Global Stocks, U.S. Futures Rise on China Stimulus; Yen Falls

By Adam Haigh

Nov. 10 (Bloomberg) -- Stocks rose in Europe and Asia and U.S. index futures climbed after China unveiled a $586 billion plan to stimulate the economy and world leaders urged further cuts in interest rates. Oil and copper rallied, while the yen fell.

China's CSI 300 Index jumped 7.4 percent, and Japan's Nikkei 225 Stock Average surged 5.8 percent. BHP Billiton Ltd.ArcelorMittal and ABB Ltd. added more than 10 percent in Europe. The yen slipped 1.7 percent against the euro on speculation China's package will give investors confidence to buy higher- yielding assets using money borrowed in Japan.

``This is very encouraging,'' said Virginie Maisonneuve who helps oversee $19 billion as head of global equities at Schroder Investment Management in London. ``We need a speedy implementation. From a sentiment standpoint and in terms of planning ahead, this will create a positive shift.'' She spoke in a Bloomberg Television interview.

The MSCI World Index increased 1.6 percent to 954.36 at 11:27 a.m. in London, trimming this year's drop to 40 percent. The International Monetary Fund predicts global growth will slow to 2.2 percent in 2009 from 3.7 percent this year, meaning a world recession under the fund's informal definition -- growth of 3 percent or less.

Europe's Dow Jones Stoxx 600 Index advanced 2.8 percent, and futures on the Standard & Poor's 500 Index climbed 2.5 percent. The MSCI Asia Pacific Index added 3.2 percent.

The yen fell 1.7 percent to 127.24 per euro, and it declined to 98.98 from 98.24 against the dollar.

Infrastructure Spending

The government of China, the world's fourth-largest economy, announced infrastructure spending, tax deductions and farming subsidies. The central bank has already cut interest rates three times in two months, joining policy makers from Washington and Tokyo to Frankfurt and London in efforts to lower borrowing costs and inject cash to avoid recession.

Emerging-market stocks, bonds and currencies gained. The MSCI Emerging Markets Index added 3.4 percent, with Russia's Micex Index climbing 8.1 percent and India's Sensitive Index adding 4.4 percent. The Polish zloty, South African rand and Hungarian forint gained against the dollar, and the extra yield investors demand for developing nations' bonds fell against U.S. Treasuries.

``With China accounting for roughly 27 percent of global economic growth last year, this package should certainly help in averting a global recession,'' said Ben Potter, research analyst at IG Markets in Melbourne.

The Group of 20 nations said yesterday that it is prepared to act ``urgently'' to bolster growth and called on governments to cut interest rates and raise spending as the world's leading industrialized economies battle the economic slump.

Obama's Team

The U.S. economy, the world's biggest, is forecast to expand 1.6 percent this year, down from 2 percent growth in 2007, according to economists' estimates compiled by Bloomberg News. China's will expand 9.9 percent in 2008, down from 11.9 percent, the data show. The U.S., Japan and the euro zone will all shrink next year, the IMF said last week.

U.S. President-elect Barack Obama doesn't plan to name a Treasury secretary or fill other top positions on his economic team this week, people familiar with the matter said, as he tries to keep from being drawn into Bush administration decisions he may disagree with.

More than $28 trillion has been erased from the value of global equity markets as credit losses and writedowns totaled $690 billion in the worst financial crisis since the Great Depression. The Stoxx 600 has declined 38 percent in 2008, headed for its worst year on record.

BHP Billiton, the world's biggest mining company, rose 15 percent to 1,165 pence. Rio Tinto Group, the world's third- largest mining company, added 16 percent to 3,024 pence.

Copper, Gold Rally

Copper jumped 8.4 percent on the London Metal Exchange. Gold rose 1.8 percent.

ArcelorMittal, the world's largest steelmaker, climbed 15 percent to 20.22 euros.

BP Plc, Europe's second-largest energy producer, increased 4.2 percent to 536.75 pence. Royal Dutch Shell Plc, the region's biggest oil company, gained 4.7 percent to 21.775 euros.

Crude oil for December delivery rose as much as 5.3 percent to $64.30 a barrel in New York.

ABB, the world's largest builder of electricity grids, jumped 11 percent to 15.07 Swiss francs.

AIG Advances

American International Group Inc. rallied 9 percent to $2.30 after the insurer bailed out by the U.S. got an expanded government rescue package valued at more than $150 billion after posting a fourth straight quarterly loss.

The U.S. will reduce the original $85 billion loan that saved the New York-based insurer in September to $60 billion and buy $40 billion of AIG preferred shares. The insurer lost $24.5 billion, or $9.05 a share in the period ended Sept. 30, compared with profit of $3.09 billion, or $1.19, a year earlier.

Air France-KLM Group climbed 2.5 percent to 12 euros. Europe's biggest airline said passenger traffic rose 9 percent in October as more travelers took trans-Atlantic flights and year-earlier figures were held back by a strike.

Cable & Wireless Plc surged 7.1 percent to 144.3 pence after the U.K.'s second-biggest phone company increased its full-year forecast for operating profit. Earnings before interest, taxes, depreciation and amortization are now predicted to reach at least 780 million pounds ($1.2 billion) in the 12 months ending March 31, 2009. The previous forecast was for Ebitda of 702 million pounds to 725 million pounds.

Crucell, Telefonica

Crucell NV rose 3.7 percent to 10.58 euros after its experimental AIDS vaccine kept six monkeys from getting an animal equivalent of the disease. Crucell is a biotechnology company that markets vaccines and antibodies to treat infectious diseases such as influenza, hepatitis A and B, and typhoid fever.

Telefonica SA, Spain's largest telephone company, gained 3.6 percent to 15.60 euros after JPMorgan Chase & Co. upgraded the shares to ``buy'' from ``neutral.''

Santander SA fell 3.6 percent to 8.04 euros after saying it will raise 7.2 billion euros ($9.2 billion) by selling shares. Spain's biggest bank will sell stock at 4.5 euros each.

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

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Anadarko, Dana May Be Targets for Exxon, BP on `Cheaper' Assets

By Anthony DiPaola and Fred Pals

Nov. 10 (Bloomberg) -- Anadarko Petroleum Corp. and Dana Petroleum Plc, oil drillers that lost more than 30 percent in market value this year, may become acquisition targets as they show it's cheaper to buy oil and gas reserves than to go and find them.

Anadarko's proven deposits have a stock market value of $6.99 a barrel after its shares tumbled 45 percent this year in New York trading, while Dana's are at $7.80 a barrel. That's more than 39 percent below the $12.87 a barrel Royal Dutch Shell Plc spent last year to find and develop its own fields, data compiled by Bloomberg show, and may attract offers.

Exxon Mobil Corp., Shell, BP Plc, Chevron Corp. and Total SA, the five largest non-state oil companies, held $82 billion of cash at the end of September, enough between them to acquire seven of the 11 members of the Standard & Poor's 500 Oil & Gas Exploration & Production Index. Smaller companies such as Talisman Energy Inc. may also have funds for acquisitions.

``It's cheaper to buy a barrel on Wall Street instead of a barrel that companies need to find and develop,'' said Andrew Bartlett, global head of oil and gas corporate advisory at Standard Chartered Plc in London. ``Companies with cash are looking for infill-opportunities with a large resource base.''

The last time oil plunged, when crude fell to $10 a barrel in 1998, led to a transformation of the industry as BP bought Amoco Corp., Exxon acquired Mobil Corp. and Total Fina SA took over Elf Aquitaine SA. Deals now are for niche targets.

Acquisition Trail

``It may prove better value to buy than to build over the course of the next 12 to 24 months,'' Talisman Chief Executive Officer John Manzoni said Nov. 4. BP CEO Tony Hayward said Oct. 28 the credit crisis may create opportunities which BP would look at ``very closely.''

As oil stocks trade close to their lowest in four years, smaller producers are more vulnerable to takeovers. The 224- member Bloomberg World Oil and Gas index tumbled 45 percent this year as crude declined 59 percent from its July record of $147.27 a barrel on forecasts a global recession will cause oil demand to slump to its slowest growth rate since 1993.

International oil companies are seeking reserves as decades- old fields from the North Sea to Alaska dry up and as producing nations keep their best resources and more profits for themselves.

Analysts say targets include The Woodlands, Texas-based Anadarko, the second-largest independent U.S. oil and natural-gas producer. It's among 25 companies with the lowest ratio of reserves to market value on the World Oil & Gas index.

Stock Decline

Anadarko had 81 percent of revenue last year in the U.S. and in September announced a deep-sea discovery off Brazil. The stock market valuation of its deposits compares with $7.68 a barrel for ConocoPhillips, $14.25 for Chevron and $18.29 for Exxon, according to data compiled by Bloomberg.

``Anadarko has gotten killed,'' Gene Pisasale, who helps oversee about $13 billion at PNC Capital Advisors in Baltimore, said of the company's stock price, which this year has fallen more than Apache Corp., Devon Energy Corp. and EOG Resources Inc. ``All four of those are large enough companies that they'd be attractive,'' Pisasale said.

The company's ``capital structure and liquidity position remain very strong,'' said John Christiansen, an Anadarko spokesman. Its market value is $16.7 billion, compared with between $19.9 billion and $33.6 billion for Apache, Devon and EOG. ``We don't comment on rumors or speculation,'' said Chip Minty, a Devon Energy spokesman.

Other U.S. explorers whose asset valuations have plunged include Exco Resources Inc., valued at $2.68 a barrel, and Pioneer Natural Resources Co., at $2.99 a barrel. Neither could be reached for comment.

Credit Markets

``The liquidity crisis is hurting small to midsized companies with difficulty funding growth and operations,'' said Alessandra Pasini, a Milan-based banker at Citigroup Inc.

In Europe companies priced below $8 per barrel of oil equivalent reserves include Aberdeen, Scotland-based Dana Petroleum, DNO International ASA of Oslo and JKX Oil & Gas Plc.

``That's below the finding and producing cost for the majors,'' said Jason Kenney, an analyst at ING Wholesale Banking in Edinburgh who recommends buying Shell, Total and Eni SpA shares. ``Market conditions are creating unique opportunities to make targeted acquisitions.''

Dana Petroleum produces oil in the North Sea and explores in Africa. ``Dana benefits from an attractive combination of asset backing, exposure to exploration upside and takeover risk,'' Jessica Saadat, oil analyst at Cazenove, wrote in a report Oct. 21.

Algerian Gas

Dana fell 31 percent to 961 pence in London this year, valuing it at 835 million pounds ($1.31 billion). Angela Bisset, who handles investor relations, said officials were unavailable for comment.

DNO, whose barrels are valued at $3.26 according to Bloomberg data, may be attractive for assets it's developing in the Kurdish area of northern Iraq, ING's Kenney said. JKX operates in Ukraine.

``There are some great opportunities out there,'' said Ian Taylor, CEO of Vitol Group, which is seeking to buy out Awarak Energy Ltd., an explorer in Russia and Kazakhstan of which it already owns 41 percent.

``When companies are trading so far below their net asset value, then the obvious thing to do is to, quite frankly, buy them.,'' Taylor said at a London conference Oct. 28.

Energy Assets

The world's five biggest non-state oil companies have spent more than $12.5 billion on acquisitions in 2008, with Shell agreeing in July to buy Canada's Duvernay Oil Corp. for C$5.9 billion ($5.0 billion), including debt.

Eni agreed Sept. 8 to pay C$923 million for First Calgary Petroleums Ltd. to gain Algerian gas. Oil & Natural Gas Corp. of India said Aug. 26 it would buy Imperial Energy Plc for 1.4 billion pounds to tap Siberian deposits. China Petrochemical Corp., or Sinopec, offered $1.8 billion Sept. 25 for Canada's Tanganyika Oil Co. to gain Syrian resources.

To contact the reporters on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.netFred Pals in Amsterdam on fpals@bloomberg.net

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Embraer, Gap, Sociedad Quimica Minera: Latin Equity Preview

By [bn:PRSN=1] William Freebairn [] and James Attwood

Nov. 10 (Bloomberg) -- The following companies may have unusual price changes today in Latin America trading. Stock symbols are in parentheses, and share prices are from the previous close. Preferred shares are usually the most-traded class of stock in Brazil.

The MSCI Latin America Index rose 1.1 percent Nov. 7 to 2,139.56.

Brazil

Empresa Brasileira de Aeronautica SA (EMBR3 BS): The world's fourth-largest aircraft maker said 2009 sales and deliveries will be lower than it previously forecast, according to a JPMorgan Chase & Co. analyst. Embraer reduced its 2009 revenue forecast by 11 percent to $6.3 billion, analyst Joseph B. Nadol wrote Nov. 7 in a report. Embraer fell 8.3 percent to 9.22 reais.

Chile

Sociedad Quimica y Minera de Chile SA (SQM/B CC): Chile's biggest fertilizer producer had its ``BBB+'' credit rating placed on watch with negative implications by Standard & Poor's. The action reflects ``our expectations of a more aggressive dividend policy that could in turn affect the company's financial profile,'' S&P wrote in a Nov. 7 statement. Soquimich rose 5.2 percent to 14,200 pesos.

Mexico

Grupo Aeroportuario del Sureste SAB (ASURB MM): Mexico's second-biggest non-government airport operator reported October passenger traffic that was lower than forecast, IXE Grupo Financiero said in a research note Nov. 7. IXE reduced the price at which it expects shares to trade at the end of 2009 to 48 pesos from 55 pesos. Asur rose 1.8 percent to 39.82 pesos.

Grupo Aeroportuario del Pacifico SAB (GAPB MM): The operator of 12 Mexican airports said Alma airline, which announced today it was seeking bankruptcy protection, accounted for 3.8 percent of passenger traffic in the first 10 months of the year. Alma said in a statement Nov. 7 it owed 23 million pesos ($1.8 million) to the airport company, Gap, as the company is known. Gap fell 0.2 percent to 23.91 pesos.

To contact the reporters on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net; James Attwood in Santiago at jattwood3@bloomberg.net.

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Believing in Estimates Means 20% Advance for S&P 500

By Eric Martin and Elizabeth Campbell

Nov. 10 (Bloomberg) -- Even after cutting estimates at the fastest rate ever, Wall Street strategists still need the biggest year-end rally in the Standard & Poor's 500 Index for their forecasts to come true.

David Kostin of Goldman Sachs Group Inc. predicts an advance because U.S. companies are cheap relative to earnings. Strategas Research Partners' Jason Trennert is counting on a resumption in bank lending to lift equities. Thomas Lee at JPMorgan Chase & Co. says stocks are swinging so much that a 25 percent jump by Dec. 31 isn't out of the question.

Strategists were also calling for a record gain at this time last year, after the first quarterly decline in corporate profits dragged the S&P 500 down from its high of 1,565.15 on Oct. 9. It never materialized and stocks have dropped 41 percent since.

``It's very difficult for us to see that kind of turnaround by year end,'' said Richard Weiss, who oversees $53 billion as chief investment officer at City National Bank in Beverly Hills, California. ``The stock market would need to see a bottoming of this economic cycle, and that is nowhere in sight.''

The S&P 500 is poised for its worst year since the 1930s after almost $700 billion in bank losses froze credit markets and spurred concern the economy will shrink. U.S. equities posted the steepest monthly loss in 21 years in October and $6 trillion was erased from U.S. markets in 2008.

Biggest Bears

Futures on the S&P 500 expiring in December gained 2.7 percent to 961.60 at 5:47 a.m. New York time after China unveiled a $586 billion economic stimulus package and the Group of 20 nations urged central banks to cut interest rates.

Kostin, Trennert and Lee are among the most pessimistic of Wall Street strategists with year-end estimates tracked by Bloomberg. The three expect the benchmark for American equities to end 2008 at an average of 1,075, up 15 percent from its closing level last week.

``I wouldn't call it extremely bullish,'' said New York- based Lee, who says the S&P 500 may rise to 1,125. ``The high level of volatility means you're going to have a pretty wide range of possible outcomes.''

The average Wall Street forecast calls for the S&P 500 to break out of a bear market and surge 20 percent to 1,118 by Dec. 31 -- more than twice as much as the biggest-ever advance to close out a year, according to data compiled by Bloomberg. Strategists were even more bullish at the beginning of the year, predicting that the S&P 500 would end 2008 at a record 1,632.

`A Stretch'

Since then, they've slashed their projections after failing to foresee the biggest financial crisis since the Great Depression. Strategists cut their forecasts about 28 percent this year, while the S&P 500 lost 37 percent.

``Even a 15 percent gain could be a stretch,'' said Robert Doll, who helps manage $1.3 trillion as chief investment officer for BlackRock Inc. in Plainsboro, New Jersey. ``My guess is from here to the end of the year we do have another rally, but confined inside a narrower trading range.''

Goldman's Kostin reduced his S&P 500 prediction by 29 percent on Oct. 13 to 1,000, saying economies around the world deteriorated and oil prices slid faster than he expected.

Still, Kostin expects the S&P 500 to hit bottom this month and rebound as investors buy shares that are inexpensive compared with companies' forecast profit. A Goldman spokeswoman said Kostin declined to comment.

The S&P 500 trades at 10.39 times next year's estimated earnings from continuing operations, compared with the weekly average of 21.1 times historical operating profit over the past decade, according to data compiled by Bloomberg.

Borrowing Costs

JPMorgan's Lee, who started the year with an S&P 500 estimate of 1,590, lowered his projection of 1,375 last month by a further 18 percent. The 1,125 forecast still implies an advance of 21 percent through the end of the year.

Trennert expects the S&P 500 to increase 18 percent to 1,100, even after cutting his estimate twice between the end of September and mid-October. He says stocks will rebound as borrowing costs fall.

``The market discounted what we believe will be a recession in 2009'' when it reached a five-year low of 848.92 on Oct. 27, Trennert said.

The strategist who cut his projection the most since September was Deutsche Bank AG's Binky Chadha. Chadha abandoned his year-end call for the S&P 500 to reach 1,350, decreasing it on Nov. 7 to as low as 800 and becoming the first strategist to acknowledge the possibility that stocks may fall for the rest of the year. Chadha, previously one of Wall Street's biggest bulls, declined to comment through spokeswoman Renee Calabro.

Fair Value

Merrill Lynch & Co.'s Richard Bernstein also reduced his forecast last week. Bernstein, Merrill's chief quantitative strategist, cut his 12-month projection for the S&P 500 to 1,047 from 1,248.

``Severe overvaluation at the end of August is correcting,'' wrote Bernstein, who doesn't provide a year-end estimate, on Nov. 4. ``Our models are still working their way back to fair value.''

The rate at which strategists are reducing their estimates is a sign equities are close to a nadir, some investors say.

``The U.S. is going to be the first market out of the bottom,'' Barton Biggs, a former Morgan Stanley strategist who now runs Traxis Partners LLC, a New York-based hedge fund, said on Bloomberg Television. ``We're at a major buying opportunity.''

Still, the 20 percent rally strategists predict must overcome a deteriorating economy as the fallout from the credit crisis spreads. The jobless rate rose to 6.5 percent in October from 6.1 percent the previous month.

``It's a stretch,'' said Leo Grohowski, the chief investment officer for the wealth management unit of Bank of New York Mellon Corp., which oversees $158 billion. ``The economic news definitely gets worse before it gets better.''

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net; Elizabeth Campbell in New York at ecampbell11@bloomberg.net.

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U.S. Stock Futures Rise on China Stimulus Plan, G-20 Rate Call

By Chua Kong Ho and Michael Patterson

Nov. 10 (Bloomberg) -- U.S. stock-index futures rose after China unveiled a $586 billion economic stimulus package and the Group of 20 nations urged central banks to cut interest rates.

General Electric Co. and Caterpillar Inc. climbed more than 2 percent as China's plan eased concern that infrastructure and construction spending may slow in the fastest-growing major economy. Citigroup Inc. rose 3.6 percent after the G-20 said it will use ``monetary and fiscal policy'' to combat the threat of a global recession. Newmont Mining Corp. added 4.3 percent and Exxon Mobil Corp. climbed 2.1 percent on higher metals and oil.

``Governments and businesses are working on solutions to the slowdown plaguing economies and earnings, which may bring us some positive surprises,'' Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co., said in an interview on Bloomberg Television. ``Given demand is waning, government spending will be a welcome boost to economies.''

Futures on the Standard & Poor's 500 Index gained 2.5 percent to 959.8 at 11:09 a.m. in London. Dow Jones Industrial Average futures added 2.2 percent, while Nasdaq-100 Index futures rose 2.5 percent. Europe's Dow Jones Stoxx 600 Index jumped 2.9 percent and the MSCI Asia Pacific Index increased 3.2 percent.

The S&P 500 has retreated 37 percent this year as concern deepened that the credit crises sparked by a surge in U.S. mortgage defaults will drag down the global economy. President- elect Barack Obama may inherit the worst U.S. recession since 1982, according to economists' estimates, putting pressure on the Democrat to assemble a response and name his economic team.

China Package

China's stimulus package, equivalent to almost a fifth of the country's gross domestic product last year, will be used by the end of 2010, the Beijing-based State Council said yesterday. China accounted for 27 percent of global economic growth last year, more than any other nation, according to the International Monetary Fund.

The extra spending may boost the nation's economic growth by 2 percentage points next year, said Xing Ziqiang, an economist at China International Capital Corp. in Beijing. UBS AG and Credit Suisse AG, before yesterday's announcement, forecast GDP would rise no more than 7.5 percent next year, which would be the smallest increase in nearly two decades.

GE, which gets about 44 percent of its revenue from energy and technology infrastructure businesses, climbed 3.4 percent to $19.50. Caterpillar, the world's largest maker of bulldozers and excavators, increased 2.8 percent to $38.51 in Germany.

`Support Global Growth'

Citigroup increased 3.6 percent to $12.25 in Germany and JPMorgan Chase & Co. added 2.7 percent to $38.78.

``We stand ready to urgently take forward work and actions agreed by our leaders to restore and maintain financial stability and support global growth,'' the G-20 said in a statement released yesterday following a meeting in Sao Paulo. ``Countries must use all their policy flexibility, consistent with their circumstances, to support sustainable growth.''

Newmont Mining rose 4.3 percent to $27.13 in Germany. Exxon, the world's biggest oil company, advanced 2.1 percent to $75.53.

Copper surged 8.1 percent in London and crude oil added 5.4 percent in New York after the announcement by China, the world's largest user of the metal and second-largest oil consumer.

American International Group Inc. jumped 18 percent to $2.49. The U.S. Treasury will take a $40 billion stake in the insurer and the Federal Reserve will open two new emergency loan units to finance the company's securities, the government said today.

General Motors Corp. advanced 7.1 percent to $4.67 even after the biggest U.S. automaker was cut to ``underweight'' from ``equal-weight'' at Barclays Capital, which predicted the shares may tumble to $1.

To contact the reporters on this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Michael Patterson in London at mpatterson10@bloomberg.net.

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FX Technical Commentary

Daily Forex Technicals | Written by Easy Forex | Nov 10 08 01:36 GMT |

Euro 1.2818 Initial support at 1.2526 (Nov 4 low) followed by 1.2329 (Oct 28 low). Initial resistance is now located at 1.2956 (Nov 6 High) at followed by 1.3116 (76.4% retrace 1.3298 to 1.2526) Yen 98.94 Initial support is located at 96.36 (Oct 31 low) followed by 96.08 (Oct 29 low). Initial resistance is now at 99.92 (Nov 5 high) followed by 100.57 (Oct 22 high). Pound 1.5795 Initial support at 1.5402 (Oct 28 low) followed by 1.5269 (Oct 24 low). Initial resistance is now at 1.6167 (Nov 5) followed by 1.6264 (61.8% retrace 1.6672 to 1.5604). Australian Dollar 0.6870 Initial support at 0.6546 (Nov 7 low) followed by the 0.6339 (Oct 29 low). Initial resistance is now at 0.7065 (Oct 20 high) followed by 0.7239 (Oct 14 high). Gold 748 Initial support at 718 (61.8% retrace 777.90-682.41) followed by 707 (Oct 27 low). Initial resistance is now at 777.5 (Oct 30 high) followed by 803.65 (Oct 21 Level). Currency Sup 2 Sup 1 Spot Res 1 Res 2 EUR/USD 1.2329 1.2526 1.2818 1.2956 1.3116 USD/JPY 96.08 96.36 98.94 99.92 100.57 GBP/USD 1.5269 1.5402 1.5795 1.6197 1.6264 AUD/USD 0.6339 0.6546 0.6870 0.7065 0.7239 XAU/USD 707.50 718.25 748.00 777.50 803.30 Easy Forex http://www.easy-forex.com Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products

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Forex Exchange Morning Report

Daily Forex Fundamentals | Written by Westpac Institutional Bank | Nov 10 08 01:23 GMT |

News And Views US equities and DXY negotiated the woeful US employment report without particular damage, perhaps a function of just how low expectations were. The headline -240K reading was indeed not quite as bad as some numbers being bandied around, but given the very large, negative revisions, this was truly an awful set of numbers. Perhaps the DJIA's stronger open an hour after the data and its full session in positive territory is a reminder that hard data are still not yet pivotal. The Dow closed +248pts/+2.9%. DXY chopped around then ticked higher in thin NY afternoon trade but ranges were relatively tight. The improvement continued in USD 3mth LIBOR, its yield slipping another >9bp to 2.29%. NZD/USD traded 0.5855 - 0.5930, finishing at the upper end as the DJIA closed positively. The kiwi shouldn't be noticeably impacted by the expected formation of a National Party-led coalition after New Zealand's elections on Saturday. AUD/USD gained about 80 pips from the London open to NY close (0.6740) in fairly muted trade. AUD brushed off sharp losses for most metals on the LME including lead (-6.7%), aluminium (-3.9%) and copper (-1.3%). EUR/USD tested up to 1.2851 in the European morning but ran out of steam amid a flurry of 'sell euro' recommendations (many unimpressed by the seemingly slowmoving ECB), fading to 1.2720 at the end of the week. USD/JPY traded sedately in the low 97s for some hours before the resilient US equity market encouraged some buying on crosses, helping USD/JPY up to 98.25 at the close. US non-farm payrolls fall 240k in Oct. The big surprise was the steep 179k downward revision to jobs in Aug and Sep, which means the average job loss over the latest 3 months is now 217k, compared to just 100k when the Sep report was published. The household survey, normally volatile, delivered its sixth consecutive monthly decline, down 297k in Oct, for a three month average loss of 287k, so it is still painting a weaker picture than payrolls but the gap has narrowed thanks to those big (payrolls) revisions. The jobless rate jump from 6.1% to 6.5% corrected for the steady job rate in Sep which was due to some job losers leaving the labour force altogether that month. In Oct the labour force grew and added directly to unemployment. With the unemployment rate now higher than at any point during the 2001 recession, there can be no doubt that is the current status of the US economy once again. US pending home sales fell 4.6% in Sep, continuing to see-saw, this time to the downside, though the decline was not as steep as August's rise, continuing the pattern of the last six months where a gain has been followed by a smaller drop. So we cannot yet conclude that the latest banking system troubles are the main driver of the fall; it may just be that the bargain-hunters snapping up cheap foreclosed homes took a break (but not in the West where sales were up 4.1%!). A further fall in October would however be significant. German industrial production down 3.6% in Sep. Factory orders plunged 8% in September following August's gain which was the only monthly rise for orders this year so far. This weakness is now showing through in production which fell in September. In annual terms IP is contracting at the fastest pace since the slowdown in 2003. Emerging weakness in business investment prospects both in the Western world and emerging markets poses a big risk to the German growth outlook, given the economy's leading role as a producer of capital equipment. Canada posted a further 10k jobs gain in Oct on top of the biggest monthly gain since the 1970s in September. However the detail reveals that public administration jobs rose 40k, related to last month's federal elections. Without that contribution, jobs would have fallen; indeed we expect November employment to post a decline. Outlook We are neutral NZD/USD short term, being inclined to sell into NZD/USD in the 0.60/0.62 area but not before. We see AUD/NZD higher, with scope for 1.18 multiday, as a somewhat improved risk environment encourages unwinding of some of the excessive AUD shorts. Country Release Last Forecast NZ Oct REINZ House Prices %yr –6.1% – Aus RBA Statement on Monetary Policy Sep Housing Finance –2.2% –3.0% US Treasury-Speak: Kashkari Jpn Sep Machinery Orders –14.5% 3.00% Eur Nov Sentix Investor Confidence –27.8 –30.0 UK Oct PPI %yr 5.40% 5.10% Can Oct Housing Starts 218k 205k Sep New House Prices flat –0.1% Westpac Institutional Bank http://www.wib.westpac.co.nz/ Disclaimer All customers please note that this information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. Australian customers can obtain Westpac's financial services guide by calling +612 9284 8372, visiting www.westpac.com.au or visiting any Westpac Branch. The information may contain material provided directly by third parties, and while such material is published with permission, Westpac accepts no responsibility for the accuracy or completeness of any such material. Except where contrary to law, Westpac intends by this notice to exclude liability for the information. The information is subject to change without notice and Westpac is under no obligation to update the information or correct any inaccuracy which may become apparent at a later date. Westpac Banking Corporation is regulated for the conduct of investment business in the United Kingdom by the Financial Services Authority. © 2004 Westpac Banking Corporation. Past performance is not a reliable indicator of future performance. The forecasts given in this document are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from these forecasts.

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US Jobs Fall 240 000 In October

Daily Forex Fundamentals | Written by Easy Forex | Nov 10 08 01:30 GMT |

U.S. Dollar Trading (USD) had a mixed day with the strong uptrend put on hold by terrible unemployment data. October Non Farm Payrolls dropped -240K vs. -200k expected and the Unemployment rate jumped to 6.5%. Pending Home Sales fell -4.6% above the -3.4% forecast. After two days of heavy losses on the stockmarket investors shrugged off the data and sent stocks higher into the weekend. In the U.S. share markets, the NASDAQ was up 38.70 points (2.41%) and the Dow Jones was up 248 points (2.85%). Crude Oil closed up $0.27 ending the New York session at $61.04 per barrel. The Euro (EUR) was under pressure initially during Asia but as Tokyo stocks turned around so did the Euros fortunes. The strength was maintained as US data was very weak and Stocks held gains. German Industrial Production was worse than expected at -3.6% in September. Overall the EUR/USD traded with a low of 1.2664 and a high of 1.2951 before closing the day at 1.2745 in the New York session. Looking ahead, November Sentix are expected at -34 vs. -28 previously. The Japanese Yen (JPY) initially very strong going into the Asian open but was unable to hold these gains as the Nikkei turned around and risk sentiment improved. The Crosses recovered sharply with the EUR/JPY and AUD/JPY all staging decent rallies. Initial strength on poor US jobs numbers was reversed as equities rallied in the US. Overall the USDJPY traded with a low of 96.77 and a high of 98.68 before closing the day around 98.12 in the New York session. The Sterling (GBP) volatility continued with initial weakness in the pound on the back of Thursday’s 1.5% rate cut. As equities reverse though the pound found some buyers and the GBP/JPY lead the recovery. Aggressively lower interest rates are bringing hope that the UK recession may not be as bad as markets are predicting. Overall the GDP/USD traded with a low of 1.5537 and a high of 1.5880 before closing the day at 1.5650 in the New York session. Looking ahead, October PPI is expected at -0.4%. The Australian Dollar (AUD) came under severe pressure early in Asia when Oil dropped below $60 a barrel. Joined the majors in recovering well but was extremely volatile during the US session as poor data was absorbed by the market. The Aussie continues to express market sentiment and follows stocks movement very closely. Overall the AUD/USD traded with a low of 0.6545 and a high of 0.6789 before closing the US session at 0.6740. Gold (XAU) moved lower with Oil initially before finding some buyers and tracking USD weakness higher. The range was relatively low when compared to other days. Overall trading with a low of USD$727 and high of USD$743 before ending the New York session at USD$737 an ounce. Easy Forex http://www.easy-forex.com Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products

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Indonesia May Grow 5% in `Very Challenging' 2009, Minister Says

By Shamim Adam

Nov. 10 (Bloomberg) -- Indonesia's economy may expand less than expected next year as the world tilts toward a recession, and the government will study ways to provide fiscal stimulus to sustain growth, Finance Minister Sri Mulyani Indrawati said.

Signs of a slowdown in Southeast Asia's largest economy may emerge by the year-end after ``very strong'' expansion last quarter, Sri Mulyani said in an interview in Sao Paulo yesterday where finance officials from the Group of 20 nations met. Growth may be as little as 5 percent in 2009, from a previous estimate of between 5.5 percent and 6.5 percent, she said.

``It will be very, very challenging for us to maintain growth under the current circumstances,'' Sri Mulyani said. ``Just like other developing countries, we have to be prepared for a longer period of weakening in the economy.''

The International Monetary Fund last week predicted the first simultaneous recession in the U.S., Japan and euro region in the post-World War II era next year. Central banks in Asia and around the world have slashed interest rates as inflation worries ease, and governments are boosting spending as the world battles the threat of prolonged slowdown.

Indonesia's central bank expects the $433 billion economy to expand as much as 5.9 percent in the fourth quarter, little changed from an estimated 6.3 percent in the third quarter, Deputy Governor Hartadi Sarwono said on Nov. 5.

Inflationary pressures are easing as commodity prices decline, Sri Mulyani said. Indonesia plans to reduce gasoline prices by 8.3 percent from Dec. 1 on lower crude costs, she said last week. Prices of kerosene and diesel may be cut within two months, according to a newspaper report today citing an Indonesian energy ministry official.

Commodity Prices

The decline in fuel costs will probably spur domestic consumption, which the government predicts will support growth next year amid expectations of a weaker agricultural industry hurt by declining commodity prices and as company revenues fall, Sri Mulyani said.

Indonesia has the resources to provide a fiscal boost to the economy if the government decides to do so, Sri Mulyani said.

China, the world's largest developing economy, yesterday announced an economic stimulus package worth 4 trillion yuan ($586 billion), or almost a fifth of its output to sustain domestic demand as the global credit shortage drags down growth.

Still, there is no rush to introduce more of such measures as the government still subsidizes food and fuel costs for many Indonesians and helps the poor among its populace by distributing cash, Sri Mulyani said.

`Most Effective'

``In our budget for 2009, we have already provided an allocation that can be used by the government to respond to any worsening situation that may come up from this crisis,'' she said. ``We are still evaluating and looking at the experience of other countries on what is the most effective way to address this situation.''

While emerging economies such as Indonesia can play a part in boosting global growth at a time when advanced countries are slowing or entering a recession, the costs of financing such expansionary policies may be prohibitive, Sri Mulyani said.

``It used to be very easy for emerging countries with high growth like Indonesia to get capital inflows so they can support economic activity,'' she said. ``Now, capital is quite scarce and it's going to be very costly if we have to issue bonds when the bond market is not functioning normally.''

Indonesia will continue to sell debt and ``maintain'' its presence in credit markets as long as rates and the costs of selling such bonds remain ``reasonable,'' Sri Mulyani said. The country has standby loan arrangements with development partners and multilateral organizations that it can tap on if required, she said.

To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net

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China Stands Between Sydney and 1930s Nostalgia: William Pesek

Commentary by William Pesek

Nov. 10 (Bloomberg) -- Australia isn't buying into this whole revisiting-the-1930s thing. The Asia-Pacific region's fifth-biggest economy is even hiring.

The unexpected addition of 34,300 jobs in October may not excite Americans losing employment at a feverish pace. Yet when your population is 21 million versus 309 million in the U.S. and the world economy is melting down, such gains are impressive.

Australia's secret? China. While economists also point to income-tax cuts, lower interest rates and government handouts, there's a sense from Sydney to Perth that China will shield the economy from forces causing global panic.

It's a dangerous assumption as the worst financial crisis in decades spreads. The same goes for other Asia-Pacific nations.

Few countries have benefited more from China's boom than Australia. Geography is part of it, though the real boon for the $822 billion economy is its abundance of raw materials, which China needs to thrive. They include iron ore, copper, coal and other commodities, not to mention agriculture.

Craig James, a senior economist at Commonwealth Bank of Australia in Sydney, had a point when he headlined a Nov. 6 report: ``Job Surge Silences Doomsayers.'' Yet the 10 percent- plus growth that neighbors expect from China may edge closer to 5 percent. While it is the kind of expansion the U.S., Japan and Germany would envy, it is crisis territory for China.

Slowing China

``It's clear there is evidence of some slowdown in the Chinese economy and that will affect us as well, and again that's one of the international challenges that we face,'' Kevin Rudd, Australia's prime minister, told Radio 2UE in Sydney on Oct. 31.

In the next breath, Rudd added: ``I believe we are going to see further action from the Chinese on what we would describe as the country's fiscal policy to add to growth in that economy.''

In other words, officials in Beijing are on top of things. If Rudd realizes how vulnerable his economy could be to a deepening Chinese slowdown, he's not saying.

Australia is hardly without options. It still has a budget surplus, a rare thing among developed nations. Even if it did slash its forecast by three quarters last week to A$5.4 billion ($3.8 billion), a surplus is a surplus. Not needing to borrow much in this environment is a key advantage.

The nation's 4.3 percent jobless rate compares favorably with the U.S. and Europe. Reserve Bank of Australia Governor Glenn Stevens still has 525 basis points worth of short-term rates to cut. The U.S. has just 100 basis points of ammunition; Japan has just 30.

No Iceland

Australia certainly isn't a candidate for the Asian region's Iceland. A dependence on foreign money to fund a current-account deficit is hurting the Australian dollar, which is down 24 percent against the U.S. currency this year. Like Iceland, Australia was a favorite among investors borrowing cheaply in yen to bet on high-yielding currencies. The similarities end there.

Given the worsening global-growth picture, Australia will need all the policy tools it can find. Concern that the housing slowdown is deepening may be one reason. The central bank last week cut the benchmark interest rate by three-quarters of a percentage point -- following a one percentage-point cut in October -- as real-estate values slide.

Construction shrank in October for an eighth month. One index came in at 36.4, according to the Australian Industry Group and Housing Industry Association. A reading of less than 50 points shows construction contracted.

Reason for Pause

A measure of shipping costs for commodities known as the Baltic Dry Index also should give Rudd reason for pause. It has fallen about 90 percent since May due to the global economic slump and slowing international trade amid tight credit markets.

Such numbers dramatize China's increasing fragility. When commodity-shipping costs are falling, you know China is slowing more drastically than the official data suggest.

It's telling, for example, that Chinese Finance Minister Xie Xuren left an international economic conference in Peru before it even began. He arrived on Nov. 5 and headed back shortly afterward to help resolve problems at home, an organizer of the event told Bloomberg News.

It's also a bad sign for executives who think growth in Southeast Asia will offset falling Chinese demand. As the U.S. slides, it will bring Japan and China with it. Southeast Asia would be next. And then there's India, also a growing export market for Australia's resources.

When shares of solid companies such as Toyota Motor Corp. plunge -- Toyota last week projected the biggest annual earnings drop in at least 18 years -- you know the economy is in trouble.

The same is true of Sheldon Adelson, the billionaire who controls Las Vegas Sands Corp. and is seeking a bailout from Singapore. Wasn't gambling supposed to be recession-proof? Look out Macau.

Australia is better positioned than others in the Asia- Pacific region amid fears of another Great Depression. That doesn't mean an economy that has been the envy of the world for years will avoid a worsening global storm.

(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net

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G-20 Says Its Ready to Urgently Boost Growth, Stimulus Needed

By Ben Sills and Shamim Adam

Nov. 10 (Bloomberg) -- The Group of 20 nations is prepared to act ``urgently'' to bolster growth and called on governments to cut interest rates and raise spending as the world's leading industrialized economies battle the threat of a recession.

``We stand ready to urgently take forward work and actions agreed by our leaders to restore and maintain financial stability and support global growth,'' the group said in a statement released yesterday following a meeting in Sao Paulo. ``Countries must use all their policy flexibility, consistent with their circumstances, to support sustainable growth.''

Those measures include ``monetary and fiscal policy,'' it said.

China, the world's largest developing economy, announced an economic stimulus package worth almost a fifth of its output to sustain domestic demand as the credit crunch drags down growth from New York to Tokyo. Officials in the U.S. and Europe already have slashed borrowing costs and boosted spending in a bid to contain the effects of the slump.

``The solution to this crisis must be rapid,'' Brazilian Finance Minister Guido Mantega told reporters. ``We need to change the tire on the car while it's still moving.''

Australia's central bank signaled today that it's prepared to add to the most aggressive interest-rate cuts in 17 years. Taiwan's central bank yesterday cut its benchmark interest rate for the fourth time in two months.

Stocks Rally

Asian stocks rallied for the first time in three days, with the MSCI Asia Pacific Index gaining 3 percent and Japan's Nikkei 225 Stock Average surging 5.5 percent as of 11:30 a.m. China's CSI 300 Index rose 5.4 percent.

Brazil, Russia, India and China, the so-called BRIC nations, plan coordinated measures to increase trade and capital flows among their economies, Russian Finance Minister Alexei Kudrin said in an interview. Mexican Deputy Finance Minister Alejandro Werner said slower economic growth and lower food and commodity prices justify cutting interest rates.

Finance ministers and central bankers from the G-20 are laying the groundwork this weekend for a Nov. 15 heads-of-state summit in Washington.

The Bank of England already lowered its key rate to 3 percent last week while the European Central Bank cut by half a percentage point twice within a month. The U.S. Federal Reserve, battling the financial crisis at its source, has already lowered its benchmark rate to 1 percent.

Monetary Easing

``The recent slowdown in world growth and consequent reduction in commodity prices have decreased inflationary pressures, especially in advanced economies, and permitted central banks to decide on monetary easing,'' the statement said.

The International Monetary Fund is forecasting that the U.K., Japan, the euro region and the U.K. economies will all contract next year in their first simultaneous recession since the Second World War. With slower growth damping inflationary pressures, central banks are likely to cut borrowing costs further, Canadian Finance Minister Jim Flaherty said.

``There are ongoing conversations about who plans to do what, when'' on interest rates, Flaherty said. ``I expect that these discussions will lead to some degree of coordinated action.''

Some countries' maneuvering room on interest rates is still constrained by inflation pressures as weakening currencies increase the cost of imported goods, the draft statement said. The Brazilian government has spent $5.1 billion defending the real in the past two months, while the Mexican peso fell by more than a quarter since July.

Even the euro has lost 20 percent against the dollar since touching a record that month.

Falling Currencies

``In those economies facing currency depreciation and still suffering from second-round effects inflationary pressures may be more persistent,'' the statement said. ``In this context, monetary authorities will need to continue to carefully monitor economic developments including the consequences of financial de-leveraging in order to take appropriate action if needed.''

China's State Council said yesterday the government will spend 4 trillion yuan ($586 billion) by the end of 2010 as part of its stimulus plans. The package, of which 100 billion yuan is earmarked for this quarter, will go toward low-rent housing, infrastructure in rural areas, as well as roads, railways and airports, the State Council said.

``We are closely watching the development of the financial crisis and the situation regarding global activity,'' Zhou Xiaochuan, governor of the People's Bank of China, said yesterday. ``If China can maintain domestic demand, it's helpful for global stability.''

China accounted for 27 percent of global economic growth last year, more than any other nation, the International Monetary Fund said in a report in April.

To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net

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Malaysia May Cut Fuel Prices Twice This Month, Times Reports

By Soraya Permatasari

Nov. 10 (Bloomberg) -- Malaysia may cut gasoline prices twice this month as crude oil prices continue to decline, the New Straits Times reported, citing a minister.

The government will probably lower gasoline prices over the weekend and another reduction may come by the end of the month, the newspaper reported, citing Domestic Trade and Consumer Affairs Minister Shahrir Abdul Samad.

Malaysia's government has cut gasoline and diesel prices four times since it raised the prices June, the report said.

To contact the reporter on this story: Soraya Permatasari in Kuala Lumpur at soraya@bloomberg.net

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Newcastle Port Power-Station Coal Price Gains for Second Week

By Jesse Riseborough

Nov. 10 (Bloomberg) -- Power station coal prices at Australia's Newcastle port, a benchmark for Asia, rose for a second week, gaining 3.2 percent amid rising demand from utilities.

The weekly index for power-station coal prices at the New South Wales port increased $3.19 to $104.02 a metric ton in the week ended Nov. 7, according to the globalCOAL NEWC Index.

Shipments from the port, the world's biggest coal-export harbor, increased 35 percent last week to the most in 15 months as demand rebounded. The price has slumped 47 percent from a July 4 record as the worst financial crisis since the Great Depression curbs demand for raw materials.

``We continue to view the thermal coal market as remaining tight, with utilities viewing security of supply as key and unlikely to renege on volumes,'' UBS AG analysts said in a Nov. 7 report.

Xstrata Plc, the world's largest exporter of power-station coal, BHP Billiton Ltd. and Rio Tinto Group are among mining companies that ship coal through Newcastle. Thermal coal producers won a 125 percent increase in annual contract prices in the year that started April 1 to $125 a ton.

The price fell to a nine-month low of $96 in the week ended Oct. 24. The monthly index fell 26 percent to $106.92 a ton in October, from $144.82 the previous month.

UBS cut its 2009 contract price forecast by 20 percent last month to $100 a ton.

To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net

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Crude Oil, Gold Rise as China Unveils Growth Support Package

By Christian Schmollinger and Gavin Evans

Nov. 10 (Bloomberg) -- Crude oil and gold rose for a second day after China announced a 4 trillion-yuan ($586 billion) stimulus package that may spur economic growth and demand for fuels.

China, the world's second-largest oil consumer, yesterday said it will spend the money through 2010 on housing and infrastructure, boosting demand for commodities including iron ore, crude oil and copper, which also gained. Saudi Aramco, the world's biggest state oil company, told South Korean and Japanese refiners it would cut December supplies.

``China's steps will stimulate investment and also spending by consumers, all of which drives oil demand,'' said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore. ``The oil market has been waiting for a clear signal out of the Saudis that they'd cut and this is an indication that they are following through.''

Crude oil for December delivery gained as much as $3.26, or 5.3 percent, to $64.30 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $63.90 at 10:33 a.m. in Singapore.

Prices fell 10 percent last week as equities dropped, U.S. fuel stockpiles rose more than expected and the nation's unemployment rate climbed to a 14-year high.

Copper for delivery in three months on the London Metal Exchange climbed for the first day in four to $4,040.00 a metric ton, and stood at $4,039 a ton at 10:17 a.m. Singapore time.

Bullion for immediate delivery rose for the second day, gaining 1.7 percent to $749.50 an ounce at 10:16 a.m. in Singapore.

G-20 Ministers

China said yesterday it will spend the equivalent of almost a fifth of its gross domestic product last year on infrastructure and encourage investments in machinery.

``It's a pretty big spending package they've announced,'' said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. It ``definitely gives the commodity markets a bit of a boost.''

The International Monetary Fund is forecasting that the economies of the U.S., Japan, Europe and the U.K. will all contract next year in their first simultaneous recession since the Second World War.

Governments worldwide must do all they can to lower interest rates and raise spending to support sustainable economic growth, finance ministers and central bankers from the Group of 20 industrial nations said in a statement after a meeting in Sao Paulo yesterday.

``This is all supportive for oil,'' said Purvin & Gertz's Shum. ``The major economies and central banks will continue to take steps to get the financial markets going again.''

Saudi Cuts

Saudi Aramco, the world's biggest state oil company, will cut crude supplies in December to customers in Japan by about 5 percent to 6 percent below levels agreed under annual contracts, a refinery official said.

The Dhahran, Saudi Arabia-based producer will reduce mostly supplies of its heavy crude, said the refinery official who had received notices from the company and asked not to be identified because of confidentiality agreements.

Brent crude oil for December settlement gained as much as $3.11, or 5.4 percent, to $60.46 a barrel on London's ICE Futures Europe exchange. The contract was at $60.08 at 10:35 a.m. Singapore time.

Shipments from Russia, the biggest producer after Saudi Arabia, have fallen 25 percent below normal levels this month after export duties fell less than oil companies had wanted, Interfax reported Nov. 9.

Producers have contracts to meet and the reduction in deliveries will be temporary, the news service said, citing Nikolai Tokarev, chief executive officer of government-owned pipeline operator OAO Transneft.

To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net; Gavin Evans in Wellington at gavinevans@bloomberg.net

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Japan Sept. Core Machinery Orders: Statistical Summary (Table)

By Shizuka Muragishi

Nov. 10 (Bloomberg) -- Japanese machinery orders, excluding shipbuilding and utilities, rose 5.5 percent in September from August, seasonally adjusted, the Cabinet Office in Tokyo said.

===============================================================================
                         Sept.    Aug.     July     June      May     April
                         2008     2008     2008     2008     2008     2008
===============================================================================
                         ------------Month-on-Month Percent Change------------
Total orders               -3.0%    -1.2%    -8.5%    -4.8%    10.8%     4.5%
Private                    0.9%   -10.8%    -6.6%     5.5%     4.9%    -5.3%
-------------------------------------------------------------------------------
Ex-ships, utils (core)      5.5%   -14.5%    -3.9%    -2.6%    10.4%     5.5%
3-month % change         -10.4%    -2.0%     7.7%     0.6%    -5.1%    -7.3%
3-month annualized       -35.6%    -7.7%    34.8%     2.5%   -18.9%   -26.1%
-------------------------------------------------------------------------------
 Manufacturers             9.7%   -13.9%   -10.4%     3.9%    12.2%     1.9%
 Non-manufacturers*       -1.3%   -14.9%    -2.4%    -3.3%     8.8%     8.8%
Public                    -1.0%    -4.4%    -4.9%     4.4%   -13.9%    23.7%
===============================================================================
                         Sept.    Aug.     July     June      May     April
                         2008     2008     2008     2008     2008     2008
===============================================================================
Foreign                    3.1%    14.8%   -14.4%   -12.1%    21.1%     4.6%
Agency                    13.6%   -10.6%     2.0%   -19.7%    15.2%     3.3%
                         -------------Year-on-Year Percent Change-------------
Total orders               -2.8%   -10.1%    -4.6%     4.9%     3.6%    -0.6%
Private                   -4.3%    -9.0%    -2.4%    17.9%     2.3%     2.5%
-------------------------------------------------------------------------------
 Ex-ships, utils (core)   -4.2%   -13.0%    -4.7%     9.7%     5.1%     0.5%
-------------------------------------------------------------------------------
 Manufacturers            -8.6%   -12.2%    -4.9%    13.8%    -1.0%     0.9%
 Non-manufacturers*       -0.1%   -13.6%    -4.9%    12.4%    10.5%     0.3%
Public                     1.5%    -9.1%    -2.4%   -31.1%   -17.5%     5.8%
Foreign                   -2.5%    -9.3%    -7.2%     0.8%     6.8%    -4.7%
Agency                     1.4%   -27.4%    -3.7%    -9.5%    14.8%    -1.3%
                         ---------------------Yen Levels----------------------
Total orders             2,366.6  2,439.9  2,470.6  2,699.3  2,835.2  2,560.0
Private                 1,059.4  1,049.7  1,177.1  1,260.8  1,195.6  1,139.5
-------------------------------------------------------------------------------
===============================================================================
                         Sept.    Aug.     July     June      May     April
                         2008     2008     2008     2008     2008     2008
===============================================================================
 Ex-ships, utils (core)   940.7    891.7  1,042.8  1,085.1  1,114.6  1,009.4
 Manufacturers            433.7    395.3    459.2    512.4    493.3    439.9
 Non-manufacturers*       494.3    500.8    588.4    603.1    623.4    573.0
Public                    216.9    219.1    229.3    241.0    230.7    268.0
Foreign                 1,099.0  1,065.7    928.5  1,084.6  1,233.4  1,018.2
Agency                    103.8     91.4    102.2    100.1    124.8    108.3
===============================================================================

NOTE: Monthly data are seasonally adjusted. Yen levels in billions. Three-month percentage changes are calculated as the three-month average change from the prior three-month average. *: Excludes shipping and utilities.

SOURCE: Economic and Social Research Institute, Cabinet Office

To contact the reporter on this story: Shizuka Muragishi in Tokyo at smuragishi@bloomberg.net

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