By Kosuke Goto
July 10 (Bloomberg) -- The euro may rise to $1.5909 against the dollar should it stay above its five-day moving average, said Masashi Hashimoto, a senior currency analyst at Bank of Tokyo-Mitsubishi UFJ Ltd.
The five-day moving average, currently at $1.5715, will provide a level of so-called support for the euro, Tokyo-based Hashimoto said, citing technical charts traders use to predict price movements. The target of $1.5909 will match a two-month high set by Europe's single currency on July 3. Support is an area where buy orders may be clustered.
``Should the euro break through its five-day moving average completely, it will likely challenge its July 3 high,'' said Hashimoto at the unit of Japan's largest publicly traded financial group.
Europe's 15-nation currency traded at $1.5728 against the dollar as of 11:55 a.m. in Tokyo, from $1.5743 late in New York yesterday. It reached a record high of $1.6019 on April 22.
Traders typically look for evidence of a currency's short- term trend by using the five-day moving average, and seek to predict its two- to three-week outlook by using the 21-day moving average. They use moving averages to identify levels of support, where they expect buying, or resistance, where they expect selling.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.
To contact the reporter on this story: Kosuke Goto in Tokyo at kgoto2@bloomberg.net.
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Thursday, July 10, 2008
Macquarie Expects Gains in Soft Commodities on Global Demand
By Bernard Lo and Madelene Pearson
July 10 (Bloomberg) -- Macquarie Group Ltd., Australia's biggest investment bank, said global demand for food will continue to drive a rally in soft commodities.
``We're in the very early stages of an upward trend for soft commodities at the moment,'' Tim Hornibrook, director of the bank's pastoral services unit, said in an interview with Bloomberg Television today. ``Ultimately we feel the world needs food more than it needs oil, so we like the longer term fundamentals.''
The UBS Bloomberg Constant Maturity Commodity Index has gained 29 percent this year, compared with the 22 percent slump in Australia's benchmark stock index. Macquarie has established a fund to buy cattle and sheep farms in Australia.
``It's a very good time to be investing in agricultural assets, particularly with what's happening with financial assets in terms of the downward trend at the moment,'' he said today in Singapore. ``We feel the purest play is to go to the producers end and buy the farm land.''
Demand for beef is growing, driven by rising incomes in emerging markets, Hornibrook said. ``There's definitely more upside there,'' he said.
To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net; Bernard Lo in Hong Kong at blo2@bloomberg.net;
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July 10 (Bloomberg) -- Macquarie Group Ltd., Australia's biggest investment bank, said global demand for food will continue to drive a rally in soft commodities.
``We're in the very early stages of an upward trend for soft commodities at the moment,'' Tim Hornibrook, director of the bank's pastoral services unit, said in an interview with Bloomberg Television today. ``Ultimately we feel the world needs food more than it needs oil, so we like the longer term fundamentals.''
The UBS Bloomberg Constant Maturity Commodity Index has gained 29 percent this year, compared with the 22 percent slump in Australia's benchmark stock index. Macquarie has established a fund to buy cattle and sheep farms in Australia.
``It's a very good time to be investing in agricultural assets, particularly with what's happening with financial assets in terms of the downward trend at the moment,'' he said today in Singapore. ``We feel the purest play is to go to the producers end and buy the farm land.''
Demand for beef is growing, driven by rising incomes in emerging markets, Hornibrook said. ``There's definitely more upside there,'' he said.
To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net; Bernard Lo in Hong Kong at blo2@bloomberg.net;
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Rubber Drops Fourth Day as Falling Stocks Raise Demand Concern
By Aya Takada
July 10 (Bloomberg) -- Natural rubber futures in Tokyo fell for a fourth day and traded near a four-week low as declines in global stock markets added to concern that slowing economies may curb demand for the commodity used to make car tires.
Futures dropped as much as 0.6 percent, retreating further from a 28-year high reached last month. U.S. stocks tumbled yesterday, sending the Standard & Poor's 500 Index into its first bear market since 2002 on concern continued turmoil in financial markets will erode earnings.
``Futures came under pressure from plunging U.S. stocks,'' Kazuhiko Saito, strategist at Interes Capital Management Co. in Tokyo, said today by phone. ``U.S. car sales are falling amid an economic slowdown, leading to decreased demand for rubber.''
Rubber for December delivery lost 0.5 percent to 335.3 yen a kilogram ($3,140 a metric ton) on the Tokyo Commodity Exchange at the 11 a.m. local time break. The most-active contract reached a 28-year high of 356.9 yen on June 30, as record oil boosted production costs for competing synthetic rubber.
Rubber futures also dropped on expectations supplies will rise in coming months with the approach of the high production season in Thailand, the world's largest producer and exporter, Saito said.
Natural rubber stockpiles in China, the world's biggest consumer, rose by 1,735 tons to 18,960 tons, the Shanghai Futures Exchange said July 4 based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin. It was the second weekly gain.
Rubber inventories monitored by the Tokyo Commodity Exchange fell to 6,587 tons on June 30 from 6,862 tons on June 20, the bourse said today in a faxed statement. The volume was the lowest since Nov. 10.
September-delivery rubber on the Shanghai Futures Exchange, the most-active contract, was little changed at 26,800 yuan ($3,914) a ton at 10:59 a.m. local time.
To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net
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July 10 (Bloomberg) -- Natural rubber futures in Tokyo fell for a fourth day and traded near a four-week low as declines in global stock markets added to concern that slowing economies may curb demand for the commodity used to make car tires.
Futures dropped as much as 0.6 percent, retreating further from a 28-year high reached last month. U.S. stocks tumbled yesterday, sending the Standard & Poor's 500 Index into its first bear market since 2002 on concern continued turmoil in financial markets will erode earnings.
``Futures came under pressure from plunging U.S. stocks,'' Kazuhiko Saito, strategist at Interes Capital Management Co. in Tokyo, said today by phone. ``U.S. car sales are falling amid an economic slowdown, leading to decreased demand for rubber.''
Rubber for December delivery lost 0.5 percent to 335.3 yen a kilogram ($3,140 a metric ton) on the Tokyo Commodity Exchange at the 11 a.m. local time break. The most-active contract reached a 28-year high of 356.9 yen on June 30, as record oil boosted production costs for competing synthetic rubber.
Rubber futures also dropped on expectations supplies will rise in coming months with the approach of the high production season in Thailand, the world's largest producer and exporter, Saito said.
Natural rubber stockpiles in China, the world's biggest consumer, rose by 1,735 tons to 18,960 tons, the Shanghai Futures Exchange said July 4 based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin. It was the second weekly gain.
Rubber inventories monitored by the Tokyo Commodity Exchange fell to 6,587 tons on June 30 from 6,862 tons on June 20, the bourse said today in a faxed statement. The volume was the lowest since Nov. 10.
September-delivery rubber on the Shanghai Futures Exchange, the most-active contract, was little changed at 26,800 yuan ($3,914) a ton at 10:59 a.m. local time.
To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net
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Platinum Futures Gain as Japan Wholesale Inflation Rate Climbs
By Dave McCombs
July 10 (Bloomberg) -- Platinum futures in Tokyo gained as a Bank of Japan report showed wholesale inflation jumped to a 27- year high last month, boosting demand for a hedge against rising consumer prices.
Metal for immediate delivery has jumped 30 percent this year, driven partly by concern soaring commodity prices will erode company profits, damp demand for equities and slash returns on bonds. Japanese producer prices for June climbed 5.6 percent from a year ago, the central bank said today.
``People are certainly concerned about rising food and energy prices and inflation, it's out of control,'' Peter McGuire, managing director at Commodity Warrants Australia, said today by phone. ``You've got to look at precious metals. There's nowhere else to turn.''
Platinum for June delivery in Tokyo gained 36 yen, or 0.5 percent, to 6,720 yen a gram ($1,957 an ounce) at the 11 a.m. break on the Tokyo Commodity Exchange.
Metal for immediate delivery rose $12 to $1,980.50 an ounce at 11:16 a.m. in Tokyo, 0.6 percent higher than yesterday in New York.
Japan's benchmark Nikkei 225 Stock Average has dropped 15 percent this year, while an index of Japanese government bonds with three to 10 years to maturity has dropped 0.09 percent.
To contact the reporter for this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net
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July 10 (Bloomberg) -- Platinum futures in Tokyo gained as a Bank of Japan report showed wholesale inflation jumped to a 27- year high last month, boosting demand for a hedge against rising consumer prices.
Metal for immediate delivery has jumped 30 percent this year, driven partly by concern soaring commodity prices will erode company profits, damp demand for equities and slash returns on bonds. Japanese producer prices for June climbed 5.6 percent from a year ago, the central bank said today.
``People are certainly concerned about rising food and energy prices and inflation, it's out of control,'' Peter McGuire, managing director at Commodity Warrants Australia, said today by phone. ``You've got to look at precious metals. There's nowhere else to turn.''
Platinum for June delivery in Tokyo gained 36 yen, or 0.5 percent, to 6,720 yen a gram ($1,957 an ounce) at the 11 a.m. break on the Tokyo Commodity Exchange.
Metal for immediate delivery rose $12 to $1,980.50 an ounce at 11:16 a.m. in Tokyo, 0.6 percent higher than yesterday in New York.
Japan's benchmark Nikkei 225 Stock Average has dropped 15 percent this year, while an index of Japanese government bonds with three to 10 years to maturity has dropped 0.09 percent.
To contact the reporter for this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net
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China's Jinchuan Group Raises Nickel Price as Global Rates Gain
By Li Xiaowei
July 10 (Bloomberg) -- Jinchuan Group Co., Asia's biggest nickel producer, raised the price of the refined metal to reflect the increase in global rates.
The price was by lifted by 4,000 yuan, or 2 percent, to 175,000 yuan ($25,537) a metric ton effective today, according to a statement on the Web site of the company, which is based in the western province of Gansu.
To contact the reporter on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net;
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July 10 (Bloomberg) -- Jinchuan Group Co., Asia's biggest nickel producer, raised the price of the refined metal to reflect the increase in global rates.
The price was by lifted by 4,000 yuan, or 2 percent, to 175,000 yuan ($25,537) a metric ton effective today, according to a statement on the Web site of the company, which is based in the western province of Gansu.
To contact the reporter on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net;
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Gold Advances in Asia on Crude Oil Rebound, U.S. Dollar Outlook
By Iris Leung
July 10 (Bloomberg) -- Gold advanced for the second day in Asia after crude oil gained boosting the appeal of the precious metal as an inflation hedge.
Gold also rose on expectations the dollar may fall against the euro for a second day, increasing the appeal of bullion as a haven. Oil rose as much as 0.9 percent today.
``Gold is often viewed as a hedge against inflation and exchange rate movements,'' Michael Widmer, an analyst at Lehman Brothers Holdings Inc., said in a report e-mailed today. ``Movements of oil prices are an important determinant of inflation.''
Bullion for immediate delivery climbed as much as $2.38, or 0.3 percent, to $930.95 an ounce, and stood at $929.80 at 9:57 a.m. in Hong Kong. Silver traded little changed at $18.1425 an ounce.
The dollar may extend declines against the euro and yen on speculation losses will deepen at Fannie Mae and Freddie Mac, the largest U.S. mortgage finance companies. It traded at $1.5724 per euro from $1.5743 yesterday, and was at 106.80 yen from 106.76 yen at 9:58 a.m. Hong Kong time.
``We believe that even if the dollar may strengthen, gold prices are set to increase as we move into the fourth quarter this year, on continued difficulties in the global economy and a problematic risk environment,'' said Widmer.
Gold for August delivery gained 0.3 percent to $930.80 an ounce in after-hours electronic trading on Comex at 9:59 a.m. Hong Kong time, while gold for December delivery traded in Shanghai gained 1 percent to 205.60 yuan a gram ($933 an ounce) at the same time.
Gold for June 2009 delivery fell 0.2 percent to 3,222 yen a gram ($938 an ounce) on the Tokyo Commodity Exchange at the 11 a.m. local time break.
To contact the reporter for this story: Iris Leung in Hong Kong at Ileung7@bloomberg.net
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July 10 (Bloomberg) -- Gold advanced for the second day in Asia after crude oil gained boosting the appeal of the precious metal as an inflation hedge.
Gold also rose on expectations the dollar may fall against the euro for a second day, increasing the appeal of bullion as a haven. Oil rose as much as 0.9 percent today.
``Gold is often viewed as a hedge against inflation and exchange rate movements,'' Michael Widmer, an analyst at Lehman Brothers Holdings Inc., said in a report e-mailed today. ``Movements of oil prices are an important determinant of inflation.''
Bullion for immediate delivery climbed as much as $2.38, or 0.3 percent, to $930.95 an ounce, and stood at $929.80 at 9:57 a.m. in Hong Kong. Silver traded little changed at $18.1425 an ounce.
The dollar may extend declines against the euro and yen on speculation losses will deepen at Fannie Mae and Freddie Mac, the largest U.S. mortgage finance companies. It traded at $1.5724 per euro from $1.5743 yesterday, and was at 106.80 yen from 106.76 yen at 9:58 a.m. Hong Kong time.
``We believe that even if the dollar may strengthen, gold prices are set to increase as we move into the fourth quarter this year, on continued difficulties in the global economy and a problematic risk environment,'' said Widmer.
Gold for August delivery gained 0.3 percent to $930.80 an ounce in after-hours electronic trading on Comex at 9:59 a.m. Hong Kong time, while gold for December delivery traded in Shanghai gained 1 percent to 205.60 yuan a gram ($933 an ounce) at the same time.
Gold for June 2009 delivery fell 0.2 percent to 3,222 yen a gram ($938 an ounce) on the Tokyo Commodity Exchange at the 11 a.m. local time break.
To contact the reporter for this story: Iris Leung in Hong Kong at Ileung7@bloomberg.net
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Australian S&P/ASX Falls to 2-Year Low on Credit Market Concern
By Shani Raja
July 10 (Bloomberg) -- The S&P/ASX 200 Index fell to its lowest in almost two years on concern financial losses will widen after U.S. mortgage-finance company Fannie Mae's borrowing costs surged on speculation it won't be able to fund its business.
Australia & New Zealand Banking Group Ltd., the country's third-largest lender, slumped the most in almost two weeks, while the nation's largest, National Australia Bank Ltd., posted its biggest drop since June 27.
The benchmark lost 84.60 points, or 1.7 percent, to 4,927.30 at 11:15 a.m. in Sydney, its lowest since July 19, 2006.
The S&P/ASX 200 has tumbled 28 percent since reaching a high on Nov. 1, 2007, on concern over the extent of U.S. subprime- related losses and consequent tightening of global credit markets.
``The markets are in a negative mindset,'' said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management in Sydney. ``Our banks are fundamentally solid, but that doesn't mean they won't go down further because they get dragged down with the rest of what's going on in the world.''
U.S. financial stocks had their biggest decline in six years yesterday after Fannie Mae paid a record yield over benchmark rates on $3 billion of two-year notes, fueling concern it doesn't have enough capital to weather the biggest housing slump since the Great Depression. The decline sent Standard & Poor's 500 Index 2.3 percent lower and into its first bear market since 2002.
Reserve Bank of Australia Governor Glenn Stevens said in a speech yesterday that the global shakeout from the credit squeeze has further to run as banks and securities firms report losses, cut workers and improve risk monitoring.
The following companies were among the biggest gainers and losers on the Australian stock exchange.
CSR Ltd. (CSR AU), Australia's third-largest maker if building products, slumped 34 cents, or 15 percent, to A$1.97, the most since 1987 and the biggest loser on the benchmark. The company said the housing industry is ``challenging'' as 12-year high interest rates dent confidence.
Metcash Ltd. (MTS AU), Australia's biggest grocery wholesaler, gained 4 cents, or 1 percent, to A$3.87, the highest since June 20. The company withdrew from bidding for a pharmaceuticals wholesaling unit of Primary Health Care Ltd. (PRY AU) after the antitrust regulator called for further submissions on the takeover.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
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July 10 (Bloomberg) -- The S&P/ASX 200 Index fell to its lowest in almost two years on concern financial losses will widen after U.S. mortgage-finance company Fannie Mae's borrowing costs surged on speculation it won't be able to fund its business.
Australia & New Zealand Banking Group Ltd., the country's third-largest lender, slumped the most in almost two weeks, while the nation's largest, National Australia Bank Ltd., posted its biggest drop since June 27.
The benchmark lost 84.60 points, or 1.7 percent, to 4,927.30 at 11:15 a.m. in Sydney, its lowest since July 19, 2006.
The S&P/ASX 200 has tumbled 28 percent since reaching a high on Nov. 1, 2007, on concern over the extent of U.S. subprime- related losses and consequent tightening of global credit markets.
``The markets are in a negative mindset,'' said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management in Sydney. ``Our banks are fundamentally solid, but that doesn't mean they won't go down further because they get dragged down with the rest of what's going on in the world.''
U.S. financial stocks had their biggest decline in six years yesterday after Fannie Mae paid a record yield over benchmark rates on $3 billion of two-year notes, fueling concern it doesn't have enough capital to weather the biggest housing slump since the Great Depression. The decline sent Standard & Poor's 500 Index 2.3 percent lower and into its first bear market since 2002.
Reserve Bank of Australia Governor Glenn Stevens said in a speech yesterday that the global shakeout from the credit squeeze has further to run as banks and securities firms report losses, cut workers and improve risk monitoring.
The following companies were among the biggest gainers and losers on the Australian stock exchange.
CSR Ltd. (CSR AU), Australia's third-largest maker if building products, slumped 34 cents, or 15 percent, to A$1.97, the most since 1987 and the biggest loser on the benchmark. The company said the housing industry is ``challenging'' as 12-year high interest rates dent confidence.
Metcash Ltd. (MTS AU), Australia's biggest grocery wholesaler, gained 4 cents, or 1 percent, to A$3.87, the highest since June 20. The company withdrew from bidding for a pharmaceuticals wholesaling unit of Primary Health Care Ltd. (PRY AU) after the antitrust regulator called for further submissions on the takeover.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
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Japan's Chip Stocks Fall on Earnings Outlook; Developers Surge
By Masaki Kondo and Makiko Kitamura
July 10 (Bloomberg) -- Japan's chipmaker stocks fell on speculation a slowing global economy will crimp demand, while Urban Corp. led by property developers higher after BNP Paribas SA decided to buy its convertible bonds, allaying funding concern.
Elpida Memory Inc., Japan's largest maker of memory chips, sank to the lowest in four months after Merrill Lynch & Co. said global chip leader Intel Corp. may not beat earnings estimates. Urban, Japan's eighth-largest developer, surged the most in two years, while Creed Corp., a real-estate advisory company, headed for a two-week high after forecasting higher profit.
The Nikkei 225 Stock Average dipped 12.64, or 0.1 percent, to 13,039.49 at the 11 a.m. break in Tokyo. The broader Topix slid 0.62, or less than 0.1 percent, to 1,284.91. The Nikkei swung between a gain and loss 10 times.
``What have been considered fundamentals for investing are crumbling,'' said Yuuki Sakurai, general manager of financial and investment planning in Tokyo at Fukoku Mutual Life Insurance Co., which manages the equivalent of $54 billion. ``Now is the time to fasten your seatbelt and not move around too much.''
Corporate technology spending has fallen, and consumers in emerging markets have slowed purchases, hurting Intel's earnings, Merrill Lynch said yesterday. Cisco Systems Inc., the world's biggest maker of computer-networking equipment, may forecast revenue for next quarter that's less than analyst estimates, UBS AG said yesterday, sending the shares to a near two-year low.
Elpida, Japan's largest maker of computer-memory chips, dropped 3.8 percent to 3,030 yen, headed for the lowest since March 17. Advantest Corp., the world's biggest maker of memory- chip testers, fell 2.4 percent to 2,070 yen. Tokyo Electron Ltd., a semiconductor equipment maker, lost 1.2 percent to 5,730 yen.
Developers Surge
Electronics makers were the largest drag on the Topix, while developers posted the biggest gain among 33 industry groups.
Urban surged 18 percent to 245 yen, set for the sharpest advance since May 2006. BNP Paribas will proceed with the purchase of 30 billion yen ($281 million) worth of convertible bonds from Urban, the developer said yesterday. Urban plunged 28 percent on July 4 amid speculation the deal might not go through.
Creed soared 13 percent to 89,400 yen, en route to the biggest gain since April 2. Annual profit is expected to rise 8.3 percent this business year, after having fallen by almost a fifth in the previous period, the company said yesterday.
Nikkei futures expiring in September retreated 0.4 percent to 13,070 in Osaka and slumped 0.7 percent to 13,050 in Singapore.
To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net.
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Asian Stocks Gain, Reversing Decline; Banks, Steelmakers Climb
By Chua Kong Ho
July 10 (Bloomberg) -- Asian stocks rose, reversing earlier declines, led by financial companies and steelmakers.
Industrial & Commercial Bank of China Ltd. gained in Hong Kong and Posco, Asia's third-biggest steelmaker, surged the most in two months in Seoul.
The MSCI Asia-Pacific Index advanced 0.5 percent to 132.61 at 1:15 p.m. Tokyo time, reversing a loss of 0.6 percent.
Japan's Nikkei 225 Stock Average rose 0.5 percent to 13,120.50.
To contact the reporter for this story: Chua Kong Ho at in Shanghai or kchua6@bloomberg.net;
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Camaieu, Carrefour, Icade, Vet'Affaires: French Stocks Preview
By Alan Katz
July 10 (Bloomberg) -- The following is a list of companies whose stocks may have unusual changes in Paris. Symbols are in parentheses after company names and prices are from the last close.
France's CAC 40 Index rose 64.05, or 1.5 percent, to 4,339.66 in Paris, gaining for a second time this week. The SBF 120 Index added 1.6 percent.
Air France-KLM Group (AF FP): Europe's biggest airline holds its annual shareholder meeting in Paris on July 10. The shares gained 26 cents, or 1.7 percent, to 15.48 euros.
Camaieu SA (AMA FP): The women's clothing retailer said first-half revenue rose 11 percent to 327.1 million euros. The shares closed unchanged at 230 euros.
Carrefour SA (CA FP): Europe's biggest retailer said second-quarter sales growth slowed as consumer spending dwindled in its domestic French market. Revenue rose 6 percent to 23.7 billion euros, less than the first quarter's 10 percent increase and missing the 24.2 billion-euro median estimate of six analysts. The shares added 81 cents, or 2.4 percent, to 34.45 euros.
Egide SA (GID FP): The producer of ceramic packages that protect electronic systems used by the U.S. Air Force reported a 20 percent increase in first-half revenue to 15.4 million euros. The shares closed unchanged at 8.99 euros.
Geci International SA (GECP FP): The aerospace services company agreed to buy a majority stake in Reims Aviation for 4.5 million euros in order to enter the airplane customization market. The shares added 22 cents, or 8.6 percent, to 2.77 euros.
Icade SA (ICAD FP): The real-estate investment trust controlled by France's Caisse des Depots et Consignations acquired four clinics near Paris from Generale de Sante SA (GDS FP) for 202 million euros. Icade shares gained 78 cents, or 1.1 percent, to 71.50 euros, while Generale de Sante closed unchanged at 13 euros.
Vet'Affaires SA (VET FP): The discount clothing retailer said second-quarter sales rose 1.1 percent to 23.8 million euros and forecast an increase in full-year revenue from 2007 levels. The shares closed unchanged at 18.72 euros.
To contact the reporter on this story: Alan Katz in Paris at akatz5@bloomberg.net.
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July 10 (Bloomberg) -- The following is a list of companies whose stocks may have unusual changes in Paris. Symbols are in parentheses after company names and prices are from the last close.
France's CAC 40 Index rose 64.05, or 1.5 percent, to 4,339.66 in Paris, gaining for a second time this week. The SBF 120 Index added 1.6 percent.
Air France-KLM Group (AF FP): Europe's biggest airline holds its annual shareholder meeting in Paris on July 10. The shares gained 26 cents, or 1.7 percent, to 15.48 euros.
Camaieu SA (AMA FP): The women's clothing retailer said first-half revenue rose 11 percent to 327.1 million euros. The shares closed unchanged at 230 euros.
Carrefour SA (CA FP): Europe's biggest retailer said second-quarter sales growth slowed as consumer spending dwindled in its domestic French market. Revenue rose 6 percent to 23.7 billion euros, less than the first quarter's 10 percent increase and missing the 24.2 billion-euro median estimate of six analysts. The shares added 81 cents, or 2.4 percent, to 34.45 euros.
Egide SA (GID FP): The producer of ceramic packages that protect electronic systems used by the U.S. Air Force reported a 20 percent increase in first-half revenue to 15.4 million euros. The shares closed unchanged at 8.99 euros.
Geci International SA (GECP FP): The aerospace services company agreed to buy a majority stake in Reims Aviation for 4.5 million euros in order to enter the airplane customization market. The shares added 22 cents, or 8.6 percent, to 2.77 euros.
Icade SA (ICAD FP): The real-estate investment trust controlled by France's Caisse des Depots et Consignations acquired four clinics near Paris from Generale de Sante SA (GDS FP) for 202 million euros. Icade shares gained 78 cents, or 1.1 percent, to 71.50 euros, while Generale de Sante closed unchanged at 13 euros.
Vet'Affaires SA (VET FP): The discount clothing retailer said second-quarter sales rose 1.1 percent to 23.8 million euros and forecast an increase in full-year revenue from 2007 levels. The shares closed unchanged at 18.72 euros.
To contact the reporter on this story: Alan Katz in Paris at akatz5@bloomberg.net.
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Experian Group, FirstGroup, Hays: U.K., Irish Equity Preview
By Kari Lundgren
July 10 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in U.K. markets today. Stock symbols are in parentheses and prices are from the last market close.
The benchmark FTSE 100 Index rose 89.1, or 1.6 percent, to close at 5,529.6. The FTSE All-Share Index gained 45.41 pence, or 1.7 percent, to 2,790.15.
Ireland's ISEQ Index climbed 126.67, or 2.7 percent, to close at 4,786.18.
U.K. Companies:
Barratt Developments Plc (BDEV LN): The U.K. homebuilder may announce agreements today extending the group's 400 million-pound ($792.4 million) debt repayment, the Financial Times reported. Barratt rose 15 pence, or 38.46 percent, to 54 pence.
Experian Group Ltd. (EXPN LN): The world's largest credit- checking company is releasing a trading update. Experian added 13.75 pence, or 4 percent, to 361.25 pence.
FirstGroup Plc (FGP LN): Britain's biggest train operator is releasing a trading update. FirstGroup lost 1.5 pence, or 0.3 percent, to 541 pence.
Hays Plc (HAS LN): The U.K.'s largest recruitment company is releasing a trading update. Hays dropped 1 penny, or 1.3 percent, to 78 pence.
Helphire Group Plc (HHR LN): The U.K. supplier of rental cars for motorists involved in accidents, said it would raise 45 million pounds ($89.1 million) in a share offer, while two executives would leave the company. Helphire increased 2.5 pence, or 2.5 percent, to 103 pence.
Rightmove Plc (RMV LN): Operator of the U.K.'s largest residential-property Web site was downgraded to ``sell'' from ``buy'' by analyst Anthony Chow at Canaccord Adams. Rightmove jumped 7 pence, or 2.9 percent, to 244.75 pence.
Spectris Plc (SXS LN): The maker of production-testing gear for clients including GlaxoSmithKline Plc is releasing a trading update. Spectris gained 19 pence, or 2.8 percent, to 687 pence.
To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net
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July 10 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in U.K. markets today. Stock symbols are in parentheses and prices are from the last market close.
The benchmark FTSE 100 Index rose 89.1, or 1.6 percent, to close at 5,529.6. The FTSE All-Share Index gained 45.41 pence, or 1.7 percent, to 2,790.15.
Ireland's ISEQ Index climbed 126.67, or 2.7 percent, to close at 4,786.18.
U.K. Companies:
Barratt Developments Plc (BDEV LN): The U.K. homebuilder may announce agreements today extending the group's 400 million-pound ($792.4 million) debt repayment, the Financial Times reported. Barratt rose 15 pence, or 38.46 percent, to 54 pence.
Experian Group Ltd. (EXPN LN): The world's largest credit- checking company is releasing a trading update. Experian added 13.75 pence, or 4 percent, to 361.25 pence.
FirstGroup Plc (FGP LN): Britain's biggest train operator is releasing a trading update. FirstGroup lost 1.5 pence, or 0.3 percent, to 541 pence.
Hays Plc (HAS LN): The U.K.'s largest recruitment company is releasing a trading update. Hays dropped 1 penny, or 1.3 percent, to 78 pence.
Helphire Group Plc (HHR LN): The U.K. supplier of rental cars for motorists involved in accidents, said it would raise 45 million pounds ($89.1 million) in a share offer, while two executives would leave the company. Helphire increased 2.5 pence, or 2.5 percent, to 103 pence.
Rightmove Plc (RMV LN): Operator of the U.K.'s largest residential-property Web site was downgraded to ``sell'' from ``buy'' by analyst Anthony Chow at Canaccord Adams. Rightmove jumped 7 pence, or 2.9 percent, to 244.75 pence.
Spectris Plc (SXS LN): The maker of production-testing gear for clients including GlaxoSmithKline Plc is releasing a trading update. Spectris gained 19 pence, or 2.8 percent, to 687 pence.
To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net
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Buy Petrobras Preferred, Sell Common Becoming Top Brazil Trade
By Alexander Ragir
July 10 (Bloomberg) -- The best trade in Brazil may be buying preferred shares of Petroleo Brasileiro SA, the nation's biggest company, and betting its common stock will fall after international investors pushed up prices 19 percent since March.
Common shares of the Rio de Janeiro-based company, the world's fourth-largest oil producer by market value, cost 22 percent more than its preferred, the biggest price difference since at least 1994, according to data compiled by Bloomberg. Petrobras, as the company is known, rose to a record in May after announcing the largest oil discovery in the Western hemisphere in three decades.
The expanding gap prompted hedge funds Ciano Investimentos Gestao, Mercatto Gestao de Recursos and Neo Gestao de Recursos to bet in the past three weeks that prices will converge. Petrobras, the most heavily traded Latin American company on the New York Stock Exchange, is controlled by the government, so common shareholders get no say in company decisions and a sale is prohibited by Brazil's constitution.
``The premium for common shares isn't justified and we can't find any good reason that it widened so much,'' Felipe Taylor, a portfolio manager at Ciano Investimentos Gestao, the $142 million Sao Paulo hedge fund managed by former central bank chief economist Ilan Goldfajn. ``It's a good opportunity to short the common and buy the preferred.''
Short sellers borrow shares and sell them, hoping to replace the stock at a lower price and pocket the difference.
Investors outside Brazil mistakenly assume common shares of Petrobras are worth more than the preferred, even though the securities are virtually identical, according to Credit Suisse Group AG analyst Emerson Leite.
Biggest ADR
American depositary receipts on Petrobras common stock surged 81 percent in the past year, surpassing the 68 percent gain in the preferred ADRs. An average of 17.9 million common ADRs trade daily on the NYSE, more than double the preferred shares. That's the most of any Latin American company, according to data compiled by Deutsche Bank AG.
Petrobras's market value of $249.6 billion makes it the sixth-largest company in the world, according to data compiled by Bloomberg. The only bigger oil producers are Exxon Mobil Corp., based in Irvine, Texas, PetroChina Co., based in Bejing, and Moscow's OAO Gazprom.
The company gained worldwide attention in November when it said an offshore oil discovery may be the biggest since Mexico's Cantarell field in 1976. The Tupi field has 8 billion barrels of recoverable oil, Petrobras said in November, worth $1.1 trillion at current prices.
International Investors
``Foreigners like common shares,'' said Bruno Garcia, who helps oversee the equivalent of $5.5 billion as a hedge fund manager at BNY Mellon Arx in Rio de Janeiro and only holds preferred stock. ``That's all that's going on.''
Common shares at most companies are more attractive to investors because they give the right to vote in shareholder meetings, sell for more in takeovers and pay higher dividends, according to reports by Credit Suisse and Merrill Lynch & Co.
That's not the case with Petrobras, said Leite. What's more, preferred shares get ``priority'' for dividends, according to Petrobras's Web site. The 12-month dividend yield on Brazil- preferred shares is 1.89 percent, compared with the common's 1.54 percent yield, according to data compiled by Bloomberg.
Goldman's `Buy'
Daniella Marques, who manages the equivalent of $1.2 billion at Mercatto Gestao de Recursos in Rio de Janeiro, started selling short the locally traded common shares and buying preferred three weeks ago.
``You have a company that has such a low risk that it would be bought and the dividend is more in the preferred shares, so why would you ever pay 22 percent more for common shares?'' Marques said.
The difference between preferred and common prices of the locally traded shares and the American depositary receipts hit records June 30 after the Sao Paulo-listed common stock jumped by 2 percentage points more from a March 20 low. Goldman Sachs Group Inc. began coverage of Petrobras preferred ADRs with a ``buy'' recommendation on July 7, citing the discount to common shares even though differences are ``largely insignificant.''
The higher level of trading in Petrobras' common ADRs may be boosting the spread. The average three-month daily trading of common ADRs increased 57 percent from a year ago, compared with a 30 percent rise in average volume for the preferred ADRs.
Liquidity Concern
``It would be great to get the preferred shares if there was enough liquidity,'' said Mark Mobius, who oversees about $47 billion of emerging-market equities as executive chairman of Templeton Asset Management Ltd. in Singapore.
In Brazil, Petrobras preferred shares Petrobras trade almost seven times more than the common.
``When we see no reason for the spread widening, we mount a position,'' said Cristina Sarian, who helps manage $850 million at Neo Gestao de Recursos in Sao Paulo and began short-selling Petrobras common shares and buying its preferred shares three weeks ago. ``Nothing's changed with Petrobras, so there's no reason for the premium.''
To contact the reporters on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net;
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Daily Forex Fundamentals | Written by Trade The News | Jul 10 08 04:22 GMT |
Asian Market Update
More evidence that China's overall trade surplus may have peaked
China's trade surplus falls -11.8% y/y in 1H08: (CH JUNE TRADE SURPLUS: $21.35B V $22.35B expected, $20.21B prior) China's imports outpaced exports once more, as they have all this year with the exception of March, providing more evidence that China's overall trade surplus may have peaked. - Aussie jobs market surprisingly strong during June: (AU JUNE EMPLOYMENT CHANGE: 29.8K V 10K expected, prior revised to -25.6K from -19.7K; UNEMPLOYMENT RATE: 4.2% V 4.3% expected, 4.3% prior; PARTICIPATION RATE: 65.3% V 65.3% expected, 65.2% prior) Analysts were quick to downplay the significance of the data, with many pointing out that statistical payback was to be expected after last month's shocker. 'You can't read too much into it,' said Adam Carr at UBS. 'The labor force is a lagging indicator, and the leading indicators of employment are telling us that things are going to moderate in second half of the year.' The AUD/USD was soft going into the number, but spiked from 0.9555 to 0.9615 in the moments after the release. It is currently hovering around 0.9595.
New Zealand manufacturing contracts for the third time in four months: (NZ JUNE BUSINESS NZ PMI: 45.7 V 47.9 prior, prior revised from 49.3; This is the second lowest result recorded since the survey began in 2002) The current run of manufacturing data is showing 'a more persistent trend downwards,' said Business NZ chief executive Phil O'Reilly. 'The first half of 2008 has been the toughest six months manufacturers have had to deal with for some time, with the possibility of ongoing contraction for the next half of 2008.'
Japanese wholesale price inflation at a 27yr high: (JP JUNE DOMESTIC CORPORATE GOODS PRICE INDEX: MOM: 0.8% V 0.6% expected, 1.1% prior; YOY: 5.6% V 5.3% expected, 4.7% prior) Analysts said that Japanese companies seem to be exhibiting a little more determination to pass on more of the cost increase, suggesting that continuous inflation pressure, coupled with a weakening economy, may make life difficult for the Bank of Japan. 'On top of rises in crude oil prices, some final goods prices are starting to increase so the upward price pressure may spread to consumer prices,' said Seiji Adachi at Deutsche.
Japan's current account narrows on a y/y basis for a third consecutive month: (JP MAY CURRENT ACCOUNT: ¥2.0T V ¥1.92T expected, ¥1.38T prior; ADJUSTED: ¥2.03T V ¥1.96T expected, ¥1.51T prior) Japan had a surplus of ¥2.0T in its current account, down -5.9% from a year earlier. Exports grew 4.2% during May, with solid demand from emerging Asia offsetting the impact of a U.S. slowdown. However, few analysts expect Japan's export momentum to continue, and the trade surplus is expected to deteriorate over the coming months as higher oil prices boost the value of imports.
Australia's median inflation expectations stays at a 15yr high: (AU JULY CONSUMER MEDIAN INFLATION EXPECTATION: 5.9% V 5.9% prior) The survey found that only 7.5% of the 1,200 respondents believed that inflation would come back down to within the RBA's target band of 2%-3% in the coming year, off from an 8.0% reading in June. 'Although inflationary expectations did not rise in July, the effect of income tax cuts and the path of crude oil prices will be significant factors in determining whether inflationary expectations fall in the next few months,' said Melbourne Institute research fellow Sam Tsiaplias.
Equities: At 0:04 EDT Japan's Nikkei is +0.56%, the S&P/ASX200 is -1.31%, South Korea's KOSPI is -0.10%, and the Shanghai composite index is -0.74%. The S&P500 futures contract gained +0.09% since the U.S. close, last trading at 1,249. Chipmakers and commodities related companies listed in Tokyo traded lower, dragging the benchmark Nikkei index down to 12,950 in mid morning. Since then the index has rebounded, with short-covering of financials pushing the index above 13,100. The S&P/ASX200 remains stuck below 5,000, with financials, retailers and miners generally trading lower. Technology companies and automakers pushed the KOSPI lower, while airlines listed in Shanghai also traded lower.
Commodities: Nymex crude oil gained +0.34% between 18:00 EDT and 0:03 EDT, last trading at $136.51/bbl. Spot gold gained +0.19%, last trading at $930.90/oz.
Trade The News Staff
Trade The News, Inc.
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Asian Market Update
More evidence that China's overall trade surplus may have peaked
China's trade surplus falls -11.8% y/y in 1H08: (CH JUNE TRADE SURPLUS: $21.35B V $22.35B expected, $20.21B prior) China's imports outpaced exports once more, as they have all this year with the exception of March, providing more evidence that China's overall trade surplus may have peaked. - Aussie jobs market surprisingly strong during June: (AU JUNE EMPLOYMENT CHANGE: 29.8K V 10K expected, prior revised to -25.6K from -19.7K; UNEMPLOYMENT RATE: 4.2% V 4.3% expected, 4.3% prior; PARTICIPATION RATE: 65.3% V 65.3% expected, 65.2% prior) Analysts were quick to downplay the significance of the data, with many pointing out that statistical payback was to be expected after last month's shocker. 'You can't read too much into it,' said Adam Carr at UBS. 'The labor force is a lagging indicator, and the leading indicators of employment are telling us that things are going to moderate in second half of the year.' The AUD/USD was soft going into the number, but spiked from 0.9555 to 0.9615 in the moments after the release. It is currently hovering around 0.9595.
New Zealand manufacturing contracts for the third time in four months: (NZ JUNE BUSINESS NZ PMI: 45.7 V 47.9 prior, prior revised from 49.3; This is the second lowest result recorded since the survey began in 2002) The current run of manufacturing data is showing 'a more persistent trend downwards,' said Business NZ chief executive Phil O'Reilly. 'The first half of 2008 has been the toughest six months manufacturers have had to deal with for some time, with the possibility of ongoing contraction for the next half of 2008.'
Japanese wholesale price inflation at a 27yr high: (JP JUNE DOMESTIC CORPORATE GOODS PRICE INDEX: MOM: 0.8% V 0.6% expected, 1.1% prior; YOY: 5.6% V 5.3% expected, 4.7% prior) Analysts said that Japanese companies seem to be exhibiting a little more determination to pass on more of the cost increase, suggesting that continuous inflation pressure, coupled with a weakening economy, may make life difficult for the Bank of Japan. 'On top of rises in crude oil prices, some final goods prices are starting to increase so the upward price pressure may spread to consumer prices,' said Seiji Adachi at Deutsche.
Japan's current account narrows on a y/y basis for a third consecutive month: (JP MAY CURRENT ACCOUNT: ¥2.0T V ¥1.92T expected, ¥1.38T prior; ADJUSTED: ¥2.03T V ¥1.96T expected, ¥1.51T prior) Japan had a surplus of ¥2.0T in its current account, down -5.9% from a year earlier. Exports grew 4.2% during May, with solid demand from emerging Asia offsetting the impact of a U.S. slowdown. However, few analysts expect Japan's export momentum to continue, and the trade surplus is expected to deteriorate over the coming months as higher oil prices boost the value of imports.
Australia's median inflation expectations stays at a 15yr high: (AU JULY CONSUMER MEDIAN INFLATION EXPECTATION: 5.9% V 5.9% prior) The survey found that only 7.5% of the 1,200 respondents believed that inflation would come back down to within the RBA's target band of 2%-3% in the coming year, off from an 8.0% reading in June. 'Although inflationary expectations did not rise in July, the effect of income tax cuts and the path of crude oil prices will be significant factors in determining whether inflationary expectations fall in the next few months,' said Melbourne Institute research fellow Sam Tsiaplias.
Equities: At 0:04 EDT Japan's Nikkei is +0.56%, the S&P/ASX200 is -1.31%, South Korea's KOSPI is -0.10%, and the Shanghai composite index is -0.74%. The S&P500 futures contract gained +0.09% since the U.S. close, last trading at 1,249. Chipmakers and commodities related companies listed in Tokyo traded lower, dragging the benchmark Nikkei index down to 12,950 in mid morning. Since then the index has rebounded, with short-covering of financials pushing the index above 13,100. The S&P/ASX200 remains stuck below 5,000, with financials, retailers and miners generally trading lower. Technology companies and automakers pushed the KOSPI lower, while airlines listed in Shanghai also traded lower.
Commodities: Nymex crude oil gained +0.34% between 18:00 EDT and 0:03 EDT, last trading at $136.51/bbl. Spot gold gained +0.19%, last trading at $930.90/oz.
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Agrenco, BM&F, Tractebel Energia, Walmex: Latin Equity Preview
By William Freebairn and Paulo Winterstein
July 10 (Bloomberg) -- The following stocks may have significant gains or losses in Latin American markets. Symbols are in parentheses after company names, and stock prices are from the last session.
The MSCI index of Latin American shares fell 0.3 percent to 4,359.75 yesterday. Markets in Argentina and Brazil were closed yesterday for holidays.
Brazil
Agrenco Ltd. (AGEN11 BS): Noble do Brasil Ltda., the Brazilian unit of the third-largest U.S. offshore oil driller, is seeking to buy a stake in Brazilian agriculture company Agrenco on terms ``substantially equivalent'' to Louis Dreyfus & Cie.'s June 25 offer, Agrenco said yesterday in a Brazil regulatory filing. Closely held commodities trader Louis Dreyfus agreed to buy at least $33.5 million in a sale of 77.4 million or more new shares. Noble's offer is valid for seven days and includes payment to cover fines that would result from Agrenco deciding to not sell a stake to Louis Dreyfus, Agrenco said in the filing. Agrenco fell 0.7 percent to 1.40 reais.
Bovespa Holding SA (BOVH3 BS) and Bolsa de Mercadorias & Futuros-BM&F SA (BMEF3 BS): The merger between the operator of Latin America's largest stock and derivatives exchanges, respectively, was approved by regulators without restrictions, Reuters reported yesterday. Bovespa advanced 4.9 percent to 20 reais. BM&F rose 3.6 percent to 13.97 reais.
Tractebel Energia SA (TBLE3 BS): The Brazilian power generator controlled by Suez SA agreed to buy hydropower companies Tupan Energia Eletrica SA and Hidropower Energia SA for 203.9 million reais ($126.7 million) and will assume 110 million reais of the companies' debt. Tupan operates a 26.6 megawatt hydroelectric dam, and Hidropower runs a 23.7 megawatt dam, Tractebel said in a filing posted yesterday on Brazil's securities regulator Web site. Tractebel fell 1.5 percent to 22.60 reais.
Mexico
Wal-Mart de Mexico SAB (WALMEXV MM): Mexico's largest retailer said second-quarter net income rose 9 percent to 3.23 billion pesos ($313.5 million), more than the 3.19 billion peso average of five analyst estimates compiled by Bloomberg. Revenue increased 12 percent to 57.2 billion pesos, the company said in a statement e-mailed yesterday after markets closed. Walmex, as the company is known, fell 1 percent to 40.78 pesos.
To contact the reporters on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net; Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net
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July 10 (Bloomberg) -- The following stocks may have significant gains or losses in Latin American markets. Symbols are in parentheses after company names, and stock prices are from the last session.
The MSCI index of Latin American shares fell 0.3 percent to 4,359.75 yesterday. Markets in Argentina and Brazil were closed yesterday for holidays.
Brazil
Agrenco Ltd. (AGEN11 BS): Noble do Brasil Ltda., the Brazilian unit of the third-largest U.S. offshore oil driller, is seeking to buy a stake in Brazilian agriculture company Agrenco on terms ``substantially equivalent'' to Louis Dreyfus & Cie.'s June 25 offer, Agrenco said yesterday in a Brazil regulatory filing. Closely held commodities trader Louis Dreyfus agreed to buy at least $33.5 million in a sale of 77.4 million or more new shares. Noble's offer is valid for seven days and includes payment to cover fines that would result from Agrenco deciding to not sell a stake to Louis Dreyfus, Agrenco said in the filing. Agrenco fell 0.7 percent to 1.40 reais.
Bovespa Holding SA (BOVH3 BS) and Bolsa de Mercadorias & Futuros-BM&F SA (BMEF3 BS): The merger between the operator of Latin America's largest stock and derivatives exchanges, respectively, was approved by regulators without restrictions, Reuters reported yesterday. Bovespa advanced 4.9 percent to 20 reais. BM&F rose 3.6 percent to 13.97 reais.
Tractebel Energia SA (TBLE3 BS): The Brazilian power generator controlled by Suez SA agreed to buy hydropower companies Tupan Energia Eletrica SA and Hidropower Energia SA for 203.9 million reais ($126.7 million) and will assume 110 million reais of the companies' debt. Tupan operates a 26.6 megawatt hydroelectric dam, and Hidropower runs a 23.7 megawatt dam, Tractebel said in a filing posted yesterday on Brazil's securities regulator Web site. Tractebel fell 1.5 percent to 22.60 reais.
Mexico
Wal-Mart de Mexico SAB (WALMEXV MM): Mexico's largest retailer said second-quarter net income rose 9 percent to 3.23 billion pesos ($313.5 million), more than the 3.19 billion peso average of five analyst estimates compiled by Bloomberg. Revenue increased 12 percent to 57.2 billion pesos, the company said in a statement e-mailed yesterday after markets closed. Walmex, as the company is known, fell 1 percent to 40.78 pesos.
To contact the reporters on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net; Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net
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Daily Forex Market Commentary
Daily Forex Technicals | Written by Global Forex Trading | Jul 10 08 03:24 GMT |
The dollar's attempts to pad its gains were unsuccessful on Wednesday, as Iran's test of missiles triggered a knee-jerk reaction. The US currency sank broadly and my model went short. Firing nine missiles doesn't change a thing, but the US equity indices sinking into recession do. Thus, choppy trading should continue in FX.
Euro/dollar
Euro/dollar rallied on Wednesday, but remained stuck in an inside range. My model is now long, but with the market alternating up and down days, I'm not sure for how long. Expect choppy trading.
Immediate resistance is at 1.5765. Above 1.5820, euro/dollar faces key resistance at 1.5905.
Below 1.5710, support now comes at 1.5675. The next good levels are at 1.5630 and 1.5575.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell on Wednesday, but once again didn't break any new ground. Expect more choppy trading today as well, but the upside seems limited.
Good support is at 106.75 from a 50-point pivot, which targets 106.25 and 107.25.
Initial resistance is at 107.25. Strong resistance iis at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar rallied sharply and unexpectedly and obliterated losses made in the previous two days. My model is long, but the upside looks limited.
Initial resistance is seen at 1.9865. Above 1.9908, cable now faces distant resistance at 2.0004.
Below 1.9775, support is now seen at 1.9730. Distant support is now seen at 1.9650.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss fell from a nearly two-week high and formed an incipient bearish reversal formation. Expect further choppy trading, but my model is now short.
Initial support is now seen at 1.0250. The next level is 1.0215. Distant support is seen at 1.0166.
Above 1.0320, resistance remains at 1.0415 and 1.0450. Distant resistance comes at 1.0540.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Cornelius Luca
Global Forex Trading
http://www.gftforex.com
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The dollar's attempts to pad its gains were unsuccessful on Wednesday, as Iran's test of missiles triggered a knee-jerk reaction. The US currency sank broadly and my model went short. Firing nine missiles doesn't change a thing, but the US equity indices sinking into recession do. Thus, choppy trading should continue in FX.
Euro/dollar
Euro/dollar rallied on Wednesday, but remained stuck in an inside range. My model is now long, but with the market alternating up and down days, I'm not sure for how long. Expect choppy trading.
Immediate resistance is at 1.5765. Above 1.5820, euro/dollar faces key resistance at 1.5905.
Below 1.5710, support now comes at 1.5675. The next good levels are at 1.5630 and 1.5575.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell on Wednesday, but once again didn't break any new ground. Expect more choppy trading today as well, but the upside seems limited.
Good support is at 106.75 from a 50-point pivot, which targets 106.25 and 107.25.
Initial resistance is at 107.25. Strong resistance iis at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar rallied sharply and unexpectedly and obliterated losses made in the previous two days. My model is long, but the upside looks limited.
Initial resistance is seen at 1.9865. Above 1.9908, cable now faces distant resistance at 2.0004.
Below 1.9775, support is now seen at 1.9730. Distant support is now seen at 1.9650.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss fell from a nearly two-week high and formed an incipient bearish reversal formation. Expect further choppy trading, but my model is now short.
Initial support is now seen at 1.0250. The next level is 1.0215. Distant support is seen at 1.0166.
Above 1.0320, resistance remains at 1.0415 and 1.0450. Distant resistance comes at 1.0540.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Cornelius Luca
Global Forex Trading
http://www.gftforex.com
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Daily Technical Analysis
Daily Forex Technicals | Written by FX Instructor | Jul 10 08 03:04 GMT |
EURUSD Outlook
The Euro was traded stronger against Dollar yesterday. The pair topped at 1.5750 and closed at 1.5738. We have a bullish channel on hourly chart. We might still in consolidation/correctional phase of bullish outlook, so the pair might make another attempt to push lower. As long as the pair move above 1.5650, the bias is up. My model for today is mixed with upside bias. CCI in neutral area on daily chart. A consistent move above 1.5750 could trigger further upside scenario.
EURUSD Daily Supports and Resistances:
S1= 1.5676
S2= 1.5614
S3= 1.5577
R1= 1.5775
R2= 1.5812
R3= 1.5874
GBPUSD Outlook
The Greenback slumped against Sterling yesterday. GBPUSD topped at 1.9837 and closed at 1.9835. The pair is making a new bullish channel on hourly and 4h chart. My model goes long targeting 1.9895. Immediate support is seen at 1.9780. CCI in overbought area in 4h chart so watch out for a minor downside pullback.
GBPUSD Daily Supports and Resistances:
S1= 1.9725
S2= 1.9615
S3= 1.9559
R1= 1.9891
R2= 1.9947
R3= 2.0057
USDJPY Outlook
The Japanese Yen recovered against Dollar yesterday. The pair bottomed at 106.68 and closed at 106.80. We have a valid bearish channel from last high on 16/06/2008 (108.58) on daily chart. My model is short, targeting 106.15. Immediate resistance is seen at 106.91. CCI heading down towards -100 line on daily chart.
USDJPY Daily Supports and Resistances:
S1= 106.43
S2= 106.06
S3= 105.45
R1= 107.41
R2= 108.02
R3= 108.39
USDCHF Outlook
The Swiss Franc recovered against US Dollar yesterday. The pair bottomed at 1.0276 and closed at 1.0284. The pair is making a new bearish channel on hourly chart. My model is short targeting 1.0215. Immediate resistance is seen at 1.0310. CCI in neutral area on daily chart.
USDCHF Daily Supports and Resistances:
S1= 1.0256
S2= 1.0228
S3= 1.0181
R1= 1.0331
R2= 1.0378
R3= 1.0406
FX Instructor LLC
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EURUSD Outlook
The Euro was traded stronger against Dollar yesterday. The pair topped at 1.5750 and closed at 1.5738. We have a bullish channel on hourly chart. We might still in consolidation/correctional phase of bullish outlook, so the pair might make another attempt to push lower. As long as the pair move above 1.5650, the bias is up. My model for today is mixed with upside bias. CCI in neutral area on daily chart. A consistent move above 1.5750 could trigger further upside scenario.
EURUSD Daily Supports and Resistances:
S1= 1.5676
S2= 1.5614
S3= 1.5577
R1= 1.5775
R2= 1.5812
R3= 1.5874
GBPUSD Outlook
The Greenback slumped against Sterling yesterday. GBPUSD topped at 1.9837 and closed at 1.9835. The pair is making a new bullish channel on hourly and 4h chart. My model goes long targeting 1.9895. Immediate support is seen at 1.9780. CCI in overbought area in 4h chart so watch out for a minor downside pullback.
GBPUSD Daily Supports and Resistances:
S1= 1.9725
S2= 1.9615
S3= 1.9559
R1= 1.9891
R2= 1.9947
R3= 2.0057
USDJPY Outlook
The Japanese Yen recovered against Dollar yesterday. The pair bottomed at 106.68 and closed at 106.80. We have a valid bearish channel from last high on 16/06/2008 (108.58) on daily chart. My model is short, targeting 106.15. Immediate resistance is seen at 106.91. CCI heading down towards -100 line on daily chart.
USDJPY Daily Supports and Resistances:
S1= 106.43
S2= 106.06
S3= 105.45
R1= 107.41
R2= 108.02
R3= 108.39
USDCHF Outlook
The Swiss Franc recovered against US Dollar yesterday. The pair bottomed at 1.0276 and closed at 1.0284. The pair is making a new bearish channel on hourly chart. My model is short targeting 1.0215. Immediate resistance is seen at 1.0310. CCI in neutral area on daily chart.
USDCHF Daily Supports and Resistances:
S1= 1.0256
S2= 1.0228
S3= 1.0181
R1= 1.0331
R2= 1.0378
R3= 1.0406
FX Instructor LLC
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FX Technical Commentary
Daily Forex Technicals | Written by Easy Forex | Jul 10 08 01:26 GMT |
Euro 1.5730
Initial support at 1.5651 (July 9 low) followed by 1.5606 (50.% retracement 1.5303 to 1.5910). Initial resistance is now located 1.5754 (July 7 high) at followed by 1.5910 (July 3 high).
Yen 106.85
Initial support is located at 106.25 (July 8 low) followed by 105.78 (Jul 3 low). Initial resistance is now at 107.76 (July 7 high) followed by 108.19 (Jun 26 high).
Pound 1.9820
Initial support at 1.9673 (July 9 low) followed by 1.9637 (61.8% retracement of 1.9410 to 2.008 rally). Initial resistance is now at 1.9834 (July 7 high) followed by 1.9849 (July 4 high)
Australian Dollar 0.9555
Initial support at 0.9477 (July 9 low) followed by 0.9459 (61.8% retracement of the 0.9328 to 0.9670 advance). Initial resistance is now at 0.9592 (July 9 high) followed by 0.9642 (July 7 high).
Gold 929
Initial support at 913.35 (Jul 8 low) followed by 885.1 (Jun 26 low). Initial resistance is now at 936.5 (July 4 high) followed by 946.5 (July 3 high).
Currency Sup 2 Sup 1 Spot Res 1 Res 2
EUR/USD 1.5606 1.5651 1.5730 1.5754 1.5910
USD/JPY 105.78 106.25 106.85 107.76 108.19
GBP/USD 1.9637 1.9673 1.9820 1.9834 1.9849
AUD/USD 0.9459 0.9477 0.9555 0.9592 0.9642
XAU/USD 885.10 913.35 928.00 936.58 946.50
Easy Forex
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Euro 1.5730
Initial support at 1.5651 (July 9 low) followed by 1.5606 (50.% retracement 1.5303 to 1.5910). Initial resistance is now located 1.5754 (July 7 high) at followed by 1.5910 (July 3 high).
Yen 106.85
Initial support is located at 106.25 (July 8 low) followed by 105.78 (Jul 3 low). Initial resistance is now at 107.76 (July 7 high) followed by 108.19 (Jun 26 high).
Pound 1.9820
Initial support at 1.9673 (July 9 low) followed by 1.9637 (61.8% retracement of 1.9410 to 2.008 rally). Initial resistance is now at 1.9834 (July 7 high) followed by 1.9849 (July 4 high)
Australian Dollar 0.9555
Initial support at 0.9477 (July 9 low) followed by 0.9459 (61.8% retracement of the 0.9328 to 0.9670 advance). Initial resistance is now at 0.9592 (July 9 high) followed by 0.9642 (July 7 high).
Gold 929
Initial support at 913.35 (Jul 8 low) followed by 885.1 (Jun 26 low). Initial resistance is now at 936.5 (July 4 high) followed by 946.5 (July 3 high).
Currency Sup 2 Sup 1 Spot Res 1 Res 2
EUR/USD 1.5606 1.5651 1.5730 1.5754 1.5910
USD/JPY 105.78 106.25 106.85 107.76 108.19
GBP/USD 1.9637 1.9673 1.9820 1.9834 1.9849
AUD/USD 0.9459 0.9477 0.9555 0.9592 0.9642
XAU/USD 885.10 913.35 928.00 936.58 946.50
Easy Forex
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FTSE jumps 1.6% as banks and miners lead bounce
Wed Jul 9, 2008 12:13pm EDT
* FTSE 100 up 1.6 pct; analysts doubt rally's sustainability
* Banking stocks lead the upside after Fed comments
* Miners track rising metal prices, Alcoa results
By Michael Taylor
LONDON, July 9 (Reuters) - Britain's blue-chip index ended 1.6 percent higher on Wednesday as beaten-down banking stocks rebounded, while firmer metal prices buoyed miners.
The FTSE 100 .FTSE rose 89.1 points to 5,529.6 after falling 1.3 percent in the previous session, and is down 14.3 percent for the year to date.
But with data light and volumes thin, many market participants doubted the sustainability of the rise on the UK benchmark.
"Equity markets are reacting to the likelihood of recession. The U.S. economy is verging on recession and, as for the UK, a recession may be under way already," said Mike Lenhoff, chief market strategist at Brewin Dolphin.
"Interest rates and oil prices need to come down before confidence in equity markets returns," he said, cutting his year-end target for the FTSE 100 to 6,200 from 7,200.
Banks were the leading sector, accounting for 24 positive index points after Fed Chairman Ben Bernanke said on Tuesday the U.S. central bank may keep an emergency lending facility for big Wall Street banks open longer than it initially intended.
Barclays , Royal Bank of Scotland , HSBC , HBOS , Lloyds TSB and Standard Chartered advanced between 1 and 6.7 percent.
Mid-cap Bradford & Bingley , which has been battered by concerns over its future and the impact of a deteriorating UK economy, bounced 27.2 percent despite several investment banks cutting their price targets on the lender.
The Bank of England began a two-day rate-setting policy meeting and will announce its verdict on Thursday. Analysts expect the central bank to leave rates unchanged at 5 percent.
Miners tracked higher metal prices, with gold trading higher after news that Iran had test-fired nine long-range and medium-range missiles.
BHP Billiton , Rio Tinto , Vedanta Resources , Anglo American , Antofagasta , Ferrexpo and Xstrata were all up between 0.4 and 5.1 percent.
U.S. aluminium producer Alcoa also boosted sentiment after it posted stronger-than-expected results late on Tuesday.
Within the commodity sector, Tullow Oil added 0.5 percent after the oil explorer gave an optimistic outlook for reserves and for the production start-up at its main Ghana field and disclosed another discovery in Uganda.
In individual shares, London Stock Exchange jumped 10.3 percent to top the FTSE 100 leaderboard and recover some recent losses after the company said its revenue for the first quarter rose 8 per cent to 178 million pounds.
"Traders are speculating that losses in financial firms will not be as bad as initially feared," said David Evans, market analyst at BetOnMarkets.com. "Iran's testing of missiles has caused a small spike in crude oil prices back towards $140, but the reaction is small in comparison to previous gut-wrenching moves seen over the last fortnight."
BP , Shell and Petrofac all traded lower.
"In all it is a relatively slow day for global markets with most of the day's movement in Europe a reaction to the previous night's buying in the U.S.," added Evans. WPP Group reversed earlier losses to end up 1.2 percent after the world's second-largest advertising company launched a hostile bid worth 1.08 billion pounds ($2.13 billion) for British market research firm Taylor Nelson Sofres , which gained 10.7 percent as Germany's GfK Holdings said it was working on a rival cash offer.
Other media stocks boosted by the positive sentiment included ITV , BSkyB and Yell Group . (Additional reporting by Dominic Lau and Atul Prakash; Editing by Quentin Bryar)
Read more...
* FTSE 100 up 1.6 pct; analysts doubt rally's sustainability
* Banking stocks lead the upside after Fed comments
* Miners track rising metal prices, Alcoa results
By Michael Taylor
LONDON, July 9 (Reuters) - Britain's blue-chip index ended 1.6 percent higher on Wednesday as beaten-down banking stocks rebounded, while firmer metal prices buoyed miners.
The FTSE 100 .FTSE rose 89.1 points to 5,529.6 after falling 1.3 percent in the previous session, and is down 14.3 percent for the year to date.
But with data light and volumes thin, many market participants doubted the sustainability of the rise on the UK benchmark.
"Equity markets are reacting to the likelihood of recession. The U.S. economy is verging on recession and, as for the UK, a recession may be under way already," said Mike Lenhoff, chief market strategist at Brewin Dolphin.
"Interest rates and oil prices need to come down before confidence in equity markets returns," he said, cutting his year-end target for the FTSE 100 to 6,200 from 7,200.
Banks were the leading sector, accounting for 24 positive index points after Fed Chairman Ben Bernanke said on Tuesday the U.S. central bank may keep an emergency lending facility for big Wall Street banks open longer than it initially intended.
Barclays , Royal Bank of Scotland , HSBC , HBOS , Lloyds TSB and Standard Chartered advanced between 1 and 6.7 percent.
Mid-cap Bradford & Bingley , which has been battered by concerns over its future and the impact of a deteriorating UK economy, bounced 27.2 percent despite several investment banks cutting their price targets on the lender.
The Bank of England began a two-day rate-setting policy meeting and will announce its verdict on Thursday. Analysts expect the central bank to leave rates unchanged at 5 percent.
Miners tracked higher metal prices, with gold
BHP Billiton , Rio Tinto , Vedanta Resources , Anglo American , Antofagasta , Ferrexpo and Xstrata were all up between 0.4 and 5.1 percent.
U.S. aluminium producer Alcoa also boosted sentiment after it posted stronger-than-expected results late on Tuesday.
Within the commodity sector, Tullow Oil added 0.5 percent after the oil explorer gave an optimistic outlook for reserves and for the production start-up at its main Ghana field and disclosed another discovery in Uganda.
In individual shares, London Stock Exchange jumped 10.3 percent to top the FTSE 100 leaderboard and recover some recent losses after the company said its revenue for the first quarter rose 8 per cent to 178 million pounds.
"Traders are speculating that losses in financial firms will not be as bad as initially feared," said David Evans, market analyst at BetOnMarkets.com. "Iran's testing of missiles has caused a small spike in crude oil prices back towards $140, but the reaction is small in comparison to previous gut-wrenching moves seen over the last fortnight."
BP , Shell and Petrofac all traded lower.
"In all it is a relatively slow day for global markets with most of the day's movement in Europe a reaction to the previous night's buying in the U.S.," added Evans. WPP Group reversed earlier losses to end up 1.2 percent after the world's second-largest advertising company launched a hostile bid worth 1.08 billion pounds ($2.13 billion) for British market research firm Taylor Nelson Sofres , which gained 10.7 percent as Germany's GfK Holdings said it was working on a rival cash offer.
Other media stocks boosted by the positive sentiment included ITV , BSkyB and Yell Group . (Additional reporting by Dominic Lau and Atul Prakash; Editing by Quentin Bryar)
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HK shares seen giving up gains after Wall St slump
HONG KONG, July 10 (Reuters) - Hong Kong shares are expected to fall on Thursday as cautious investors take to the sidelines after steep losses in U.S. markets and a recovery in crude oil prices after a two-day slide.
U.S. stocks tumbled on Wednesday, dragging the S&P 500 into a bear market, as worries about more credit losses hurt financial companies and Cisco Systems led technology shares lower after its CEO raised fears of an extended economic downturn.
All three major stock indices fell more than 2 percent.
"Investors will go back to fretting about the U.S. credit crisis and likely weak corporate earnings today after Wall Street's overnight slump," said Alex Tang, research director with Core Pacific Yamaichi International.
Tang expects the main index to find support at the 21,000 level today and trend lower to 20,600 in the short term. Hong Kong shares rebounded 2.8 percent on Wednesday, recovering from the previous session's steep fall, after the U.S. Fed said it may keep open a lifeline for Wall Street banks battered by the credit crisis.
STOCKS TO WATCH
* Air China won approval from the securities regulator to make a previously announced offer of up to 400 million additional A shares, the flag carrier said on Wednesday.
The issue, equivalent to about 3.3 percent of the company's share capital, must be conducted within six months, it said in a brief statement.
At Wednesday's closing price for Air China's shares of 10.39 yuan, the offer could raise as much as 4.16 billion yuan ($607 million).
Plastics maker Bestway International Holdings Ltd has agreed to pay a combined HK$6.98 billion ($894.7 million) for two Mongolian resource prospectors. The first, with a price tag of HK$1.28 billion, has rights to a polymetallic mine covering roughly 4.88 square kilometres. The second, costing HK$5.7 billion, has rights to a coal mine covering an area no less than 200 square metres. For more details, see here
* China's fifth largest bank, Bank of Communications will sell 3 billion yuan worth of yuan-denominated bonds in Hong Kong starting next week, the South China Morning Post quoted unnamed sources as saying. It would be the first yuan bond issue by a Chinese bank this year. ---------------MARKET SNAP SHOT @ 23:00 GMT ------------------
INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 1,244.69 -2.28% -29.010 USD/JPY 106.87 0.08% 0.090 10-YR US TSY YLD 3.809 -- 0.000 SPOT GOLD $927.60 -0.02% -0.150 US CRUDE CLc1 $135.96 -0.07% -0.090 DOW JONES .DJI 11147.44 -2.08% -236.77 ASIA ADRS .BKAS 143.73 -1.47% -2.15 -------------------------------------------------------------> > SE Asian Stocks-Firmer as oil recoils, but Iran weighs [.SO] > Iran saber-rattling sends dollar tumbling broadly [USD/] > TREASURIES-Bonds gain as stocks fall on financials worry [US/] > Gold firms on Iran missile launch, rise in oil [GOL/] > Oil pulls out of nose-dive as US supplies drop [O/R] > US STOCKS-S&P 500 plunges into a bear market [.N] (Reporting by Parvathy Ullatil; Editing by Anne Marie Roantree)
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U.S. stocks tumbled on Wednesday, dragging the S&P 500 into a bear market, as worries about more credit losses hurt financial companies and Cisco Systems led technology shares lower after its CEO raised fears of an extended economic downturn.
All three major stock indices fell more than 2 percent.
"Investors will go back to fretting about the U.S. credit crisis and likely weak corporate earnings today after Wall Street's overnight slump," said Alex Tang, research director with Core Pacific Yamaichi International.
Tang expects the main index to find support at the 21,000 level today and trend lower to 20,600 in the short term. Hong Kong shares rebounded 2.8 percent on Wednesday, recovering from the previous session's steep fall, after the U.S. Fed said it may keep open a lifeline for Wall Street banks battered by the credit crisis.
STOCKS TO WATCH
* Air China won approval from the securities regulator to make a previously announced offer of up to 400 million additional A shares, the flag carrier said on Wednesday.
The issue, equivalent to about 3.3 percent of the company's share capital, must be conducted within six months, it said in a brief statement.
At Wednesday's closing price for Air China's shares of 10.39 yuan, the offer could raise as much as 4.16 billion yuan ($607 million).
Plastics maker Bestway International Holdings Ltd has agreed to pay a combined HK$6.98 billion ($894.7 million) for two Mongolian resource prospectors. The first, with a price tag of HK$1.28 billion, has rights to a polymetallic mine covering roughly 4.88 square kilometres. The second, costing HK$5.7 billion, has rights to a coal mine covering an area no less than 200 square metres. For more details, see here
* China's fifth largest bank, Bank of Communications will sell 3 billion yuan worth of yuan-denominated bonds in Hong Kong starting next week, the South China Morning Post quoted unnamed sources as saying. It would be the first yuan bond issue by a Chinese bank this year. ---------------MARKET SNAP SHOT @ 23:00 GMT ------------------
INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 1,244.69 -2.28% -29.010 USD/JPY
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Nikkei falls on economic and credit worries
TOKYO, July 10 (Reuters) - The Nikkei stock average fell 0.7 percent on Thursday, led by exporters such as Kyocera Corp following a steep drop on Wall Street on growing worries about the economy and credit problems.
Bank shares were mixed, with top lender Mitsubishi UFJ Financial Group rising 0.9 percent while No. 2 Mizuho Financial Group lost 1 percent.
Market analysts said the Tokyo market, which pared most of its earlier gains on Wednesday after news of an Iran missile test, was unlikely to fall sharply as one of investors' biggest worries had not materialised.
"There were fears about a jump in oil prices after Iran's missile test, but they didn't change much, and forex moves are also relatively calm," said Norio Shimura, deputy head of the equity department at Chuo Securities.
"Given U.S. stocks' falls, we are seeing selling this morning, but after that runs its course, the Nikkei might even regain ground back to 13,000," he said.
As of 0040 GMT, the benchmark Nikkei .N225 had fallen 95.45 points to 12,962.24. The broader Topix lost 0.4 percent to 1,279.89.
U.S. stocks tumbled on Wednesday, dragging the S&P 500 into a bear market, as worries about more credit losses hurt financial companies and Cisco Systems led technology shares lower after its CEO raised fears of an extended economic downturn.
High-tech parts maker Kyocera fell 2.1 percent to 9,150 yen, the biggest drag on the Nikkei.
Mitsubishi UFJ rose to 964 yen and Mizuho fell to 507,000 yen.
GS Yuasa Corp jumped 3.6 percent to 459 yen after the Nikkei business daily said Mitsubishi Motors Corp will start selling electric cars to retail customers next year, a year ahead of schedule, as it sees opportunities for these cars amid surging gasoline prices.
GS Yuasa, Asia's biggest car battery firm, has set up a joint venture with Mitsubishi Motors and Mitsubishi Corp to produce lithium-ion batteries for electric cars.
Mitsubishi Motor rose 1.6 percent to 190 yen, while Mitsubishi fell 1.9 percent to 3,140 yen. (Reporting by Taiga Uranaka; Editing by Chris Gallagher)
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Bank shares were mixed, with top lender Mitsubishi UFJ Financial Group rising 0.9 percent while No. 2 Mizuho Financial Group lost 1 percent.
Market analysts said the Tokyo market, which pared most of its earlier gains on Wednesday after news of an Iran missile test, was unlikely to fall sharply as one of investors' biggest worries had not materialised.
"There were fears about a jump in oil prices after Iran's missile test, but they didn't change much, and forex moves are also relatively calm," said Norio Shimura, deputy head of the equity department at Chuo Securities.
"Given U.S. stocks' falls, we are seeing selling this morning, but after that runs its course, the Nikkei might even regain ground back to 13,000," he said.
As of 0040 GMT, the benchmark Nikkei .N225 had fallen 95.45 points to 12,962.24. The broader Topix lost 0.4 percent to 1,279.89.
U.S. stocks tumbled on Wednesday, dragging the S&P 500 into a bear market, as worries about more credit losses hurt financial companies and Cisco Systems led technology shares lower after its CEO raised fears of an extended economic downturn.
High-tech parts maker Kyocera fell 2.1 percent to 9,150 yen, the biggest drag on the Nikkei.
Mitsubishi UFJ rose to 964 yen and Mizuho fell to 507,000 yen.
GS Yuasa Corp jumped 3.6 percent to 459 yen after the Nikkei business daily said Mitsubishi Motors Corp will start selling electric cars to retail customers next year, a year ahead of schedule, as it sees opportunities for these cars amid surging gasoline prices.
GS Yuasa, Asia's biggest car battery firm, has set up a joint venture with Mitsubishi Motors and Mitsubishi Corp to produce lithium-ion batteries for electric cars.
Mitsubishi Motor rose 1.6 percent to 190 yen, while Mitsubishi fell 1.9 percent to 3,140 yen. (Reporting by Taiga Uranaka; Editing by Chris Gallagher)
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China 'committed to fighting' climate change
(China Daily)
Updated: 2008-07-10 06:45
TOYAKO, Japan: The world has to fight climate change together but the responsibilities of the developed and developing countries in this battle has to be different, President Hu Jintao reiterated Wednesday.
Speaking at the Major Economies Meeting on Energy Security and Climate Change, he said global warming is the common concern of the world.
But the UN Framework Convention on Climate Change reflects the international consensus on the "common but differentiated responsibilities" of different countries, Hu said on the sidelines of the Group of Eight (G8) Summit.
He urged the world's major economies to play an exemplary role in meeting the needs of the UN convention and the Kyoto Protocol.
He suggested the major economies take forward international negotiations on climate change, and urged them to take the lead in carrying out practical cooperation.
The G8 has announced that it would cut its greenhouse gas emissions by half by 2050.
But the eight richest countries have not specified what the base year for the cut would be, making the target vague.
That's why the developing countries, including China and India, invited to the G8 talks, are not impressed. They want the G8 to reduce its emissions further because historically the richest countries are the world's biggest polluters and economically the most capable of adapting to the needed changes.
Hu reaffirmed China's pledge in the fight against global warming, and said it is determined to tackle the issue.
China has taken a series of measures that include saving energy and cutting emissions. It has set specific energy-saving targets, including reducing the energy consumption per unit of GDP by 20 percent by 2010, and increasing the forest cover to 20 percent. China is committed to meeting these targets, and is "ready to work with the rest of the world to achieve harmonious, clean and sustainable development", Hu said.
Xinhua
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Updated: 2008-07-10 06:45
TOYAKO, Japan: The world has to fight climate change together but the responsibilities of the developed and developing countries in this battle has to be different, President Hu Jintao reiterated Wednesday.
Speaking at the Major Economies Meeting on Energy Security and Climate Change, he said global warming is the common concern of the world.
But the UN Framework Convention on Climate Change reflects the international consensus on the "common but differentiated responsibilities" of different countries, Hu said on the sidelines of the Group of Eight (G8) Summit.
He urged the world's major economies to play an exemplary role in meeting the needs of the UN convention and the Kyoto Protocol.
He suggested the major economies take forward international negotiations on climate change, and urged them to take the lead in carrying out practical cooperation.
The G8 has announced that it would cut its greenhouse gas emissions by half by 2050.
But the eight richest countries have not specified what the base year for the cut would be, making the target vague.
That's why the developing countries, including China and India, invited to the G8 talks, are not impressed. They want the G8 to reduce its emissions further because historically the richest countries are the world's biggest polluters and economically the most capable of adapting to the needed changes.
Hu reaffirmed China's pledge in the fight against global warming, and said it is determined to tackle the issue.
China has taken a series of measures that include saving energy and cutting emissions. It has set specific energy-saving targets, including reducing the energy consumption per unit of GDP by 20 percent by 2010, and increasing the forest cover to 20 percent. China is committed to meeting these targets, and is "ready to work with the rest of the world to achieve harmonious, clean and sustainable development", Hu said.
Xinhua
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Australian Dollar Rises on Speculation Jobs Rebounded in June
By Candice Zachariahs
July 10 (Bloomberg) -- The Australian dollar gained against the U.S. currency for the first time in five days before a government report expected to show employment rebounded in June.
The currency climbed the most in two weeks on speculation a mining boom will spur jobs growth and prompt traders to resume betting the central bank raise interest rates for a third time this year to cool inflation. The number of people employed rose 10,000 last month after a 19,700 drop in May, according to the median estimate of 25 economists surveyed by Bloomberg News.
``The Australian economy is in a very strong shape in large part because of the global commodity boom,'' said Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia, the nation's largest lender. ``That's feeding through to a strong Australian dollar, lots of spending and that means more employment.''
The Australian dollar rose 0.4 percent to 95.57 U.S. cents at 9:39 a.m. in Sydney, from 95.17 cents in late Asian trading yesterday. It bought 102.07 yen from 102.19.
Demand for commodities from emerging markets including China and India helped exports rise to a record in May, helping to offset falling consumer spending and business confidence. Prior to the jobs decline in May, Australian employers had added workers every month from October 2006, the longest run of gains since the government began publishing monthly figures in 1978.
The statistics bureau will release the employment report at 11:30 a.m. in Sydney.
Rebounding Currency
The Australian dollar fell to a three-week low yesterday as traders reduced bets the central bank will raise borrowing costs after a government report showed home-loan approvals slid by the most in eight years and a private-sector survey of consumer confidence dropped to the lowest level since 1992.
Traders have assigned 12 percent odds to the Reserve Bank of Australia raising its 7.25 percent benchmark interest rate by a quarter-percentage point in the next 12 months, according to a Credit Suisse Group index based on trading in interest-rate swaps. The probabilities were 72 percent a week ago.
Australian government bonds gained for a fifth day. The yield on the 10-year bond fell 4 basis points, or 0.04 percentage point, to 6.30 percent. The price of the 5.25 percent bond maturing in March 2019 rose 0.257, or A$2.57 per A$1,000 face amount, to 91.902. Bond yields move inversely to price.
To contact the reporter on this story: Candice Zachariahs in New York at czachariahs1@bloomberg.net.
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Japan Should Create $33 Billion Sovereign Wealth Fund, Ito Says
By Ron Harui and Liza Lin
July 10 (Bloomberg) -- Japan should start a sovereign wealth fund with about $33 billion in assets, using interest earned on its $1 trillion of foreign reserves, said Takatoshi Ito, a member of a government advisory committee.
The fund would invest in higher-yielding assets overseas including equities, Ito said in a Bloomberg Television interview in Singapore. It needs to be set up ``as soon as possible'' to avoid exchange-rate fluctuations that may hurt the nation's reserves, he added.
The value of the $592 billion that Japanese investors, including the government, hold in U.S. Treasuries has been eroded in the past 12 months by the dollar's 12 percent drop against the yen. Ito, a member of Prime Minister Yasuo Fukuda's key economic panel, has scaled back his plan since suggesting a $700 billion fund a year ago because of opposition from the Ministry of Finance.
``My proposal is to take interest income separate from foreign reserves, accumulate it and manage it more actively,'' Ito said. ``The reserves are very exposed to currency and interest-rate risks in the future, so this is not desirable.''
He estimates that the government receives interest payments of about 3.5 trillion yen ($33 billion) a year on the reserves, which are held in highly-liquid assets such as Treasuries.
Japan's foreign reserves are second only to those of China, which set up a sovereign wealth fund to manage $200 billion of its $1.68 trillion of reserves in September. Assets managed by such funds will triple to more than $10 trillion by 2015, International Financial Services London said in March.
Carry Trade
Finance Minister Fukushiro Nukaga said in March the ministry focuses on liquidity and safety in managing the reserves. His ministry has said the money should be used in case Japan needs to intervene in the currency markets.
The finance ministry is ``opposed to doing anything about foreign reserves,'' said Ito, who described the current investment strategy as ``basically a huge carry trade.''
In such trades, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the borrowing and lending rate. The risk is that currency market moves erase those profits. The benchmark interest rate is 0.5 percent in Japan, compared with 2 percent in the U.S., 8.25 percent in New Zealand and 12.25 percent in Brazil.
The yen has risen against 12 of the 16 most-active currencies in the past year as deepening credit-market losses prompted investors to cut carry trades. The currency traded at 106.83 per dollar as of 8:30 a.m. in Tokyo from 106.76 late in New York yesterday. It reached 95.76 on March 17, the strongest since Aug. 15, 1996.
To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net; Liza Lin in Singapore at llin15@bloomberg.net
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July 10 (Bloomberg) -- Japan should start a sovereign wealth fund with about $33 billion in assets, using interest earned on its $1 trillion of foreign reserves, said Takatoshi Ito, a member of a government advisory committee.
The fund would invest in higher-yielding assets overseas including equities, Ito said in a Bloomberg Television interview in Singapore. It needs to be set up ``as soon as possible'' to avoid exchange-rate fluctuations that may hurt the nation's reserves, he added.
The value of the $592 billion that Japanese investors, including the government, hold in U.S. Treasuries has been eroded in the past 12 months by the dollar's 12 percent drop against the yen. Ito, a member of Prime Minister Yasuo Fukuda's key economic panel, has scaled back his plan since suggesting a $700 billion fund a year ago because of opposition from the Ministry of Finance.
``My proposal is to take interest income separate from foreign reserves, accumulate it and manage it more actively,'' Ito said. ``The reserves are very exposed to currency and interest-rate risks in the future, so this is not desirable.''
He estimates that the government receives interest payments of about 3.5 trillion yen ($33 billion) a year on the reserves, which are held in highly-liquid assets such as Treasuries.
Japan's foreign reserves are second only to those of China, which set up a sovereign wealth fund to manage $200 billion of its $1.68 trillion of reserves in September. Assets managed by such funds will triple to more than $10 trillion by 2015, International Financial Services London said in March.
Carry Trade
Finance Minister Fukushiro Nukaga said in March the ministry focuses on liquidity and safety in managing the reserves. His ministry has said the money should be used in case Japan needs to intervene in the currency markets.
The finance ministry is ``opposed to doing anything about foreign reserves,'' said Ito, who described the current investment strategy as ``basically a huge carry trade.''
In such trades, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the borrowing and lending rate. The risk is that currency market moves erase those profits. The benchmark interest rate is 0.5 percent in Japan, compared with 2 percent in the U.S., 8.25 percent in New Zealand and 12.25 percent in Brazil.
The yen has risen against 12 of the 16 most-active currencies in the past year as deepening credit-market losses prompted investors to cut carry trades. The currency traded at 106.83 per dollar as of 8:30 a.m. in Tokyo from 106.76 late in New York yesterday. It reached 95.76 on March 17, the strongest since Aug. 15, 1996.
To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net; Liza Lin in Singapore at llin15@bloomberg.net
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G8 couldn't push emitters to set targets
Thursday, July 10, 2008
Despite fading clout, group gets China, India, Brazil to join global warming fight, if their growth isn't victim
By REIJI YOSHIDA,Japantimes
Staff writer
TOYAKO, Hokkaido — The three-day Group of Eight summit in Toyako, Hokkaido, concluded Wednesday as the major industrialized powers and key emerging economies agreed to jointly fight global warming but failed to set any quantitative goals to substantiate their pledge.
"We, the leaders of the world's major economies, both developed and developing, commit to combat climate change in accordance with our common but differentiated responsibilities and respective capabilities," said a joint statement by the G8 states and eight other major greenhouse gas-emitting countries.
But five of the eight non-G8 participants — namely China, India, Brazil, South Africa and Mexico — turned down the G8's call to share a target to halve global emissions of greenhouse gases by 2050, a goal that was barely agreed on by the industrial countries the previous day.
Of the eight countries invited to the outreach session of the annual G8 summit, only Indonesia, South Korea and Australia expressed support for the long-term goal, according to a senior Japanese official who monitored the closed-door session of the top world leaders.
The five emerging powers reiterated they will not sacrifice their future economic growth for the sake of emissions cuts without the developed countries first making bold cuts themselves.
"There has not been any dramatic change in the positions of each participant," the official said.
Still, Prime Minister Yasuo Fukuda, the chair of this year's G8, praised the joint statement as a step to promote United Nations-led negotiations to establish a post-Kyoto Protocol agreement to curb global emissions. "This is a big achievement. . . . We have made a contribution to accelerate negotiations (to reduce emissions) at the United Nations," Fukuda said.
The joint statement released after Wednesday's talks between the G8 and emerging economies said, "We support a shared vision for long-term cooperative action, including a long-term global goal for emission reductions, that assures growth, prosperity and other aspects of sustainable development.
"Taking account of the science, we recognize that deep cuts in global emissions will be necessary to achieve the ultimate objective (of the U.N. Framework Convention on Climate Change)," it added.
Observers say this year's G8 summit has revealed the limits of the influence of the G8, given the growing clout of emerging economies and new global challenges such as soaring food and oil prices.
At a news conference wrapping up the summit, Fukuda was asked if the various written agreements pledging cooperation among the G8 nations can stop global inflation, a focus of crucial interest to people in developing nations.
Fukuda avoided a direct answer, only mentioning some of the measures agreed on by the G8 leaders at the summit.
Specifically, he cited the agreements to improve the transparency of oil futures trading by strengthening government monitoring, to extend emergency food aid and to provide long-term assistance to improve agricultural productivity in developing countries.
Fukuda also argued that all 16 countries that took part in Wednesday's discussion on climate change recognized the seriousness and urgency of global warming.
However, environmental groups were quick to lash out at the omission of any numerical targets in the declaration to cut greenhouse gases.
Indeed, forming any consensus on specific reduction targets between developed and developing countries is considered an extremely difficult task, since capping a nation's carbon dioxide emissions could directly affect its economic growth.
Thus talks over setting an emissions-reduction target are considered a diplomatic battle between developed and developing nations over the global distribution of future economic growth.
Tactically, there may not be many incentives for emerging economies to rush to clinch a deal with developed countries at this point, as negotiations over emissions are ongoing toward a meeting of the U.N. Framework Convention on Climate Change to be held in Copenhagen at the end of 2009.
"Developing countries must consider Copenhagen as the main battlefield of the negotiations," said a senior negotiator at the Foreign Ministry ahead of the G8 summit.
In addition, talks will be greatly affected by the environmental policies of the next president of the United States, who will replace George W. Bush in January.
The G8 countries — Japan, Britain, France, Germany, Italy, Canada, the U.S. and Russia — together with the eight guest states account for 80 percent of global greenhouse gas emissions.
"In order to address climate change, all major economies must be at the table. And that's what took place today," Bush said Wednesday at Toyako. "The G8 expressed our desire to have a significant reduction in greenhouse gases by 2050. We made it clear and the other nations agreed that they must also participate in an ambitious goal," he added.
Separately, Australian Prime Minister Kevin Rudd said the summit marked "a positive steppingstone" toward further global cooperation to deal with climate change.
"There has been no huge breakthrough" for a new international framework to fight global warming after the 1997 Kyoto Protocol expires in 2012, he acknowledged. But Rudd said the G8 agreement to seek to share the vision of halving global emissions by 2050 is a "step forward."
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Despite fading clout, group gets China, India, Brazil to join global warming fight, if their growth isn't victim
By REIJI YOSHIDA,Japantimes
Staff writer
TOYAKO, Hokkaido — The three-day Group of Eight summit in Toyako, Hokkaido, concluded Wednesday as the major industrialized powers and key emerging economies agreed to jointly fight global warming but failed to set any quantitative goals to substantiate their pledge.
"We, the leaders of the world's major economies, both developed and developing, commit to combat climate change in accordance with our common but differentiated responsibilities and respective capabilities," said a joint statement by the G8 states and eight other major greenhouse gas-emitting countries.
But five of the eight non-G8 participants — namely China, India, Brazil, South Africa and Mexico — turned down the G8's call to share a target to halve global emissions of greenhouse gases by 2050, a goal that was barely agreed on by the industrial countries the previous day.
Of the eight countries invited to the outreach session of the annual G8 summit, only Indonesia, South Korea and Australia expressed support for the long-term goal, according to a senior Japanese official who monitored the closed-door session of the top world leaders.
The five emerging powers reiterated they will not sacrifice their future economic growth for the sake of emissions cuts without the developed countries first making bold cuts themselves.
"There has not been any dramatic change in the positions of each participant," the official said.
Still, Prime Minister Yasuo Fukuda, the chair of this year's G8, praised the joint statement as a step to promote United Nations-led negotiations to establish a post-Kyoto Protocol agreement to curb global emissions. "This is a big achievement. . . . We have made a contribution to accelerate negotiations (to reduce emissions) at the United Nations," Fukuda said.
The joint statement released after Wednesday's talks between the G8 and emerging economies said, "We support a shared vision for long-term cooperative action, including a long-term global goal for emission reductions, that assures growth, prosperity and other aspects of sustainable development.
"Taking account of the science, we recognize that deep cuts in global emissions will be necessary to achieve the ultimate objective (of the U.N. Framework Convention on Climate Change)," it added.
Observers say this year's G8 summit has revealed the limits of the influence of the G8, given the growing clout of emerging economies and new global challenges such as soaring food and oil prices.
At a news conference wrapping up the summit, Fukuda was asked if the various written agreements pledging cooperation among the G8 nations can stop global inflation, a focus of crucial interest to people in developing nations.
Fukuda avoided a direct answer, only mentioning some of the measures agreed on by the G8 leaders at the summit.
Specifically, he cited the agreements to improve the transparency of oil futures trading by strengthening government monitoring, to extend emergency food aid and to provide long-term assistance to improve agricultural productivity in developing countries.
Fukuda also argued that all 16 countries that took part in Wednesday's discussion on climate change recognized the seriousness and urgency of global warming.
However, environmental groups were quick to lash out at the omission of any numerical targets in the declaration to cut greenhouse gases.
Indeed, forming any consensus on specific reduction targets between developed and developing countries is considered an extremely difficult task, since capping a nation's carbon dioxide emissions could directly affect its economic growth.
Thus talks over setting an emissions-reduction target are considered a diplomatic battle between developed and developing nations over the global distribution of future economic growth.
Tactically, there may not be many incentives for emerging economies to rush to clinch a deal with developed countries at this point, as negotiations over emissions are ongoing toward a meeting of the U.N. Framework Convention on Climate Change to be held in Copenhagen at the end of 2009.
"Developing countries must consider Copenhagen as the main battlefield of the negotiations," said a senior negotiator at the Foreign Ministry ahead of the G8 summit.
In addition, talks will be greatly affected by the environmental policies of the next president of the United States, who will replace George W. Bush in January.
The G8 countries — Japan, Britain, France, Germany, Italy, Canada, the U.S. and Russia — together with the eight guest states account for 80 percent of global greenhouse gas emissions.
"In order to address climate change, all major economies must be at the table. And that's what took place today," Bush said Wednesday at Toyako. "The G8 expressed our desire to have a significant reduction in greenhouse gases by 2050. We made it clear and the other nations agreed that they must also participate in an ambitious goal," he added.
Separately, Australian Prime Minister Kevin Rudd said the summit marked "a positive steppingstone" toward further global cooperation to deal with climate change.
"There has been no huge breakthrough" for a new international framework to fight global warming after the 1997 Kyoto Protocol expires in 2012, he acknowledged. But Rudd said the G8 agreement to seek to share the vision of halving global emissions by 2050 is a "step forward."
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Japan's Stock Futures Fall on Concern Credit Turmoil May Linger
By Masaki Kondo and Makiko Kitamura
July 10 (Bloomberg) -- Japan's stock futures fell on concern turmoil in the global financial market hasn't reached an end and a slowdown in the U.S. economy will weigh down company earnings.
U.S.-traded receipts of Sumitomo Mitsui Financial Group Inc. fell 2.6 percent from the closing share price in Tokyo yesterday after Fitch Ratings said it may cut its credit rating on Merrill Lynch & Co. Advantest Corp., the world's biggest maker of memory- chip testers, declined 0.9 percent after Merrill Lynch said slowing demand in the U.S. and emerging markets will crimp Intel Corp.'s earnings.
``It's likely the drop in financial shares in the U.S. will have a big impact on the Japanese market,'' Mitsushige Akino, who manages the equivalent of $557 million at Ichiyoshi Investment Management Co. in Tokyo, said in an interview with Bloomberg Television. ``Domestic demand is bad, export-related demand is bad; it's going to be a weak day.''
Nikkei 225 Stock Average futures expiring in September last traded at 13,010 in Chicago, 0.8 percent lower than the close of 13,120 in Osaka and 1 percent down from 13,145 in Singapore yesterday. The Bank of New York Japan ADR Index, which tracks American depositary receipts of Japanese companies, slid 1.6 percent.
Merrill Lynch, the third-largest U.S. securities firm, plunged to the lowest in almost six years in New York yesterday after Fitch placed the brokerage on Rating Watch Negative, owing to its worsening earnings outlook. Meanwhile, Fannie Mae paid a record yield over rates on two-year notes on concern the largest U.S. mortgage-finance company doesn't have enough capital to weather the housing slump.
The Nikkei rose 0.2 percent to 13,052.13 in Tokyo yesterday. The broader Topix index added 0.2 percent, to 1,285.53.
Waning Spending
Corporate technology spending has diminished, and consumers in emerging countries have slowed purchases, hurting Intel's earnings, a Merrill Lynch analyst said yesterday. There were ``signs of slowdown'' last month, especially in China and Europe, the brokerage said.
Meanwhile, Cisco Systems Inc., the world's biggest maker of computer-networking equipment, may forecast revenue in the quarter to October will be little changed or decline from the preceding three months, UBS AG said yesterday. Corporate customers and telecommunications carriers may curb their spending this year, Nikos Theodosopoulos an analyst at the brokerage, said.
To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net.
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