The country relies on LNG for its gas requirements.
Japan's imports rose 6.2 percent to 34.67 million tons in the first six months, according to data compiled by the Finance Ministry. The country, which imports almost all its gas, bought 66.8 million tons of LNG in 2007.
Tokyo Electric Power Co., Asia's largest utility, increased consumption by about 18 percent to 19.9 million tons in the year ended March 31 after an earthquake last July shut its Kashiwazaki Kariwa nuclear plant, the world's biggest. LNG use in July grew 7.4 percent to 1.75 million tons from a year earlier, the company said Aug. 12.
``Japan and South Korea will pay whatever it takes to get the fuel,'' Cambridge Energy's Harris said. ``They do not have access to pipeline gas and the alternative is oil-based fuel.''
To contact the reporters on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net; Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
Read more...
Yen, Singapore Dollar, Philippine Peso: Asia Currency Preview
By Bob Chen
Aug. 15 (Bloomberg) -- The following events and economic reports may influence trading in Asian currencies today.
Exchange rates are from the previous session.
Japanese yen: Finance Minister Bunmei Ibuki, Economic and Fiscal Policy Minister Kaoru Yosano and Chief Cabinet Secretary Nobutaka Machimura will hold briefings after a cabinet meeting this morning.
The yen was at 109.64 a dollar at 6:37 a.m. in New York.
Singapore dollar: Retail sales fell 0.2 percent in June from a year earlier, following a 4.8 percent increase the previous month, economists said in a Bloomberg News survey before the government reports the data at 1 p.m. local time.
The local dollar was at S$1.4083.
Philippine peso: The central bank will detail June remittances data today. Money sent home by Filipinos working abroad increased 15.6 percent in May to $1.43 billion.
The peso was at 44.982.
Thai baht: The Bank of Thailand will detail foreign- exchange reserves for the week ended Aug. 8 at 2:30 p.m.
The baht was at 33.72.
To contact the reporter on this story: Bob Chen in Hong Kong at bchen45@bloomberg.net.
Read more...
Aug. 15 (Bloomberg) -- The following events and economic reports may influence trading in Asian currencies today.
Exchange rates are from the previous session.
Japanese yen: Finance Minister Bunmei Ibuki, Economic and Fiscal Policy Minister Kaoru Yosano and Chief Cabinet Secretary Nobutaka Machimura will hold briefings after a cabinet meeting this morning.
The yen was at 109.64 a dollar at 6:37 a.m. in New York.
Singapore dollar: Retail sales fell 0.2 percent in June from a year earlier, following a 4.8 percent increase the previous month, economists said in a Bloomberg News survey before the government reports the data at 1 p.m. local time.
The local dollar was at S$1.4083.
Philippine peso: The central bank will detail June remittances data today. Money sent home by Filipinos working abroad increased 15.6 percent in May to $1.43 billion.
The peso was at 44.982.
Thai baht: The Bank of Thailand will detail foreign- exchange reserves for the week ended Aug. 8 at 2:30 p.m.
The baht was at 33.72.
To contact the reporter on this story: Bob Chen in Hong Kong at bchen45@bloomberg.net.
Read more...
Asia Commodities Day Ahead: Nebraska Beef Widens E. Coli Recall
Aug. 15 (Bloomberg) -- Nebraska Beef Ltd. of Omaha has expanded its latest E. coli-related recall, the government said. Corn and wheat gained. Harbinger Capital Management will ask Cleveland-Cliffs Inc.'s shareholders to allow it to double its stake in the iron-ore producer. Platinum and gold dropped. Cia. Vale do Rio Doce plans to almost double iron-ore output. Sugar, cotton and cocoa declined.
AGRICULTURAL COMMODITIES
Nebraska Beef Expands Second E. Coli-Related Recall
Nebraska Beef Ltd. of Omaha has expanded its latest E. coli-related recall, bringing the total amount of meat called back since late June to 6.66 million pounds, according to the U.S. Department of Agriculture.
U.S. Soybean Use Falls After End of Argentine Crisis
Soybean demand from U.S. processors fell 6.7 percent last month after Argentina rescinded an export tax increase, ending a four-month dispute with farmers and reducing demand for U.S. vegetable oils and animal feed.
Corn Rises Amid Speculation Cold Weather Will Damage U.S. Crops
Corn rose, capping the biggest three-day gain in more than eight weeks, on speculation that freezing temperatures in the Midwest during September will damage crops in the U.S., the world's top producer. Corn rose 18.75 cents, or 3.4 percent, to $5.7725 a bushel in Chicago.
Soybeans Decline as Reports Shows Slowing Demand for U.S. Crops
Soybeans fell for the first time in four sessions, after reports showed a slowdown in demand for supplies in the U.S., the world's biggest grower and exporter. Soybeans fell 10 cents, or 0.8 percent, to $12.74 a bushel in Chicago.
Wheat Extends Rally on Signs of Improved Demand for U.S. Grain
Wheat rose to a six-week high on signs of increased demand and speculation importers are betting that U.S. supplies are the cheapest they will be for the rest of this year. Wheat rose 14.25 cents, or 1.6 percent, to $8.895 a bushel in Chicago.
Cattle Rise on Signs of Tightening U.S. Beef Supply; Hogs Fall
Cattle rose to the highest price this week on signs of improving demand for U.S. beef and reduced supplies for meatpackers. Cattle climbed 0.45 cent, or 0.4 percent, to $1.079 a pound in Chicago. Feeder cattle gained 0.575 cent, or 0.5 percent, to $1.15425 a pound. Hogs fell 0.15 cent, or 0.2 percent, to 76.075 cents a pound.
STEEL, IRON ORE, COAL & URANIUM
Harbinger Seeks to Buy Up to 33% of Cleveland-Cliffs
Harbinger Capital Management will ask Cleveland-Cliffs Inc.'s shareholders to allow it to double its stake in the iron-ore producer to one-third as it seeks to prevent the company's purchase of Alpha Natural Resources Inc.
Vale Boosts Output Goal, Plans to Double Iron, Alumina Capacity
Cia. Vale do Rio Doce, the world's biggest iron-ore producer, plans to almost double output of the raw material used to make steel, more than previously planned, as part of $25 billion in investments in Brazil's Para state.
Cameco Second-Quarter Net Falls 27% as Sales Decline
Cameco Corp., the world's largest uranium producer, said second-quarter profit fell 27 percent as sales and output of the raw material in nuclear fuel declined.
Usiminas Net Rises as Brazil Growth Boosts Demand
Usinas Siderurgicas de Minas Gerais, Brazil's second- largest steelmaker, said second-quarter profit rose 7.3 percent as growth in Latin America's biggest economy boosted demand for the company's flat steel.
PRECIOUS METALS, GEMS
Gold, Silver Fall as U.S. Consumer Prices Rise Most in 17 Years
Gold fell on speculation surging U.S. consumer costs may spur the Federal Reserve to raise interest rates, boosting the dollar and eroding the metal's appeal as an alternative investment. Gold fell $17, or 2 percent, to $814.50 an ounce in New York. Silver futures for December delivery sank 61.8 cents, or 4.1 percent, to $14.36 an ounce.
Platinum, Palladium Fall in N.Y. as U.S. Consumer Prices Climb
Platinum and palladium fell in New York on speculation that the Federal Reserve may raise U.S. interest rates next month to cool inflation after a report showed consumer prices climbed the most in 17 years in July. Platinum fell $27.40, or 1.8 percent, to $1,489.10 an ounce. Palladium dropped $8.35, or 2.6 percent, to $308 an ounce.
INDUSTRIAL METALS, MINING
Copper Declines in New York as Dollar Rallies, Crude Oil Drops
Copper slid as a decline in oil prices and an advance in the dollar limited demand for commodities as inflation hedges. Copper dropped 4.7 cents, or 1.4 percent, to $3.305 a pound in New York.
CHEMICALS
Hexion Loss Widens to $180 Million on Rising Expenses
Hexion Specialty Chemicals Inc., the Apollo Management LP unit trying to cancel a merger with Huntsman Corp., reported a wider second-quarter loss because of rising raw-material costs and acquisition-related expenses.
SOFT COMMODITIES
Sugar Falls in New York as Crude Oil Slips, Dollar Strengthens
Sugar dropped the most in more than a week in New York as a strengthening dollar pushed down crude oil and cut demand for fuel made from cane. Sugar fell 0.46 cent, or 3.3 percent, to 13.39 cents a pound.
Cotton Futures Fall on Slumping U.S. Exports, Economic Slowdown
Cotton fell for the first time in three sessions as shipments last week were less than expected from the U.S., the world's largest exporter, fueling speculation that a slowing economy will curb demand. Cotton dropped 1.71 cents, or 2.4 percent, to 69.48 cents a pound in New York.
Cocoa Joins Commodities Decline as U.S. Currency Strengthens
Cocoa fell in New York as the dollar gained, damping demand for commodities including gold and crude oil as hedges against inflation. Cocoa slid $19, or 0.7 percent, to $2,678 a metric ton in New York.
Orange Juice Rises on Bets Tropical Storms to Hurt Florida Crop
Orange-juice futures rose for a third day on concern that a tropical storm may batter Florida groves still recovering from hurricane damage in 2004 and 2005. Orange juice climbed 0.55 cent, or 0.5 percent, to $1.0775 a pound.
Coffee Falls as Stronger Dollar May Erode Appeal of Commodities
Coffee futures fell for the second-straight day on speculation the rising dollar, which makes commodities more expensive for buyers holding other currencies, will reduce the appeal of contracts traded in New York. Coffee declined 0.4 cent, or 0.3 percent, to $1.3905 a pound in New York.
Read more...
AGRICULTURAL COMMODITIES
Nebraska Beef Expands Second E. Coli-Related Recall
Nebraska Beef Ltd. of Omaha has expanded its latest E. coli-related recall, bringing the total amount of meat called back since late June to 6.66 million pounds, according to the U.S. Department of Agriculture.
U.S. Soybean Use Falls After End of Argentine Crisis
Soybean demand from U.S. processors fell 6.7 percent last month after Argentina rescinded an export tax increase, ending a four-month dispute with farmers and reducing demand for U.S. vegetable oils and animal feed.
Corn Rises Amid Speculation Cold Weather Will Damage U.S. Crops
Corn rose, capping the biggest three-day gain in more than eight weeks, on speculation that freezing temperatures in the Midwest during September will damage crops in the U.S., the world's top producer. Corn rose 18.75 cents, or 3.4 percent, to $5.7725 a bushel in Chicago.
Soybeans Decline as Reports Shows Slowing Demand for U.S. Crops
Soybeans fell for the first time in four sessions, after reports showed a slowdown in demand for supplies in the U.S., the world's biggest grower and exporter. Soybeans fell 10 cents, or 0.8 percent, to $12.74 a bushel in Chicago.
Wheat Extends Rally on Signs of Improved Demand for U.S. Grain
Wheat rose to a six-week high on signs of increased demand and speculation importers are betting that U.S. supplies are the cheapest they will be for the rest of this year. Wheat rose 14.25 cents, or 1.6 percent, to $8.895 a bushel in Chicago.
Cattle Rise on Signs of Tightening U.S. Beef Supply; Hogs Fall
Cattle rose to the highest price this week on signs of improving demand for U.S. beef and reduced supplies for meatpackers. Cattle climbed 0.45 cent, or 0.4 percent, to $1.079 a pound in Chicago. Feeder cattle gained 0.575 cent, or 0.5 percent, to $1.15425 a pound. Hogs fell 0.15 cent, or 0.2 percent, to 76.075 cents a pound.
STEEL, IRON ORE, COAL & URANIUM
Harbinger Seeks to Buy Up to 33% of Cleveland-Cliffs
Harbinger Capital Management will ask Cleveland-Cliffs Inc.'s shareholders to allow it to double its stake in the iron-ore producer to one-third as it seeks to prevent the company's purchase of Alpha Natural Resources Inc.
Vale Boosts Output Goal, Plans to Double Iron, Alumina Capacity
Cia. Vale do Rio Doce, the world's biggest iron-ore producer, plans to almost double output of the raw material used to make steel, more than previously planned, as part of $25 billion in investments in Brazil's Para state.
Cameco Second-Quarter Net Falls 27% as Sales Decline
Cameco Corp., the world's largest uranium producer, said second-quarter profit fell 27 percent as sales and output of the raw material in nuclear fuel declined.
Usiminas Net Rises as Brazil Growth Boosts Demand
Usinas Siderurgicas de Minas Gerais, Brazil's second- largest steelmaker, said second-quarter profit rose 7.3 percent as growth in Latin America's biggest economy boosted demand for the company's flat steel.
PRECIOUS METALS, GEMS
Gold, Silver Fall as U.S. Consumer Prices Rise Most in 17 Years
Gold fell on speculation surging U.S. consumer costs may spur the Federal Reserve to raise interest rates, boosting the dollar and eroding the metal's appeal as an alternative investment. Gold fell $17, or 2 percent, to $814.50 an ounce in New York. Silver futures for December delivery sank 61.8 cents, or 4.1 percent, to $14.36 an ounce.
Platinum, Palladium Fall in N.Y. as U.S. Consumer Prices Climb
Platinum and palladium fell in New York on speculation that the Federal Reserve may raise U.S. interest rates next month to cool inflation after a report showed consumer prices climbed the most in 17 years in July. Platinum fell $27.40, or 1.8 percent, to $1,489.10 an ounce. Palladium dropped $8.35, or 2.6 percent, to $308 an ounce.
INDUSTRIAL METALS, MINING
Copper Declines in New York as Dollar Rallies, Crude Oil Drops
Copper slid as a decline in oil prices and an advance in the dollar limited demand for commodities as inflation hedges. Copper dropped 4.7 cents, or 1.4 percent, to $3.305 a pound in New York.
CHEMICALS
Hexion Loss Widens to $180 Million on Rising Expenses
Hexion Specialty Chemicals Inc., the Apollo Management LP unit trying to cancel a merger with Huntsman Corp., reported a wider second-quarter loss because of rising raw-material costs and acquisition-related expenses.
SOFT COMMODITIES
Sugar Falls in New York as Crude Oil Slips, Dollar Strengthens
Sugar dropped the most in more than a week in New York as a strengthening dollar pushed down crude oil and cut demand for fuel made from cane. Sugar fell 0.46 cent, or 3.3 percent, to 13.39 cents a pound.
Cotton Futures Fall on Slumping U.S. Exports, Economic Slowdown
Cotton fell for the first time in three sessions as shipments last week were less than expected from the U.S., the world's largest exporter, fueling speculation that a slowing economy will curb demand. Cotton dropped 1.71 cents, or 2.4 percent, to 69.48 cents a pound in New York.
Cocoa Joins Commodities Decline as U.S. Currency Strengthens
Cocoa fell in New York as the dollar gained, damping demand for commodities including gold and crude oil as hedges against inflation. Cocoa slid $19, or 0.7 percent, to $2,678 a metric ton in New York.
Orange Juice Rises on Bets Tropical Storms to Hurt Florida Crop
Orange-juice futures rose for a third day on concern that a tropical storm may batter Florida groves still recovering from hurricane damage in 2004 and 2005. Orange juice climbed 0.55 cent, or 0.5 percent, to $1.0775 a pound.
Coffee Falls as Stronger Dollar May Erode Appeal of Commodities
Coffee futures fell for the second-straight day on speculation the rising dollar, which makes commodities more expensive for buyers holding other currencies, will reduce the appeal of contracts traded in New York. Coffee declined 0.4 cent, or 0.3 percent, to $1.3905 a pound in New York.
Read more...
New Zealand Dollar Heads for 5th Weekly Decline on Rate Outlook
By Candice Zachariahs
Aug. 15 (Bloomberg) -- The New Zealand dollar headed for a fifth consecutive weekly decline, its longest losing streak since May, as investors bet that lower interest rates would make the country's assets less attractive.
The kiwi, as the currency is called, fell to a near 12- month low against the U.S. dollar and its weakest in almost two years against the yen this week as concerns global growth will slow spurred investors to exit the so-called carry trade. The currency pared losses today after a government report showed retail sales in New Zealand rebounded in June.
``The New Zealand dollar has been affected by the momentum of the carry trade,'' said Alex Sinton, a senior currency trader at ANZ National Bank Ltd. in Auckland. ``Economically there are still factors that weigh on the kiwi.''
New Zealand's dollar dropped 0.4 percent to 69.88 U.S. cents as of 10:57 a.m. in Wellington, from 70.14 cents late in Asia yesterday and 70.43 a week ago in New York. It touched 68.26 cents on Aug. 13, the lowest since Aug. 17, 2007. The currency has fallen 0.8 percent this week.
The New Zealand dollar climbed from 69.75 cents after Statistics New Zealand released a report showing retail sales rose 0.9 percent from May when they declined 1.1 percent. The median estimate of 12 economists surveyed by Bloomberg News was for no change.
The currency has dropped 8.4 percent versus the U.S. dollar in the past month after the Reserve Bank of New Zealand reduced borrowing costs to 8 percent on July 24 and signaled more cuts ahead. The Treasury Department said Aug. 4 the nation probably contracted in the second quarter, pushing New Zealand into its first recession in a decade.
`Slowing Activity'
Goldman Sachs Group Inc. changed its forecast for the kiwi yesterday. New Zealand and neighboring Australia face ``challenges on the domestic front from slowing activity,'' analysts led by Thomas Stolper wrote in a research note. The firm now expects the currency to buy 68 U.S. cents in three months, compared with an earlier forecast of 73 cents.
The kiwi bought 76.84 yen, from 76.95 yen in Asia yesterday and 77.61 in New York on Aug. 8. It has lost 1 percent this week.
New Zealand's benchmark interest rate compares with 2 percent in the U.S. and 0.5 percent in Japan, making its currency a favorite target for carry trades.
In carry trades, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the rates. The risk is that currency market moves can erase those profits.
Traders are betting the Reserve Bank will lower its benchmark rate by 1.53 percentage points over the next 12 months, according to a Credit Suisse Group index based on overnight swaps trading yesterday.
To contact the reporter on this story: Candice Zachariahs in New York at czachariahs1@bloomberg.net
Read more...
Aug. 15 (Bloomberg) -- The New Zealand dollar headed for a fifth consecutive weekly decline, its longest losing streak since May, as investors bet that lower interest rates would make the country's assets less attractive.
The kiwi, as the currency is called, fell to a near 12- month low against the U.S. dollar and its weakest in almost two years against the yen this week as concerns global growth will slow spurred investors to exit the so-called carry trade. The currency pared losses today after a government report showed retail sales in New Zealand rebounded in June.
``The New Zealand dollar has been affected by the momentum of the carry trade,'' said Alex Sinton, a senior currency trader at ANZ National Bank Ltd. in Auckland. ``Economically there are still factors that weigh on the kiwi.''
New Zealand's dollar dropped 0.4 percent to 69.88 U.S. cents as of 10:57 a.m. in Wellington, from 70.14 cents late in Asia yesterday and 70.43 a week ago in New York. It touched 68.26 cents on Aug. 13, the lowest since Aug. 17, 2007. The currency has fallen 0.8 percent this week.
The New Zealand dollar climbed from 69.75 cents after Statistics New Zealand released a report showing retail sales rose 0.9 percent from May when they declined 1.1 percent. The median estimate of 12 economists surveyed by Bloomberg News was for no change.
The currency has dropped 8.4 percent versus the U.S. dollar in the past month after the Reserve Bank of New Zealand reduced borrowing costs to 8 percent on July 24 and signaled more cuts ahead. The Treasury Department said Aug. 4 the nation probably contracted in the second quarter, pushing New Zealand into its first recession in a decade.
`Slowing Activity'
Goldman Sachs Group Inc. changed its forecast for the kiwi yesterday. New Zealand and neighboring Australia face ``challenges on the domestic front from slowing activity,'' analysts led by Thomas Stolper wrote in a research note. The firm now expects the currency to buy 68 U.S. cents in three months, compared with an earlier forecast of 73 cents.
The kiwi bought 76.84 yen, from 76.95 yen in Asia yesterday and 77.61 in New York on Aug. 8. It has lost 1 percent this week.
New Zealand's benchmark interest rate compares with 2 percent in the U.S. and 0.5 percent in Japan, making its currency a favorite target for carry trades.
In carry trades, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the rates. The risk is that currency market moves can erase those profits.
Traders are betting the Reserve Bank will lower its benchmark rate by 1.53 percentage points over the next 12 months, according to a Credit Suisse Group index based on overnight swaps trading yesterday.
To contact the reporter on this story: Candice Zachariahs in New York at czachariahs1@bloomberg.net
Read more...
Aussie Dollar Falls for 4th Week on Lower Commodities, Rates
By Candice Zachariahs
Aug. 15 (Bloomberg) -- Australia's dollar headed for its fourth consecutive weekly decline, the longest losing streak since October 2006, as prices of commodities dropped and traders added to bets the central bank will reduce interest rates.
The currency slid 2 percent this week after gold, its third most valuable raw material export, dropped 5.8 percent. Reserve Bank of Australia Deputy Governor Ric Battellino said yesterday the central bank ``is in a position to consider'' cutting interest rates even before inflation slows.
``With the RBA reinforcing market expectations that they are likely to start lowering the official cash rate as soon as September, we remain bearish,'' Deutsche Bank AG currency strategists including London-based Bilal Hafeez and Sydney-based John Horner, wrote in a research note yesterday. ``We continue to target a fall to 85 U.S. cents on this move.''
Australia's dollar fell 0.6 percent to 87.05 U.S. cents at 8:19 a.m. in Sydney, compared with 87.61 cents in late Asian trading yesterday and from 88.85 cents in New York a week ago. It dropped to 85.93 cents on Aug. 13, the weakest since Jan. 23.
The currency dropped to 95.60 yen from 96.10 yen yesterday. It has slipped 2.4 percent against the yen this week, its fourth consecutive weekly decline.
Interest-Rate Bets
The Aussie, as the currency is nicknamed, was the second- worst performer among the 16 major currencies the past five days. Traders expect the RBA will cut its benchmark rate of 7.25 percent by 1.1 percentage points over the next 12 months according to a Credit Suisse Group index based on interest-rate swaps yesterday.
``We cannot wait to see a fall in inflation before we start cutting rates because by then it would be too late,'' Battellino told a parliamentary committee in Sydney yesterday. ``We try to be pre-emptive when we start tightening and pre-emptive when we start easing.''
Goldman Sachs Group Inc. revised its forecast for the Aussie yesterday, saying that the Australian and New Zealand dollars faced challenges on the ``domestic front from slowing activity.'' The firm now expects the currency to buy 86 cents in three months, compared with a pervious forecast of 96 cents.
Australia's dollar has fallen 11 percent versus the dollar this month as the UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials has dropped 12.5 percent.
To contact the reporter on this story: Candice Zachariahs in New York at czachariahs1@bloomberg.net
Read more...
Aug. 15 (Bloomberg) -- Australia's dollar headed for its fourth consecutive weekly decline, the longest losing streak since October 2006, as prices of commodities dropped and traders added to bets the central bank will reduce interest rates.
The currency slid 2 percent this week after gold, its third most valuable raw material export, dropped 5.8 percent. Reserve Bank of Australia Deputy Governor Ric Battellino said yesterday the central bank ``is in a position to consider'' cutting interest rates even before inflation slows.
``With the RBA reinforcing market expectations that they are likely to start lowering the official cash rate as soon as September, we remain bearish,'' Deutsche Bank AG currency strategists including London-based Bilal Hafeez and Sydney-based John Horner, wrote in a research note yesterday. ``We continue to target a fall to 85 U.S. cents on this move.''
Australia's dollar fell 0.6 percent to 87.05 U.S. cents at 8:19 a.m. in Sydney, compared with 87.61 cents in late Asian trading yesterday and from 88.85 cents in New York a week ago. It dropped to 85.93 cents on Aug. 13, the weakest since Jan. 23.
The currency dropped to 95.60 yen from 96.10 yen yesterday. It has slipped 2.4 percent against the yen this week, its fourth consecutive weekly decline.
Interest-Rate Bets
The Aussie, as the currency is nicknamed, was the second- worst performer among the 16 major currencies the past five days. Traders expect the RBA will cut its benchmark rate of 7.25 percent by 1.1 percentage points over the next 12 months according to a Credit Suisse Group index based on interest-rate swaps yesterday.
``We cannot wait to see a fall in inflation before we start cutting rates because by then it would be too late,'' Battellino told a parliamentary committee in Sydney yesterday. ``We try to be pre-emptive when we start tightening and pre-emptive when we start easing.''
Goldman Sachs Group Inc. revised its forecast for the Aussie yesterday, saying that the Australian and New Zealand dollars faced challenges on the ``domestic front from slowing activity.'' The firm now expects the currency to buy 86 cents in three months, compared with a pervious forecast of 96 cents.
Australia's dollar has fallen 11 percent versus the dollar this month as the UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials has dropped 12.5 percent.
To contact the reporter on this story: Candice Zachariahs in New York at czachariahs1@bloomberg.net
Read more...
Oil Steady After Falling on Signs Fuel Use Decline Will Spread
By Mark Shenk
Aug. 15 (Bloomberg) -- Crude oil was little changed after falling on speculation that fuel-consumption declines in the U.S. will spread to other countries as their economies slow.
Gasoline demand was down 2.1 percent through July as record prices and slower economic growth cut consumer spending, an American Petroleum Institute report showed Aug. 13. Europe's economy contracted for the first time since the introduction of the euro almost a decade ago, a report showed yesterday.
``The market is much more focused on demand destruction than on supply concerns,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``The concern now is that the demand destruction in the U.S. will spread like a virus to other countries.''
Crude oil for September delivery fell 25 cents to $114.76 a barrel at 8:32 a.m. Sydney time on the New York Mercantile Exchange. Prices are up 57 percent from a year ago. They reached a record $147.27 on July 11. Yesterday, futures fell 99 cents, or 0.9 percent, to settle at $115.01 a barrel.
Futures climbed $2.99 a barrel Aug. 13 after an Energy Department report showed that U.S. gasoline supplies dropped 6.39 million barrels to 202.8 million barrels last week, the biggest decline since October 2002. Petroleum-product imports fell to the lowest since April 2005 and refinery operating rates were 1.1 percentage points lower, the report showed.
The report ``was one of the most bullish in a year,'' said Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky. ``The overriding sentiment of the market is bearish because of the negative demand outlook.''
European Economy
European gross domestic product fell 0.2 percent in the second quarter from the first, when it increased 0.7 percent, the European Union statistics office in Luxembourg said yesterday.
Most energy and metals futures dropped as the U.S. currency advanced to a 5 1/2-month high versus the euro yesterday because of the European report. A strong dollar reduces the appeal of commodities to investors looking for an inflation hedge.
The dollar traded at $1.4808 per euro at 6:32 a.m. in Tokyo, after rising 0.6 percent yesterday and touching $1.4778, the strongest since Feb. 21. The U.S. currency was at 109.73 yen, following a 0.2 percent gain yesterday.
Exxon Mobil Corp. Chief Executive Officer Rex Tillerson said in an ABC News interview Aug. 13 that oil prices don't reflect supply and demand, and are being influenced by such factors as a weak dollar.
`Number of Causes'
``If you look at just basic fundamentals of supply and demand, clearly we've been at a price level that, my view has been for some time, is not reflective of strictly fundamental supply and demand, but also is reflective of a lot of uncertainty about the future of supply that you can attribute to any number of causes,'' Tillerson said.
Brent crude oil for September settlement declined 83 cents, or 0.7 percent, to $112.64 a barrel on London's ICE Futures Europe exchange yesterday.
Prices also fell because natural gas tumbled more than 3 percent after a government report showed that U.S. supplies rose 50 billion cubic feet last week. Some users can switch between oil-based fuels and gas, depending on cost.
Natural gas for September delivery fell 32 cents, or 3.8 percent, to settle at $8.136 per million British thermal units in New York. Futures are up 17 percent from a year ago.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
Read more...
Aug. 15 (Bloomberg) -- Crude oil was little changed after falling on speculation that fuel-consumption declines in the U.S. will spread to other countries as their economies slow.
Gasoline demand was down 2.1 percent through July as record prices and slower economic growth cut consumer spending, an American Petroleum Institute report showed Aug. 13. Europe's economy contracted for the first time since the introduction of the euro almost a decade ago, a report showed yesterday.
``The market is much more focused on demand destruction than on supply concerns,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``The concern now is that the demand destruction in the U.S. will spread like a virus to other countries.''
Crude oil for September delivery fell 25 cents to $114.76 a barrel at 8:32 a.m. Sydney time on the New York Mercantile Exchange. Prices are up 57 percent from a year ago. They reached a record $147.27 on July 11. Yesterday, futures fell 99 cents, or 0.9 percent, to settle at $115.01 a barrel.
Futures climbed $2.99 a barrel Aug. 13 after an Energy Department report showed that U.S. gasoline supplies dropped 6.39 million barrels to 202.8 million barrels last week, the biggest decline since October 2002. Petroleum-product imports fell to the lowest since April 2005 and refinery operating rates were 1.1 percentage points lower, the report showed.
The report ``was one of the most bullish in a year,'' said Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky. ``The overriding sentiment of the market is bearish because of the negative demand outlook.''
European Economy
European gross domestic product fell 0.2 percent in the second quarter from the first, when it increased 0.7 percent, the European Union statistics office in Luxembourg said yesterday.
Most energy and metals futures dropped as the U.S. currency advanced to a 5 1/2-month high versus the euro yesterday because of the European report. A strong dollar reduces the appeal of commodities to investors looking for an inflation hedge.
The dollar traded at $1.4808 per euro at 6:32 a.m. in Tokyo, after rising 0.6 percent yesterday and touching $1.4778, the strongest since Feb. 21. The U.S. currency was at 109.73 yen, following a 0.2 percent gain yesterday.
Exxon Mobil Corp. Chief Executive Officer Rex Tillerson said in an ABC News interview Aug. 13 that oil prices don't reflect supply and demand, and are being influenced by such factors as a weak dollar.
`Number of Causes'
``If you look at just basic fundamentals of supply and demand, clearly we've been at a price level that, my view has been for some time, is not reflective of strictly fundamental supply and demand, but also is reflective of a lot of uncertainty about the future of supply that you can attribute to any number of causes,'' Tillerson said.
Brent crude oil for September settlement declined 83 cents, or 0.7 percent, to $112.64 a barrel on London's ICE Futures Europe exchange yesterday.
Prices also fell because natural gas tumbled more than 3 percent after a government report showed that U.S. supplies rose 50 billion cubic feet last week. Some users can switch between oil-based fuels and gas, depending on cost.
Natural gas for September delivery fell 32 cents, or 3.8 percent, to settle at $8.136 per million British thermal units in New York. Futures are up 17 percent from a year ago.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
Read more...
Dollar May Rise Before Report Forecast to Show Confidence Boost
By Ye Xie and Candice Zachariahs
Aug. 15 (Bloomberg) -- The dollar may extend its gain versus the euro before a report forecast to show U.S. consumer confidence increased in August for a second month.
The euro dropped yesterday to a 5 1/2-month low against the dollar after crude oil fell and a report showed Europe's economy contracted for the first time since the 15-nation currency was introduced almost a decade ago. The pound declined to the lowest level against the dollar in 22 months on concern Britain's economy is falling into a recession.
``The tide has turned,'' said Matthew Strauss, a senior currency strategist in Toronto at RBC Capital Markets Inc., a unit of Canada's biggest bank by assets. ``The dollar's appreciation won't be as sharp going forward, but the trend will continue.''
Against the euro, the dollar traded at $1.4808 at 6:32 a.m. in Tokyo, after rising 0.6 percent yesterday and touching $1.4778, the strongest since Feb. 21. The U.S. currency was at 109.73 yen, following a 0.2 percent gain yesterday. The euro traded at 162.52 yen, after dropping 0.5 percent.
The European currency's decline accelerated yesterday after breaking $1.4840, a level at which traders had placed pre-set sell orders, according to Brian Dolan, chief currency strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey.
The dollar has ``bottomed'' against the euro, said Goldman Sachs Group Inc. yesterday in a revision of its forecast for the U.S. currency. The dollar will strengthen to $1.45 per euro in three months, compared with an earlier estimate of $1.56, said Goldman analysts led by London-based Thomas Stolper in a research note, citing weakening global growth, declining oil prices and an improved U.S. trade balance.
Weaker Pound
Sterling decreased 0.1 percent to $1.8686 yesterday after touching $1.8619, the lowest level since October 2006. The Bank of England cut its economic-growth forecast on Aug. 12, signaling it may reduce its 5 percent target lending rate. Against the euro, the pound rose 0.6 percent to 79.30 pence.
Crude oil for September delivery fell 1 percent to $114.89 a barrel yesterday after a 2.7 percent gain the previous day. The euro-dollar exchange rate and oil have had a correlation of 0.9 in the past year, according to Bloomberg calculations. A reading of 1 would mean they move in lockstep.
The euro's 14-day relative strength index against the dollar was at 19 yesterday. A reading below 30 typically signals a change in price direction is imminent.
`Beyond the U.S.'
``What has driven the market in the past several weeks has primarily been events beyond the U.S. -- the slowdown in a number of other developed economies and also the decline in commodity prices,'' said Stephen Malyon, co-head of currency strategy at Scotia Capital Inc. in Toronto. ``I think the U.S. dollar is going to come under some corrective pressure over the coming days, but we need a catalyst for that.''
The Reuters/University of Michigan index of consumer sentiment probably increased to 62 this month, from 61.2 in July, according to the median forecast of 63 economists surveyed by Bloomberg News. The index fell to 56.4 in June, the lowest since 1980. The report is due at 10 a.m. New York time.
Europe's gross domestic product shrank 0.2 percent in the second quarter, after growing 0.7 percent in the first three months of the year, the European Union's statistics office said yesterday in Luxembourg. The German economy, Europe's largest, contracted for the first time in almost four years, the Federal Statistics Office said in Wiesbaden.
ECB Stance
ECB council member Axel Weber said in a speech in Germany yesterday that it's ``premature'' to say slower economic growth will damp inflation in the euro area.
``He's blowing smoke,'' said FOREX.com's Dolan. ``Slow growth is the trading theme in the market. Commodities can't sustain the rebound for 24 hours. It's a bearish indicator for the euro and bullish for the dollar.''
Sales of existing homes fell to a 10-year low in the second quarter, and the median price of a single-family house dropped 7.6 percent, the Chicago-based National Association of Realtors said yesterday.
Futures on the Chicago Board of Trade show a 30 percent chance that the Fed will increase the 2 percent target rate for overnight lending between banks by a quarter-percentage point at the Dec. 16 meeting, compared with 46 percent odds a month ago. Policy makers next meet Sept. 16.
``Given the weak economic backdrop, I can't really see a strong appreciation of the dollar over the next couple of months,'' said Thomas Kressin, a fund manager at Pimco Europe Ltd., in an interview on Bloomberg Television. ``We don't believe that the Federal Reserve will hike interest rates in the foreseeable future.''
To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Candice Zachariahs in New York at czachariahs1@bloomberg.net.
Read more...
Aug. 15 (Bloomberg) -- The dollar may extend its gain versus the euro before a report forecast to show U.S. consumer confidence increased in August for a second month.
The euro dropped yesterday to a 5 1/2-month low against the dollar after crude oil fell and a report showed Europe's economy contracted for the first time since the 15-nation currency was introduced almost a decade ago. The pound declined to the lowest level against the dollar in 22 months on concern Britain's economy is falling into a recession.
``The tide has turned,'' said Matthew Strauss, a senior currency strategist in Toronto at RBC Capital Markets Inc., a unit of Canada's biggest bank by assets. ``The dollar's appreciation won't be as sharp going forward, but the trend will continue.''
Against the euro, the dollar traded at $1.4808 at 6:32 a.m. in Tokyo, after rising 0.6 percent yesterday and touching $1.4778, the strongest since Feb. 21. The U.S. currency was at 109.73 yen, following a 0.2 percent gain yesterday. The euro traded at 162.52 yen, after dropping 0.5 percent.
The European currency's decline accelerated yesterday after breaking $1.4840, a level at which traders had placed pre-set sell orders, according to Brian Dolan, chief currency strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey.
The dollar has ``bottomed'' against the euro, said Goldman Sachs Group Inc. yesterday in a revision of its forecast for the U.S. currency. The dollar will strengthen to $1.45 per euro in three months, compared with an earlier estimate of $1.56, said Goldman analysts led by London-based Thomas Stolper in a research note, citing weakening global growth, declining oil prices and an improved U.S. trade balance.
Weaker Pound
Sterling decreased 0.1 percent to $1.8686 yesterday after touching $1.8619, the lowest level since October 2006. The Bank of England cut its economic-growth forecast on Aug. 12, signaling it may reduce its 5 percent target lending rate. Against the euro, the pound rose 0.6 percent to 79.30 pence.
Crude oil for September delivery fell 1 percent to $114.89 a barrel yesterday after a 2.7 percent gain the previous day. The euro-dollar exchange rate and oil have had a correlation of 0.9 in the past year, according to Bloomberg calculations. A reading of 1 would mean they move in lockstep.
The euro's 14-day relative strength index against the dollar was at 19 yesterday. A reading below 30 typically signals a change in price direction is imminent.
`Beyond the U.S.'
``What has driven the market in the past several weeks has primarily been events beyond the U.S. -- the slowdown in a number of other developed economies and also the decline in commodity prices,'' said Stephen Malyon, co-head of currency strategy at Scotia Capital Inc. in Toronto. ``I think the U.S. dollar is going to come under some corrective pressure over the coming days, but we need a catalyst for that.''
The Reuters/University of Michigan index of consumer sentiment probably increased to 62 this month, from 61.2 in July, according to the median forecast of 63 economists surveyed by Bloomberg News. The index fell to 56.4 in June, the lowest since 1980. The report is due at 10 a.m. New York time.
Europe's gross domestic product shrank 0.2 percent in the second quarter, after growing 0.7 percent in the first three months of the year, the European Union's statistics office said yesterday in Luxembourg. The German economy, Europe's largest, contracted for the first time in almost four years, the Federal Statistics Office said in Wiesbaden.
ECB Stance
ECB council member Axel Weber said in a speech in Germany yesterday that it's ``premature'' to say slower economic growth will damp inflation in the euro area.
``He's blowing smoke,'' said FOREX.com's Dolan. ``Slow growth is the trading theme in the market. Commodities can't sustain the rebound for 24 hours. It's a bearish indicator for the euro and bullish for the dollar.''
Sales of existing homes fell to a 10-year low in the second quarter, and the median price of a single-family house dropped 7.6 percent, the Chicago-based National Association of Realtors said yesterday.
Futures on the Chicago Board of Trade show a 30 percent chance that the Fed will increase the 2 percent target rate for overnight lending between banks by a quarter-percentage point at the Dec. 16 meeting, compared with 46 percent odds a month ago. Policy makers next meet Sept. 16.
``Given the weak economic backdrop, I can't really see a strong appreciation of the dollar over the next couple of months,'' said Thomas Kressin, a fund manager at Pimco Europe Ltd., in an interview on Bloomberg Television. ``We don't believe that the Federal Reserve will hike interest rates in the foreseeable future.''
To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Candice Zachariahs in New York at czachariahs1@bloomberg.net.
Read more...
Economic Calendar Eco Data 8/15/08
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Read more...
New York Session Recap
Daily Forex Fundamentals | Written by Forex.com | Aug 14 08 20:56 GMT |
New York Session Recap
The turn lower in oil prices coupled with a stock market rally led the USD higher in the NY session. Oil dropped $1.25 in NY trading and closed near $114.90/bbl after trading as low as $112.75/bbl. US equities rose 0.6% in broad terms as financials rebounded 2.6% after posting two days of sharp losses.
There were also some important US economic reports out in the form of July consumer prices and weekly initial jobless claims. Headline CPI jumped a higher than expected 0.8%, taking the annual rate to a whopping 5.6% from 5.0% previously. The guts of the report showed broad-based gains in prices, though the recent falloff in oil led many in the market to discount this report as "old news".
Jobless claims, meanwhile, fell to 450K from 460K the prior week. Though the print seems high on the face of it, one has to remember that this number is not adjusted for labor force growth. The latest numbers have also been propped up by recent legislation that extended unemployment benefits to those who would have otherwise dropped off the tally, so in reality they are somewhat lower.
The FX market shrugged off the economic reports and focused on the goings on in oil and stocks instead. EURUSD was sold from an open near 1.4905 to a close near the 1.4815 mark. AUDUSD lost ground on the decline in commodities and slipped from an open near 0.8760 to close around the 0.8710 area.
Lower oil also boosted USDCAD modestly towards a close near 1.0640 after opening near 1.0615. USDJPY, however, traded practically sideways all session to a 109.70 close, as lower US yields (-5 bps) offset the positive impact from higher stock prices.
Upcoming Economic Data Releases (Asia Session) Prior Estimate
* 8/14/2008 22:45 GMT NZ Retail Sales (MoM) JUN -1.2% - -
* 8/14/2008 22:45 GMT NZ Retail Sales Ex-Auto (MoM) JUN 0.7% - -
* 8/14/2008 22:45 GMT NZ Retail Sales Ex Inflation (QoQ) 2Q -1.2% - -
Forex.com
http://www.forex.com
DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Read more...
New York Session Recap
The turn lower in oil prices coupled with a stock market rally led the USD higher in the NY session. Oil dropped $1.25 in NY trading and closed near $114.90/bbl after trading as low as $112.75/bbl. US equities rose 0.6% in broad terms as financials rebounded 2.6% after posting two days of sharp losses.
There were also some important US economic reports out in the form of July consumer prices and weekly initial jobless claims. Headline CPI jumped a higher than expected 0.8%, taking the annual rate to a whopping 5.6% from 5.0% previously. The guts of the report showed broad-based gains in prices, though the recent falloff in oil led many in the market to discount this report as "old news".
Jobless claims, meanwhile, fell to 450K from 460K the prior week. Though the print seems high on the face of it, one has to remember that this number is not adjusted for labor force growth. The latest numbers have also been propped up by recent legislation that extended unemployment benefits to those who would have otherwise dropped off the tally, so in reality they are somewhat lower.
The FX market shrugged off the economic reports and focused on the goings on in oil and stocks instead. EURUSD was sold from an open near 1.4905 to a close near the 1.4815 mark. AUDUSD lost ground on the decline in commodities and slipped from an open near 0.8760 to close around the 0.8710 area.
Lower oil also boosted USDCAD modestly towards a close near 1.0640 after opening near 1.0615. USDJPY, however, traded practically sideways all session to a 109.70 close, as lower US yields (-5 bps) offset the positive impact from higher stock prices.
Upcoming Economic Data Releases (Asia Session) Prior Estimate
* 8/14/2008 22:45 GMT NZ Retail Sales (MoM) JUN -1.2% - -
* 8/14/2008 22:45 GMT NZ Retail Sales Ex-Auto (MoM) JUN 0.7% - -
* 8/14/2008 22:45 GMT NZ Retail Sales Ex Inflation (QoQ) 2Q -1.2% - -
Forex.com
http://www.forex.com
DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Read more...
Australia Stocks: Allco, Newcrest, QBE Insurance, Woolworths
By Shani Raja
Aug. 15 (Bloomberg) -- The following is a list of companies whose shares may rise or fall in Australia. This preview includes news announced after markets closed on yesterday. Prices are from yesterday's close unless otherwise stated.
The S&P/ASX 200 Index futures contract due in September gained 0.4 percent to 4,949 at 6:59 a.m. in Sydney. The Bank of New York Australia ADR Index lost 1.7 percent in New York.
The S&P/ASX 200 Index rose 29.50 points, or 0.6 percent, to 4,981.10.
Mining shares: Gold fell on speculation surging U.S. consumer costs may spur the Federal Reserve to raise interest rates, boosting the dollar and eroding the metal's appeal as an alternative investment. Gold futures for December delivery fell 2 percent to $814.50 an ounce on the Comex division of the New York Mercantile Exchange.
Newcrest Mining Ltd. (NCM AU), Australia's largest gold mining company, advanced 15 cents, or 0.6 percent, to A$25.05.
Nickel fell 2.1 percent on the London Metal Exchange. Minara Resources Ltd. (MRE AU), Australia's second-largest nickel producer, rose 1.5 cents, or 1.3 percent, to A$1.20.
Oil companies: Crude oil fell on speculation that fuel- consumption declines in the U.S. will spread to other countries as their economies slow. Crude oil for September delivery fell 99 cents, or 0.9 percent, to settle at $115.01 a barrel at 2:52 p.m. on the New York Mercantile Exchange.
Woodside Petroleum Ltd. (WPL AU), Australia's second-largest oil and gas producer, added A$3.46, or 6.6 percent, to A$55.57.
Financial stocks: Fannie Mae and Freddie Mac, the largest sources of financing for U.S. home loans, led a rally in U.S. banking shares. Each jumped more than 7 percent after the Securities Industry and Financial Markets Association said larger loans financed by the two companies will be allowed in the main market for mortgage bonds. The Standard & Poor's 500 Index added 7.1 points, or 0.6 percent, to 1,292.93.
Commonwealth Bank of Australia (CBA AU), the nation's biggest mortgage lender, dropped 55 cents, or 1.3 percent, to A$43.50.
Allco Finance Group Ltd. (AFG AU): The Sydney-based manager of ships, aircraft and wind farms said it expects at least a A$90 million ($79 million) profit on the sale of part of its Singapore real estate unit. Allco lost 0.5 cent, or 1.1 percent, to 46 cents.
QBE Insurance Group Ltd. (QBE AU): QBE agreed to buy PMI Group Inc.'s Asian and Australian businesses for A$1.03 billion ($896 million), a week after the U.S. mortgage insurer posted a fourth consecutive quarterly loss. QBE declined 40 cents, or 1.7 percent, to A$23.50.
Woolworths Ltd. (WOW AU): Australia's biggest retailer will appeal a court decision blocking it from buying New Zealand's Warehouse Group Ltd., the Australian Financial Review reported, without saying where it got the information. Woolworth fell 52 cents, or 1.9 percent, to A$26.70.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
Read more...
Dollar Index And The Financial Sector
Daily Forex Fundamentals | Written by TheLFB-Forex.com | Aug 14 08 20:59 GMT |
Dollar Index: The index continued to strengthen Thursday despite the fact that new claims for unemployment are averaging well over 400k per week. The connection between the unemployment report, oil and the dollar might appear a bit convoluted, but would seem to make sense on closer examination. Weak employment figures indicate “demand destruction,” an obvious negative for oil which declined by 1.9% about an hour before the NYMEX close. With EUR/USD (43% of the index) correlating around .90 with oil, the net effect was a further appreciation of the index towards 77.00. On the daily chart, we note that a trend line of resistance extending from October 12 2006 through June 14 and Aug 16 2007 was breeched on Monday, was support on Tuesday's close and served as support for Thursday's low. On the day, the index rose 0.465 (0.60%) to 76.669.
The Financial Sector: Shares of the GSE's were helped when the Securities Industry and Financial Markets Association said larger loans financed by the two companies will be allowed in the main market for mortgage bonds and the positive news regarding mortgage financing was good news for firms with large exposures to the housing market. PMI Group, the second-largest U.S. mortgage insurer, rallied 49.46% on its plan to raise cash by selling businesses. Also helping the beaten down financial sector look attractive were Friday's options expiries, and Wednesday's move to the downside might also have been a bit exaggerated with thinner summer trading. JPMorgan Chase (JPM) gained 2.44%, Merrill Lynch (MER) rose 1.48%, and Wachovia (WB) moved 6.75% higher as Fannie Mae (FNM) and Freddie Mac (FRE), gained 7.72% and 7.03% respectively. The XLF closed on 21.21 after gaining 0.64 point (3.11%) on relatively light volume of 129,452,256, against the daily average of 177,480,000. Volume in the XLF has increased over 70% on a daily basis since the beginning of July.
U.S. Session Wrap A confusing, but positive day
It was a tricky day in the equity markets, as quickening inflation and bad news on unemployment figures initially sent markets lower. The sentiment changed quickly as oil declined on speculation that slowing global growth would continue to curb demand and traders moved into financial stocks. Markets finished off their highs on what might have been profit taking. From a technical viewpoint, the S&P found support on a well-established trend line and did manage to close above the .382 Fibonacci retracement of the May to July sell off.
At the close of floor trading on the NYSE, the DOW was on 11,615.93 after gaining 82.97 (0.72%). The S&P closed on 1292.93, up 7.10 (0.55%) while the NASDAQ finished trading on 2453.67 with an increase of 25.05 (1.03%). Treasuries were higher even as traders moved into equities on speculation the economy would slow in the second half of the year. The two-year note yield fell 4.2 basis points to 2.426%. The benchmark 10-year note lost 4.4 basis points to yield 3.891%. The dollar was mixed during N.Y. trading; gaining on the euro (0.73%) and pound (0.17%) while trading a bit lower against the yen (0.12%).
In other news, billionaire investor T. Boone Pickens said on Thursday that oil would probably not fall below $100 per barrel, because the U.S. imports so much of its oil. "I don't think it'll drop below $100," Pickens told Reuters in a telephone interview. "I would say $110 is where it might go, something like that." While we have all the respect in the world for Mr. Pickens' opinion, the New York Post reported that his $7 billion hedge fund, BP Capital, lost just over a third of its value in July as oil fell from its peak on $147 per barrel.
There was more news the housing market does not seem to be improving. The National Association of Realtors (NAR) said today that in the second quarter, existing U.S. sales of single family homes and condominiums fell by 16% to an annual rate of 4.913M, a ten year low, and that the median price for a single-family house fell 7.6% to $206.5k from 223.5k. A third of all sales in the quarter were foreclosures in which lenders took a loss, the NAR said. RealtyTrac said that bank repossessions nearly tripled in the year to July. RealtyTrac's executive vice president for marketing said that “the number of properties that have been foreclosed on by the banks and still haven't sold is the highest we've ever seen."
Crude oil for September delivery fell 99 cents (0.9%) to $115.01 a barrel on speculation that global demand will slow as more economies contract.
Gold futures for December delivery fell $17 (2.0%) to $814.50 an ounce as the dollar appreciated on speculation the Fed may be closer to raising interest rates after yearly CPI rose 5.6%, the fastest rate of inflation since January 1991.
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com
TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.
The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.
Read more...
Dollar Index: The index continued to strengthen Thursday despite the fact that new claims for unemployment are averaging well over 400k per week. The connection between the unemployment report, oil and the dollar might appear a bit convoluted, but would seem to make sense on closer examination. Weak employment figures indicate “demand destruction,” an obvious negative for oil which declined by 1.9% about an hour before the NYMEX close. With EUR/USD (43% of the index) correlating around .90 with oil, the net effect was a further appreciation of the index towards 77.00. On the daily chart, we note that a trend line of resistance extending from October 12 2006 through June 14 and Aug 16 2007 was breeched on Monday, was support on Tuesday's close and served as support for Thursday's low. On the day, the index rose 0.465 (0.60%) to 76.669.
The Financial Sector: Shares of the GSE's were helped when the Securities Industry and Financial Markets Association said larger loans financed by the two companies will be allowed in the main market for mortgage bonds and the positive news regarding mortgage financing was good news for firms with large exposures to the housing market. PMI Group, the second-largest U.S. mortgage insurer, rallied 49.46% on its plan to raise cash by selling businesses. Also helping the beaten down financial sector look attractive were Friday's options expiries, and Wednesday's move to the downside might also have been a bit exaggerated with thinner summer trading. JPMorgan Chase (JPM) gained 2.44%, Merrill Lynch (MER) rose 1.48%, and Wachovia (WB) moved 6.75% higher as Fannie Mae (FNM) and Freddie Mac (FRE), gained 7.72% and 7.03% respectively. The XLF closed on 21.21 after gaining 0.64 point (3.11%) on relatively light volume of 129,452,256, against the daily average of 177,480,000. Volume in the XLF has increased over 70% on a daily basis since the beginning of July.
U.S. Session Wrap A confusing, but positive day
It was a tricky day in the equity markets, as quickening inflation and bad news on unemployment figures initially sent markets lower. The sentiment changed quickly as oil declined on speculation that slowing global growth would continue to curb demand and traders moved into financial stocks. Markets finished off their highs on what might have been profit taking. From a technical viewpoint, the S&P found support on a well-established trend line and did manage to close above the .382 Fibonacci retracement of the May to July sell off.
At the close of floor trading on the NYSE, the DOW was on 11,615.93 after gaining 82.97 (0.72%). The S&P closed on 1292.93, up 7.10 (0.55%) while the NASDAQ finished trading on 2453.67 with an increase of 25.05 (1.03%). Treasuries were higher even as traders moved into equities on speculation the economy would slow in the second half of the year. The two-year note yield fell 4.2 basis points to 2.426%. The benchmark 10-year note lost 4.4 basis points to yield 3.891%. The dollar was mixed during N.Y. trading; gaining on the euro (0.73%) and pound (0.17%) while trading a bit lower against the yen (0.12%).
In other news, billionaire investor T. Boone Pickens said on Thursday that oil would probably not fall below $100 per barrel, because the U.S. imports so much of its oil. "I don't think it'll drop below $100," Pickens told Reuters in a telephone interview. "I would say $110 is where it might go, something like that." While we have all the respect in the world for Mr. Pickens' opinion, the New York Post reported that his $7 billion hedge fund, BP Capital, lost just over a third of its value in July as oil fell from its peak on $147 per barrel.
There was more news the housing market does not seem to be improving. The National Association of Realtors (NAR) said today that in the second quarter, existing U.S. sales of single family homes and condominiums fell by 16% to an annual rate of 4.913M, a ten year low, and that the median price for a single-family house fell 7.6% to $206.5k from 223.5k. A third of all sales in the quarter were foreclosures in which lenders took a loss, the NAR said. RealtyTrac said that bank repossessions nearly tripled in the year to July. RealtyTrac's executive vice president for marketing said that “the number of properties that have been foreclosed on by the banks and still haven't sold is the highest we've ever seen."
Crude oil for September delivery fell 99 cents (0.9%) to $115.01 a barrel on speculation that global demand will slow as more economies contract.
Gold futures for December delivery fell $17 (2.0%) to $814.50 an ounce as the dollar appreciated on speculation the Fed may be closer to raising interest rates after yearly CPI rose 5.6%, the fastest rate of inflation since January 1991.
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com
TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.
The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.
Read more...
The Day Ahead Canada & U.S.: Manufacturing Data and Consumer Sentiment
The Day Ahead Canada & U.S.: Manufacturing Data and Consumer Sentiment
15 Agustus 2008 5:01
(CEP News) - Economists and strategists said they are expecting lower oil prices to help boost U.S. consumer sentiment. On Friday, markets will receive a preliminary glimpse at confidence levels with the release of the University of Michigan/Reuters consumer confidence report.
Read more...
15 Agustus 2008 5:01
(CEP News) - Economists and strategists said they are expecting lower oil prices to help boost U.S. consumer sentiment. On Friday, markets will receive a preliminary glimpse at confidence levels with the release of the University of Michigan/Reuters consumer confidence report.
Read more...
Closing Market Recap: U.S. Dollar-Based Assets Get a Lift
Closing Market Recap: U.S. Dollar-Based Assets Get a Lift
15 Agustus 2008 4:00
(CEP News) - The U.S. dollar, U.S. stocks and U.S. debt all rose on Thursday as investors increasingly favour the world's largest economy as the best place to park assets while the global economy slows.
U.S. Preview: August Empire State Survey to Remain in Modest Decline
Read more...
15 Agustus 2008 4:00
(CEP News) - The U.S. dollar, U.S. stocks and U.S. debt all rose on Thursday as investors increasingly favour the world's largest economy as the best place to park assets while the global economy slows.
U.S. Preview: August Empire State Survey to Remain in Modest Decline
Read more...
Thursday's News Recap: U.S. Jobless Claims Trend Upward, U.S. CPI Soars
Thursday's News Recap: U.S. Jobless Claims Trend Upward, U.S. CPI Soars
15 Agustus 2008 3:01
(CEP News) - Markets received a pair of downbeat reports out of the U.S. today, which showed a smaller-than-expected decline in initial jobless claims in the past week and a surge in Consumer Price Index inflation to a 17-year-high. In Canada, housing data showed that real estate markets slowed in much of Western Canada this year to date.
Read more...
15 Agustus 2008 3:01
(CEP News) - Markets received a pair of downbeat reports out of the U.S. today, which showed a smaller-than-expected decline in initial jobless claims in the past week and a surge in Consumer Price Index inflation to a 17-year-high. In Canada, housing data showed that real estate markets slowed in much of Western Canada this year to date.
Read more...
Subscribe to:
Posts (Atom)
Posts
