By John Kipphoff
Aug. 15 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading today. Stock symbols are in parentheses, and share prices are from the previous close in Toronto.
The Standard & Poor's/TSX Composite Index fell 0.1 percent to 13,358.91. The benchmark has gained 0.1 percent this week.
Aurelian Resources Inc. (ARU CN): Ecuador, which halted most mine operations, including those of Toronto-based Aurelian, in April, plans to provide guarantees to reassure foreign investors as long as the country's social and environmental standards are met, Mines and Oil Minister Galo Chiriboga said yesterday after meeting with Canada's Trade Minister Michael Fortier.
Aurelian, which is developing the Fruta del Norte gold deposit in Ecuador, and agreed to sell itself to Kinross Gold Corp. (K CN) last month, fell 7.1 percent to C$5.75. Kinross Gold slid 6.5 percent to C$16.59. Corriente Resources Inc. (CTQ CN), developing a copper project, rose 0.5 percent to C$4.45.
Barrick Gold Corp. (ABX CN): Peru's government will investigate the dismissals of 30 workers at mines operated by Barrick, Southern Copper Corp. and Glencore International AG, Labor Minister Mario Pasco said yesterday. The ministry will carry out inspections at the mines, Pasco told reporters in Lima today. Barrick dropped 5.2 percent to C$35.65.
Bonterra Energy Trust (BNE-U CN): The oil and gas income fund plans to convert to a corporation and buy Silverwing Energy Inc. (SVW CN) for C$30.5 million (28.6 million). Conversion to the corporate structure will occur after the Silverwing deal's completion, planned for November, Calgary-based Bonterra said in a statement distributed by Canada NewsWire.
Bonterra units gained 2.9 percent to C$32.20. Silverwing shares were unchanged at 3 cents.
Enerflex Systems Income Fund (EFX-U CN): The provider of compression for natural-gas pipelines said yesterday that net income in the second quarter rose 36 percent to C$17.5 million ($10.6 million), and sales rose 31 percent to C$259.5 million. Profit and revenue exceeded the average of analyst estimates in a Bloomberg survey. The units gained 1.8 percent to C$13.26.
Iamgold Corp. (IMG CN): The bullion miner was rated ``overweight'' in new coverage by Thomas Weisel Partners analyst Heather Douglas at in Toronto. The shares fell 1.4 percent to C$5.82.
Ivernia Inc. (IVW CN): The company that used to produce 3 percent of the world's mined lead said it doesn't expect to restart exports from its Australian mine until at least early 2009. The shares dropped 8.9 percent to 51 cents, extending their decline this year to 71 percent.
Martinrea International Inc. (MRE CN): Canada's third- largest auto-parts maker said second-quarter net income fell 42 percent to C$11.3 million as sales slid 24 percent to C$410.9 million. Per-share earnings of 16 cents, excluding one-time items, exceeded the 12-cent average of analyst estimates compiled by Bloomberg. The shares fell 0.1 percent to C$6.69.
Research In Motion Ltd. (RIM CN): The maker of the BlackBerry e-mail phone was reinstated ``market perform'' by Steven Li at Raymond James Financial Inc. The Toronto-based analyst set a six month to 12-month share-price target of C$149.14 ($140). The shares gained 3.4 percent to C$139.24.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
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Friday, August 15, 2008
Ambac Financial, MBIA, UAL, Continental: U.S. Equity Preview
By Katherine Greene
Aug. 15 (Bloomberg) -- The following companies may have unusual price changes in U.S. markets. Stock symbols are in parentheses after company names, and prices are as of 8 a.m. in New York, unless stated otherwise.
Ambac Financial Group Inc. (ABK US) jumped 16 percent to $5.30. Standard & Poor's ended a review of its ratings on MBIA Inc. (MBI US) and Ambac, the two largest bond insurers, without changing their ratings. MBIA's MBIA Insurance Corp. and Ambac's Ambac Assurance Corp. remain AA rated, New York-based S&P said today in separate statements.
MBIA shares rose 8.5 percent to $11.20.
Autodesk Inc. (ADSK US) increased 7.6 percent to $36.97. The biggest maker of engineering-design software forecast third- quarter and full-year revenue that topped some analysts' estimates.
Continental Airlines Inc. (CAL US) climbed 3.9 percent to $17. The fourth-largest U.S. carrier may be next to sell stock to raise capital, following an offering today by US Airways Group Inc., a UBS AG analyst said.
UAL Corp., (UAUA US) the owner of United Airlines, may also sell shares, the analyst said. The shares rose 4.1 percent to $13.20.
Kohl's Corp. (KSS US) increased 2.3 percent to $49.40. The fourth-largest U.S. department-store chain reported second- quarter profit that fell less than analysts estimated after the company slowed new orders and reduced the amount of goods it had to sell on clearance.
Nordstrom Inc. (JWN US) lost 3.4 percent to $29.18. The U.S. department-store chain with more than 100 locations of the same name said second-quarter profit fell and forecast annual earnings that would be lower than its previous projection.
NRG Energy Inc. (NRG US) gained 5.6 percent to $37.20. Billionaire Warren Buffett's Berkshire Hathaway Inc. disclosed a stake in the second-biggest power producer in Texas. Buffett also made an undisclosed transaction involving ConocoPhillips (COP US), the second-largest U.S. refiner, according to a regulatory filing disclosing equity investments at the end of the second quarter.
ConocoPhillips slipped 0.2 percent to $79.25.
SunPower Corp. (SPWR US) increased 10 percent to $86.40. The second-biggest U.S. solar-module maker won a contract to build a 250-megawatt solar-power plant to supply electricity to PG&E Corp., owner of California's largest utility. Merrill Lynch & Co. upgraded the stock to ``buy'' from ``neutral,'' saying the company is making inroads into the U.S. utility market.
To contact the reporter on this story: Katherine Greene in New York at kgreene8@bloomberg.net.
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Aug. 15 (Bloomberg) -- The following companies may have unusual price changes in U.S. markets. Stock symbols are in parentheses after company names, and prices are as of 8 a.m. in New York, unless stated otherwise.
Ambac Financial Group Inc. (ABK US) jumped 16 percent to $5.30. Standard & Poor's ended a review of its ratings on MBIA Inc. (MBI US) and Ambac, the two largest bond insurers, without changing their ratings. MBIA's MBIA Insurance Corp. and Ambac's Ambac Assurance Corp. remain AA rated, New York-based S&P said today in separate statements.
MBIA shares rose 8.5 percent to $11.20.
Autodesk Inc. (ADSK US) increased 7.6 percent to $36.97. The biggest maker of engineering-design software forecast third- quarter and full-year revenue that topped some analysts' estimates.
Continental Airlines Inc. (CAL US) climbed 3.9 percent to $17. The fourth-largest U.S. carrier may be next to sell stock to raise capital, following an offering today by US Airways Group Inc., a UBS AG analyst said.
UAL Corp., (UAUA US) the owner of United Airlines, may also sell shares, the analyst said. The shares rose 4.1 percent to $13.20.
Kohl's Corp. (KSS US) increased 2.3 percent to $49.40. The fourth-largest U.S. department-store chain reported second- quarter profit that fell less than analysts estimated after the company slowed new orders and reduced the amount of goods it had to sell on clearance.
Nordstrom Inc. (JWN US) lost 3.4 percent to $29.18. The U.S. department-store chain with more than 100 locations of the same name said second-quarter profit fell and forecast annual earnings that would be lower than its previous projection.
NRG Energy Inc. (NRG US) gained 5.6 percent to $37.20. Billionaire Warren Buffett's Berkshire Hathaway Inc. disclosed a stake in the second-biggest power producer in Texas. Buffett also made an undisclosed transaction involving ConocoPhillips (COP US), the second-largest U.S. refiner, according to a regulatory filing disclosing equity investments at the end of the second quarter.
ConocoPhillips slipped 0.2 percent to $79.25.
SunPower Corp. (SPWR US) increased 10 percent to $86.40. The second-biggest U.S. solar-module maker won a contract to build a 250-megawatt solar-power plant to supply electricity to PG&E Corp., owner of California's largest utility. Merrill Lynch & Co. upgraded the stock to ``buy'' from ``neutral,'' saying the company is making inroads into the U.S. utility market.
To contact the reporter on this story: Katherine Greene in New York at kgreene8@bloomberg.net.
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U.S. Stocks Climb on Lower Commodities; GM, Ford, MBIA Advance
By Lynn Thomasson
Aug. 15 (Bloomberg) -- U.S. stocks rose for a second day after lower commodity prices boosted the earnings outlook for consumer and transportation companies and Standard & Poor's affirmed credit ratings on the two largest bond insurers.
General Motors Corp. and Ford Motor Co., the biggest U.S. automakers, climbed as oil headed for a second weekly decline. Ambac Financial Corp. rallied 23 percent and MBIA Inc. advanced 9.5 percent after S&P concluded a credit review without lowering the companies' ratings. General Electric Co. led industrial shares higher on a Federal Reserve report showing manufacturing in New York unexpectedly grew in August as materials prices retreated.
``It's a big positive for all the companies we invest in that use oil,'' Charles Bobrinskoy, who helps manage about $13 billion as vice chairman of Ariel Investments in Chicago, told Bloomberg Television. ``Commodities got way too high and consumer stocks in particular got too low.''
The S&P 500 rose 5.41, or 0.4 percent, to 1,298.34 as of 9:35 a.m. in New York. The Dow Jones Industrial Average increased 69.29, or 0.6 percent, to 11,685.22. The Nasdaq Composite Index added 12.03 to 2,465.7. About five stocks rose for every two that fell on the New York Stock Exchange.
The S&P 500 erased its weekly decline, leaving it little changed on the week. The benchmark for American equities has lost 12 percent this year as surging commodities and credit-market losses curbed profit growth. Earnings have slumped 23 percent on average for the 445 companies in the S&P 500 that released second-quarter results since July 8, according Bloomberg data.
Oil's Retreat
GM, the biggest U.S. carmaker, added 48 cents to $11.83. Ford, the second-largest U.S. automaker, gained 9 cents to $5.19. Crude oil retreated as the stronger dollar diminished the appeal of commodities as an inflation hedge.
The contract for September delivery dropped as much as 2 percent to $112.75 a barrel in New York.
MBIA added 9.5 percent to $11.30. Ambac climbed 23 percent to $5.63. Bond insurers owned by MBIA, Ambac, Syncora Holdings Ltd., FGIC Corp., and CIFG Holdings were stripped of their AAA ratings over the past six months as losses grew from collateralized debt obligations and other mortgage-linked securities.
MBIA Insurance's capital levels remain ``well above the level required for a 'AA' rating,'' S&P said. Ambac Assurance's efforts to cancel protection on mortgage-linked CDOs also ``are starting to bear fruit,'' the firm said.
Financial shares have slumped this year as the worldwide costs for the collapse of the subprime mortgage market exceeded $500 billion.
The Reuters/University of Michigan preliminary survey on consumer confidence for August, due around 10 a.m., may show sentiment rose for a second month after reaching a 28-year low in June.
U.S. stocks rose yesterday after a trade group loosened restrictions on Fannie Mae and Freddie Mac to help revive the mortgage industry. PMI Group Inc., the second-biggest mortgage insurer, rallied 49 percent on plans to raise cash by selling businesses.
To contact the reporters on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.
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Aug. 15 (Bloomberg) -- U.S. stocks rose for a second day after lower commodity prices boosted the earnings outlook for consumer and transportation companies and Standard & Poor's affirmed credit ratings on the two largest bond insurers.
General Motors Corp. and Ford Motor Co., the biggest U.S. automakers, climbed as oil headed for a second weekly decline. Ambac Financial Corp. rallied 23 percent and MBIA Inc. advanced 9.5 percent after S&P concluded a credit review without lowering the companies' ratings. General Electric Co. led industrial shares higher on a Federal Reserve report showing manufacturing in New York unexpectedly grew in August as materials prices retreated.
``It's a big positive for all the companies we invest in that use oil,'' Charles Bobrinskoy, who helps manage about $13 billion as vice chairman of Ariel Investments in Chicago, told Bloomberg Television. ``Commodities got way too high and consumer stocks in particular got too low.''
The S&P 500 rose 5.41, or 0.4 percent, to 1,298.34 as of 9:35 a.m. in New York. The Dow Jones Industrial Average increased 69.29, or 0.6 percent, to 11,685.22. The Nasdaq Composite Index added 12.03 to 2,465.7. About five stocks rose for every two that fell on the New York Stock Exchange.
The S&P 500 erased its weekly decline, leaving it little changed on the week. The benchmark for American equities has lost 12 percent this year as surging commodities and credit-market losses curbed profit growth. Earnings have slumped 23 percent on average for the 445 companies in the S&P 500 that released second-quarter results since July 8, according Bloomberg data.
Oil's Retreat
GM, the biggest U.S. carmaker, added 48 cents to $11.83. Ford, the second-largest U.S. automaker, gained 9 cents to $5.19. Crude oil retreated as the stronger dollar diminished the appeal of commodities as an inflation hedge.
The contract for September delivery dropped as much as 2 percent to $112.75 a barrel in New York.
MBIA added 9.5 percent to $11.30. Ambac climbed 23 percent to $5.63. Bond insurers owned by MBIA, Ambac, Syncora Holdings Ltd., FGIC Corp., and CIFG Holdings were stripped of their AAA ratings over the past six months as losses grew from collateralized debt obligations and other mortgage-linked securities.
MBIA Insurance's capital levels remain ``well above the level required for a 'AA' rating,'' S&P said. Ambac Assurance's efforts to cancel protection on mortgage-linked CDOs also ``are starting to bear fruit,'' the firm said.
Financial shares have slumped this year as the worldwide costs for the collapse of the subprime mortgage market exceeded $500 billion.
The Reuters/University of Michigan preliminary survey on consumer confidence for August, due around 10 a.m., may show sentiment rose for a second month after reaching a 28-year low in June.
U.S. stocks rose yesterday after a trade group loosened restrictions on Fannie Mae and Freddie Mac to help revive the mortgage industry. PMI Group Inc., the second-biggest mortgage insurer, rallied 49 percent on plans to raise cash by selling businesses.
To contact the reporters on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.
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Cemig, CSN, Pao de Acucar, Rossi: Brazilian Equity Movers
By Paulo Winterstein
Aug. 15 (Bloomberg) -- The following companies are having unusual price changes in Brazil trading. Stock symbols are in parentheses, and share prices are as of 9:20 a.m. New York time. Preferred shares are usually the most-traded class of stock.
The Bovespa index gained 0.1 percent to 55,199.89.
Banco do Brasil SA (BBAS3 BS) rose for a second day, adding 2 percent to 22.23 reais. Second-quarter profit for Latin America's largest bank by assets rose 53 percent from the year- earlier period to 1.64 billion reais ($1.01 billion), the Brasilia-based bank said in a statement yesterday on the Brazilian regulator's Web site. The result beat the 1.5 billion reais average estimate of six analysts surveyed by Bloomberg.
Cia. Brasileira de Distribuicao Grupo Pao de Acucar SA (PCAR4 BS) gained the most in a month adding 2.8 percent to 36.30 reais. Net sales at stores of Brazil's biggest food retailer open for more than a year rose 13 percent in July on rising demand for electronics. Net sales in all stores jumped 26 percent in July to 1.5 billion reais, Sao Paulo-based Pao de Acucar said in an e- mailed statement yesterday.
Cia. Energetica de Minas Gerais SA (CMIG4 BS) gained for a fourth day, adding 2.7 percent to 36.20 reais. Second-quarter profit at Brazil's largest combined electricity generator and distributor rose 16 percent to 599.3 million reais from 515 million reais a year earlier, according to a filing sent yesterday to Brazil's securities regulator. That's more than the 424.9 million reais average of eight analysts' estimates compiled by Bloomberg.
Cia. Siderurgica Nacional SA (CSNA3 BS) fell for the first time in three days, dropping 1.1 percent to 53.60 reais. The third-largest Brazilian steelmaker said in a regulatory filing yesterday that second-quarter net income rose 8.2 percent from a year earlier to 1.03 billion reais ($635 million). That's less than the 1.13 billion reais average of nine analysts' estimates compiled by Bloomberg. CSN, as the company is known, rose 1.5 percent to 54.19 reais.
Rossi Residencial SA (RSID3 BS) led gains on the index, adding 3.1 percent to 12.87 reais. Brazil's third-largest homebuilder showed ``strong margin recovery'' in the second quarter, putting Rossi ``on track'' to meet its forecast for the year, UBS AG analyst Guilherme Vilazante wrote in a note.
To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.
Read more...
Aug. 15 (Bloomberg) -- The following companies are having unusual price changes in Brazil trading. Stock symbols are in parentheses, and share prices are as of 9:20 a.m. New York time. Preferred shares are usually the most-traded class of stock.
The Bovespa index gained 0.1 percent to 55,199.89.
Banco do Brasil SA (BBAS3 BS) rose for a second day, adding 2 percent to 22.23 reais. Second-quarter profit for Latin America's largest bank by assets rose 53 percent from the year- earlier period to 1.64 billion reais ($1.01 billion), the Brasilia-based bank said in a statement yesterday on the Brazilian regulator's Web site. The result beat the 1.5 billion reais average estimate of six analysts surveyed by Bloomberg.
Cia. Brasileira de Distribuicao Grupo Pao de Acucar SA (PCAR4 BS) gained the most in a month adding 2.8 percent to 36.30 reais. Net sales at stores of Brazil's biggest food retailer open for more than a year rose 13 percent in July on rising demand for electronics. Net sales in all stores jumped 26 percent in July to 1.5 billion reais, Sao Paulo-based Pao de Acucar said in an e- mailed statement yesterday.
Cia. Energetica de Minas Gerais SA (CMIG4 BS) gained for a fourth day, adding 2.7 percent to 36.20 reais. Second-quarter profit at Brazil's largest combined electricity generator and distributor rose 16 percent to 599.3 million reais from 515 million reais a year earlier, according to a filing sent yesterday to Brazil's securities regulator. That's more than the 424.9 million reais average of eight analysts' estimates compiled by Bloomberg.
Cia. Siderurgica Nacional SA (CSNA3 BS) fell for the first time in three days, dropping 1.1 percent to 53.60 reais. The third-largest Brazilian steelmaker said in a regulatory filing yesterday that second-quarter net income rose 8.2 percent from a year earlier to 1.03 billion reais ($635 million). That's less than the 1.13 billion reais average of nine analysts' estimates compiled by Bloomberg. CSN, as the company is known, rose 1.5 percent to 54.19 reais.
Rossi Residencial SA (RSID3 BS) led gains on the index, adding 3.1 percent to 12.87 reais. Brazil's third-largest homebuilder showed ``strong margin recovery'' in the second quarter, putting Rossi ``on track'' to meet its forecast for the year, UBS AG analyst Guilherme Vilazante wrote in a note.
To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.
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Morning Market Recap: Canadian Dollar Bucks Commodity Slide
Morning Market Recap: Canadian Dollar Bucks Commodity Slide
15 Agustus 2008 20:29
(CEP News) - The Canadian dollar is up on Friday even as crude oil and gold decline. In the United States, equity futures point to a strong open and fixed income yields are down.
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15 Agustus 2008 20:29
(CEP News) - The Canadian dollar is up on Friday even as crude oil and gold decline. In the United States, equity futures point to a strong open and fixed income yields are down.
Read more...
Currency Pair Daily Forecasts
| Daily Forex Technicals | Written by Finotec Group | Aug 15 08 10:08 GMT | | |
EUR/USD Daily Technical ReportsEUR/USD-market strategy can be a sell from the level 1.4695$ Technical oscillators supporting the bearish trend for the currency pair To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the MACD lines after a bearish crossover below the zero line. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI; we can determine that the market is in a bearish direction. Also, MA oscillators indicate a bearish cross on the short MA line. As seen on the chart there are two tops leading downwards to a selling trend, although slightly over sold according to Bollinger
USD/JPY Daily Technical ReportsUSD/JPY-market strategy can be a buy from the level 107.80 Technical oscillators supporting the bullish trend for the currency pair To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the MACD lines after a bullish crossover above the zero line. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI; we can determine that the market is in a bullish direction. Also, MA oscillators indicate a bullish cross on the short MA line. As seen on the chart there are two bottoms leading upwards to a buying trend.
GBP/USD Daily Technical ReportsGBP/USD-market strategy can be a sell from the level 1.8605$ Technical oscillators supporting the bearish trend for the currency pair To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the MACD lines after a bearish crossover below the zero line. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI; we can determine that the market is in a bearish direction. Also, MA oscillators indicate a bearish cross on the short MA line. As seen on the chart there are two tops leading downwards to a selling trend.
USD/CHF Daily Technical ReportsUSD/CHF-market strategy can be a buy from the level 1.1015 Technical oscillators supporting the bullish trend for the currency pair To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the MACD lines after a bullish crossover above the zero line. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI; we can determine that the market is in a bullish direction. Also, MA oscillators indicate a bullish cross on the short MA line. As seen on the chart there are two bottoms leading upwards to a buying trend. Although slightly over bought today.
Finotec Group Inc. Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein. | |
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Asia-Pacific Market Recap: Fixed Income Mixed, Equities Closed Higher
Asia-Pacific Market Recap: Fixed Income Mixed, Equities Closed Higher
15 Agustus 2008 13:17
(CEP News) - Asia-Pacific fixed income markets are mixed and equities closed higher with yields on Australian 10-year bonds down 1.4 bps to 5.88% and Japanese 10-year government bonds up 2.4 bps to 1.47%.
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15 Agustus 2008 13:17
(CEP News) - Asia-Pacific fixed income markets are mixed and equities closed higher with yields on Australian 10-year bonds down 1.4 bps to 5.88% and Japanese 10-year government bonds up 2.4 bps to 1.47%.
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FTSE up as crude falls ease inflation fears
* FTSE 100 rises 0.4 pct
* Commodities trade lower as energy, metal prices fall
* Falling crude price eases inflationary concerns
By Michael Taylor
LONDON, Aug 15 (Reuters) - Britain's blue-chip index rose early on Friday as lower oil prices helped reduce concerns over spiralling inflation, while dragging commodity stocks lower.
At 0735 GMT the FTSE 100 .FTSE was up 19.4 points, or 0.4 percent at 5,516.8 to extend a 0.9 percent rise in the previous session.
As U.S. crude CLc1 prices slipped to about $113 a barrel, heavyweight oil companies sagged. BP , Royal Dutch Shell and Tullow Oil shed between 0.2 and 0.7 percent.
BP and its partners in oil firm TNK-BP will meet next month in a bid to resolve a row over management and a share float, a source close to the board said, as the Russian co-owners moved closer to oust TNK-BP's head.
Adding to the negative oil sector sentiment, the International Energy Agency said oil demand in Western countries is set for its biggest fall in 25 years as the global economic slowdown intensifies and consumers respond to high prices, the Times newspaper reported.
But the falling energy prices helped buoy British Airways and Carnival , traders said, with the airliner and cruise ship operator 2.3 and 2.8 percent higher, respectively.
Retailers also rose as the inflationary threat weakened, with Next , Kingfisher and Carphone Warehouse up 1.9-2.5 percent.
"With some European markets closed and little if any interesting corporate news, it looks as if we are going nowhere very slowly today," said Howard Wheeldon, senior strategist at BGC Partners.
"As far as oil goes ... we've moved into a very new world and I don't think it's right to take a view that the oil price can be sustainable at below $100."
"We may be lower for a bit but you should still expect oil hovering closer -- and hopefully remaining -- to $120 and perhaps we can begin to live with that," he added.
Sterling stuck a 22-month low against the dollar, and the euro hit a six-month low against the U.S. currency.
In banking shares, Bradford & Bingley (BB.L: Quote, Profile, Research, Stock Buzz) was up 0.5 percent ahead of the close its 400 million pounds rights issue.
The Guardian newspaper said six high street banks could be left with stakes of at least 3 percent in Bradford & Bingley following its cash call. The six banks are Abbey, HBOS , HSBC , Lloyds TSB , Royal Bank of Scotland and Barclays .
Royal Bank of Scotland , Barclays and Lloyds TSB all traded positive as banks accounted for over 9 positive index points.
RSA Insurance Group extended large gains from the previous session to rise 1.5 percent on vague press reports of a possible bid for the company. RSA declined to comment.
U.S. industrial production and capacity utilisation data for July and the Reuters/University of Michigan August preliminary consumer sentiment are due to be released from 1315 GMT.
Many European markets are closed or are suffering weaker trading volumes due to Assumption Day.
MINERS LOSE GROUND
Mining companies tracked weaker metal prices MCU3 MZN3 with Antofagasta , Kazakhmys , Xstrata and Anglo American down 2-3.5 percent.
Further on the upside, Vodafone tacked on 0.8 percent after the Financial Times said it was in talks with TDC , Denmark's leading telecommunications company, about buying part of its stake in Polkomtel, Poland's second-biggest mobile phone operator.
Among midcaps, British recruitment company Michael Page International shed 2.1 percent after it rejected an approach worth 1.3 billion pounds ($2.43 billion) from Swiss rival Adecco, saying it materially undervalued the company. (Additional reporting by Dominic Lau; Editing by Hans Peters)
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* Commodities trade lower as energy, metal prices fall
* Falling crude price eases inflationary concerns
By Michael Taylor
LONDON, Aug 15 (Reuters) - Britain's blue-chip index rose early on Friday as lower oil prices helped reduce concerns over spiralling inflation, while dragging commodity stocks lower.
At 0735 GMT the FTSE 100 .FTSE was up 19.4 points, or 0.4 percent at 5,516.8 to extend a 0.9 percent rise in the previous session.
As U.S. crude CLc1 prices slipped to about $113 a barrel, heavyweight oil companies sagged. BP , Royal Dutch Shell and Tullow Oil shed between 0.2 and 0.7 percent.
BP and its partners in oil firm TNK-BP will meet next month in a bid to resolve a row over management and a share float, a source close to the board said, as the Russian co-owners moved closer to oust TNK-BP's head.
Adding to the negative oil sector sentiment, the International Energy Agency said oil demand in Western countries is set for its biggest fall in 25 years as the global economic slowdown intensifies and consumers respond to high prices, the Times newspaper reported.
But the falling energy prices helped buoy British Airways and Carnival , traders said, with the airliner and cruise ship operator 2.3 and 2.8 percent higher, respectively.
Retailers also rose as the inflationary threat weakened, with Next , Kingfisher and Carphone Warehouse up 1.9-2.5 percent.
"With some European markets closed and little if any interesting corporate news, it looks as if we are going nowhere very slowly today," said Howard Wheeldon, senior strategist at BGC Partners.
"As far as oil goes ... we've moved into a very new world and I don't think it's right to take a view that the oil price can be sustainable at below $100."
"We may be lower for a bit but you should still expect oil hovering closer -- and hopefully remaining -- to $120 and perhaps we can begin to live with that," he added.
Sterling stuck a 22-month low against the dollar, and the euro hit a six-month low against the U.S. currency.
In banking shares, Bradford & Bingley (BB.L: Quote, Profile, Research, Stock Buzz) was up 0.5 percent ahead of the close its 400 million pounds rights issue.
The Guardian newspaper said six high street banks could be left with stakes of at least 3 percent in Bradford & Bingley following its cash call. The six banks are Abbey, HBOS , HSBC , Lloyds TSB , Royal Bank of Scotland and Barclays .
Royal Bank of Scotland , Barclays and Lloyds TSB all traded positive as banks accounted for over 9 positive index points.
RSA Insurance Group extended large gains from the previous session to rise 1.5 percent on vague press reports of a possible bid for the company. RSA declined to comment.
U.S. industrial production and capacity utilisation data for July and the Reuters/University of Michigan August preliminary consumer sentiment are due to be released from 1315 GMT.
Many European markets are closed or are suffering weaker trading volumes due to Assumption Day.
MINERS LOSE GROUND
Mining companies tracked weaker metal prices MCU3 MZN3 with Antofagasta , Kazakhmys , Xstrata and Anglo American down 2-3.5 percent.
Further on the upside, Vodafone tacked on 0.8 percent after the Financial Times said it was in talks with TDC , Denmark's leading telecommunications company, about buying part of its stake in Polkomtel, Poland's second-biggest mobile phone operator.
Among midcaps, British recruitment company Michael Page International shed 2.1 percent after it rejected an approach worth 1.3 billion pounds ($2.43 billion) from Swiss rival Adecco, saying it materially undervalued the company. (Additional reporting by Dominic Lau; Editing by Hans Peters)
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Telegraaf publisher to cut 425 jobs after H1 loss
(Adds details, background, analyst comment)
AMSTERDAM, Aug 15 (Reuters) - Telegraaf Media Groep , the Netherlands' biggest newspaper publisher, said it needed to make "more drastic" cost reductions, including at least 425 job cuts, to battle rising costs and lower advertising sales.
TMG said on Friday an impairment charge and lower advertising revenues sent it to a first-half net loss of 175.5 million euros ($262 million), compared with a profit of 39.7 million a year earlier.
"In terms of the macro economic trends, it is clear that all signals are red," TMG said in a statement, saying it faced rising wage and energy costs, and it expected advertising revenues to remain under pressure in the second half.
The publisher said the job cuts, to boost long-term margins, would come from "normal attrition" and possibly layoffs, and it would need to take additional restructuring costs into acount from the second half.
Shares in TMG, owner of the country's biggest-selling daily De Telegraaf, were down 0.8 percent at 16.97 euros, while the Amsterdam small index was up 0.35 percent.
First-half sales fell 1.4 percent to 360 million euros. The earnings before interest, taxes and amortisation (EBITA) margin fell to 7.3 percent from 8.7 percent. TMG reiterated its 2008 margin target of at least 8 percent.
It is seeking annual cost savings of 40 million to 50 million euros as it targets a 15 percent EBITA margin.
"Although we expect the advertising market to deteriorate further, we see a number of positive company specific triggers for the next six to 12 months," Rabo analysts said in a note, adding that the savings exceeded its assumed 20 million euros.
The company was forced to exercise an option to buy 12 percent of German broadcaster ProSiebenSat.1 from private equity firms, resulting in a 185 million euros impairment charge.
The purchase of ProSiebenSat.1 shares was triggered after a holding company controlled by KKR [KKR.UL] and Permira exercised a put option, or a right to sell its stake in the German broadcaster, at 28.71 euros per share.
Since TMG is buying the stake well above ProSiebenSat.1's then share price of 5.42 euros, for a total 377 million euros, it is writing down the value of its stake.
As well as the job cuts, TMG said it would continue to divest unprofitable operations, seek acquisitions and outsource activities. (Reporting by Aaron Gray-Block; Editing by Quentin Webb)
Read more...
AMSTERDAM, Aug 15 (Reuters) - Telegraaf Media Groep , the Netherlands' biggest newspaper publisher, said it needed to make "more drastic" cost reductions, including at least 425 job cuts, to battle rising costs and lower advertising sales.
TMG said on Friday an impairment charge and lower advertising revenues sent it to a first-half net loss of 175.5 million euros ($262 million), compared with a profit of 39.7 million a year earlier.
"In terms of the macro economic trends, it is clear that all signals are red," TMG said in a statement, saying it faced rising wage and energy costs, and it expected advertising revenues to remain under pressure in the second half.
The publisher said the job cuts, to boost long-term margins, would come from "normal attrition" and possibly layoffs, and it would need to take additional restructuring costs into acount from the second half.
Shares in TMG, owner of the country's biggest-selling daily De Telegraaf, were down 0.8 percent at 16.97 euros, while the Amsterdam small index was up 0.35 percent.
First-half sales fell 1.4 percent to 360 million euros. The earnings before interest, taxes and amortisation (EBITA) margin fell to 7.3 percent from 8.7 percent. TMG reiterated its 2008 margin target of at least 8 percent.
It is seeking annual cost savings of 40 million to 50 million euros as it targets a 15 percent EBITA margin.
"Although we expect the advertising market to deteriorate further, we see a number of positive company specific triggers for the next six to 12 months," Rabo analysts said in a note, adding that the savings exceeded its assumed 20 million euros.
The company was forced to exercise an option to buy 12 percent of German broadcaster ProSiebenSat.1 from private equity firms, resulting in a 185 million euros impairment charge.
The purchase of ProSiebenSat.1 shares was triggered after a holding company controlled by KKR [KKR.UL] and Permira exercised a put option, or a right to sell its stake in the German broadcaster, at 28.71 euros per share.
Since TMG is buying the stake well above ProSiebenSat.1's then share price of 5.42 euros, for a total 377 million euros, it is writing down the value of its stake.
As well as the job cuts, TMG said it would continue to divest unprofitable operations, seek acquisitions and outsource activities. (Reporting by Aaron Gray-Block; Editing by Quentin Webb)
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Europe stocks gain from weak euro, oil; EADS jumps
* FTSEurofirst 300 gains 0.7 percent
* Banks, drug stocks top weighted gainers
* EADS, car stocks gain on weak euro
By Sitaraman Shankar
LONDON, Aug 15 (Reuters) - European shares rose in early trade on Friday, led by financial and pharmaceutical stocks, while the euro at six-month lows against the dollar boosted exporters and falling oil chipped away at inflation worries.
At 0835 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 1,194.33 points, on track for a loss of less than 0.5 percent for the week.
Banks were broadly higher, with UBS up 1.9 percent, Royal Bank of Scotland up 1.6 percent and Commerzbank up 2.3 percent.
Defensive pharmaceutical stocks also gained, with Sanofi-Aventis up 2.3 percent after Warren Buffett's Berkshire Hathaway investment group raised its stake.
GlaxoSmithkline gained 0.9 percent, Roche rose 1 percent and Elan added 5.5 percent.
Mining stocks tracked metal prices lower. Miners Xstrata , Anglo American , Rio Tinto and BHP Billiton were down 1.4-3.2 percent and the top four negative weights on the index as copper fell 2.2 percent and gold fell more than 3 percent.
Oil CLc1 fell $2.25 a barrel to below $113, a far cry from a record high above $147 set last month.
"Slowing commodity prices could stabilise the market but are not a trigger for a sharp move up," said Heinz-Gerd Sonnenschein, strategist at Postbank in Bonn, Germany.
Across Europe, Britain's FTSE .FTSE gained 0.7 percent, Germany's DAX .GDAXI rose 1 percent and France .FCHI rose 1.1 percent.
EADS JUMPS ON EURO, CARMAKERS STRONG
Falling oil and metal prices have taken the edge off inflation fears and raised the prospect of rate cuts in the region, which would reduce borrowing costs for companies and leave consumers with more money to buy companies' products.
And a weakening euro is supportive of exporters in the region as it makes their products more competitive in the international market.
The euro hit a six-month low against the dollar as worries over European economic growth combined with the effect of investors liquidating holdings in commodities and energy markets. Sterling struck a 22-month low against the greenback.
Gainers included aerospace and defence group EADS , which rose 4.4 percent, while carmaker BMW rose 2 percent and Renault gained 1 percent.
"As for the weakness of the euro, it needs a bit of time to reflect in company balance sheets -- over the next weeks and months, company comments may get more positive," said Sonnenschein.
Airline stocks gained from the lower oil price, with British Airways up 3.3 percent, Lufthansa up 2.1 percent and Air France-KLM up 2.5 percent.
(Reporting by Sitaraman Shankar; Editing by Erica Billingham)
Read more...
* Banks, drug stocks top weighted gainers
* EADS, car stocks gain on weak euro
By Sitaraman Shankar
LONDON, Aug 15 (Reuters) - European shares rose in early trade on Friday, led by financial and pharmaceutical stocks, while the euro at six-month lows against the dollar boosted exporters and falling oil chipped away at inflation worries.
At 0835 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 1,194.33 points, on track for a loss of less than 0.5 percent for the week.
Banks were broadly higher, with UBS up 1.9 percent, Royal Bank of Scotland up 1.6 percent and Commerzbank up 2.3 percent.
Defensive pharmaceutical stocks also gained, with Sanofi-Aventis up 2.3 percent after Warren Buffett's Berkshire Hathaway investment group raised its stake.
GlaxoSmithkline gained 0.9 percent, Roche rose 1 percent and Elan added 5.5 percent.
Mining stocks tracked metal prices lower. Miners Xstrata , Anglo American , Rio Tinto and BHP Billiton were down 1.4-3.2 percent and the top four negative weights on the index as copper fell 2.2 percent and gold fell more than 3 percent.
Oil CLc1 fell $2.25 a barrel to below $113, a far cry from a record high above $147 set last month.
"Slowing commodity prices could stabilise the market but are not a trigger for a sharp move up," said Heinz-Gerd Sonnenschein, strategist at Postbank in Bonn, Germany.
Across Europe, Britain's FTSE .FTSE gained 0.7 percent, Germany's DAX .GDAXI rose 1 percent and France .FCHI rose 1.1 percent.
EADS JUMPS ON EURO, CARMAKERS STRONG
Falling oil and metal prices have taken the edge off inflation fears and raised the prospect of rate cuts in the region, which would reduce borrowing costs for companies and leave consumers with more money to buy companies' products.
And a weakening euro is supportive of exporters in the region as it makes their products more competitive in the international market.
The euro hit a six-month low against the dollar as worries over European economic growth combined with the effect of investors liquidating holdings in commodities and energy markets. Sterling struck a 22-month low against the greenback.
Gainers included aerospace and defence group EADS , which rose 4.4 percent, while carmaker BMW rose 2 percent and Renault gained 1 percent.
"As for the weakness of the euro, it needs a bit of time to reflect in company balance sheets -- over the next weeks and months, company comments may get more positive," said Sonnenschein.
Airline stocks gained from the lower oil price, with British Airways up 3.3 percent, Lufthansa up 2.1 percent and Air France-KLM up 2.5 percent.
(Reporting by Sitaraman Shankar; Editing by Erica Billingham)
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Swatch upbeat on H2 as Olympics boosts sales
(Adds more CEO comment, shares)
By Katie Reid
ZURICH, Aug 15 (Reuters) - Swatch Group (UHR.VX: Quote, Profile, Research, Stock Buzz) gave a confident outlook for the rest of the year as the Olympic Games give the group an extra boost, lifting its shares despite a 9 percent fall in first-half net profit.
Demand for the group's watches and jewellery remained high thanks to buoyant markets in Asia but the weak dollar and a loss on investments hit its bottom line.
The world's largest watchmaker and official timekeeper at the Olympics said on Friday net profit before minorities fell to 418 million Swiss francs ($384.5 million), slightly above analysts' forecasts.
"Despite all the negative reports of the financial sector and the increase in costs worldwide, the group management still expects sales and profitability to show solid positive development in the second half-year," said the group, whose Omega brand is the official timekeeper of the Olympics.
Chief Executive Nick Hayek told Reuters the Olympics added to an overall strong performance.
"We see good double-digit growth at the moment at Omega," Hayek said. "We see an acceleration, especially in China."
Hayek told CNBC that group sales were growing at a double-digit rate in local currencies -- even in the United States -- and looked "sensational" overall in August.
Hayed said he expected double-digit growth in local currencies at the end of the year.
"The only penalty we have today is the exchange rate," Hayek said.
MIXED BAG
The company was hit by a financial loss as it wrote down the value of investments, which include an 8 percent stake in its Chinese retail partner Xinyu , whose shares have lost over 30 percent so far this year.
"The results were overall a mixed bag. Sales were slightly worse than expected. Outlook was solid and underlying profit was better than expected, while the financial writedowns were worse than expected," said Landsbanki Kepler analyst Jon Cox
"Sales are being driven by Asia Pacific and North America. Europe was solid. The results should support the stock today," he said.
By 0914 GMT, shares in the group, which have lost some 26 percent of their value so far this year, were trading 3.2 percent higher at 259.25 francs, outperforming a 0.7 percent rise in the Swiss blue-chip index .SSMI.
The group, which is best known for its colourful plastic Swatch watches and also owns higher-end brands such as Breguet and Blancpain, said sales in its watches and jewellery unit rose 17.7 percent at constant exchange rates to 2.3 billion francs.
"Once more the Middle East and Asia put in the strongest performance, growing by high double-digit rates," the group said.
Investors have been looking at luxury goods makers such as Swatch Group, Swiss rival Richemont and France's LVMH -- which have benefited from several years of strong growth powered by Asia -- for any signs of cooling in demand, but sales seem to be holding up so far.
Swatch's operating profit rose 16 percent to 593 million francs, while gross sales jumped 14 percent at constant exchange rates to 2.97 billion francs. The group's operating margin rose to 21 percent from 19.6 percent in the year-ago period.
Swatch trades at 11.5 times 2009 earnings, while Richemont trades at 13.7 times, according to Reuters data. (Reporting by Katie Reid; Editing by Erica Billingham, Hans Peters)
Read more...
By Katie Reid
ZURICH, Aug 15 (Reuters) - Swatch Group (UHR.VX: Quote, Profile, Research, Stock Buzz) gave a confident outlook for the rest of the year as the Olympic Games give the group an extra boost, lifting its shares despite a 9 percent fall in first-half net profit.
Demand for the group's watches and jewellery remained high thanks to buoyant markets in Asia but the weak dollar and a loss on investments hit its bottom line.
The world's largest watchmaker and official timekeeper at the Olympics said on Friday net profit before minorities fell to 418 million Swiss francs ($384.5 million), slightly above analysts' forecasts.
"Despite all the negative reports of the financial sector and the increase in costs worldwide, the group management still expects sales and profitability to show solid positive development in the second half-year," said the group, whose Omega brand is the official timekeeper of the Olympics.
Chief Executive Nick Hayek told Reuters the Olympics added to an overall strong performance.
"We see good double-digit growth at the moment at Omega," Hayek said. "We see an acceleration, especially in China."
Hayek told CNBC that group sales were growing at a double-digit rate in local currencies -- even in the United States -- and looked "sensational" overall in August.
Hayed said he expected double-digit growth in local currencies at the end of the year.
"The only penalty we have today is the exchange rate," Hayek said.
MIXED BAG
The company was hit by a financial loss as it wrote down the value of investments, which include an 8 percent stake in its Chinese retail partner Xinyu , whose shares have lost over 30 percent so far this year.
"The results were overall a mixed bag. Sales were slightly worse than expected. Outlook was solid and underlying profit was better than expected, while the financial writedowns were worse than expected," said Landsbanki Kepler analyst Jon Cox
"Sales are being driven by Asia Pacific and North America. Europe was solid. The results should support the stock today," he said.
By 0914 GMT, shares in the group, which have lost some 26 percent of their value so far this year, were trading 3.2 percent higher at 259.25 francs, outperforming a 0.7 percent rise in the Swiss blue-chip index .SSMI.
The group, which is best known for its colourful plastic Swatch watches and also owns higher-end brands such as Breguet and Blancpain, said sales in its watches and jewellery unit rose 17.7 percent at constant exchange rates to 2.3 billion francs.
"Once more the Middle East and Asia put in the strongest performance, growing by high double-digit rates," the group said.
Investors have been looking at luxury goods makers such as Swatch Group, Swiss rival Richemont and France's LVMH -- which have benefited from several years of strong growth powered by Asia -- for any signs of cooling in demand, but sales seem to be holding up so far.
Swatch's operating profit rose 16 percent to 593 million francs, while gross sales jumped 14 percent at constant exchange rates to 2.97 billion francs. The group's operating margin rose to 21 percent from 19.6 percent in the year-ago period.
Swatch trades at 11.5 times 2009 earnings, while Richemont trades at 13.7 times, according to Reuters data. (Reporting by Katie Reid; Editing by Erica Billingham, Hans Peters)
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China's central bank confident on growth outlook
(Adds details)
BEIJING, Aug 15 (Reuters) - China's economy is on a solid footing, despite weakening global demand, thanks to long-standing drivers of growth such as urbanisation, the central bank said on Friday.
As a result, the world's fourth-largest economy is likely to retain its momentum in the second half of the year after growing 10.4 percent in the first six months, the People's Bank of China said.
In its second-quarter monetary report, the PBOC said Chinese exports were likely to weaken as clouds gathered over the world economy.
It warned of growing risks of recession in the euro zone and said the United States was likely to go through a long period of low growth as its economy adjusts to past excesses.
"Currently, the international environment is getting tougher and more complicated. Many economies face a dilemma of having to stabilise prices while safeguarding growth," the report said.
China, too, still faced many structural problems and quite serious inflationary pressure, a combination that made it very difficult for policy makers to steer the economy.
"But with the combined forces of industrialisation, urbanisation, internationalisation and the upgrading of consumption and of industry, our economy will continue to enjoy robust internal vigour and strength," the PBOC said.
The report gave few clues as to the direction of policy.
The PBOC restated its long-standing formula that the yuan's exchange rate would be kept basically stable at a reasonable, balanced level and it said monetary policy would be fine-tuned in line with domestic and global conditions.
The PBOC also reaffirmed its commitment to fighting inflation alongside ensuring stable growth.
It said inflation as measured by the GDP deflator, the broadest gauge of prices pressures in the economy, was 8.6 percent in the first half of 2008, up from 4.2 percent a year earlier.
"The GDP deflator has been rising since the second quarter of 2007. We need to pay close attention to the trend," the report said. (Reporting by Eadie Chen and Langi Chiang; Writing by Alan Wheatley, Editing by Jacqueline Wong)
Read more...
BEIJING, Aug 15 (Reuters) - China's economy is on a solid footing, despite weakening global demand, thanks to long-standing drivers of growth such as urbanisation, the central bank said on Friday.
As a result, the world's fourth-largest economy is likely to retain its momentum in the second half of the year after growing 10.4 percent in the first six months, the People's Bank of China said.
In its second-quarter monetary report, the PBOC said Chinese exports were likely to weaken as clouds gathered over the world economy.
It warned of growing risks of recession in the euro zone and said the United States was likely to go through a long period of low growth as its economy adjusts to past excesses.
"Currently, the international environment is getting tougher and more complicated. Many economies face a dilemma of having to stabilise prices while safeguarding growth," the report said.
China, too, still faced many structural problems and quite serious inflationary pressure, a combination that made it very difficult for policy makers to steer the economy.
"But with the combined forces of industrialisation, urbanisation, internationalisation and the upgrading of consumption and of industry, our economy will continue to enjoy robust internal vigour and strength," the PBOC said.
The report gave few clues as to the direction of policy.
The PBOC restated its long-standing formula that the yuan's exchange rate would be kept basically stable at a reasonable, balanced level and it said monetary policy would be fine-tuned in line with domestic and global conditions.
The PBOC also reaffirmed its commitment to fighting inflation alongside ensuring stable growth.
It said inflation as measured by the GDP deflator, the broadest gauge of prices pressures in the economy, was 8.6 percent in the first half of 2008, up from 4.2 percent a year earlier.
"The GDP deflator has been rising since the second quarter of 2007. We need to pay close attention to the trend," the report said. (Reporting by Eadie Chen and Langi Chiang; Writing by Alan Wheatley, Editing by Jacqueline Wong)
Read more...
Fresh dollar surge knocks commodities lower
By Natsuko Waki
LONDON (Reuters) - A fresh surge in the dollar drove commodities lower on Friday, knocking gold and oil prices and weighing on world stocks as evidence mounted that U.S. economic problems are spreading to the rest of the world.
The dollar struck a fresh six-month high against major currencies as shrinking economies in the euro zone and Japan contrasted with resilient growth in the United States.
This helped push oil below $114 a barrel while gold fell below $800 an ounce to a 2008 low. Other commodities from silver to vegoil tumbled as evidence of economic weakness fanned concerns that demand would weaken.
Weakening commodities had a mixed effect on equities with European and Japanese bourses gaining while emerging stocks fell back towards this week's one-year low.
"The bears are back in town. They are here in full force and doing lots of damage. It's going to be a pretty ugly Friday and Monday," said Edward Meir, MF Global analyst in Singapore, of the commodities markets.
"The root causes are many, but beyond the macroeconomic triggers, the immediate reason for the slide is the dollar."
Gold fell as low as $787.10 an ounce, its lowest since December, while silver and spot palladium lost 5 percent on the day.
Broader commodities .CRB fell towards this week's four-month low, having posted their biggest monthly loss in 10 years last month.
U.S. light crude was down 1.3 percent at $113.52 a barrel, nearly $35 below its record peak hit only last month.
GOLDMAN BACKS DOLLAR
The dollar rose as high as $1.4720 per euro a six-month high, while it hit a 22-month peak against sterling of $1.8540.
"The dollar has bottomed!" Goldman Sachs said in a note to clients.
"The rapid weakening of OECD growth outside the U.S., a clear technical break in many dollar crosses and much lower oil prices are powerful signs of improving dollar fundamentals."
Data this week showed the euro zone joined Japan to move half way into a recession -- technically defined as two successive quarters of growth contraction -- after their gross domestic product fell in the second quarter.
The MSCI main world equity index .MIWD00000PUS slipped 0.3 percent, driven by weakness in emerging stocks .MSCIEF which fell 0.7 percent.
The FTSEurofirst 300 index rose half a percent as investors took heart from falling oil and commodity prices -- which would lead to lower costs for corporates.
Emerging sovereign spreads tightened 2 basis points.
Government bonds attracted safe-haven demand, with the September Bund future FGBLU8 rising 15 ticks.
(Editing by Mike Peacock)
Read more...
LONDON (Reuters) - A fresh surge in the dollar drove commodities lower on Friday, knocking gold and oil prices and weighing on world stocks as evidence mounted that U.S. economic problems are spreading to the rest of the world.
The dollar struck a fresh six-month high against major currencies as shrinking economies in the euro zone and Japan contrasted with resilient growth in the United States.
This helped push oil below $114 a barrel while gold fell below $800 an ounce to a 2008 low. Other commodities from silver to vegoil tumbled as evidence of economic weakness fanned concerns that demand would weaken.
Weakening commodities had a mixed effect on equities with European and Japanese bourses gaining while emerging stocks fell back towards this week's one-year low.
"The bears are back in town. They are here in full force and doing lots of damage. It's going to be a pretty ugly Friday and Monday," said Edward Meir, MF Global analyst in Singapore, of the commodities markets.
"The root causes are many, but beyond the macroeconomic triggers, the immediate reason for the slide is the dollar."
Gold fell as low as $787.10 an ounce, its lowest since December, while silver and spot palladium lost 5 percent on the day.
Broader commodities .CRB fell towards this week's four-month low, having posted their biggest monthly loss in 10 years last month.
U.S. light crude was down 1.3 percent at $113.52 a barrel, nearly $35 below its record peak hit only last month.
GOLDMAN BACKS DOLLAR
The dollar rose as high as $1.4720 per euro a six-month high, while it hit a 22-month peak against sterling of $1.8540.
"The dollar has bottomed!" Goldman Sachs said in a note to clients.
"The rapid weakening of OECD growth outside the U.S., a clear technical break in many dollar crosses and much lower oil prices are powerful signs of improving dollar fundamentals."
Data this week showed the euro zone joined Japan to move half way into a recession -- technically defined as two successive quarters of growth contraction -- after their gross domestic product fell in the second quarter.
The MSCI main world equity index .MIWD00000PUS slipped 0.3 percent, driven by weakness in emerging stocks .MSCIEF which fell 0.7 percent.
The FTSEurofirst 300 index rose half a percent as investors took heart from falling oil and commodity prices -- which would lead to lower costs for corporates.
Emerging sovereign spreads tightened 2 basis points.
Government bonds attracted safe-haven demand, with the September Bund future FGBLU8 rising 15 ticks.
(Editing by Mike Peacock)
Read more...
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* HSI closes at 5 month low; HKEx at 14-month low
* Resource stocks drag on commodity price pullback
* Foxconn slumps on bleak handset demand outlook
By Parvathy Ullatil
(updates to close)
HONG KONG, Aug 15 (Reuters) - Hong Kong shares fell 1.1 percent on Friday, with the main index closing at its lowest level in nearly five months, after a spate of disappointing earnings announcements triggered analyst downgrades.
"With weak corporate earnings pouring in almost everyday and we have been seeing heavy selling since the beginning of the month," Alex Tang, research director with Core Pacific-Yamaichi said.
The blue chip Hang Seng Index .HSI has given up more than 7 percent since end-July and 3.3 percent this week.
"Funds have taken to rotational selling with Chinese banks going first, then conglomerates, HKEx and utilities today. Property stocks seem next in line, with a few big results expected next week," said Tang.
Offshore oil producer CNOOC fell 4.3 percent, leading losses on the main index, as it tracked a retreat in crude oil prices. The stock had risen 7.5 percent on Wednesday.
Gold miner Zijin Mining dropped 6.9 percent after the international gold price tumbled 3 percent and slipped below $800 an ounce for the first time since December 2007.
The world's largest contract manufacturer of cell phones, Foxconn International Holdings , plunged 9.4 percent to HK$7.87, falling in line with Taiwanese parent Hon Hai Precision on growth concerns.
JPMorgan slashed its target price on Foxconn International to HK$8 from HK$13 on Thursday, citing weak outlook for handset market in the second half.
The Hang Seng Index .HSI ended the morning session down 232.13 points at 21,160.58.
Market watchers see the next major support on the index at its March 2008 low of 20,600 points.
Shares in bourse operator Hong Kong Exchanges & Clearing fell 0.8 percent to close at a 14-month low of HK$100.20 after posting a 6 percent dip in second quarter earninsg and warning of tougher times ahead.
Hutchison Whampoa , billionaire Li Ka-shing's flagship conglomerate, rose 2 percent ahead of an earnings announcement due next week.
Citigroup forecast a net profit of HK$6.99 billion for the first half and said the company is seen meeting its guidance for the first time since it launched 3G services in 2003.
Index heavyweight China Mobile fell 1.4 percent. Morgan Stanley removed the stock from its Global Emerging Markets Equity Strategy focus list.
Mainboard turnover fell to a very low HK$49 billion ($3.4 billion) from HK$61.1 billion on Thursday.
The China Enterprises Index .HSCE of top locally listed Chinese firms had fallen 0.7 percent.
Melco International Development advanced 6.7 percent after the company said its Nasdaq-listed casino-operator Melco Crown Entertainment MPEL.N trimmed its second-quarter loss to US$5.7 million against a US$69.2 million loss last year.
(Reporting by Parvathy Ullatil; Editing by Tom Miles)
Read more...
* Resource stocks drag on commodity price pullback
* Foxconn slumps on bleak handset demand outlook
By Parvathy Ullatil
(updates to close)
HONG KONG, Aug 15 (Reuters) - Hong Kong shares fell 1.1 percent on Friday, with the main index closing at its lowest level in nearly five months, after a spate of disappointing earnings announcements triggered analyst downgrades.
"With weak corporate earnings pouring in almost everyday and we have been seeing heavy selling since the beginning of the month," Alex Tang, research director with Core Pacific-Yamaichi said.
The blue chip Hang Seng Index .HSI has given up more than 7 percent since end-July and 3.3 percent this week.
"Funds have taken to rotational selling with Chinese banks going first, then conglomerates, HKEx and utilities today. Property stocks seem next in line, with a few big results expected next week," said Tang.
Offshore oil producer CNOOC fell 4.3 percent, leading losses on the main index, as it tracked a retreat in crude oil prices. The stock had risen 7.5 percent on Wednesday.
Gold miner Zijin Mining dropped 6.9 percent after the international gold price tumbled 3 percent and slipped below $800 an ounce for the first time since December 2007.
The world's largest contract manufacturer of cell phones, Foxconn International Holdings , plunged 9.4 percent to HK$7.87, falling in line with Taiwanese parent Hon Hai Precision on growth concerns.
JPMorgan slashed its target price on Foxconn International to HK$8 from HK$13 on Thursday, citing weak outlook for handset market in the second half.
The Hang Seng Index .HSI ended the morning session down 232.13 points at 21,160.58.
Market watchers see the next major support on the index at its March 2008 low of 20,600 points.
Shares in bourse operator Hong Kong Exchanges & Clearing fell 0.8 percent to close at a 14-month low of HK$100.20 after posting a 6 percent dip in second quarter earninsg and warning of tougher times ahead.
Hutchison Whampoa , billionaire Li Ka-shing's flagship conglomerate, rose 2 percent ahead of an earnings announcement due next week.
Citigroup forecast a net profit of HK$6.99 billion for the first half and said the company is seen meeting its guidance for the first time since it launched 3G services in 2003.
Index heavyweight China Mobile fell 1.4 percent. Morgan Stanley removed the stock from its Global Emerging Markets Equity Strategy focus list.
Mainboard turnover fell to a very low HK$49 billion ($3.4 billion) from HK$61.1 billion on Thursday.
The China Enterprises Index .HSCE of top locally listed Chinese firms had fallen 0.7 percent.
Melco International Development advanced 6.7 percent after the company said its Nasdaq-listed casino-operator Melco Crown Entertainment MPEL.N trimmed its second-quarter loss to US$5.7 million against a US$69.2 million loss last year.
(Reporting by Parvathy Ullatil; Editing by Tom Miles)
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Obama Bests McCain Among Bush-Backing Bankers, Drug Companies
By Jonathan D. Salant
Aug. 15 (Bloomberg) -- John McCain's presidential campaign lacks the support of several Republican-leaning industries central to President George W. Bush's record-setting fundraising four years ago.
Democrat Barack Obama has captured $9.6 million in donations from employees working for securities, mortgage and drug companies, compared with McCain's $6.6 million. In 2004, people in those industries gave $10.6 million to Bush and $5.4 million to Democratic nominee John Kerry, according to the Center for Responsive Politics, a research group in Washington.
McCain's inability to match Bush's performance in attracting traditional Republican donors illustrates the fundraising gap between the candidates. Obama is seeking to bring in double or triple the $84.1 million in federal funds that McCain will have to spend in the final two months before the Nov. 4 election. In June, Obama declined to accept public financing, which caps his spending at the federal allotment.
Not all Republicans ``are opening their wallets to a McCain presidential run,'' said Mallory Factor, a banker who co-hosts a weekly meeting of conservatives in New York and raised more than $1 million for Bush and his party four years ago.
Some Republicans who ``support certain principles'' are shunning McCain, Factor said, citing the Arizona senator's initial opposition to Bush's tax cuts and his authorship of a campaign-finance law opposed by many in his party.
Iraq Issue
Disdain for McCain is combined with enthusiasm for Obama in some quarters. Many of the brokers, bankers and traders in the securities industry, who contributed $9.2 million to Bush and $4.8 million to Kerry four years ago, are now Obama supporters, motivated by issues such as the Illinois senator's opposition to the Iraq War. Obama has received $8.9 million and McCain $6.3 million from the industry from Jan. 1, 2007 through June 30 of this year, according to the center.
Their support comes even as Obama seeks higher taxes for wealthy Americans. He's pushing a rollback of Bush's income tax cuts for families making more than $250,000 a year. The average salary on Wall Street was $339,910 in 2006, according to the New York State Comptroller.
``Many people on Wall Street believed they had made enough money in life and were more concerned about the war and the generational effect that Obama brings to this election,'' said Richard Hunt, a Washington-based lobbyist for the Securities Industry and Financial Markets Association, which represents Goldman Sachs Group Inc. and Merrill Lynch & Co.
Goldman, Merrill
Employees of New York-based Goldman Sachs, the biggest U.S. securities firm by market value, were Obama's top donors among all companies through June. McCain's top backers work at New York-based Merrill Lynch, according to the center.
The mortgage industry also favors Obama over McCain after supporting Bush over Kerry. Employees in the industry, including those working for Freddie Mac and Fannie Mae, gave $278,937 to Obama and $133,475 to McCain. In 2004, they gave Bush $867,169 and Kerry $294,252.
Obama has called for programs to refinance mortgages, offer credits to homeowners who don't itemize, increase federal and state scrutiny of mortgage fraud and allow bankruptcy judges to change mortgage terms. McCain focuses primarily on refinancing loans.
`Unknown' McCain
``At least the mortgage industry knows what will be coming down the pike with Obama,'' said former Mortgage Bankers Association lobbyist Howard Glaser, who now runs his own consulting firm. ``McCain is more of an unknown for them.''
Obama, 47, also fares better than McCain among donors in the pharmaceutical industry. While drug-company executives and employees have given 52 percent of the industry's money for the 2008 elections to Republicans, Obama has received more than three times as much as McCain, $450,094 to $132,575. Four years ago, donations to Bush almost doubled Kerry's, $516,839 to $280,688.
McCain, 71, has said the industry charges Medicare and Medicaid too much for their products, and said in a debate earlier this year that ``the power of the pharmaceutical companies'' keeps drug prices high.
Republican lobbyist John Feehery said the lack of some industry donations helps McCain.
``He does go after these companies and they don't like it,'' Feehery said of McCain. ``This solidifies McCain's reputation as someone who fights special interests.''
Oil and Gas
Even so, the presumptive Republican nominee has won support from many industries that traditionally support his party. Employees working for oil and gas companies gave him $1.4 million through June 30, almost four times the $398,765 they gave to Obama. Four years ago, they gave $2.7 million to Bush and $313,860 to Kerry. McCain supports removing the federal moratorium on offshore oil drilling.
Transportation industry employees supported McCain by a 2-1 margin over Obama, $1.7 million to $814,382, as they gave 61 percent of their money to Republicans. Four years ago, they backed Bush over Kerry by $4.8 million to $685,041. McCain is a senior member of the Senate Commerce Committee, which oversees airlines and railroads.
Feehery said that industries now snubbing his party will start giving to Republicans again.
``They'll be hedging their bets and as McCain looks stronger, they'll be giving just as much money to him as they have to Obama,'' he said.
To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net.
Read more...
Hong Kong's Economic Growth Is Slowest in Five Years
By Nipa Piboontanasawat
Aug. 15 (Bloomberg) -- Hong Kong's growth cooled more than economists expected to the slowest pace since the third quarter of 2003, when the economy began to recover after shrinking during the severe acute respiratory syndrome epidemic.
Gross domestic product rose 4.2 percent in the second quarter from a year earlier, after gaining a revised 7.3 percent in the previous three months, the government said today at a press conference. That compared with the 5.9 percent median estimate of 15 economists surveyed by Bloomberg News. None had forecast such a small increase.
A global slowdown and a more expensive yuan have curbed demand for Chinese-made exports shipped through Hong Kong, a trade hub for China. Rising prices and a stock-market decline have curtailed consumer spending and dimmer growth prospects have damped business sentiment.
``This is a broad-based slowdown -- the spillover of the global slowdown has directly impacted Hong Kong's economic growth through trade and indirectly through domestic sentiment and consumption,'' said Kelvin Lau, an economist at Standard Chartered Bank Plc in Hong Kong. ``This is the start of a down cycle and we will see things slowing down for at least a couple of quarters ahead.''
Growth in exports, investment and domestic consumption all slowed, today's report showed.
Singapore's Slowdown
From the first quarter, Hong Kong's economy contracted a seasonally adjusted 1.4 percent in the three months ended June 30, the government said.
Singapore's economy grew at the slowest pace in five years in the second quarter, a report this week showed. The expansion was 2.1 percent from a year earlier.
The global economic slowdown, financial market ``turbulence,'' high commodity prices and rising inflation across Asia are challenges for Hong Kong's economy, the government said in a statement. ``The macroeconomic adjustment measures in the mainland economy also need to be closely watched,'' it said.
``Everything has slowed in the second quarter,'' said Paul Tang, chief economist at Bank of East Asia Ltd. in Hong Kong. ``Looking ahead, sluggish exports and domestic consumption will continue to drag economic growth throughout this year.''
Hong Kong Exchanges & Clearing Ltd., operator of Asia's third-biggest stock market, posted on Aug. 13 its first drop in quarterly profit in three years, as the absence of one-off gains countered revenue from higher trading volume.
Growth Forecast
The government kept today its forecast for economic growth of between 4 percent and 5 percent this year. Last year's expansion was 6.4 percent. Inflation will probably accelerate to 4.2 percent this year from 2 percent in 2007, the government said, raising its estimate from 3.4 percent.
Hong Kong's exports of goods rose 4.4 percent in the second quarter from a year earlier, after gaining 8.3 percent in the previous three months, the government said.
Concern that a global slowdown will erode company profits has dragged the key Hang Seng Index of shares down 24 percent this year. In the housing market, the number of residential units changing hands fell 19.1 percent in July from a year earlier.
Inflation surged 6.1 percent in June, more than triple the 2 percent pace in all of 2007, as a fixed exchange rate boosted the cost of imports and food prices climbed in China, the city's major supplier. Rents, utility and transportation prices have also increased.
Consumer confidence fell in the second quarter to the lowest level in 3 1/2 years, according to a report published in June by MasterCard Inc., the U.S. credit-card company.
Business Investment
Household spending rose 3.1 percent in the second quarter from a year earlier, after gaining 7.9 percent in the previous three months, the government said. Business investment increased 4.3 percent after climbing 9.9 percent.
Still, unemployment at a decade low, reduced interest rates, tax cuts and government subsidies may give some support to domestic consumption.
Hong Kong Chief Executive Donald Tsang last month announced HK$11 billion ($1.4 billion) of inflation relief, including electricity subsidies and a food allowance for the poor. In February, Financial Secretary John Tsang cut salary and profit taxes, scrapped beer and wine duties and waived property rates.
The seasonally adjusted jobless rate was at 3.3 percent in the second quarter. Banks in the city have cut interest rates seven times between September and March, following similar moves by the U.S. Federal Reserve because of a fixed exchange rate.
To contact the reporter on this story: Nipa Piboontanasawat in Hong Kong at npiboontanas@bloomberg.netRead more...
Cytos shares surge on Pfizer vaccine deal
(Adds details, analyst comments, shares, background)
ZURICH, Aug 15 (Reuters) - Cytos has entered a vaccine deal with Pfizer , sending its shares up more than 9 percent.
The Swiss biotech company will receive an upfront payment of 150 million Swiss francs ($138 million)and potential further milestones, Cytos said on Friday.
In return, the agreement will allow the U.S. drug maker to acquire world-wide exclusive rights to commercialize certain vaccines, based on Cytos Biotechnology's Immunodrug technology.
Cytos shares were up by 9.2 percent at 57.00 Swiss francs by 0815 GMT.
Analysts at bank Vontobel said in a note the deal showed that the Immunodrug technology is increasingly recognized in the industry as an excellent technology. The exclusive global research, option and license agreement aims to research, develop, manufacture and commercialize novel vaccines for a defined number of human diseases, Cytos said.
The deal also comprises manufacturing technology transfer fees and Cytos will be eligible for research funding and royalties on net sales of products.
(Reporting by Andrew Thompson in Zurich; Editing by Erica Billingham)
Read more...
ZURICH, Aug 15 (Reuters) - Cytos has entered a vaccine deal with Pfizer , sending its shares up more than 9 percent.
The Swiss biotech company will receive an upfront payment of 150 million Swiss francs ($138 million)and potential further milestones, Cytos said on Friday.
In return, the agreement will allow the U.S. drug maker to acquire world-wide exclusive rights to commercialize certain vaccines, based on Cytos Biotechnology's Immunodrug technology.
Cytos shares were up by 9.2 percent at 57.00 Swiss francs by 0815 GMT.
Analysts at bank Vontobel said in a note the deal showed that the Immunodrug technology is increasingly recognized in the industry as an excellent technology. The exclusive global research, option and license agreement aims to research, develop, manufacture and commercialize novel vaccines for a defined number of human diseases, Cytos said.
The deal also comprises manufacturing technology transfer fees and Cytos will be eligible for research funding and royalties on net sales of products.
(Reporting by Andrew Thompson in Zurich; Editing by Erica Billingham)
Read more...
Hong Kong's Economic Growth Is Slowest in Five Years
By Nipa Piboontanasawat
Aug. 15 (Bloomberg) -- Hong Kong's growth cooled more than economists expected to the slowest pace since the third quarter of 2003, when the economy began to recover after shrinking during the severe acute respiratory syndrome epidemic.
Gross domestic product rose 4.2 percent in the second quarter from a year earlier, after gaining a revised 7.3 percent in the previous three months, the government said today at a press conference. That compared with the 5.9 percent median estimate of 15 economists surveyed by Bloomberg News. None had forecast such a small increase.
A global slowdown and a more expensive yuan have curbed demand for Chinese-made exports shipped through Hong Kong, a trade hub for China. Rising prices and a stock-market decline have curtailed consumer spending and dimmer growth prospects have damped business sentiment.
``This is a broad-based slowdown -- the spillover of the global slowdown has directly impacted Hong Kong's economic growth through trade and indirectly through domestic sentiment and consumption,'' said Kelvin Lau, an economist at Standard Chartered Bank Plc in Hong Kong. ``This is the start of a down cycle and we will see things slowing down for at least a couple of quarters ahead.''
Growth in exports, investment and domestic consumption all slowed, today's report showed.
Singapore's Slowdown
From the first quarter, Hong Kong's economy contracted a seasonally adjusted 1.4 percent in the three months ended June 30, the government said.
Singapore's economy grew at the slowest pace in five years in the second quarter, a report this week showed. The expansion was 2.1 percent from a year earlier.
The global economic slowdown, financial market ``turbulence,'' high commodity prices and rising inflation across Asia are challenges for Hong Kong's economy, the government said in a statement. ``The macroeconomic adjustment measures in the mainland economy also need to be closely watched,'' it said.
``Everything has slowed in the second quarter,'' said Paul Tang, chief economist at Bank of East Asia Ltd. in Hong Kong. ``Looking ahead, sluggish exports and domestic consumption will continue to drag economic growth throughout this year.''
Hong Kong Exchanges & Clearing Ltd., operator of Asia's third-biggest stock market, posted on Aug. 13 its first drop in quarterly profit in three years, as the absence of one-off gains countered revenue from higher trading volume.
Growth Forecast
The government kept today its forecast for economic growth of between 4 percent and 5 percent this year. Last year's expansion was 6.4 percent. Inflation will probably accelerate to 4.2 percent this year from 2 percent in 2007, the government said, raising its estimate from 3.4 percent.
Hong Kong's exports of goods rose 4.4 percent in the second quarter from a year earlier, after gaining 8.3 percent in the previous three months, the government said.
Concern that a global slowdown will erode company profits has dragged the key Hang Seng Index of shares down 24 percent this year. In the housing market, the number of residential units changing hands fell 19.1 percent in July from a year earlier.
Inflation surged 6.1 percent in June, more than triple the 2 percent pace in all of 2007, as a fixed exchange rate boosted the cost of imports and food prices climbed in China, the city's major supplier. Rents, utility and transportation prices have also increased.
Consumer confidence fell in the second quarter to the lowest level in 3 1/2 years, according to a report published in June by MasterCard Inc., the U.S. credit-card company.
Business Investment
Household spending rose 3.1 percent in the second quarter from a year earlier, after gaining 7.9 percent in the previous three months, the government said. Business investment increased 4.3 percent after climbing 9.9 percent.
Still, unemployment at a decade low, reduced interest rates, tax cuts and government subsidies may give some support to domestic consumption.
Hong Kong Chief Executive Donald Tsang last month announced HK$11 billion ($1.4 billion) of inflation relief, including electricity subsidies and a food allowance for the poor. In February, Financial Secretary John Tsang cut salary and profit taxes, scrapped beer and wine duties and waived property rates.
The seasonally adjusted jobless rate was at 3.3 percent in the second quarter. Banks in the city have cut interest rates seven times between September and March, following similar moves by the U.S. Federal Reserve because of a fixed exchange rate.
To contact the reporter on this story: Nipa Piboontanasawat in Hong Kong at npiboontanas@bloomberg.netRead more...
Philippines Says June Remittances Rise 30% to Record
By Karl Lester M. Yap and Francisco Alcuaz Jr.
Aug. 15 (Bloomberg) -- Remittances from Philippine citizens working overseas rose at the fastest pace in 14 months in June as more people found jobs as nurses, seamen and engineers abroad.
Money sent back to the Philippines jumped 30 percent from a year earlier to $1.5 billion, the highest since records began in 1989, the central bank said in a statement in Manila today. Remittances grew 15.6 percent in May.
Remittances, equivalent to about 10 percent of the $118 billion economy, are helping sustain consumer spending as the fastest inflation in more than 16 years erodes household incomes. Filipinos may be sending more money home after an 8.8 percent decline in the peso this year boosted foreign-currency earnings.
``There are more workers going abroad and they're higher skilled,'' said Luz Lorenzo, an economist at ATR-KimEng Securities Inc. in Manila. Filipinos overseas may be accelerating remittances because ``they expect the dollar to weaken again. They can't hedge but they can time'' when they send funds home.
The number of Filipinos who got jobs overseas rose 33.5 percent to 640,401 in the first six months of the year, the central bank said today. The Philippine unemployment rate was 8 percent in April, the highest after Indonesia in the Asia- Pacific region, according to Bloomberg data.
Slowing global growth may limit jobs abroad as companies lay off workers and freeze expansion, reducing the amount of money expatriates can send home in the coming months. Half of the Philippines' remittances come from the U.S., where tumbling home prices, mounting job losses and credit restraints are threatening growth.
Doctors, Nurses
Philippine remittance growth in 2008 may slip to about half of last year's 13.2 percent pace as the global economy cools, the Asian Development Bank said in March.
Still, ``Philippine workers aren't in the sectors that are weak,'' said Lorenzo. ``Filipinos are usually teachers, nurses, doctors, caregivers. They're relatively recession-resistant.''
Funds sent home by the more than 8 million Filipinos living abroad climbed 17.2 percent to $8.2 billion in the first half of 2008 from a year earlier.
To contact the reporter on this story: Karl Lester M. Yap in Manila at Kyap5@bloomberg.net;
Read more...
Aug. 15 (Bloomberg) -- Remittances from Philippine citizens working overseas rose at the fastest pace in 14 months in June as more people found jobs as nurses, seamen and engineers abroad.
Money sent back to the Philippines jumped 30 percent from a year earlier to $1.5 billion, the highest since records began in 1989, the central bank said in a statement in Manila today. Remittances grew 15.6 percent in May.
Remittances, equivalent to about 10 percent of the $118 billion economy, are helping sustain consumer spending as the fastest inflation in more than 16 years erodes household incomes. Filipinos may be sending more money home after an 8.8 percent decline in the peso this year boosted foreign-currency earnings.
``There are more workers going abroad and they're higher skilled,'' said Luz Lorenzo, an economist at ATR-KimEng Securities Inc. in Manila. Filipinos overseas may be accelerating remittances because ``they expect the dollar to weaken again. They can't hedge but they can time'' when they send funds home.
The number of Filipinos who got jobs overseas rose 33.5 percent to 640,401 in the first six months of the year, the central bank said today. The Philippine unemployment rate was 8 percent in April, the highest after Indonesia in the Asia- Pacific region, according to Bloomberg data.
Slowing global growth may limit jobs abroad as companies lay off workers and freeze expansion, reducing the amount of money expatriates can send home in the coming months. Half of the Philippines' remittances come from the U.S., where tumbling home prices, mounting job losses and credit restraints are threatening growth.
Doctors, Nurses
Philippine remittance growth in 2008 may slip to about half of last year's 13.2 percent pace as the global economy cools, the Asian Development Bank said in March.
Still, ``Philippine workers aren't in the sectors that are weak,'' said Lorenzo. ``Filipinos are usually teachers, nurses, doctors, caregivers. They're relatively recession-resistant.''
Funds sent home by the more than 8 million Filipinos living abroad climbed 17.2 percent to $8.2 billion in the first half of 2008 from a year earlier.
To contact the reporter on this story: Karl Lester M. Yap in Manila at Kyap5@bloomberg.net;
Read more...
Colombia Central Bank May Keep Rate at 10% as Economy Slows
By Helen Murphy
Aug. 15 (Bloomberg) -- Colombia's central bank will probably keep borrowing costs unchanged as policy makers bet a slowing economy and 16 interest rate increases in the past 28 months are enough to stem inflation.
The Bogota-based bank will hold the interbank rate at a seven-year high of 10 percent, according to 32 of 36 economists surveyed by Bloomberg. The other four economists expect the rate to increase a quarter point to 10.25 percent.
Colombian economic growth slowed to 4.1 percent in the first quarter from 9.1 percent a year ago, sparking criticism from President Alvaro Uribe that monetary policy is too harsh. Easing commodity prices, the biggest driver of inflation in Colombia, will lower pressure on policy makers to raise rates further.
``Economic growth is moderating, international food and fuel prices are coming down, and Colombia's central bank is definitely not behind the tightening curve,'' said Alexandre Lintz, an economist at BNP Paribas in Sao Paulo. ``It has already done what's needed to bring inflation down.''
Policy makers have missed their inflation target for two years and are unlikely to meet their 3.5 percent to 4.5 percent range for 2008. Annual inflation quickened to 7.52 percent in July, the highest since May 2003, and may accelerate in August after a two-week strike by truckers halted deliveries and drove the prices of fruits and vegetables higher.
Increasing Criticism
Policy makers have increased the rate from 7.5 percent at the start of 2007 and bank chief Jose Dario Uribe is coming under increasing criticism from government officials. Colombia's President Uribe says high rates hurt economic growth and strengthen the peso, curbing demand for Colombian exports and forcing companies to fire workers.
``The last increase was enough to calm inflation expectations,'' said Liliana Rojas, an economist at Bogota- based Vision de Valores SA. ``The decision to raise rates was the best decision the board could have made and so to increase further now would have the opposite effect and scare the market into thinking inflation is going to worsen.''
The central bank counters it needs to anchor inflation expectations and boost its credibility. Still, minutes of the bank's July 25 meeting show policy makers discussed the ``dilemma'' of bolstering economic growth and stemming inflation over the long term.
``Inflation expectations are the biggest concern for the bank right now, but economic activity is slowing more than expected and will continue to slow,'' said Camilo Perez, chief analyst at Banco de Bogota SA.
Presidential Worry
In a bid to slow the Colombian currency's 54 percent rally over the past five years, the central bank in June said it would make daily purchases of up to $20 million a day in the currency market.
President Uribe has used his six years in office to battle drug-funded paramilitary and guerrilla fighters, making Colombia's roads safer and encouraging consumers to increase borrowing to buy cars and new homes.
That helped raise economic growth to its fastest in three decades and stoked inflation.
The bank's policy of raising interest rates and pushing up costs for the purchase of big-ticket items has sparked almost monthly criticism from government officials.
``I cannot deny I am worried,'' President Uribe said in comments published on the presidential Web site Aug. 6. ``I am afraid that high interest rates are crimping consumption. People don't want to buy houses anymore because they are afraid of interest rates.''
Central bank chief Uribe defended last month's decision to raise rates saying inflation is still the biggest threat to Colombians' disposable income.
``The question we are getting from various clients now is when will the bank start to lower rates and I believe that maybe we are getting ahead of ourselves with that,'' said Boris Segura, an economist at Morgan Stanley in New York. ``I think that at least from now until the second quarter of next year the central bank won't be cutting rates.''
To contact the reporters on this story: Helen Murphy in Bogota at Hmurphy1@bloomberg.net.
Read more...
Aug. 15 (Bloomberg) -- Colombia's central bank will probably keep borrowing costs unchanged as policy makers bet a slowing economy and 16 interest rate increases in the past 28 months are enough to stem inflation.
The Bogota-based bank will hold the interbank rate at a seven-year high of 10 percent, according to 32 of 36 economists surveyed by Bloomberg. The other four economists expect the rate to increase a quarter point to 10.25 percent.
Colombian economic growth slowed to 4.1 percent in the first quarter from 9.1 percent a year ago, sparking criticism from President Alvaro Uribe that monetary policy is too harsh. Easing commodity prices, the biggest driver of inflation in Colombia, will lower pressure on policy makers to raise rates further.
``Economic growth is moderating, international food and fuel prices are coming down, and Colombia's central bank is definitely not behind the tightening curve,'' said Alexandre Lintz, an economist at BNP Paribas in Sao Paulo. ``It has already done what's needed to bring inflation down.''
Policy makers have missed their inflation target for two years and are unlikely to meet their 3.5 percent to 4.5 percent range for 2008. Annual inflation quickened to 7.52 percent in July, the highest since May 2003, and may accelerate in August after a two-week strike by truckers halted deliveries and drove the prices of fruits and vegetables higher.
Increasing Criticism
Policy makers have increased the rate from 7.5 percent at the start of 2007 and bank chief Jose Dario Uribe is coming under increasing criticism from government officials. Colombia's President Uribe says high rates hurt economic growth and strengthen the peso, curbing demand for Colombian exports and forcing companies to fire workers.
``The last increase was enough to calm inflation expectations,'' said Liliana Rojas, an economist at Bogota- based Vision de Valores SA. ``The decision to raise rates was the best decision the board could have made and so to increase further now would have the opposite effect and scare the market into thinking inflation is going to worsen.''
The central bank counters it needs to anchor inflation expectations and boost its credibility. Still, minutes of the bank's July 25 meeting show policy makers discussed the ``dilemma'' of bolstering economic growth and stemming inflation over the long term.
``Inflation expectations are the biggest concern for the bank right now, but economic activity is slowing more than expected and will continue to slow,'' said Camilo Perez, chief analyst at Banco de Bogota SA.
Presidential Worry
In a bid to slow the Colombian currency's 54 percent rally over the past five years, the central bank in June said it would make daily purchases of up to $20 million a day in the currency market.
President Uribe has used his six years in office to battle drug-funded paramilitary and guerrilla fighters, making Colombia's roads safer and encouraging consumers to increase borrowing to buy cars and new homes.
That helped raise economic growth to its fastest in three decades and stoked inflation.
The bank's policy of raising interest rates and pushing up costs for the purchase of big-ticket items has sparked almost monthly criticism from government officials.
``I cannot deny I am worried,'' President Uribe said in comments published on the presidential Web site Aug. 6. ``I am afraid that high interest rates are crimping consumption. People don't want to buy houses anymore because they are afraid of interest rates.''
Central bank chief Uribe defended last month's decision to raise rates saying inflation is still the biggest threat to Colombians' disposable income.
``The question we are getting from various clients now is when will the bank start to lower rates and I believe that maybe we are getting ahead of ourselves with that,'' said Boris Segura, an economist at Morgan Stanley in New York. ``I think that at least from now until the second quarter of next year the central bank won't be cutting rates.''
To contact the reporters on this story: Helen Murphy in Bogota at Hmurphy1@bloomberg.net.
Read more...
Indonesia's Yudhoyono Gets Help From Oil Before Polls
By Berni Moestafa and Arijit Ghosh
Aug. 15 (Bloomberg) -- Indonesia's fuel-subsidy bill may be almost cut in half next year, giving President Susilo Bambang Yudhoyono more to spend on health and schools ahead of elections.
The cost of capping fuel prices is expected to fall to 101.4 trillion rupiah ($11 billion) from an estimated 180.3 trillion rupiah in 2008, Yudhoyono told parliament in Jakarta today. Oil is predicted to cost an average $100 a barrel for next year's budget, which is forecast to post a deficit of 1.9 percent of gross domestic product.
The deficit target ``indicates an expansionary period'' in the political cycle, said Eric Alexander Sugandi, an economist at Standard Chartered Plc in Jakarta. ``The government is spending more to boost growth and reduce unemployment prior to the elections.''
Indonesia's first directly elected leader is struggling to meet his pledge to reduce the poverty rate in Southeast Asia's most populated nation by half to 8.2 percent by 2009. Yudhoyono, eligible for re-election next year, has seen his popularity wane after higher global oil prices forced the government to increase local fuel costs in May to prevent a budget blowout.
A 23 percent decline in crude oil prices from July's record $147.27 a barrel will reduce the amount Yudhoyono has to pay out to keep fuel affordable for the nation's poor. About 15.4 percent of Indonesia's estimated 222 million people were still on incomes below the government's poverty line as of March.
Education, Health Care
Indonesia will spend 20 percent of next year's estimated 1,122.2 trillion rupiah in total budget outlays on education, the first time a government will meet a constitutionally mandated level. Spending on health care will increase from 16 trillion rupiah in 2008.
Yudhoyono is boosting welfare spending as his government prepares for parliamentary elections scheduled for next April.
The government will provide scholarship for children of families affected by the May fuel prices increase and raise salaries of teachers and build new schools as part of its attempt to improve education quality, the president said.
``The strategy I have laid down is growth with equity,'' Yudhoyono said in the speech on the eve of Indonesia's 63rd Independence Day.
Indonesia's economic growth unexpectedly accelerated to 6.4 percent in the second quarter as rising prices and demand for the nation's coal, palm oil and rubber pushed exports to a record. Economists expected a 6.1 percent gain.
Free Stoves
The government, seeking to avoid another fuel-price increase before the elections, is encouraging the nation's 35 million poor to reduce their kerosene consumption.
To control subsidy costs, ``the government will expedite the program of converting kerosene to liquefied petroleum gas,'' Yudhoyono said. The government will keep amending its subsidy policy ``based on current developments of global oil prices.''
State oil company PT Pertamina has distributed free LPG stoves to 9.34 million low-income families and small businesses as part of the drive to replace the more expensive kerosene as a fuel for cooking. That's 22 percent of the overall target aimed to be achieved in 2011.
The program may reduce consumption of kerosene in Indonesia by a third, the government estimates.
Still, economists said Yudhoyono's government may have difficulties in achieving a budget deficit next year of 1.9 percent of GDP, the same level estimated for 2008, unless crude oil declines further.
``It's too soon to expect oil to average $100 a barrel next year because that would mean the price would have to fall below that,'' said Anton Gunawan, chief economist at PT Bank Danamon Indonesia in Jakarta.
To contact the reporters on this story: Arijit Ghosh in Jakarta at aghosh@bloomberg.net; Berni Moestafa in Jakarta at bmoestafa@bloomberg.net
Read more...
Aug. 15 (Bloomberg) -- Indonesia's fuel-subsidy bill may be almost cut in half next year, giving President Susilo Bambang Yudhoyono more to spend on health and schools ahead of elections.
The cost of capping fuel prices is expected to fall to 101.4 trillion rupiah ($11 billion) from an estimated 180.3 trillion rupiah in 2008, Yudhoyono told parliament in Jakarta today. Oil is predicted to cost an average $100 a barrel for next year's budget, which is forecast to post a deficit of 1.9 percent of gross domestic product.
The deficit target ``indicates an expansionary period'' in the political cycle, said Eric Alexander Sugandi, an economist at Standard Chartered Plc in Jakarta. ``The government is spending more to boost growth and reduce unemployment prior to the elections.''
Indonesia's first directly elected leader is struggling to meet his pledge to reduce the poverty rate in Southeast Asia's most populated nation by half to 8.2 percent by 2009. Yudhoyono, eligible for re-election next year, has seen his popularity wane after higher global oil prices forced the government to increase local fuel costs in May to prevent a budget blowout.
A 23 percent decline in crude oil prices from July's record $147.27 a barrel will reduce the amount Yudhoyono has to pay out to keep fuel affordable for the nation's poor. About 15.4 percent of Indonesia's estimated 222 million people were still on incomes below the government's poverty line as of March.
Education, Health Care
Indonesia will spend 20 percent of next year's estimated 1,122.2 trillion rupiah in total budget outlays on education, the first time a government will meet a constitutionally mandated level. Spending on health care will increase from 16 trillion rupiah in 2008.
Yudhoyono is boosting welfare spending as his government prepares for parliamentary elections scheduled for next April.
The government will provide scholarship for children of families affected by the May fuel prices increase and raise salaries of teachers and build new schools as part of its attempt to improve education quality, the president said.
``The strategy I have laid down is growth with equity,'' Yudhoyono said in the speech on the eve of Indonesia's 63rd Independence Day.
Indonesia's economic growth unexpectedly accelerated to 6.4 percent in the second quarter as rising prices and demand for the nation's coal, palm oil and rubber pushed exports to a record. Economists expected a 6.1 percent gain.
Free Stoves
The government, seeking to avoid another fuel-price increase before the elections, is encouraging the nation's 35 million poor to reduce their kerosene consumption.
To control subsidy costs, ``the government will expedite the program of converting kerosene to liquefied petroleum gas,'' Yudhoyono said. The government will keep amending its subsidy policy ``based on current developments of global oil prices.''
State oil company PT Pertamina has distributed free LPG stoves to 9.34 million low-income families and small businesses as part of the drive to replace the more expensive kerosene as a fuel for cooking. That's 22 percent of the overall target aimed to be achieved in 2011.
The program may reduce consumption of kerosene in Indonesia by a third, the government estimates.
Still, economists said Yudhoyono's government may have difficulties in achieving a budget deficit next year of 1.9 percent of GDP, the same level estimated for 2008, unless crude oil declines further.
``It's too soon to expect oil to average $100 a barrel next year because that would mean the price would have to fall below that,'' said Anton Gunawan, chief economist at PT Bank Danamon Indonesia in Jakarta.
To contact the reporters on this story: Arijit Ghosh in Jakarta at aghosh@bloomberg.net; Berni Moestafa in Jakarta at bmoestafa@bloomberg.net
Read more...
Drivers Spend More on Fuel Than Cars for First Time Since 1982
By Margot Habiby
Aug. 15 (Bloomberg) -- Consumers spent more on gasoline than vehicles and parts for the first time in 26 years in May and June, as U.S. pump prices headed for a record.
Gasoline accounted for about 4.4 percent of spending in June, compared with 3.9 percent for autos and motor parts, according to the U.S. Bureau of Economic Analysis. Both were at about 4 percent in May. The last time gasoline exceeded cars and parts as a percentage of spending was in January 1982.
``Prices of cars, particularly on a quality-adjusted basis, have been trending lower for many years, and the price of gasoline is obviously hugely higher over the past few years,'' said Dana Johnson, chief economist at Comerica Bank in Dallas. ``The two trends have crossed.''
Regular gasoline, averaged nationwide, reached a then-record $4.09 a gallon in June, on its way to the all-time high of $4.114 a gallon on July 17, according to AAA, the biggest U.S. motorist group. The average was $3.778 a gallon yesterday.
Record prices at the pump are already affecting U.S. gasoline demand, which sank to a five-year low in the first seven months of the year, according to the American Petroleum Institute in Washington. The decline in demand has slashed sales of automobiles and cut consumer spending.
Auto sales fell to the lowest in 15 years in July and partly accounted for retail sales dropping for the first time in five months. Consumer spending makes up more than two-thirds of the U.S. economy.
``People are spending as much today on gasoline as they did in the 1970s and 1980s,'' George Magliano, an auto analyst for Global Insight Inc. in New York, said in a telephone interview. ``It's one more statistic in what appears to be an unprecedented string of bad news'' for both the economy and the auto industry.
Iranian Revolution
The last time gasoline as a component of personal spending was this high was in September 1982 during an energy crisis triggered by the 1979 Islamic revolution in Iran, OPEC's second- largest producer. It was the second price shock in a decade, following the 1973 Arab oil embargo.
``Oil consumption was a bigger share of household income back then because household income has grown faster than fuel costs did,'' said Stephen P.A. Brown, director of energy economics at the Federal Reserve Bank of Dallas.
Crude oil for September delivery fell 99 cents, or 0.9 percent, to settle at $115.01 a barrel at 2:52 p.m. on the New York Mercantile Exchange. Oil touched a record $147.27 a barrel on July 11, the same day gasoline futures reached a record $3.631 a gallon.
Demand Lag
U.S. refiners paid an average $33.55 a barrel for imported oil in 1982, more than double the $14.57 a barrel they paid in 1978, according to the U.S. Energy Information Administration, the statistical arm of the Energy Department. Prices rose high enough to cause global demand for oil and petroleum products to drop 8.4 percent between 1978 and 1983.
``You saw a lag,'' said Doug MacIntyre, senior oil market analyst with the EIA in Washington. ``Demand kept on falling in 1982 and 1983, even as prices were falling. A lot of people in the U.S. were buying much smaller cars.''
U.S. auto sales tumbled in July, pushing the industry toward its worst year since 1993, as General Motors Corp., Ford Motor Co. and Toyota Motor Corp. posted declines on lower demand for fuel-thirsty trucks.
The industry's annualized selling rate for July was 12.5 million cars and light trucks, the lowest since March 1993, according to Bloomberg data. Full-year sales in 2007 were 16.1 million.
Sales Tumble
Sales of cars and light trucks fell 29 percent at Chrysler LLC, 26 percent at GM, 15 percent at Ford, 12 percent at Toyota and 1.6 percent at Honda Motor Co., the companies said on Aug. 1.
U.S. refiners will probably pay an average of $111.11 a barrel for imported oil this year, compared with $67.02 a barrel last year and $27.21 a barrel in 2002, according to EIA data.
``What has to happen is you need to have the prices drop a lot more, and they have to stay there,'' Global Insight's Magliano said. ``Right now, it's so ingrained in the consumer's mind and his buying habits that it's going to take a massive reversal to get it out of the consumer's mind.''
Autos aren't likely to be the only part of the retail sector affected if fuel costs continue to siphon off consumer spending, Comerica's Johnson said.
``Whatever they care least about, they're going to consume less of,'' he said. ``A huge run-up in gasoline prices is like a tax increase. It's got to come out of something.''
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
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Daily FX Report
| Daily Forex Technicals | Written by Varengold Bank | Aug 15 08 08:42 GMT | | |
| Good morning from wonderful Hamburg and welcome to the Varengold Daily FX Report. The RBNZ fears an economic recession and plans to reduce interest rates, as the retail sales reached a record low. However, we wish you an effective last trading day in this week and a nice weekend. Markets reviewThe retail sales in New Zealand fall to a record pace in Q2. It's led by lower car and grocery store sales. The Reserve Bank of New Zealand plans to cut interest rates further, before the economic recession is coming up. Sales volumes drop 1.5 % in June quarter. That's the biggest drop since the data series began in 1995. The NZD/USD raised 0.3 % on the day to 0.7002, up from a session low of 0.6955. The AUD/JPY decreased 0.8 % at 94.75, while the AUD/NZD fell about 0.7 % to 1.2360. The AUD/USD fell also 0.7 % to a low of 0.8635 and traded close to its 7-mth low of 0.8590 as gold was going down about 2 % below the 800 $ to 790.35 $. With the down moves in Gold the EUR was down to a 6-mth low at 1.4750 against the USD this morning, extending losses from the days before. The USD has rallied more than 5 percent against the EUR this month supported by a sell off in oil and weak data in Europe and Asia. Also the US Dollar Index noted stronger. The Index which measures a basket of six currencies against the USD hit a six month high at 76.925 on Friday morning. Technical analysisGBP/JPYFrom the middle of May to the end of July, the GBPJPY traded in a bullish trend channel with a resistance level at 213.83. After touching the resistance the third time, the market recovered to its old support level at 203.18 established at the end of May. If the market doesn't break trough this new support, it could rebound to its resistance at 213.83. | |
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Gold Falls Below $800oz
Daily Forex Fundamentals | Written by AC-Markets | Aug 15 08 08:05 GMT |
Market Brief
The Usd was slightly stronger in the Asian session, as commodities, specifically precious metals, weakened. The Gold fell below $800oz for the first time this year and silver followed right behind down a whopping -11.00%. The EurUsd slipped from 1.4803 to 1.4754, while UsdJpy trended higher from 109.57 to 110.34. The GbpUsd continued to come under selling pressure on the back of BoE inflation report, dropping steadily from 1.8710 to 1.8628. The commodity bloc gave up much of their gains over the past few days, with the AudUsd continuing to slide from 0.8732 to 0.8635. Wall Street closed higher yesterday and Asia regional indexes are all positive, with the exception of the Hang Seng down 0.84%. European stock futures are pointing to a higher opening.
In New Zealand, retail sales declined 1.5% q/q slightly better than the -1.8% expected fall. However, the drop was the largest on record and the second consecutive quarter of declines. The Nzd advanced on the news, but then reversed as the market released this figure just pointing to a continued economic weakness. We are still expecting the RBNZ to cut 25bp at the next meeting (in a string of cuts), which should continue to weigh on the Nzd sentiment
With no major events or data scheduled for European session, the market will have to wait for the US session. With Industrial Production, Capacity Utilization and Consumer confidence on the docket, the market will have their hands full. The Michigan confidence might have benefited from a modest recovery in equities and decline in gasoline prices. However, the housing markets will still weigh on the consumer.
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.
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Market Brief
The Usd was slightly stronger in the Asian session, as commodities, specifically precious metals, weakened. The Gold fell below $800oz for the first time this year and silver followed right behind down a whopping -11.00%. The EurUsd slipped from 1.4803 to 1.4754, while UsdJpy trended higher from 109.57 to 110.34. The GbpUsd continued to come under selling pressure on the back of BoE inflation report, dropping steadily from 1.8710 to 1.8628. The commodity bloc gave up much of their gains over the past few days, with the AudUsd continuing to slide from 0.8732 to 0.8635. Wall Street closed higher yesterday and Asia regional indexes are all positive, with the exception of the Hang Seng down 0.84%. European stock futures are pointing to a higher opening.
In New Zealand, retail sales declined 1.5% q/q slightly better than the -1.8% expected fall. However, the drop was the largest on record and the second consecutive quarter of declines. The Nzd advanced on the news, but then reversed as the market released this figure just pointing to a continued economic weakness. We are still expecting the RBNZ to cut 25bp at the next meeting (in a string of cuts), which should continue to weigh on the Nzd sentiment
With no major events or data scheduled for European session, the market will have to wait for the US session. With Industrial Production, Capacity Utilization and Consumer confidence on the docket, the market will have their hands full. The Michigan confidence might have benefited from a modest recovery in equities and decline in gasoline prices. However, the housing markets will still weigh on the consumer.
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.
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Renewed weakness in oil prices and a break of 1.4850
| Daily Forex Fundamentals | Written by AC-Markets | Aug 15 08 08:49 GMT | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forex Market Issues and Risks News and Events: The Dollar rallied to an almost six-month high against the Euro on Thursday amid growing concern over euro zone economic weakness and accelerating inflation in the United States. Traders sold the Euro after reports showed contraction in the Euro zone's economy in the second quarter. The Euro zone single currency accelerated its losses and fell below 1.4800 after it broke through key technical levels, analysts said. Government data showed US consumer prices rose at twice the rate expected in July. Analysts said higher prices in the short term may help boost the case for interest rate hikes by the Federal Reserve, although they warned that over time, inflation would hurt the economy. EurUsd was 0.35% lower at 1.4724. It is now more than 10 cents below a record high of 1.6039 struck in July. UsdJpy was 0.55% higher at 109.79. EurGbp declined 0.91% at 79.18. UsdChf rose 0.98% to 1.0967 after hitting 1.0836 low. GbpUsd was fairly unchanged at 1.8663. Oil prices are down more than $30 from a record high 145.45 hit in July. Crude oil settled 1.26% lower on Thursday at $114.93 a barrel. Goldman Sachs's analyst sees the EurUsd falling to 1.4500 in three months, compared with previous estimates of 1.5600. The dollar has rallied more than 5% against the Euro this month with help from a sell-off in oil prices and weak data in Europe and Asia.
Today Key Issues:
The Risk Today:EurUsd Market dropped to 1.4762 low on Thursday following Friday break below 1.5304 former strong support from 13th June. Further weakness below 1.5000 will put the focus on strong support 1.4685 22nd January low. On the upside, only a return over 1.5500 will release actual pressure and put key initial resistance 1.6000 into focus. A break up there would open the way to Trendline resistance 1.6200. GbpUsd Cable hit 2.0158 high 4-weeks ago and 1.8619 low yesterday. Key level holds 2.0100 resistance. On the downside, Friday break below 1.9337 January low support lead to market below 1.9105 (50% retracement of 1.7049 – 2.1162 advance). Former support 1.9363 holds strong resistance. Initial support holds 1.8619 yesterday low. UsdJpy Last 3-weeks recovery pushed the market up to 110.40 high on Friday. The last break of 108.59 former resistance put focus on 110.10 strong resistance (Trendline). Further advance would open the way toward 111.92 early January high. On the downside, a return below 108.59 former resistance will undermine the current advance. Profit taking might bring back down to 105 level and may open the way toward 102.73 support and 100 pivot point. Initial support holds 108.53 today low. UsdChf Recent Dollar strength pushed over 1.0500 last week and hit 1.0981 high yesterday. Market broke up resistance of the 3-months upper trendline at 1.0766 last week. Initial support holds 1.0500 key level. Renewed weakness below 1.0375 would retest the 1.0000 pivot point and may open the way toward 0.9637 17th March low.
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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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