European Confidence Drops Most Since Sept. 11 Attacks

By Fergal O'Brien

July 30 (Bloomberg) -- Europeans' confidence in the outlook for the economy dropped the most since the Sept. 11 terrorist attacks as soaring energy costs and the euro's advance against the dollar rattled consumers and executives.

An index measuring sentiment in the euro area fell 5.3 points to 89.5 this month, the European Commission in Brussels said today. That is more than economists had forecast and the biggest slide since a 6.3-point drop in October 2001, the month after the attacks in the U.S.

Rising commodity prices have lifted euro-area inflation to a 16-year high of 4 percent, sapping consumers' purchasing power and pushing up companies' costs. That is adding to pressure on the economy as the global turmoil in credit markets restricts access to capital, which may limit the European Central Bank's scope to increase interest rates to fight inflation.

This is the ``latest number in a string of very weak data that confirm that the economy is experiencing a severe downturn,'' Aurelio Maccario, chief euro-area economist at Unicredit MIB in Milan, said in an e-mailed note. ``The economy is heading toward a stagnation phase bound to last at best a few months.''

Economists had forecast that the confidence index would drop to 93, according to the median of 30 estimates in a Bloomberg News survey. A separate report today showed retail sales declined for a second month in July.

Euro, Bonds

The euro erased its gains after the sentiment report. The currency was little changed at $1.5588 as of 12:45 p.m. in London, having earlier been as high as $1.5617. Bonds rose, with the yield on the German bund, Europe's benchmark security, falling 4 basis points to 4.43 percent.

Reports this month showed that euro-area manufacturing and service industries contracted in July by the most since 2003. Consumer confidence in Germany and France, the region's largest economies, fell more than economists had forecast.

The Frankfurt-based ECB this month raised its key rate by a quarter point to 4.25 percent to curb price increases even as economic growth slows. The central bank in June forecast that euro-area expansion will ease to about 1.5 percent next year from 1.8 percent this year, after growth of 2.7 percent in 2007.

Today's report shows the ECB's task may become more difficult. A measure of companies' selling-price expectations rose to 20 in July from 16 in June, compared with an average reading of 6 over the last 18 years. Consumers' outlook for prices remained close to a seven-year high, the report showed.

`Significant Degree'

``This may tie the hands of the ECB to a significant degree,'' said Gareth Claase, an economist at Royal Bank of Scotland Plc in London. ``Given that in June the central bank showed willingness to hike into a slowdown we are reluctant to forecast rate cuts.''

Companies are feeling the pressure of a 59 percent increase in crude oil in the past year, which has boosted their energy costs, as well as higher prices for commodities including wheat and corn. Confidence within the manufacturing, construction, services and retail industries all declined this month, according to the survey. Consumer sentiment dropped to minus 20, the lowest in five years.

Ryanair Holdings Plc, Europe's biggest discount airline, this week said it may post its first full-year loss since going public in 1997 because of increased fuel expenses. British Airways Plc started talks to merge with Spain's Iberia Lineas Aereas de Espana SA to lower expenses as slower economies and higher energy costs erode earnings.

Rising Costs

As euro-area companies grapple with rising costs, they also are contending with the euro's 15 percent advance against the dollar in the past 12 months. European Aeronautic, Defence & Space Co., the world's biggest maker of airliners, today raised its target for spending cuts by almost 50 percent as the weaker dollar reduces profit converted into euros.

Some companies are coping. SAP AG, the world's biggest maker of business-management software, yesterday raised its revenue and margin forecasts for this year and said its pipeline is ``strong'' in the U.S.

Still, data suggest further weakness ahead. Manufacturers' new orders fell for a fourth month in July, according to a monthly survey of purchasing managers published July 24. New business among services companies dropped for a second month. Infineon Technologies AG, Europe's second-biggest semiconductor maker, on July 25 said it plans to cut about 3,000 jobs after its third-quarter loss tripled.

``The business and consumer surveys have stagflation written all over them,'' said Martin van Vliet, an economist at ING Group in Amsterdam. There is a ``frightening mix of sharply falling confidence and elevated inflation expectations.''

To contact the reporter on this story: Fergal O'Brien in Dublin at fobrien@bloomberg.net.

Read more...

Fed Extends Emergency Loan Programs Through January

By Scott Lanman

July 30 (Bloomberg) -- The Federal Reserve extended its emergency lending programs to Wall Street firms through January after policy makers judged that markets are still too weak to go without a backstop from the central bank.

The Fed also plans to give securities dealers options for tapping one of the loan programs to ensure financing through key dates, such as the ends of quarters, when funding needs can jump. Commercial lenders will be able to borrow from the central bank for a longer period, and the Fed boosted its swap line with the European Central Bank.

Today's announcement reflects continued turmoil in financial markets, after three U.S. banks failed in as many weeks. Chairman Ben S. Bernanke and New York Fed President Timothy Geithner spearheaded the introduction of three lending programs since December as the credit crisis engulfed Wall Street and caused the collapse of Bear Stearns Cos.

``It's a recognition that there are still considerable strains in financial markets,'' said Brian Sack, a former Fed research manager who is now senior economist at Macroeconomic Advisers LLC in Washington. Sack added that today's decision bolstered his expectation for the Fed to hold off on raising interest rates until next year.

The Fed made today's announcement ``in light of continued fragile circumstances in financial markets,'' the central bank said today.

End of Programs

The Primary Dealer Credit Facility for direct loans to securities firms and the Term Securities Lending Facility for loans of Treasuries, both begun in March, ``would be withdrawn should the board determine that conditions in financial markets are no longer unusual and exigent,'' the Fed said in a statement.

Bernanke flagged the likelihood of the extension in a July 8 speech, saying the Fed is ``strongly committed'' to financial stability. The programs represent a provision of Fed credit to nonbanks unprecedented since the Great Depression.

The Fed will start auctions of options of as much as $50 billion in the TSLF on top of the $200 billion program, which loans Treasuries to securities firms in exchange for asset-backed securities and other collateral.

New York Fed officials plan to consult with the primary dealers of U.S. government bonds on the TSLF options program, the district bank said in a separate statement. The options plan is aimed at providing liquidity for two weeks or less surrounding key financing periods to be identified. Further details are planned on or before Aug. 8, the New York Fed said.

TAF Overhaul

The central bank also will start selling 84-day loans to commercial banks under the Term Auction Facility beginning next month, in addition to the sales of 28-day loans that have occurred since the program began in December. The biweekly sales will alternate between auctions of $75 billion in 28-day loans, and $25 billion in 84-day loans.

The Fed is planning the TAF sales to keep the program at $150 billion and released a schedule indicating it will remain at that size through November.

In related moves, the European Central Bank and Swiss National Bank are also extending their operations to include auctions of 84-day funds, the Fed said in a press release. The Federal Open Market Committee authorized an increase in the ECB's swap line with the Fed to $55 billion from $50 billion; the SNB's swap line is unchanged at $12 billion. The swaps are authorized through Jan. 30.

`Exigent Circumstances'

The Fed started the lending programs for investment banks under its authority to lend to nonbanks in ``unusual and exigent circumstances.'' Officials said at the time the Primary Dealer Credit Facility, which provides direct loans, would last for ``at least'' six months. The central bank had not previously given an end date for the TSLF.

The PDCF has shown a zero balance for four straight weeks. The loans, once as high as $37 billion, fell to zero after the Fed took on a portfolio of assets in June as part of a March agreement to ease Bear Stearns's acquisition by JPMorgan Chase & Co.

Geithner said last week that the PDCF and TSLF are still needed, citing ``exceptional'' tensions in financial markets. ``I don't think you can really judge the value today to the firms themselves, or the people that fund them, from looking at use day-by-day,'' Geithner told House lawmakers at a hearing in Washington.

Crunch Spreading

``I would be surprised if Jan. 30 marks the end of the measures,'' said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, North Carolina. ``The credit crunch is very much with us and, if anything, spreading a bit to consumer borrowing.''

The Fed provides loans to commercial banks of as long as 90 days through the traditional discount window, which carries an interest rate of 2.25 percent, a quarter-point higher than the Fed's benchmark rate. Lending rose to a record daily average of $16.4 billion in the week ended July 24.

Economists compared the TSLF options program to a Fed initiative aimed at potential money shortages during the 2000 computer-system changeover. The Fed sold options on almost $500 billion of repurchase agreements for standby financing. None were exercised.

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net

Read more...

Federal Reserve Statement on Liquidity Measures Released Today

July 30 (Bloomberg) -- The following is a statement from the Federal Reserve on its liquidity facilities. The Federal Reserve today announced several steps to enhance the effectiveness of its existing liquidity facilities, including the introduction of longer terms to maturity in its Term Auction Facility. In association with this change, the European Central Bank and the Swiss National Bank are adapting the maturity of their operations. Federal Reserve Actions Actions taken by the Federal Reserve include:

* Extension of the Primary Dealer Credit Facility (PDCF) and

* the Term Securities Lending Facility (TSLF) through January

* 30, 2009.

* The introduction of auctions of options on $50 billion of

* draws on the TSLF.

* The introduction of 84-day Term Auction Facility (TAF) loans

* as a complement to 28-day TAF loans.

* An increase in the Federal Reserve's swap line with the

* European Central Bank to $55 billion from $50 billion. These actions are described in detail below. Extension of the PDCF and TSLF In light of continued fragile circumstances in financial markets, the Board has extended the PDCF through January 30, 2009, and the Board and the Federal Open Market Committee (FOMC) have extended the TSLF through that same date. These facilities would be withdrawn should the Board determine that conditions in financial markets are no longer unusual and exigent. The PDCF provides discount window loans to primary dealers, collateralized by investment-grade securities. The interest rate charged is the primary credit rate (discount rate) of the Federal Reserve Bank of New York. Under the TSLF, the Federal Reserve Bank of New York conducts weekly auctions of 28-day loans of Treasury securities to primary dealers. Loans under the TSLF are collateralized by a range of government and private securities. Auctions of TSLF Options The FOMC has authorized the Federal Reserve Bank of New York to auction options for primary dealers to borrow Treasury securities from the TSLF. The Federal Reserve intends to offer such options for exercise in advance of periods that are typically characterized by elevated stress in financial markets, such as quarter ends. Under the options program, up to $50 billion of draws on the TSLF using options may be outstanding at any time. This amount is in addition to the $200 billion of Treasury securities that may be offered through the regular TSLF auctions. Draws on the TSLF through exercise of these options may be collateralized by the full range of TSLF Schedule 2 collateral. (Schedule 2 collateral includes Treasury securities, federal agency debt securities, mortgage-backed securities issued or guaranteed by federal agencies, and AAA/Aaa-rated private-label residential mortgage-backed, commercial mortgage-backed, and asset-backed securities.) Additional details of this program will be announced once consultations with the primary dealer community have been completed. Eighty-four-day Term Auction Facility Loans Beginning on August 11, the Federal Reserve will auction 84-day TAF loans while continuing to auction 28-day TAF funds. Specifically, the Federal Reserve will conduct biweekly TAF auctions, alternating between auctions of $75 billion of 28-day credit and auctions of $25 billion of 84-day credit. Currently, the Federal Reserve auctions $75 billion of 28-day funds every two weeks. During a transition period, the amount of 28-day credit being auctioned will be reduced to keep the amount of TAF credit outstanding at $150 billion. A schedule of TAF auctions and applicable terms and conditions can be found at http://www.federalreserve.gov/. Under the TAF, the Federal Reserve auctions term funds to depository institutions, secured by a wide variety of collateral. All depository institutions that are judged to be in generally sound financial condition by their local Reserve Bank are eligible to participate in TAF auctions. Increase in Swap Line with European Central Bank The European Central Bank (ECB) and the Swiss National Bank (SNB) have informed the Federal Reserve that, in association with the lengthening of the maturity of the Federal Reserve's TAF loans, these central banks will also make 84-day funds, as well as 28- day funds, available at their dollar auctions. The FOMC has authorized an increase in its dollar swap line with the ECB to $55 billion from $50 billion in order to accommodate a temporary increase in the ECB's dollar auctions as the ECB shifts some of its auctions to 84-day terms. The size of the SNB's swap line remains at $12 billion. These swap lines are authorized through January 30, 2009. Information on Related Actions Being Taken by Other Central Banks Information on the actions that will be taken by other central banks is available at the following websites: European Central Bank http://www.ecb.int/ Swiss National Bank http://www.snb.ch/ 2008 Monetary Policy Releases

Read more...

South Africa Rand Falls From Six-Month High on Importer Selling

By Garth Theunissen

July 30 (Bloomberg) -- South Africa's rand retreated from a six-month high against the dollar on speculation the country's importers are taking advantage of its gains to buy foreign currency.

The rand stayed weaker after a government report showed inflation was faster than forecast in June, exceeding the central bank's 3 to 6 percent target range for a 15th consecutive month. Consumer prices rose an annual 11.6 percent, compared with 10.9 percent in May, Pretoria-based Statistics South Africa said on its Web site today. Economists surveyed by Bloomberg had expected inflation to reach 11.3 percent.

``There are bucket loads of importers trying to get as much foreign currency as they can lay their hands on,'' said Ion de Vleeschauwer, chief trader at Bidvest Bank Ltd. in Johannesburg. ``They haven't seen the rand at such strong levels for quite a long time, so they're using it as an opportunity to increase foreign-currency holdings.''

The rand fell as much as 0.9 percent to 7.4272 per dollar and traded at 7.4107 by 1:54 p.m. in Johannesburg, from 7.3605 yesterday. Earlier the rand climbed to 7.3516 per dollar, the strongest level since Feb. 4. South Africa's currency also weakened against the euro, losing 0.7 percent to 11.5543.

South Africa's currency has risen for six straight weeks versus the U.S. currency, climbing about 10 percent since June 12, when the central bank raised its benchmark interest rate by a half-point to a five-year high of 12 percent. It has offered the best carry-trade return against the dollar, euro and yen over that period, according to data compiled by Bloomberg.

`Strong Run'

``The rand has had a really strong run and the carry trade is definitely behind it,'' said Ian Martin, a currency dealer at Rand Merchant Bank in Johannesburg. ``This strengthening trend will continue.'' Martin predicted the trend will only reverse if it falls to 7.51 per dollar.

In carry trades, investors borrow money at a low interest rate to buy assets that offer better returns. They earn the spread between the cost of borrowing and the profit from higher- yielding investments, taking the risk currency moves will erase their returns. South Africa's main interest rate is 1,150 basis points above Japan's and 925 basis points higher than Switzerland's.

The yield on South Africa's benchmark 13.5 percent security due September 2015 fell 12 basis points to 9.40 percent. The yield on the 13 percent note due August 2010, which is more sensitive to interest rate expectations, rose 3 basis points to 10.58 percent. Yields move inversely to bond prices.

``The longer end of the yield curve is flattening out because the market is forward looking,'' said Leon Myburgh, African strategist at Citigroup Inc. in Johannesburg. ``A stronger rand and weaker oil price makes for a better long-term inflation outlook.''

Crude oil fell 0.6 percent to $121.44 a barrel, taking it's decline from a record of $147.27 a barrel on July 11 to 16.3 percent.

To contact the reporter on this story: Garth Theunissen in Johannesburg gtheunissen@bloomberg.netCarli Lourens in Johannesburg at clourens@bloomberg.net



Read more...

Dollar Advances to One-Month High as U.S. Companies Add Jobs

By Ye Xie and Agnes Lovasz

July 30 (Bloomberg) -- The dollar rose to a one-month high versus the euro and the yen after a private report showed U.S. companies unexpectedly added jobs this month.

The greenback also gained as a decline in crude oil eased concern elevated fuel costs will erode consumer spending. New Zealand's dollar dropped against all of the other major currencies except the Australian dollar after Reserve Bank Governor Alan Bollard said slowing economic growth will curb inflation in the next two years.

``It's premature to say employment destruction has hit bottom, but today is a good sign,'' said Mike Moran, a senior currency strategist at Standard Chartered in New York. ``In conjunction with a pullback in oil prices recently, it certainly contributed to the dollar's recovery.''

The dollar increased 0.4 percent to $1.5524 per euro at 9:49 a.m. in New York, from $1.5588 yesterday. It touched $1.5522, the strongest level since June 24. It may advance to $1.5460, Moran said. The U.S. currency rose 0.2 percent to 108.30 yen, from 108.11. It touched 108.33, the highest since June 25. The euro fell 0.2 percent to 168.14 yen, from 168.53.

The Australian dollar declined 1 percent to 94.32 U.S. cents after a government report showed home-building approvals unexpectedly dropped in June for a second month. The Aussie decreased 0.9 percent to 102.08 yen.

Weaker Kiwi

New Zealand's dollar fell to a 10-month low against its U.S. counterpart after Bollard said in a speech in Auckland that ``weakness in the economy will be sufficient to bring inflation and inflation expectations down over the medium term.'' The kiwi dropped 1.1 percent to 73.23 U.S. cents after touching 73.16, the lowest level since Sept. 25.

The U.S. dollar strengthened versus the euro as ADP Employer Services reported that companies added 9,000 jobs in July after cutting a revised 77,000 positions in the previous month. The median forecast of 29 economists surveyed by Bloomberg News was for a reduction of 60,000 jobs.

Non-farm payrolls dropped by 75,000 this month following a decline of 62,000 in June, according to the median forecast in a separate Bloomberg survey. The Labor Department is scheduled to release its report Aug. 1.

Crude oil fell for a second day, declining as much as 0.8 percent to $121.25 a barrel on the New York Mercantile Exchange. It has dropped 17 percent from the record of $147.27 set on July 11. The euro-dollar exchange rate and oil have had a correlation of 0.9 in the past year, according to Bloomberg calculations based on the correlation of their value changes. A reading of 1 would mean they moved in lockstep.

`Starts to Align'

``Everything starts to align for the dollar,'' said Brian Dolan, chief currency strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey. ``There's optimism that we're starting to see some stabilization in the U.S. economy. A slowing global economy will likely reduce global demand for commodities. It's another positive for the dollar.''

The Dollar Index, which tracks the greenback against the currencies of six U.S. trading partners, reached 73.493, the highest level since June 24.

The U.S. currency may rise further versus the yen as Japanese investors invest their summer bonuses in overseas assets offering higher yields, according to Daisaku Ueno, a senior economist and currency analyst in Tokyo at Nomura Securities Co., Japan's largest brokerage.

`Individual Money'

``Emerging markets are constantly attracting Japanese individual money,'' said Ueno. Japan's currency may weaken to 110 per dollar by year-end, he said.

Employees at private companies were paid summer bonuses in June and July totaling 14.8 trillion yen, according to Kazuyoshi Nakata, an economist in Tokyo at Mitsubishi UFJ Research & Consulting Co., a unit of Japan's largest publicly traded lender.

HSBC Investments will seek to raise 50 billion yen for a fund focused on Brazil's stocks tomorrow, while Nomura Asset Management will seek 60 billion yen for global stocks Aug. 1. Brazil's Bovespa Index, measured in yen, advanced 16 percent over the past 12 months, according to Bloomberg calculations. Japan's Nikkei 225 Stock Average fell 23 percent.

The Bank of Japan's target lending rate of 0.5 percent is the lowest among industrialized economies, making overseas assets more attractive to domestic investors.

Implied volatility on one-month dollar-yen options fell to 10.06 percent, from 10.73 percent a week earlier. Lower volatility may encourage carry trades, in which investors borrow in countries with low interest rates and buy assets where returns are higher.

To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Agnes Lovasz in London at alovasz@bloomberg.net.



Read more...

Canadian Dollar Declines as Manufacturing Price Gains Subdued

By Jamie McGee

July 30 (Bloomberg) -- Canada's dollar fell after government reports showed that manufacturers' prices rose less than raw-material costs in June, a sign companies aren't passing all of a jump in energy expenses to consumers.

The currency has slumped for seven consecutive days amid concern that falling commodity prices signaled that economic growth was slowing.

``Inflation pressures will remained contained,'' said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. ``The Canadian economy will remain very weak for the rest of this year averaging just 1.5 percent growth in the second half.''

The dollar fell 0.3 percent to C$1.0268 per U.S. dollar at 9:15 a.m. in Toronto, from $1.0237 yesterday. One Canadian dollar buys 97.63 U.S. cents. The currency has dropped 2.4 percent so far this year versus its U.S. counterpart.

The raw materials price index rose 4.4 percent, Statistics Canada said today from Ottawa, led by an 8.4 percent gain in fuels such as crude oil. Economists anticipated a 3.5 percent increase, the median of 12 responses. The industrial product price index, which measures what factories charge for goods, rose 1.3 percent, faster than the 1 percent median forecast.

The currency has traded near parity with its U.S. counterpart since September. It touched a 2008 low of C$1.0379 on Jan.22, and a high of 97.12 cents per U.S. dollar on Feb. 28.

The Canadian dollar will weaken to C$1.07 in the first quarter of 2009, according to the median estimate of 29 economists surveyed by Bloomberg News.

To contact the reporter on this story: Jamie McGee in New York at jmcgee8@bloomberg.net.



Read more...

Argentina Suspends Capital Controls for Residents for 30 Days

By Drew Benson

July 30 (Bloomberg) -- Argentina announced a 30-day suspension of capital controls for residents, citing delays in cereal exporter dollar inflows, according to a resolution in today's official gazette.

The government put the capital controls in place in June 2005 in a bid to discourage speculative investment.

To contact the reporter on this story: Drew Benson in Buenos Aires Abenson9@bloomberg.net



Read more...

Brazil's Real Rises as U.S. Stock Gains Boost High-Yield Assets

By Adriana Brasileiro

July 30 (Bloomberg) -- Brazil's real rose to a nine-year high as gains in U.S. stocks lured investors to higher-yielding assets.

The real rose 0.3 percent to 1.564 per dollar at 9:15 a.m. New York time, from 1.5686 yesterday. Brazil's real touched 1.5627 per dollar earlier today, the strongest level since 1999. The currency has gained almost 14 percent this year, the biggest advance against the U.S. dollar among the 16 most-actively traded currencies.

``Good news from U.S. markets make investors more confident and willing to take on more risk,'' said Francisco Carvalho, currency trading manager at Sao Paulo-based brokerage Liquidez Corretora.

The Standard & Poor's 500 Index opened 0.4 percent higher today after gaining 2.3 percent yesterday.

U.S. stock-index futures advanced after employers unexpectedly added jobs in July, according to a private report today. ADP Employer Services said payrolls increased by 9,000 jobs in July. Economists surveyed by Bloomberg forecast the report would show a decrease of 60,000.

The yield on the government's zero-coupon bonds due in January 2010 fell 4 basis points, or 0.04 percentage point, to 14.92 percent, according to Banco Votorantim.

To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net



Read more...

Gold Drops to 1-Month Low as Dollar Extends Rally Against Euro

By Millie Munshi

July 30 (Bloomberg) -- Gold fell to a one-month low as the dollar extended its rally, eroding demand for the precious metal as an alternative investment. Silver also gained.

The U.S. currency gained as much as 0.3 percent against the euro, touching the highest price since June 25. The dollar has gained 3 percent since reaching a record low almost two weeks ago. Some traders buy gold to preserve purchasing power when the dollar drops. Before today, gold had fallen 10 percent from a record in March as investment demand waned.


Gold's move today ``is a knee-jerk reaction to the stronger dollar,'' said Patrick Chidley, an analyst at Barnard Jacobs Mellet in Stamford, Connecticut.

Gold futures for December delivery fell $14.40, or 1.5 percent, to $912 an ounce at 9:15 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would be the biggest drop on a most-active contract since July 23. Gold earlier touched $9.09, the lowest for a most-active contract since June 26.

The precious metal often moves in the opposite direction of the U.S. currency. The metal reached a record $1,033.90 an ounce in March as the dollar headed to an all-time low of $1.6038 per euro on July 15. Euros sold for as little as $1.5547 each today.

Silver futures for September delivery fell 28.5 cents, or 1.6 percent, to $17.09 an ounce on the Comex. Before today, the metal had gained 16 percent this year.

To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net


Read more...

Copper Falls to 6-Week Low as Global Economic Growth May Slow

By Millie Munshi

July 30 (Bloomberg) -- Copper fell to the lowest price in more than six weeks as signs of slumping economic growth increased concern that global demand for wire and pipe will wane.

Europeans' confidence in the economic outlook dropped the most since the Sept. 11 terrorist attacks. U.S. mortgage applications slumped to the lowest level since December 2000, dimming prospects for homebuilders that are the biggest users of copper. Before today, the metal fell 16 percent from a record in May on concern demand will drop as the global economy cools.

``There is no good economic news,'' said Patrick Chidley, an analyst at Barnard Jacobs Mellet in Stamford, Connecticut. ``Europe looks like it may be getting into more trouble than people were expecting.''

Copper futures for September delivery dropped 4 cents, or 1.1 percent, to $3.5505 a pound at 9:21 a.m. on the Comex division of the New York Mercantile Exchange, after earlier reaching $3.5375, the lowest for a most-active contract since June 13.

The metal also dropped as the dollar touched a one-month high against the euro, reducing demand for raw materials as a hedge against inflation.

On the London Metal Exchange, copper for delivery in three months lost $61, or 0.8 percent, to $7,870 a metric ton ($3.57 a pound). The price reached a record $8,940 on July 2.

To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net



Read more...

Norilsk, Black Earth Shares Rise on Move to Hire Putin Allies

By William Mauldin

July 30 (Bloomberg) -- OAO GMK Norilsk Nickel and Black Earth Farming Ltd. shares rose after the Russian companies moved to appoint associates of Prime Minister Vladimir Putin, whose rebuke of OAO Mechel sent the coal-producer's shares tumbling.

Black Earth, an owner and developer of agricultural land in Russia, hired Vasily Shestakov, co-author of a judo book with Putin, as an adviser, company spokesman Dmitry Lgovsky confirmed. The shares rose 0.8 krona, or 2.6 percent, to 31.8 kronor at 1:31 p.m. in Stockholm, their first gain in five days.

Billionaire investor Vladimir Potanin is in talks with other Norilsk shareholders on appointing Vladimir Strzhalkovsky, head of the federal agency for the tourism industry, as the mining company's chief executive, a spokesman for Potanin's holding company, Interros Holding Co., said by phone today. Norilsk shares jumped 5.7 percent to 4,786 rubles today.

``Strzhalkovsky has been reportedly approved by the Russian authorities, which is favorable at a time when the state is obviously increasing its metals and mining industry regulations,'' Moscow-based Alfa Bank wrote in a note to investors today.

Putin on July 24 criticized Mechel, a coal and steel producer belonging to billionaire Igor Zyuzin, for its pricing policies and called for an investigation. The company's American depositary receipts, which account for most of the trading of its stock, have lost almost half their value in New York since then.

``While we recognize that relationships with the state for an asset of Norilsk's importance are vital, we also are acutely aware that Norilsk is hemorrhaging its top echelon of management,'' Moscow-based Renaissance Capital wrote in a note to investors dated today.

Investigation

The Federal Anti-Monopoly Service, Russia's antitrust watchdog, this week started a formal investigation into whether Evraz Group SA and OAO Raspadskaya abused their ``dominant position'' in the market for coking coal, used in steelmaking.

Shestakov said his job at Black Earth will be to prevent Russian bureaucrats from ``putting sticks in the wheels'' of the company's progress, Vedomosti reported today.

Black Earth shares through yesterday declined 18 percent since Russian Agriculture Minister Alexei Gordeyev said on July 14 his ministry will ``look into foreign capital buying up farmland.''

Shestakov and Putin are co-authors of ``Learning Judo With Vladimir Putin,'' Vedomosti said. The book is listed at Amazon.com as ``Judo: History, Theory, Practice,'' where it is ranked as number 434,029 in sales.

``There should be no post-election doubt about the relative power of business and politics in Russia,'' Roland Nash, chief strategist at Renaissance Capital in Moscow, wrote in a note to investors July 25. ``Business has been firmly reminded that in a country where traditional institutional mechanisms for the implementation of policy are weak, the informal lines of communications should be respected.''

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net.



Read more...

Crude Oil Falls on Forecast for Fuel Supply Gain, Lower Demand

By Mark Shenk

July 30 (Bloomberg) -- Crude oil fell, approaching a 12-week low, before an Energy Department report that's forecast to show fuel supplies increased.

The department may say that gasoline supplies rose for a fifth week, according to a Bloomberg News survey of analysts. Consumption of the motor fuel has declined for 14 weeks as high pump prices have caused people to cut back on their driving, MasterCard Inc. reported yesterday.

``People are waiting on the DOE report before making any big bet,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``There's a lot more downside to the market. We are looking for prices to head toward $110 in the medium term.''

Crude oil for September delivery fell 38 cents, or 0.3 percent, to $121.81 a barrel at 9:13 a.m. on the New York Mercantile Exchange. Futures touched $120.42 a barrel yesterday, the lowest price since May 6. Prices are up 59 percent from a year ago.

Gasoline stockpiles probably increased 350,000 barrels from 217.1 million barrels the week before, the survey showed. Inventories of distillate fuel, including heating oil and diesel, probably rose 2.1 million barrels.

The Energy Department is scheduled to release its weekly report at 10:35 a.m. in Washington.

Gasoline

Gasoline for August delivery fell 0.57 cent to $3.002 a gallon in New York. Prices touched $2.9801 yesterday, the lowest since May 5. Futures reached a record $3.631 a gallon on July 11.

Pump prices are following changes in futures. Regular gasoline, averaged nationwide, fell 1.5 cents to $3.926 a gallon, AAA, the nation's largest motorist organization, said on its Web site. Pump prices reached a record $4.114 a gallon on July 17.

Signs U.S. demand is declining outweighed this week's renewed threat to supply from Nigeria, Africa's second-largest producer. Nigeria is now pumping less than 1 million barrels of crude a day because of militant attacks, ThisDay newspaper reported, citing an unidentified energy ministry official.

Prior to the escalation of assaults that began in February 2006, Nigeria pumped as much as 2.6 million barrels a day, the paper said.

``The psychology of the market has shifted,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``A year ago the Nigeria news would have sent prices $3 or $4 higher.''

Brent crude oil for September settlement fell 23 cents to $122.48 a barrel on London's ICE Futures Europe exchange.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.



Read more...

Sugar Gains Most in Five Months in London on Crop Speculation

By Claudia Carpenter

July 30 (Bloomberg) -- Sugar climbed the most in five months in London on speculation dry weather has damaged the crop in India on top of reduced supplies from Brazil. Coffee and cocoa were little changed.

Domestic sugar prices in India climbed 2.7 percent today, extending gains since mid-June after below-average rains in cane- growing areas in the western province of Maharashtra. Sugar production in Brazil, the world's largest grower, has dropped this year as mills used more cane to produce ethanol.

``We expect prices to gradually move higher over the next few months because of the tightening sugar balance sheet,'' said Jonathan Kingsman, chief executive officer of Lausanne, Switzerland-based sugar broker and researcher Kingsman SA. ``Ethanol pays much more than sugar.''

White, or refined, sugar for October delivery climbed $13.80, or 3.8 percent, to $375 a metric ton as of 1:11 p.m. in London on the Liffe exchange, the biggest gain since Feb. 8. Raw sugar futures in New York gained 2.7 percent after climbing 4.1 percent yesterday.

Rainfall this week in India ``could be beneficial for crops,'' Sharad Pawar, India's farm minister, told reporters in New Delhi today. Rains in Maharashtra were more than 30 percent below average in the first three weeks of the month, the weather bureau said.

The chances of crop damage are ``supportive'' for sugar, said Nick Hungate, a trader at Rabobank International in London. ``Whether the uncertainty will translate into a much lower crop number remains to be seen.''

Brazil, Ethanol

Sugar output in central Brazil, the world's biggest grower, fell to 8.47 million tons this year through July 16 from 9.5 million tons at this time last year, Brazil sugar cane industry group Unica said yesterday. Ethanol output rose to 7.94 billion liters from 7.26 billion liters.

Ethanol pays about 16 to 17 cents a pound, compared with about 13 cents a pound for raw sugar, Kingsman said.

Robusta coffee for September delivery rose $9 to $2,419 a ton. Cooler weather early next week is forecast for the coffee belt in Brazil, the world's largest grower, U.S. forecaster Meteorlogix LLC said yesterday in a ``long range guidance'' report. No damaging cold is expected, the report said.

Agriculture prices led by sugar, corn and cocoa led gains in the UBS Bloomberg CMCI index of 26 commodities yesterday. Investors in indexes that track commodities withdrew a record $1.76 billion from agricultural futures last week, the fifth consecutive week of outflows, according to UBS AG.

``Maybe it was overdone on the downside,'' Kingsman said.

Cocoa for September delivery fell 2 pounds to 1,500 pounds ($2,973) a ton.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net



Read more...

Stocks in Europe, Asia Advance on Earnings; U.S. Futures Gain

By Michael Patterson

July 30 (Bloomberg) -- Stocks in Europe and Asia climbed the most in a week after Siemens AG, ArcelorMittal and Matsushita Electric Industrial Co. reported earnings that beat analysts' estimates. U.S. index futures gained.

Europe's Dow Jones Stoxx 600 Index and Standard & Poor's 500 Index futures rose to their highest levels of the day after a private report showed U.S. employers unexpectedly added jobs in July and the Federal Reserve extended emergency lending programs to Wall Street firms.

Siemens, the region's largest engineering company, had its steepest advance in four months after orders for power plants and generator upgrades boosted profit. ArcelorMittal jumped the most since January as earnings at the world's biggest steelmaker more than doubled. Matsushita, the largest consumer-electronics maker, rose in Japan. Ryanair Holdings Plc and Singapore Airlines Ltd. led gains in carriers as oil traded near a 12-week low.

The MSCI World Index added 0.7 percent to 1,362.32 at 1:52 p.m. in London as all 10 industry groups increased. More than $11 trillion has been erased from global equities in 2008 as almost $474 billion in credit-related losses and accelerating inflation prompted analysts to cut their profit projections.

``Earnings have been good,'' said Matthieu Bordeaux-Groult, a fund manager at Richelieu Finance in Paris, which oversees $6.2 billion. ``Results that are in-line are saluted and beating estimates is even better.''

Europe's Stoxx 600 Index advanced 1.4 percent after shares of ThyssenKrupp AG and Deutsche Postbank AG also rallied. The MSCI Asia Pacific Index jumped 1.5 percent. Futures on the S&P 500 rose 0.5 percent as Fannie Mae and Freddie Mac gained.

Earnings Estimates

U.S. stocks climbed yesterday, sending the S&P 500 to a 2.3 percent advance, after Merrill Lynch & Co. secured new capital and U.S. Steel Corp. surged the most in seven years on higher- than-projected earnings.

Profits at companies in the Stoxx 600 may fall 2.6 percent on average this year, according to analysts' estimates compiled by Bloomberg. That's down from a forecast for 11 percent profit growth at the start of this year.

Companies in the S&P 500 are set to report the biggest drop in quarterly earnings since 1998, when Bloomberg began tracking the data. Profits excluding certain items at the 291 companies in the S&P 500 that reported second-quarter results so far declined 24 percent from a year earlier, according to Bloomberg data.

All of the 23 developed nations in the MSCI World except for Canada have experienced bear-market plunges of 20 percent or more since September as credit losses surged and record commodity prices stoked inflation.

Confidence Report

Europeans' confidence in the outlook for the economy dropped the most since the Sept. 11, 2001, terrorist attacks. An index measuring sentiment in the euro area fell to 89.5 in July, more than economists forecast, the European Commission in Brussels said. A separate report showed retail sales declined.


Siemens advanced 5.5 percent to 77.24 euros as net income through June 30 was 1.37 billion euros ($2.1 billion), topping the 967 million-euro profit predicted by analysts.

ArcelorMittal helped fuel a rally in raw-materials producers after second-quarter profit exceeded analysts' estimates and the steelmaker predicted profit will grow in the third quarter in Asia, Africa and the former Soviet Union. The shares added 8.4 percent to 57.80 euros.

ThyssenKrupp gained 7.5 percent to 35.89 euros. Merrill Lynch lifted its recommendation on the shares to ``buy'' from ``neutral,'' saying Germany's largest steelmaker may raise its full-year earnings forecast.

`Massive Relief'

Matsushita, which makes Panasonic-brand electronics, rose 5.5 percent to 2,300 yen. First-quarter profit surged 86 percent on sales of flat-screen televisions and digital cameras. HSBC Holdings Plc and Nomura Holdings Inc. upgraded the stock.

Ryanair, Europe's biggest discount airline, climbed 3.1 percent to 2.68 euros. British Airways Plc, the region's third- largest carrier, added 4.4 percent to 259.5 pence. Singapore Air, which yesterday forecast narrower operating profit margins due to higher fuel costs, gained 2.9 percent to S$15.82.

Crude was little changed at $122.20 a barrel in New York on speculation gasoline demand in Asia and the U.S. may slow. Prices have dropped more than $25 a barrel, or 17 percent, from their July 11 record.

``If the oil price keeps coming off maybe we can squeeze a bit higher,'' James Barty, head of macro strategy at Arrowgrass Capital Partners, said in a Bloomberg Television interview in London. ``It's a massive relief on a number of fronts.''

China Petroleum & Chemical Corp., the country's biggest refiner, jumped 4.9 percent to HK$8.29 as investors speculated lower crude prices will help boost profit margins from refining. PetroChina Co., the second-largest, rose 2.4 percent to HK$10.30.

Financial Shares

Postbank helped push financial shares higher after Germany's largest consumer bank by clients posted second-quarter revenue from lending that exceeded analysts' estimates. Postbank shares added 3.3 percent to 46.57 euros.

Dexia SA, the world's largest lender to local governments, advanced 4.4 percent to 8.76 euros. Barclays Plc, the U.K.'s third-biggest bank, increased 1.4 percent to 329.25 pence.

LVMH Moet Hennessy Louis Vuitton SA gained 4.5 percent to 71.07 euros after first-half net income at the world's largest luxury-goods maker climbed 7 percent to 891 million euros. That surpassed the 857 million-euro median estimate of nine analysts surveyed by Bloomberg.

Freddie Mac rose 5.6 percent to $8.89 and Fannie Mae added 5 percent to $12.18. The U.S. Securities and Exchange Commission extended an emergency limit on short sales in shares of the mortgage-finance companies and 17 brokerages as it prepares broader rules to thwart stock manipulation.

ADP Jobs Report

Separately, President George W. Bush signed into law legislation that helps 400,000 homeowners facing foreclosure and extends a lifeline to Fannie Mae and Freddie Mac.

Companies in the U.S. added 9,000 jobs in July following a revised drop of 77,000 for the prior month that was smaller than previously estimated, ADP Employer Services said.

Lloyds TSB Group Plc dropped 6.9 percent to 299 pence. The largest bank that depends almost entirely on U.K. lending raised its dividend by 2 percent, less than last year's 5 percent, and said first-half profit fell 63 percent after bad loans and credit writedowns rose.

European Aeronautic, Defence & Space Co. retreated 4.5 percent to 12.10 euros. The world's biggest maker of airliners reported second-quarter earnings that trailed analysts' estimates because of delays to the superjumbo Airbus SAS A380 and the dollar's decline.

To contact the reporter on this story: Michael Patterson in London at mpatterson10@bloomberg.net.


Read more...

Turkey Bonds, Stocks Jump on Bet Erdogan to Evade Ban

By Ben Holland and Seda Sezer

July 30 (Bloomberg) -- Turkish bonds, stocks and the lira surged as investors stepped up bets that Prime Minister Recep Tayyip Erdogan's party will survive a lawsuit seeking its closure.

The benchmark ISE-100 stock index gained the most in four months and yields on lira-denominated debt fell to the lowest since May in Istanbul today. The lira rose to a five-month high.

Vatan newspaper today reported growing expectations in Ankara that the Constitutional Court will reject a lawsuit to shut down the Justice and Development Party, or AKP, on the grounds it's seeking to introduce Islamic law in secular Turkey. There's speculation that only six of the court's 11 judges favor closure, less than the seven required, Vatan said.

``In the last few days people think the probability that the AKP won't be closed is getting higher,'' said Kemal Keskin, who helps manage about $1.6 billion-worth of Turkish bonds at Fortis Bank AS in Istanbul. ``Newspapers are pushing that idea.''

The court began a third day of final deliberations on the case this morning and may reach a verdict as early as today.

The ISE-100 rose for a third day, adding 4.2 percent to 40,783.22 at midday in Istanbul. Akbank TAS, the biggest bank by market value, jumped 7.6 percent and Turkcell Iletisim Hizmetleri AS, the largest mobile phone operator, added 5.7 percent.

Yields on lira debt fell 11 basis points to 19.81 percent, according to ABN Amro benchmark prices. The lira rose 0.7 percent to 1.191 per dollar.

Market Rally

Stocks, bonds and the lira have rallied this month on expectations Erdogan will evade a political ban, paring losses they posted after prosecutors filed the lawsuit in March.

Today's gain shows that ``investors are betting clearly that the Constitutional Court won't close the AKP,'' said Tolga Kotan, who helps manage $1.1 billion of Turkish assets at Finans Asset Management in Istanbul.

Investors have expressed concern that Erdogan's ouster may slow economic growth. His government has presided over a record 25 consecutive quarters of expansion since it came to power in 2002, and Turkey's stock index has almost quadrupled in the same period.

If the party is closed there would probably be ``significant volatility in Turkish asset prices,'' Tolga Ediz, an economist at Lehman Brothers Holdings Inc. in London, said in a July 25 report. ``We would expect growth to suffer too, as domestic firms and consumers become even more conservative in their spending/investment decisions.''

To contact the reporters on this story: Ben Holland in Istanbul at bholland1@bloomberg.net; Seda Sezer in Istanbul at sezer2@bloomberg.net



Read more...

U.K. Stocks Rally for Second Day; British Airways, Xstrata Rise

By Adam Haigh

July 30 (Bloomberg) -- U.K. stocks rose for a second day as declining oil prices lifted transport companies and Xstrata Plc forecast ``significantly stronger'' second-half output.

British Airways Plc, Europe's third-biggest airline, and Carnival Plc gained. Xstrata, the world's fourth-largest copper producer, led mining shares higher. Aviva Plc climbed after raising its dividend 10 percent.

``The market feels very good about itself,'' said David Buik, a market analyst at BGC Partners in London. ``Clearly the fall in oil has helped.''

The benchmark FTSE 100 Index advanced 59.6, or 1.1 percent, to 5,378.8 at 1:09 p.m. in London, the steepest gain in a week. The FTSE All-Share Index rose 1 percent and Ireland's ISEQ Index decreased 2.2 percent.

British Airways added 4.1 percent to 258.75 pence. Carnival, the world's largest cruise-line, gained 0.6 percent to 1,800 pence.

Crude oil fell from its lowest close in 12 weeks on speculation gasoline demand in Asia and the U.S. may slow after near-record prices reduced consumption.

Xstrata climbed 2.8 percent to 3,530 pence. The company expects a ``significantly stronger'' second-half output on improved copper and nickel production.

Rio Tinto Group, the world's third biggest mining company, added 2.8 percent to 5,279 pence. BHP Billiton Ltd., the largest, gained 2.1 percent to 1,675 pence.

Ferrexpo Plc, a producer of iron ore in Ukraine, jumped 7.1 percent to 283 pence after ArcelorMittal, the world's biggest steelmaker, reported second-quarter profit that exceeded analyst estimates.

Aviva added 7 percent to 499.5 pence. The U.K.'s second- largest insurer by market value increased its dividend to 13.09 pence.

The following stocks also gained or fell in the U.K. market. Stock symbols are in parentheses.

Admiral Group Plc (ADM LN) soared 54 pence, or 6.6 percent, to 879 after the car insurer and broker that owns the confused.com Web site reported first-half profit that beat analyst estimates.

Lloyds TSB Group Plc (LLOY LN) dropped 23.25 pence, or 7.2 percent, to 297.75. The lender reported worse-than-estimated profit and said the outlook for the mortgage market in the U.K., where the bank generates almost all its earnings, is deteriorating.

Irish companies:

Elan Corp. (ELN ID) slumped 5.56 euros, or 27 percent, to 15. The Irish drugmaker said an experimental Alzheimer's drug it developed with Wyeth was linked to a brain-swelling side effect in a study. Elan makes up more than 13 percent of Ireland's ISEQ index by market weighting.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net



Read more...

Lan, Santos Brasil, Southern Copper, Vivo: Latin Equity Preview

By Paulo Winterstein and James Attwood

July 30 (Bloomberg) -- The following companies may have unusual price changes in Latin America trading. Stock symbols are in parentheses, and share prices are from the previous close.

The MSCI index of Latin American shares rose 2 percent to 4,229.35 yesterday. In Brazil, preferred shares are the most commonly traded class of stock. Markets in Peru were closed July 28 and 29 for holidays.

Brazil

Cia. Vale do Rio Doce (VALE5 BS): The debt rating of the world's biggest iron-ore producer was raised one level to BBB+ from BBB by Standard & Poor's. The sale of $11.45 billion in new shares ``adds to the company's liquidity and improves its ability to handle its aggressive capital expenditure program,'' analyst Reginaldo Takara wrote in a note yesterday. Vale rose 2.2 percent to 39 reais.

Iochpe-Maxion SA (MYPK3 BS): The maker of vehicle parts and Brazil's biggest maker of rail cars may show ``strong growth'' when it reports earnings today after the close of markets, Fator Corretora analyst Jacqueline Lison wrote in a note to clients yesterday. Earnings before interest, taxes, depreciation and amortization may jump 88 percent from the year-ago period as sales increase, the analyst wrote. Iochpe Maxion jumped 4 percent to 32.50 reais.

Paranapanema SA (PMAM4 BS): The Brazilian copper and tin producer raised the amount of bonds it plans to sell in the local market to 950 million reais ($605 million). The company, based in Santo Andre, Brazil, requested regulatory approval to issue 750 million reais of bonds due in 2019 and an additional 200 million reais due in 2010, according to a filing posted yesterday on the Web site of the securities regulator. Paranapanema rose 0.2 percent to 5.70 reais.

Santos Brasil Participacoes SA (STBP11 BS): Second-quarter profit at the first Brazilian port operator to list shares doubled from the year-earlier quarter to 17.8 million reais, Santos Brasil said yesterday in a regulatory filing. That's less than the 22.4 million reais average of 7 analyst estimates compiled by Bloomberg. Santos Brasil was unchanged at 26.50 reais.

Vivo Participacoes SA (VIVO4 BS): Brazil's largest mobile- phone company posted a net loss of 59.5 million reais after spending more to retain customers gained from its Telemig Celular Participacoes SA acquisition. Vivo rose 2.1 percent to 8.18 reais.

Chile

Lan Airlines SA (LAN CC): Chile's biggest air carrier reported an 11 percent jump in second-quarter profit, beating analysts' estimates. Net income increased to $47.2 million from $42.6 million a year earlier, Santiago-based Lan Airlines wrote in a statement distributed by Business Wire yesterday. That exceeded the $44.5 million average estimate of five analysts surveyed by Bloomberg. Lan rose 5.5 percent to 5,698 pesos.

Mexico

Cemex SAB (CEMEXCP MM): Mexico's peso traded near its strongest since 2002 on bets central bankers will raise the benchmark lending rate in August, signaling lower revenue for exporters. Cemex, North America's biggest cement maker, received more than four-fifths of 2007 revenue from exports. San Pedro Garza Garcia, Mexico-based Cemex rose 2.6 percent to 22.45 pesos.

Peru

Cia. de Minas Buenaventura (BVN PE): The world's seventh- largest gold producer has dropped 6.9 percent in New York trading in the last two days, when Peruvian markets were closed for a public holiday. Buenaventura rose 3 percent to $31 in Lima when it last traded July 25.

Southern Copper Corp. (PCU/C PE): A year-long strike at the Cananea copper mine has reduced profit at Southern Copper parent Grupo Mexico SAB by $650 million, Mexico City-based Grupo Mexico said yesterday in a statement. Workers went on strike at the Southern Copper mine on July 30, 2007. The stock added 1.8 percent to $28 on July 25.

To contact the reporters on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net; James Attwood in Santiago at jattwood3@bloomberg.net.



Read more...

Canadian Oil, FirstService, Mirabela: Canada Stock Preview

By John Kipphoff

July 30 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading. Stock symbols are in parentheses, and share prices are from yesterday's close in Toronto.

The Standard & Poor's/TSX Composite Index rose 0.3 percent to 13,342.55.

Atco Ltd. (ACO/X CN): The power company was cut to ``sector perform'' from ``outperform'' at RBC Capital Markets. The shares rose 0.7 percent to C$52.06.

Canadian Oil Sands Trust (COS-U CN): The lead owner of the largest oil-sands miner said it had second-quarter net income of C$497 million ($485 million), or C$1.04 per unit, compared with a C$395 million loss a year ago.

The trust boosted its quarterly dividend by 25 percent to C$1.25 per unit and cut its output forecast. The units added 0.3 percent to C$49.06.

FirstService Corp. (FSV CN): The provider of real-estate management services was upgraded to ``outperform'' from ``market perform'' at Raymond James & Associates. Yesterday, the stock rose the most in a decade, adding 15 percent to C$16, after second-quarter earnings exceeded analysts' estimates.

Mirabela Nickel Ltd. (MNB CN): The company building the world's third-largest open-pit nickel mine in Brazil said that the Santa Rita project is being engineered and constructed for an annual capacity of 6.4 million metric tons, up 40 percent from a previous plan.

The total cost of the operation is now $387 million, up 20 percent from the previous estimate, Mirabela said. The shares rose 3.9 percent to C$4.05.

Thomson Reuters Corp. (TRI CN): The news and data company formed by Thomson Corp.'s purchase of Reuters Group Plc was barred by a district judge in New York from using its Reuters Messaging technology, after failing to exercise an option. The shares rose 0.7 percent to C$32.40.

To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.



Read more...

Cummins, Fannie Mae, Garmin, Savvis, Wyeth: U.S. Equity Preview

By Jeff Kearns

July 30 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading. Stock symbols are in parentheses, and share prices are as of 8:45 a.m. in New York unless stated otherwise.

The two biggest U.S. providers of mortgage lending, Fannie Mae (FNM US) and Freddie Mac (FRE US), advanced. President George W. Bush signed into law legislation that helps 400,000 homeowners facing foreclosure and extends a lifeline to Fannie Mae and Freddie Mac. Fannie Mae added 4.3 percent to $12.10. Freddie Mac gained 5.7 percent to $8.90.

Align Technology Inc. (ALGN US) lost 18 percent to $9.20. The maker of Invisalign dental braces said 2008 profit will be no more than 33 cents a share. Analysts estimated 40 cents on average in a Bloomberg survey.

Arthur J. Gallagher & Co. (AJG US): The insurance broker reported second-quarter profit of 45 cents a share, missing the average analyst estimate for the eighth consecutive period, according to Bloomberg data. The stock retreated 6.1 percent to $23.80 in extended trading yesterday.

Buffalo Wild Wings Inc. (BWLD US) gained 16 percent to $36. The restaurant chain specializing in multiflavored chicken wings reported second-quarter profit of 31 cents a share, beating the average analyst estimate by 13 percent, according to Bloomberg data.

Cummins Inc. (CMI US) rose 7.9 percent to $71.25. The maker of more than a third of North America's heavy-duty truck engines said today in a statement distributed by Business Wire that second-quarter profit rose 37 percent on increased engine demand at home and generator sales overseas.

Garmin Ltd. (GRMN US) lost 13 percent to $39.07. The world's largest maker of car-navigation devices posted second- quarter earnings that missed analysts' estimates and cut its sales forecast as competition with TomTom NV (TOM2 NA) hurts prices.

Hanesbrands Inc. (HBI US) 19 percent to $22.09. The clothing maker reported second-quarter profit of 65 cents a share, missing the average analyst estimate by 4.4 percent, according to Bloomberg data.

MetLife Inc. (MET US) fell 5.9 percent to $49.70. The nation's biggest life insurer cut its full-year earnings forecast and said second-quarter profit declined more than analysts estimated. Net income decreased 18 percent to $946 million, while operating profit of $1.30 a share missed the average estimate by 14 percent, according to Bloomberg data.

National Instruments Corp. (NATI US) rose 9.5 percent to $31.50. The maker of industrial testing equipment was raised to ``hold'' from ``sell'' at Citigroup Inc.

OfficeMax Inc. (OMX US) fell 1 percent to $13.97. The third-largest U.S. office-supplies retailer reported a second- quarter loss of $894.2 million after writing down the value of its assets.

RadiSys Corp. (RSYS US): The maker of equipment for telephone companies reported second-quarter profit of 14 cents a share, beating the average analyst estimate by 155 percent, according to Bloomberg data. The shares gained 16 percent to $12.15 in extended trading yesterday.

RF Micro Devices Inc. (RFMD US): The maker of chips and radio systems for mobile phones reported second-quarter profit of 5 cents a share, meeting the average analyst estimate in a Bloomberg survey. The shares gained 10 percent to $3.20 in extended trading yesterday.

Savvis Inc. (SVVS US) rose 10 percent to $15. The provider of information technology services to government and business said sales jumped 6.2 percent to $212.9 million. Eight analysts surveyed by Bloomberg estimated sales of $208.5 million.

Starent Networks Corp. (STAR US) rose 17 percent to $13.50. The maker of multimedia networking equipment for mobile phones reported second-quarter profit of 19 cents a share, beating the average analyst estimate by 12 percent, Bloomberg data show.

TTM Technologies Inc. (TTMI US): The maker of printed circuit boards said third-quarter profit will be as low as 19 cents a share. Analysts forecast 27 cents, the average estimate in a Bloomberg survey. The shares fell 12 percent to $11.30 in extended trading yesterday.

Ultimate Software Group Inc. (ULTI US) lost 29 percent to $23.50. The maker of payroll and human resources software reported a quarterly loss of 75 cents a share. Analysts had expected profit of $1.34 a share, the average of 11 estimates in a Bloomberg survey.

Wyeth (WYE US) slumped 17 percent to $37.37. An experimental Alzheimer's drug made by Wyeth and Elan Corp. (ELN US) only helped about half of patients in a study and was linked with a brain-swelling side effect. Elan American depositary receipts plunged 36 percent to $21.76.

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.



Read more...

U.S. Stock Futures Climb After ADP Report Shows Gain in Jobs

By Eric Martin

July 30 (Bloomberg) -- U.S. stock-index futures advanced after a private report showed that employers unexpectedly added jobs in July and oil retreated for a second day

Visa Inc. and Walt Disney Co., which are scheduled to report earnings today, helped lead the advance after ADP Employer Services said payrolls increased by 9,000 jobs this month. Continental Airlines Inc., the fourth-largest U.S. carrier, and General Motors Corp. gained as oil fell below $122 a barrel.

Standard & Poor's 500 Index futures expiring in September added 6.2, or 0.5 percent, to 1,267.9 at 8:50 a.m. in New York. Dow Jones Industrial Average futures increased 66 to 11,439 and Nasdaq-100 Index futures gained 14.5 to 1,856.5.

``The employment picture has held up much better than expected,'' said Lawrence Creatura, who helps manage $2.7 billion at Clover Capital Management Inc. in Rochester, New York. ``It's very difficult for the economy to collapse if people still have jobs. For the stock market, it may mean that some sectors which were depressed in anticipation of the consumer weakening may be mispriced.''

Economists surveyed by Bloomberg forecast the ADP report would show a decrease of 60,000 in jobs. The report, based on payroll data, also revised last month's decline downward to 77,000.

Visa, the world's largest credit-card network, added $1.63 to $77.60. Disney, the biggest theme-park operator, climbed 18 cents to $31.10.

Continental climbed 47 cents to $14.68 and GM rose 5 cents to $11.95. Crude oil for September delivery fell as much as 94 cents, or 0.8 percent, to $121.25 a barrel on the New York Mercantile Exchange.

Earnings Watch

Earnings have topped estimates at almost three-quarters of the S&P 500 companies that have reported second-quarter results so far even as profits slump 21 percent on average from a year earlier, according to data compiled by Bloomberg. As recently as July 3, analysts had forecast a drop of 11 percent in earnings.

Freddie Mac gained 59 cents to $9.01 and Fannie Mae added 71 cents to $12.31 after the U.S. Securities and Exchange Commission extended an emergency limit on short sales in shares of the mortgage-finance companies and 17 brokerages as it prepares broader rules to thwart stock manipulation.

The SEC pushed back expiration of its ban on so-called naked short sales of the firms' stocks to Aug. 12, the Washington-based agency said in a statement yesterday. The order aims to keep traders from driving down financial stocks to boost profits after Bear Stearns Cos. and IndyMac Bancorp Inc. collapsed amid rumors they were faltering.

OfficeMax Inc. slid 14 cents to $13.97. The third-biggest office-supplies retailer reported declining sales and a second- quarter loss of $894.2 million after writing down the value of its assets.

MetLife, Wyeth

MetLife Inc., the nation's biggest life insurer, tumbled $3.21 to $49.60. The company cut its full-year earnings forecast and said second-quarter net income fell to $946 million, or $1.26 a share, from $1.16 billion, or $1.48. Operating profit, which excludes investment losses, was $1.30 a share, missing the $1.51 average estimate of 19 analysts surveyed by Bloomberg.

Wyeth dropped $7.81 to $37.30 after its experimental Alzheimer's drug was linked to a brain-swelling side effect in a test. The company's drug, bapineuzumab, developed with Elan Corp., showed no benefit for the majority of Alzheimer's patients.

Moody's Drops

Moody's Corp., the world's second-largest credit-rating company, said second-quarter profit fell 48 percent to $135.2 million, or 54 cents a share, as demand slumped for ratings on mortgage bonds and collateralized debt obligations. Profit before one-time items was 51 cents, compared with the 47 cent average of seven analysts' estimates in a Bloomberg survey. The shares didn't trade in Europe.

Declining oil prices helped spark a 2.3 percent rally in U.S. stocks yesterday. Financial shares rose for the first time in four days, led by Bank of America Corp. and JPMorgan Chase & Co., as Merrill Lynch & Co.'s plans to sell $8.5 billion of stock and liquidate $30.6 billion of bonds bolstered speculation that Wall Street is overcoming failed subprime bets.

The S&P 500 has declined 19 percent from an October record as the collapse of the U.S. subprime mortgage market forced financial institutions worldwide to report $473 billion in writedowns and credit losses since the beginning of 2007. That prompted economists to forecast 1.5 percent growth in the U.S. economy in 2008, the slowest since 2001. Equities also suffered as inflation increased, giving the U.S. consumer price index the steepest gain since 1991.

Financial industry profits, which analysts estimated would fall 60 percent, have plummeted 87 percent. Record oil prices drove earnings of ConocoPhillips and Occidental Petroleum Corp. to the highest in their histories. The energy group of the S&P 500 has posted a 15 percent gain in earnings so far.

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.



Read more...

London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Jul 30 08 11:44 GMT |

The greenback traded sideways against the majors in the London session, moving about 15 pips on average from open to close. Data out of the Euro-zone remained weak as both business and consumer confidence numbers came in below expectations. Consumer confidence across the pond slipped to -20 in July from -17 the prior month while manufacturing confidence fell to -8 from -5 and services industry confidence pulled back to 1 from 9 in June. EUR/USD was modestly lower, opening near 1.5592 and closing the session around the 1.5588 mark. The market awaits the ADP employment report out of the US this morning, which should provide the pair with some price action. That said, any outsized reaction to the number could see a reversal as this indicator's predictive ability as far as NFP goes has been deplorable of late. USD/JPY pulled back a touch from an open near 107.98 to a close around the 107.80 level. Robust stock markets overseas -- with Asia up about 2% and Europe adding about 1% -- helped keep carry trades on the table and limited the downside to the pair. The news this morning that President Bush signed the housing relief/GSE bailout bill is likely to get a positive reaction from stocks in NY trading. The market these days seems to look for any excuse to rally -- just look at what they did yesterday when they viewed the latest huge credit market write-down as a positive. Another rally in US stocks, on top of yesterday’s 2.5% gain, should prop USD/JPY back above the 108.00 mark. Upcoming Economic Data Releases (NY Session) Prior Estimate 7/30 12:15 GMT US ADP Employment Change JUL -79K -53K 7/30 12:30 GMT CA Industrial Product Price MoM JUN 0.60% 1.00% 7/30 12:30 GMT CA Raw Materials Price Index MoM JUN 3.10% 3.00% Forex.com http://www.forex.com DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Read more...

European Market Recap: Stocks & Bonds Up Following Weak EU Conf Figures

Market Updates | Written by CEP News | Jul 30 08 12:00 GMT |

(CEP News) - In the aftermath of sharp declines in confidence indicators for the euro zone, European equity markets are trading higher with the Eurostoxx up 23.29 points on the day and the UK FTSE 100 up 58.80 points to 5378. In Germany, the bund was up 39.0 ticks to 112.03 with yields down 5.9 bps to 4.42% while the 10-year gilt was up 33.0 ticks to 106.95 with yields down 4.1 bps to 4.86%. The euro was up 0.02 cents to 1.559 USD. According to the European Commission on Wednesday, business sentiment in the euro zone declined further than expected in July, as reflected by the business climate indicator falling to -0.21 from June's 0.13 level. Economists had expected a less pronounced fall to -0.02. Meanwhile, June's business climate level was revised down from an initial reading of 0.14. The EU Commission also reported stronger-than-expected falls in all of its euro zone confidence indicators for the month. Against expectations of only a one-point decline, euro zone consumer confidence slipped all the way to -20 in July from June's -17 print. The economic confidence level dropped to 89.5 from 94.8 despite consensus calls for a 93.0 reading. The June economic confidence reading was revised down from 94.9. Meanwhile, the euro zone industrial confidence indicator slipped to -8 in July, down from both the -7 level expected and the -5 figure recorded in the previous month, while the services sentiment indicator fell to 1 following June's reading of 9. There were no major macroeconomic releases from the UK. The five-year Bobl was up 21.5 ticks to 107.02, the two-year Schatz was up 6.0 ticks to 102.85 and the March 2009 Euribor contract was trading up 4.0 ticks to 95.10. The spread between the 10-year Bund and 10-year U.S. Treasury notes widened 4.396 bps to -37.80. UK 30-year bond yields were down 1.5 bps to 4.54%, five-year bond yields were down 5.3 bps to 4.80%, while yields on the two-year bond were down 5.5 bps to 4.82%. The March 2009 Short Sterling contract was up 5.0 ticks to 94.54. Yields on U.S. 10-year Treasury notes were up 0.2 bps to 4.040%. European stock markets were gaining with the Eurostoxx up 23.29 points to 2863.39, the UK FTSE 100 up 58.80 points to 5378 and the German DAX up 33.27 points to 6432.07. The Japanese Nikkei was trading up 208.34 points to 13367.79. The Canadian dollar was up 0.07 cents to 0.9775 against the USD (1.023 USD/CAD). Against the euro, the loonie was up 0.04 cents to 0.6270 (1.5947 CAD/EUR). The U.S. dollar was down 0.24 to 107.86 and the euro was down 0.37 to 168.15, both against the yen. The euro was up 0.02 cents to 1.559 while the pound sterling was up 0.23 cents to 1.9811, both against the USD. The euro was down 0.09 cents to 0.7869 pounds. The Swiss franc was up 0.03 cents to 1.0466 against the USD and up 0.05 cents to 1.6314 against the euro. All data were taken at 7:57 a.m. EDT. Generated by CEP Newswires, edited by Nancy Girgis, ngirgis@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News. A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.

Read more...

Europe Slowdown Continues As Retail Sales And Consumer Confidence Fall, Can The ECB Hike Again?

Daily Forex Fundamentals | Written by DailyFX | Jul 30 08 11:35 GMT |

Fundamental Headlines USDJPY - Japanese fell 2% in June following a 2.8% increase the month prior. Orders from abroad fell for the first time in four years as a global slowdown has dampened demand. Meanwhile, small business confidence fell for a fourth month in July to 39.9-the lowest level in six years. This could spell trouble for the already declining labor market as the sector employs 60% of Japanese workers. USDCHF - The Swiss leading economic indicator fell to 0.90 from a revised lower 0.99 the month prior-the lowest in five tears, as rising costs and a global slowdown continue to weigh on manufacturers. Despite the improvement in the UBS consumption gauge fears have grown that the slowdown is starting to weigh on domestic demand. GBPUSD - The European retail PMI measurement rose to 46 from 44, but remains at a contraction level as rising inflation saps shoppers purchasing power. Indeed, the consumer confidence indicator fell to -20 from -17, while the economic outlook gauge slipped to 89.5-the lowest level since October 2001. The slowdown in the region may keep the ECB at next week's policy meeting. The MPC is trying to battle rising inflation as they adhere to its price stability mandate, but countries experiencing a slowdown like Italy are demanding help and may consider leaving the economic union. Lone Star's Splash (link) - Wall Street Journal Home Prices in May Took a Steep Fall (link) - Wall Street Journal SEC Extends Emergency Order on Short-Selling (link) - Financial Times Deutsche Bank Faces Pressure to Expand Consumer Unit (link) - Bloomberg World Trade May Expand Even as WTO Talks Sputter (link) - Bloomberg DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.

Read more...

Currency Technical Report

Daily Forex Technicals | Written by FX Greece | Jul 30 08 11:41 GMT |

EUR/USD Resistance: 1,5620-30/ 1,5650/ 1,5675-80/ 1,5710/ 1,5750 Support : 1,5570/ 1,5550/ 1,5510-20/ 1,5465-75 Comment : Euro declined sharply and formed new lows at 1,5550-55 area. The top formation scenario, that would lead to a rise towards 1,5830-50 before the downward move, was not accurate and yesterday's decline led euro to the next important support level. As we can see in the daily chart, the area of 1,5510-60 is technically an important support level, and due to the symmetry between the cycle lows in the 4 hour chart, an upward move formation would be very possible. Next important support level is found at 1,5460-75. Below those levels, our next target will be the base of 1,5300. That would be a less possible scenario, according to current signs. First intraday resistance emerges at 1,5620-30, followed by the area of 1,5665-75. A possible move above 1,5700 would indicate the trend reversal, leading to the area of 1,5770-80 at first and then to 1,5850 area. TRADING EUR/USD SWING TRADING : Yesterday's decline activated our lower orders at 1,5570, according to our basic scenario. We will keep our stops below 1,5500... INTRADAY TRADING : Short term buy positions in our yesterday scenario, were closed with stops after the break of 1,5650 and today we will try sell positions at 1,5665-75, with stops above 1,5710 and target at 1,5610. A clear break of 1,5620 may be used for small buy orders with stops below 1,5600 and target at 1,5670... A possible decline until 1,5520-30 will be used for buy positions, having as target the area of 1,5590 and stops below 1,5500. GBP/USD Resistance : 1,9830-40/ 1,9865/ 1,9900/ 1,9930/ 1,9960 Support: 1,9800/ 1,9760-70/ 1,9730/ 1,9700/ 1,9550 Comment : Our scenario regarding the pound proved accurate, as the base of 1,9810-30 was reached once again. The move was continued below 1,9800 and a resumption to 1,9700-30 area is now possible. First important resistance levels is found at 1,9830-50. If this level is not breached and the move is limited below today's lows, the move may be continued even lower. Next targets are set at 1,9665-75 and 1,9630... A move above 1,9860 would indicate that high volatility will be continued for the pair and a complete reversal of yesterday's decline would not come as a surprise. TRADING GBP/USD : Sell orders will be tested in the reactions towards 1,9830 and 1,9860 with stops above 1,9885 and targets at 1,9760-70 area. USD/JPY USD/CHF FX Greece DISCLAIMER The details and information included in the above analysis, are part of research based exclusively on currency charts and are of purely instructional and educational nature. None of the information featuring in the analysis can be considered as an invitation for opening positions in FOREX market or in the market of forward contracts or any securities listed on an organized or unorganized market. We assume no responsibility for any kind of losses ,profits or property loss resulting, in whole or in part, from acts that are based either directly or indirectly on the processing or the use of information, details and strategies, the reader may find in the analysis. The readers hold full responsibility for the use and the results of their actions. The recipients of the analysis must acknowledge and accept that investment choices of any kind, especially concerning the FOREX market, contain risks (high, low and occasionally zero) of reduction or even loss of their investment. Therefore, they should always be cautious prior to any kind of action. We reserve the right to change the terms and the characteristics of the analysis. The contents of the analysis are solely intended for personal use. They may not be retransmitted, reproduced, distributed, published, adapted, modified or assigned to third parties in any way whatsoever. Anyone having access to them is required to comply with the law provisions on the protection of third party intellectual property rights.

Read more...

Forex Market Issues and Risks

Daily Forex Fundamentals | Written by AC-Markets | Jul 30 08 11:02 GMT |

Dollar rallies to one-month high on Oil drop and Confidence rise News and Events: The Dollar soared to a one-month high against a basket of currencies on Tuesday, benefiting from a steep drop in oil prices and an unexpected rise in US consumer confidence. Analysts said Merrill Lynch's announcement late on Monday of yet another write-down and capital-raising exercise also helped support the Dollar, as they raised hopes the turning point in the yearlong credit crisis was close. Oil fell as low as 120.42 yesterday before ending only $2.5 down at 122.19. This was the lowest since May, as signs of weakening demand outweighed a disruption to Nigerian output. A decline in oil prices tends to benefit the Dollar, as it eases some of the growth concerns. Another positive tone came from an independent report showing consumer confidence unexpectedly rose in July, halting a six-month slide. EurUsd dropped as low as 1.5554 and was last trading at 1.5554, down 0.99%. UsdJpy rose 0.61% to 108.08 as Yen was hurt by rising Jobless rate. GbpUsd fell 0.75% to 1.9801, weighed down by British retail sales and new mortgages record low. UsdChf rose 1.19% to 1.0456. Analysts said the European, Japanese and British data was evidence that the effects of the economic slump in the United States were spreading to other regions. Second-quarter US GDP on Thursday and Friday's US non-farm payrolls figures for July will be the market's main focus later this week. Today Key Issues: 09:00 EUR July Euro-zone Business climate -0.02 vs 0.14 09:00 EUR July Euro-zone Consumer Sentiment -18 vs -17 09:00 EUR July Euro-zone Economic Sentiment 93 vs 94.9 09:00 EUR July Euro-zone Industrial Sentiment -7 vs -5 09:00 EUR July Euro-zone Service Sentiment 7 vs 9 09:30 CHF July KOF Indicator 0.96 vs 1.01 12:15 USD July ADP National Employment -60k vs -79k 12:30 CAD June Producer prices 1.0% vs 0.6% (MoM) 12:30 CAD June Raw materials prices 3% vs 3.1% (MoM) The Risk Today: EurUsd Market broke on Wednesday 1.5800 support which lightly undermine the current 3-month uptrend. Further weakness might play in 1.5400 - 1.5800 consolidation range. Below, strong support holds 1.5304 13th June low. Key initial resistance holds 1.6000. A break up there would open the way to Trendline resistance 1.6200. GbpUsd Following yesterday drop, Cable is still set in short term 1.9800 - 2.0100 trading range. It hit 2.0158 high two weeks ago and 1.9762 low yesterday. Key level holds 2.0100 resistance. On the downside, only a return below 1.9649 might bring again focus on 1.9337 January low and 1.9105 (50% retracement of 1.7049 - 2.1162 advance). Initial support holds 1.9649 July 7th low. Strong support holds 1.9363 20th February and 14th May low. UsdJpy Recovery pushed the market up to 108 last week and 108.29 yesterday. Friday strong Dollar rebound put focus on mid-June 108.59 resistance and 110.10 strong resistance (Trendline). Further advance would open the way toward 111.92 early January high. On the downside, a return below 105 may open the way toward 102.73 support and 100 pivot point. UsdChf Recent Dollar strength pushed last week over 1.0200 and is now trading near 1.0500. This is reopening the view for a 1.0200 - 1.0600 consolidation range. Initial resistance holds 1.0480 yesterday high. Renewed weakness below 1.0200 would retest the 1.0000 pivot point and may open the way toward 0.9637 17th March low. EURUSD GBPUSD USDJPY USDCHF 1.6200 T 2.1162 S 111.92 K 1.1191 K 1.6039 M 2.0158 M 110.10 T 1.0625 T 1.6000 K 2.0100 K 108.59 M 1.0480 S 1.5605 1.9825 107.95 1.0450 1.5400 S 1.9754 S 105.00 M 1.0013 M 1.5304 S 1.9649 S 102.73 S 1.0000 P 1.5000 K 1.9337 T 100.00 P 0.9637 K S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Read more...