Tin tuc ngay 23/01/2013





U.S. Stocks Advance on Better-Than-Estimated Earnings
U.S. stocks rose, following five- year highs for the benchmark indexes last week, after better- than-forecast earnings from companies including Travelers Cos. and Freeport-McMoRan Copper & Gold Inc.
Travelers rose 2.2 percent after fourth-quarter profit beat estimates. Freeport-McMoRan rallied 4.6 percent as copper sales rose more than anticipated and costs fell. DuPont Co. (DD) advanced 1.8 percent after fourth-quarter profit beat estimates as demand climbed for plastics used in autos. Google Inc. (GOOG) jumped 4.8 percent after the close of regular trading as it posted higher fourth-quarter earnings.
The Standard & Poor’s 500 Index (SPX) rose 0.4 percent to 1,492.51 at 4 p.m. in New York. The Dow Jones Industrial Average advanced 62.51 points, or 0.5 percent, to 13,712.21. About 6.2 billion shares changed hands on U.S. exchanges, or about in line with the three-month average.
“This country is on the verge of an explosion of greatness,” David Tepper, the hedge-fund manager who runs the $15 billion Appaloosa Management LP, said today in an interview with Stephanie Ruhle.” “The key is to be long equities this year.”
The S&P 500 has risen 4.7 percent in January for the best start to a year since 1997. The benchmark gauge surged to the highest level since December 2007 last week as companies including General Electric Co. and Goldman Sachs Group Inc. reported better-than-estimated earnings. Some 72 percent of the 76 companies in the benchmark index that have released results so far exceeded projections, according to data compiled by Bloomberg. Analysts on average (TRAN) forecast growth of 3.8 percent in fourth-quarter profit, the data show.
Home Sales
Sales of U.S. existing homes unexpectedly fell 1 percent to a 4.94 million annual rate last month, figures from the National Association of Realtors showed today in Washington. The median forecast of 79 economists surveyed by Bloomberg called for sales to increase to a 5.1 million rate. The reading was still the second-highest since November 2009.
In Asia, the Bank of Japan made its strongest commitment yet to end two decades of stagnation, shifting to Federal Reserve-style open-ended asset purchases. The BOJ pledged to buy about 13 trillion yen ($145 billion) in assets a month from January 2014 and doubled its inflation target without setting a deadline.
Historically Inexpensive
Tepper said he’s bullish on U.S. stocks as the economy is set to grow by as much as 3 percent this year. He said investors should own stocks because they’re historically inexpensive, U.S. companies have little debt, interest rates are low, credit is fully valued and the major risks to the global economy, such as a debt crisis in Europe, have diminished.
“Whatever happens in the near-term, there is nothing to suggest the path of least resistance is not higher over the intermediate and longer-term,” Jeffrey Saut, who helps oversee about $350 billion as chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, wrote in a note to clients today. “Therefore, I would accumulate favored stocks, as well as the indices, on any ensuing pullbacks.”
Google rose 4.8 percent to $736.75 as of 4:58 p.m. in New York. The owner of the world’s largest search engine reported higher profit as advertisers boosted spending to reach consumers during the holiday shopping season.
IBM’s Forecast
International Business Machines Corp. added 4 percent to $203.97 after the close of regular trading. The world’s biggest computer-services provider forecast profit that exceeded analyst estimates as the company shifts to data analysis and cloud computing.
Materials producers in the S&P 500 rose 0.9 percent, the most among 10 industries in the benchmark equity gauge. All groups advanced except for consumer-staples shares. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, slipped 0.2 percent to 12.43, the lowest level since April 2007.
Freeport-McMoRan added 4.6 percent to $35.19 as fourth- quarter earnings topped analysts’ estimates. Metal volumes were better than expected because of higher production in North and South America, Freeport said. Copper and gold sales increased from a year earlier when the company’s Grasberg mine in Indonesia, its biggest operation, was affected by a strike. The Phoenix-based mining company agreed last month to buy two energy companies for $9 billion.
DuPont Gains
DuPont gained 1.8 percent to $47.82. The biggest U.S. chemical company by market value said profit excluding one-time items was 11 cents a share, beating the 7-cent average of 10 estimates compiled by Bloomberg. Sales in 2013 will climb to $36 billion from $34.8 billion, DuPont said, topping the $35.9 billion average of 17 analysts’ estimates.
Travelers, the only insurer in the Dow, rallied 2.2 percent to $77.95 after profit beat estimates on higher income from its investment portfolio, increased sales and a benefit from reserves. Travelers’ fourth-quarter profit fell 51 percent as superstorm Sandy boosted claims costs.
Insurance stocks rallied 1.6 percent as group, the most among 24 industries in the S&P 500, to the highest level since September 2008.
The Dow Jones Transportation Average, which includes 20 members, rallied 1.1 percent to 5,757.44, a record high. Delta Air Lines Inc. jumped 2.9 percent to $14.01. The Atlanta-based carrier plans to cut seating capacity as much as 4 percent while working to curb labor and fuel costs that crimped fourth-quarter earnings.
Boeing, Dell
Johnson & Johnson slumped 0.7 percent to $72.69. Profit for 2013 will be $5.35 to $5.45 a share, the company said in a statement. The guidance missed the $5.49 average of 23 analyst estimates compiled by Bloomberg. Worldwide consumer sales declined in 2012 to $14.4 billion, a 2.9 percent decrease caused by a negative currency impact.
Boeing Co. fell 1.2 percent to $74.16 after saying it will suspend deliveries of 787 Dreamliners while working to meet a U.S. Federal Aviation Administration directive to ensure the plane’s lithium-ion batteries are safe.
Dell Inc. (DELL) climbed 2.2 percent to $13.12. The company is getting closer to clinching a leveraged buyout with Silver Lake Management LLC, and Microsoft Corp. is planning to provide part of the funding, people with knowledge of the matter said.
Silver Lake and Dell are negotiating a price in the range of $13.50 to $14.25 a share, said one of the people, who asked not to be named because the talks are private. Microsoft is discussing contributing about $2 billion for the deal, which could be announced this week, the person said. Microsoft retreated 0.4 percent to $27.15, erasing earlier gains.
Most Bullish
International investors are the most bullish on stocks in at least 3 1/2 years, with close to two-thirds planning to raise their holdings of equities during the next six months.
As the global financial and business elite gather in Davos, Switzerland, for their annual forum, 53 percent of respondents to the Bloomberg Global Poll also say equities will offer the highest return in the next year. That’s a 17 percentage point jump from the last poll in November and the most since the quarterly survey of investors.
With 72 percent of corporate earnings exceeding analysts’ estimates, it may be difficult for U.S. stocks not to reach a record in 2013.
The S&P 500 is less than 5 percent below the all-time high in October 2007. Profits in the benchmark gauge are forecast to exceed $1 trillion this year, or 31 percent more than when the gauge peaked, according to more than 11,000 analyst estimates compiled by Bloomberg. Even if the price-earnings ratio, now 9.8 percent below the six-decade mean, doesn’t expand, the S&P 500 is poised to recover fully from the financial crisis that began almost six years ago.
“Corporate America has done an incredible job post- recession,” Leo Grohowski, BNY Mellon Wealth Management’s New York-based chief investment officer said in a Jan. 16 phone interview. His firm oversees $179 billion. “It’s not going to be a return to the ’80s and ’90s where we had people retiring from their day jobs to become day traders. I wouldn’t revert to the historic P/E ratio kind of environment. But the good news is I don’t think we need that to reach a record.”
 
 
 
Dow, S&P 500 close at 5-year highs
U.S. stocks gained ground Tuesday, with the Dow and S&P 500 closing at fresh five-year highs amid mostly strong earnings reports.
The Dow Jones industrial average added 0.4% and S&P 500 rose 0.5%, advancing once again to their highest levels since December 2007. The two indexes have been hitting new highs since the start of the year.
Travelers (TRV, Fortune 500) was among the best performers on the Dow, with shares rising more than 2% after the company's fourth-quarter profit beat estimates. Shares of DuPont (DD, Fortune 500) also rose sharply after the company reported better-than-expected earnings and issued an upbeat outlook, helping boost the blue chip index.
Western Digital (WDC, Fortune 500) was a big winner in the S&P 500. The data storage provider, which is slated to report earnings Wednesday, said it is expanding its products to to address the small and medium-sized business market.
The Nasdaq edged up 0.3%, fueled by an 13% jump in shares of Research in Motion (RIMM). The BlackBerry maker's stock has been gaining on the hype surrounding the launch of BlackBerry 10 later this month.
Dell (DELL, Fortune 500) was also a big gainer on the tech-heavy index following reports that Microsoft (MSFT, Fortune 500) was in talks with private equity firm Silver Lake Partners and Dell CEO Michael Dell to invest between $1 billion to $3 billion in the buyout of the PC maker, citing sources close to the matter.
Related: Microsoft buying a chunk of Dell would be smart (for Microsoft)
On the downside, Johnson & Johnson (JNJ, Fortune 500) shares edged lower after the company reported earnings and sales that were roughly in line with estimates
Verizon (VZ, Fortune 500) reported a wider quarterly loss ahead of the open, but shares gained ground. Wireless carriers are expected to have a rough quarter as profit margins get dinged by high subsidies paid to Apple (AAPL, Fortune 500) for the iPhone 5.
After the closing bell, shares of IBM (IBM, Fortune 500) climbed after the company topped fourth-quarter earnings and sales expectations and also issued a better-than-expected outlook for 2013.
Google (GOOG, Fortune 500) shares also rose in after-hours trading after the company delivered earnings and revenue that exceeded forecasts.
Overall, S&P 500 companies are expected to report earnings growth of 3.8% for the last three months of 2012, according to S&P's Capital IQ.
Earlier in the day, stocks wavered as investors focused on mixed housing data. The National Association of Realtors said existing home sales surprisingly declined in December to an annual rate of 4.94 million from the previous month. Despite the month-over-month decline however, overall existing home sales in 2012 were the highest for the U.S. real estate market in five years, according to the industry trade group.
Related: Fear & Greed Index steeped in extreme greed
European markets and Asian markets ended mixed.
Japan's Nikkei ended narrowly weaker and the yen firmed slightly against the dollar after the Bank of Japan raised its inflation target and announced unlimited government bond purchases from next year. The move was widely expected and some analysts said the bank could have been even more ambitious in its bid to stimulate growth.
"Today's announcements do represent a significant step forward from the BoJ," analysts at Daiwa Capital Markets wrote in a note to clients. "Even if they are not necessarily the seismic shift in policy that the economy might require."
The dollar was also lower versus the euro and the British pound.
Oil and gold priced edged higher.
The price of the 10-year Treasury was little changed, and the yield held steady around 1.84%. To top of page
 
 
 
 
Europe Stocks Little Changed as ZEW Offsets U.S. Report
European stocks were little changed as German investor confidence surged, offsetting an unexpected decline in U.S. sales of existing homes.
Deutsche Bank AG (DBK) lost 1.9 percent after a person familiar with the matter said Germany’s regulator asked the lender to simulate an operational split. Vivendi SA (VIV) retreated the most since August after the chief executive officer of its SFR phone unit predicted a difficult market for as long as 18 months. Banca Monte dei Paschi di Siena SpA slid 5.7 percent after a report said it used derivatives that are hurting profit.
The Stoxx Europe 600 Index (SXXP) fell less than 0.1 percent to 287.66 at the close of trading, after earlier losing as much as 0.8 percent. The gauge has still gained 2.9 percent this year as U.S. lawmakers agreed on a compromise budget and optimism rose that U.S. companies would report better-than-expected earnings.
“The existing home sales figures for December were worse than expected and they add to the mixed picture with indicators pointing in many directions,” Peter Garnry, an equity strategist at Saxo Bank A/S in Copenhagen, wrote in a message. “However, if you filter out the noise, the U.S. economy is slowly approaching trend growth again. And with an improving housing sector, regardless of today’s existing home sales, the U.S. economy could surprise to the upside in 2013, which should be positive for stocks.”
The volume of shares changing hands in Stoxx 600 companies today was 6 percent greater than the 30-day average.
National benchmark indexes fell in 11 of the 18 western European markets. The U.K.’s FTSE 100 was little changed, while France’s CAC 40 slipped 0.6 percent. Germany’s DAX lost 0.7 percent.
German Confidence
German investor confidence increased to the highest in 2 1/2 years in January. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 31.5 from 6.9 in December. That’s the highest since May 2010. Economists in a survey forecast a gain to 12.
Sales of U.S. existing homes unexpectedly dropped in December, restrained by the lowest supply of properties in more than a decade.
Purchases fell 1 percent to a 4.94 million annual rate last month, the National Association of Realtors said in a report in Washington. That’s the second-highest reading since November 2009. The median forecast of 79 economists surveyed by Bloomberg called for sales to increase to a 5.1 million rate.
In Asia, the Bank of Japan said it will shift to Federal Reserve-style open-ended asset purchases in its strongest commitment yet to ending two decades of deflation.
Deutsche Bank
Deutsche Bank slid 1.9 percent to 35.94 euros after a person familiar with the matter said the regulator, Bafin, asked Germany’s biggest lender to simulate a split of its business.
A group led by Bank of Finland Governor Erkki Liikanen called for banks to move their trading activities into separately capitalized units. Deutsche Bank has the biggest trading activities compared with its balance sheet in Germany, according to the group.
Christian Streckert, a spokesman for Deutsche Bank, declined to comment.
German newspaper Boersen Zeitung reported earlier today that Bafin asked two banks to simulate a split along the lines put forward by the Liikanen group, citing unidentified people.
Vivendi SA, Europe’s biggest media and telecommunications company, lost 4 percent to 16.08 euros. Stephane Roussel, chief executive officer of Vivendi’s SFR phone business, said the unit expects a tough market for as long as 18 months, according to an interview published in Le Parisien.
Monte Paschi
Monte Paschi (BMPS), the world’s oldest bank, fell 5.7 percent to 27.8 euro cents on concern that losses from derivatives contracts are hurting profit.
The bank’s former managers signed an agreement with Nomura Holdings Inc. (8604) three years ago that will reduce 2012 earnings by 220 million euros, Il Fatto Quotidiano reported today, citing an internal report written by Chief Executive Officer Fabrizio Viola.
Monte Paschi said Jan. 17 it will review its accounts after reported the lender engaged in a transaction with Deutsche Bank at the height of the financial crisis that obscured losses before it sought a government bailout.
Rightmove Plc (RMV) gained 2.8 percent to 1,599 pence as UBS AG upgraded the British property-listings website owner to buy from neutral, saying that its competitive strengths remain intact.
Opap SA (OPAP) rallied 5.1 percent to 6.95 euros after Greek officials met to coordinate state asset-disposal plans, which include the sale of a 33 percent stake in Greece’s biggest gambling company.
Drillisch AG jumped 3.7 percent to 12.30 euros, its highest price in more than 12 years. The German telephone-services provider said it will increase its 2012 dividend to 1 euro a share from 70 cents a year earlier.
 
 
 
Most Asian Stocks Fall as Japan Shares Extend Drop on Yen
Most Asian stocks fell, with Japanese shares trading lower after the yen strengthened a day after the Bank of Japan opted to hold off on new monetary stimulus until next year. Equities outside Japan rose.
Nissan Motor Co. (7201), an automaker that gets about a third of its revenue from North America, dropped 1.4 percent in Tokyo. Nufarm Ltd., an agricultural chemicals supplier, plunged 8.3 percent in Sydney after saying BASF SE advised the company it will terminate its distribution arrangements in Australia. Asian Citrus Holdings Ltd. (73), a Chinese operator of orange plantations, may be active today in Hong Kong after saying its first-half profit is unlikely to be higher than a year earlier.
The MSCI Asia Pacific Index fell 0.2 percent to 132.74 as of 10:21 a.m. in Tokyo, with about four stocks dropping for every three that rose. The gauge rallied 11 percent through yesterday from Nov. 14, when the announcement of Japanese election sparked optimism a new leadership would take more steps to spur its economy. The MSCI Asia Pacific Excluding Japan Index rose 0.2 percent. Markets in Hong Kong and China are yet to open.
The Bank of Japan meeting “marked yet another faltering step on the path toward reflation,” said David Homan, New York- based director of macro strategy at Credit Suisse Group AG. The decision “leaves a lot of steps still to come. The reality for reflation still looks more like a slow-burning fuse.”
While Bank of Japan Governor Masaaki Shirakawa’s board said yesterday it will buy government bonds indefinitely to help achieve a 2 percent inflation target, there were caveats. The BOJ said the policy will only start next year and the increase in asset purchases will top out at 10 trillion yen ($113 billion).
Nikkei, Kospi
Japan’s Nikkei 225 Stock Average slumped 0.8 percent. The gauge rose 24 percent though yesterday from Nov. 14 on optimism the central bank would add to stimulus amid pressure from Prime Minister Shinzo Abe’s new government.
Australia’s S&P/ASX 200 Index (AS51) climbed 0.3 percent after its fourth-quarter inflation rate rose less than forecast. South Korea’s Kospi Index (KOSPI) rose 0.1 percent.
Japan’s exporters declined. The yen added to an advance yesterday that was the biggest in eight months after the BOJ announced a delayed increase in monetary easing efforts. A stronger yen reduces overseas income at Japanese companies when converted into their home currency.
The MSCI Asia Pacific Index, the benchmark regional equities gauge, traded at 14.3 times average estimated earnings compared with 13.4 for the Standard & Poor’s 500 Index and 12.1 times for the Stoxx Europe 600 Index
 
 
 
White House Says House Debt Plan De-Escalates Debate
The Capitol stands in the background as police monitor a checkpoint during the U.S. presidential inauguration in Washington.
The Obama administration said it welcomes a move by House Republicans to vote tomorrow on lifting the nation’s debt ceiling through mid-May as a de-escalation of the fiscal debate.
The measure “lifts the immediate threat of default and indicates that congressional Republicans have backed off an insistence on holding the nation’s economy hostage to extract drastic cuts in Medicare, education and other programs,” President Barack Obama’s budget office said in a statement.
White House spokesman Jay Carney said the administration still prefers a long-term extension of the nation’s debt ceiling. Still, Obama “would not stand in the way” if Congress passes the proposal, he said at a briefing.
The Treasury reached its statutory borrowing limit on Dec. 31 and is using “extraordinary” measures to avoid breaching the ceiling. Those measures will work only until mid-February to early March, Treasury Secretary Timothy F. Geithner said in a Jan. 14 letter to congressional leaders.
While the White House said it wouldn’t block the House bill, according to the statement the measure “introduces unnecessary complications, needlessly perpetuating uncertainty in the nation’s fiscal system.”
Borrowing Limit
Under the House Republican plan, the government’s $16.4 trillion borrowing limit would be suspended until May 19. At that point, the measure would allow the nation’s borrowing authority to automatically be increased to accommodate the amount the U.S. Treasury borrowed during those three months.
The House suspension plan is accompanied by a prod to lawmakers on the budget. It says the House and Senate each must adopt a budget resolution for the next fiscal year by April 15 or the pay for members of the chamber that doesn’t act will be withheld and placed in an escrow account.
Senate Majority Leader Harry Reid said he was “very glad” that the House was planning to send over “a clean debt ceiling bill.”
“The other stuff on it, we’ll approach that when we need to,” Reid, a Nevada Democrat, told reporters.
Senate Plans
The Senate’s top Republican, Mitch McConnell of Kentucky, said the House vote tomorrow will make clear that “they’re hoping to act” to keep the U.S. from defaulting in its debt.
“And then it will be incumbent upon the Senate Democratic majority to function,” McConnell told reporters. “What is their idea about raising the debt ceiling?”
The debt limit has been raised periodically since its creation in 1917 during the presidency of Woodrow Wilson. Since 1960, Congress has raised or revised the limit 79 times, including 49 times under Republican presidents. The U.S. never has defaulted on its obligations.
Investors in U.S. Treasury bonds, who most directly bear the risk of a government default, haven’t shown alarm over the political fight in Washington. The 10-year yield fell one basis point, or 0.01 percentage point, to 1.83 percent at 3:04 p.m. New York time.
 
 
 
White House gives grudging welcome to debt limit plan
The White House said Tuesday that President Barack Obama would not block a Republican plan to extend government borrowing authority by three months but would prefer a longer term debt ceiling hike.

Defusing a showdown with Obama, Republican House leaders are ready to permit the government to borrow more money to meet its obligations until May 18, despite earlier demands that debt ceiling hikes be matched by spending cuts.

The move would effectively remove the debt ceiling question from a looming conflagration with Republicans on Capitol Hill over spending cuts due to come into force at the end of next month and a soon-to-expire government budget.

White House spokesman Jay Carney noted that the debt ceiling workaround still had to make it past opposition from some conservative Republican members of Congress.

"If it does and it reaches the president's desk he would not stand in the way of the bill becoming law," he said, but added that Obama did not believe it was good for the economy in general to raise the debt ceiling in "increments."

"He believes we ought to do this for longer periods of time," Carney said, adding that Congress should give Obama authority to raise the debt limit on his own if it was not up for the job.

"Having said that, what we saw happen last week was significant, in our view. The House Republicans made a decision to back away from the kind of brinkmanship that was very concerning to the markets, very concerning to business, very concerning to the American people."

The government hit its statutory US$16 trillion debt limit last year but the administration used extraordinary measures to postpone the devastating economic shock waves that would result from defaulting on its obligations until late February or early March.

The House bill would withhold salaries of members of Congress if the chamber or the Senate does not pass a fiscal 2014 budget by April 15.

The Democratic-held Senate has not voted on a budget since 2009, and the government is being funded through temporary resolutions every six months.

Democratic leaders have said they would introduce a budget plan in the coming months, and pledged to consider the debt limit bill pass the House.

Obama has repeatedly warned that he will not negotiate with Republicans over the debt limit, pointing out that it concerns money available not for fresh spending, but for debt obligations already entered into by Congress.

Some conservative Republicans expressed concern Tuesday about their leadership's plan, though the bill would still be expected to pass the House of Representatives.

Republican Representative Tim Huelskamp said he would vote no, arguing that "raising the debt ceiling for a budget to be named later" is probably something he will not be able to vote for.

Representative Thomas Massie also expressed disquiet.

"I'm still having a lot of reservations about raising the debt limit for three months clean. It's a hard thing to do," he said.

Representative David Schweikert of Arizona was also opposed, saying the vote should be a chance for Republicans to demand a budget bill that balances the budget in 10 years.
 
 
 
U.S. Budget Discord Is Top Threat to Global Economy in Poll
Global investors say the state of the U.S. government’s finances is the greatest risk to the world economy and almost half are curbing their investments in response to continuing budget battles.
With the government within weeks of reaching its borrowing limit, 36 percent of respondents cite the nation’s fiscal woes as the biggest threat compared with 29 percent who choose Europe’s sovereign debt crisis and 15 percent who name a slowing Chinese economy, according to the quarterly poll on Jan. 17 of.
“Without a so-called ‘grand bargain’ between Democrats and Republicans, the U.S. fiscal situation sets up a series of potential crises,” says Howard Wang, a portfolio manager at JF Asset Management Ltd. in Hong Kong. “Bad politics could offset a good economy.”
The International Monetary Fund in October cut its forecast for global economic growth this year to 3.6 percent, 0.3 percentage point lower than its July 2012 estimate.
Investors may get a temporary respite today with U.S. House Republicans scheduled to vote to suspend the nation’s borrowing limit until May 19. The Republican proposal is intended to prompt the Democratic-controlled Senate to approve an annual budget, something it hasn’t done in four years, by withholding lawmakers’ pay if a budget isn’t passed by April 15. The Obama administration yesterday welcomed the House’s move.
Along with the looming debt ceiling, Congress confronts March deadlines on a measure to fund the government and $1.2 trillion in scheduled automatic spending cuts.
Staying Away
Almost half of investors -- 47 percent -- say Washington’s recurring fiscal showdowns are discouraging them from investing in U.S. financial markets. Included in that amount are 39 percent who say they would normally be investing more; 8 percent say they are actively selling.
Josh Denney, a research analyst with SGL Investment Advisors Inc. in Missoula, Montana, says his firm is in “sort of a perpetual ‘wait and see’ approach, thanks to Washington.”
Forty-five percent of respondents say the political confrontation isn’t affecting their investment decisions, while 3 percent are increasing their U.S. holdings.
Treasury Secretary Timothy F. Geithner says the government could hit its $16.4 trillion debt ceiling as soon as mid- February. By a margin of 56 percent to 40 percent, investors embrace House Republicans’ view that any increase in the limit should be matched by equal reductions in future spending.
Biggest Problem
“Spending, our biggest problem, is not being addressed,” says Ted Madaj, portfolio manager at American Agricultural Insurance Co. in Schaumburg, Illinois, who says he’s trimming his holdings of U.S. stocks.
While investors in the poll are voicing concern about the future, the markets so far are showing little apprehension. The 10-year Treasury yield was at 1.84 percent yesterday in New York. That’s up from 1.7 percent on Dec. 28, yet well below the 5.4 percent average over the past 25 years.
The Standard & Poor’s 500 Stock Index has risen more than 13 percent over the past year. It closed yesterday at 1,492.56, its highest level in more than five years.
Some investors say they’re worried about an eventual end to the Federal Reserve’s purchases of Treasury securities. Those measures, aimed at spurring economic growth, have lowered the 10-year yield by 80 to 120 basis points, according to Fed Chairman Ben S. Bernanke. Once the central bank halts its market interventions, yields could climb if deficits remain large.
Getting Messy
“What happens if economic growth suddenly picks up?” asks Paul Hickey, co-founder of Bespoke Investment Group in Harrison, New York. “If the Fed turns off the vacuum, the fixed-income market could get messy.”
Though Republicans are winning investor support for their calls for spending cuts, it comes at a cost. House Speaker John Boehner is viewed unfavorably by 46 percent of those surveyed, up from 38 percent in November. Thirty-one percent say they see the Republican leader favorably.
President Barack Obama is viewed favorably by 55 percent of respondents and unfavorably by 41 percent, about the same as in the last poll, in November.
Investors have little faith that Obama and congressional Republicans will agree this year on sweeping changes to U.S. entitlement programs such as Social Security and Medicare, and to government tax policies.
Tax Rewrite
On potential legislation that would simplify the 4 million word tax code, 58 percent say only “modest changes” will result this year, with 7 percent expecting a comprehensive rewrite and 29 percent anticipating no meaningful changes.
Republicans say government budget deficits should be reduced by trimming spending on Medicare and Social Security. Without cuts, the two programs will help drive debt held by the public to 103 percent of U.S. gross domestic product by 2040, according to the White House.
Fifty-two percent of investors predict modest changes in spending plans, while 4 percent anticipate a “comprehensive package” and 37 percent say the status quo will remain.
The budget debate will take place as Obama retools his economic team. Geithner, who is scheduled to leave his Treasury post on Jan. 25, is viewed favorably by 51 percent of those surveyed compared with 38 percent who regard him unfavorably.
Jack Lew, nominated by Obama to replace him as Treasury secretary, is a blank slate for investors; 54 percent say they have no opinion about the current White House chief of staff.
Default Unlikely
Ninety-two percent of investors, traders and analysts surveyed say it’s unlikely the U.S. will default on its debt. The wrangling over the U.S. fiscal position has taken a toll on the credit-rating companies’ reputations.
Since Standard & Poor’s downgraded U.S. debt in August 2011, the 10-year yield has fallen from 2.56 percent. In the Bloomberg poll, 26 percent of investors say they don’t value the rating companies’ opinions as much as they once did, while 9 percent say they no longer put any stock in their views. Thirty- one percent say the companies were “never useful,” and 32 percent see the opinions as one among many useful tools.
Still, the recurring political battles over the nation’s finances may be unsettling consumers. After reaching an eight- month high on Dec. 30, the weekly consumer comfort index (SPX) has declined for two consecutive weeks.
The Jan. 1 end of the temporary payroll tax cut will dent take-home pay and thus consumption, economists say. The economy is expected to grow in the first quarter at an annual rate of 1.5 percent, according to the median forecast of economists surveyed by Bloomberg.
Unless the automatic spending cuts are postponed, “we’ll be doubling down on austerity at a time when the economy is already weak,” says Scott Anderson, chief economist of Bank of the West in San Francisco.
The poll of 921 customers has a margin of error of plus or minus 3.2 percentage points.
 
 
 
 

TREASURIES-U.S. bonds slip on strong German data, debt proposal

U.S. bond prices slipped on Tuesday as a strong German market sentiment survey and a U.S. Republican proposal for a limited rise in the debt ceiling curbed demand for safe-haven assets.
* Germany's ZEW analyst and investor sentiment survey beat expectations with a sharp rise for the second month in a row, in a sign the euro zone crisis is no longer hitting Europe's largest economy as hard as in late 2012.
* In Washington, Republican leaders in the House of Representatives said they aim to pass on Wednesday a measure that would allow the government to borrow the money it needs to pay its bills for nearly four months more, to May 19.
* Some investors interpreted the proposal as a sign of Republicans softening their tone in the negotiations, but the market reaction was limited as there was uncertainty over whether the Democrats would accept it.
* Ten-year T-note yields were last 3.7 basis points higher on day at 1.8770 percent. T-note futures were 8/32 lower at 131-57/64.
* "We're waiting for further details on the debt limit debate," said Nick Stamenkovic, bond strategist at RIA Capital Markets in Edinburgh. "We're stuck in a narrow 1.80-1.90 percent range at the moment (in 10-year yields), and as long as we don't see an agreement I can't see them getting out of that."
* Traders said the Republican proposal mainly hit safe-haven assets on Monday, but U.S. Treasuries were catching up with the move after being shut in the previous session in observance of Martin Luther King Jr. Day.
* A trader said the rise in yields on Tuesday was limited by an announcement by the Bank of Japan that its open-ended commitment to buy assets would only kick in next year, disappointing those who expected more aggressive measures.
 
 
 
US existing-home sales dip in December: NAR
US existing-home sales dipped in December, capping a year that saw the briskest sales pace in five years as the housing market recovers, a trade group said Tuesday.

Sales fell 1.0 per cent from November to a seasonally adjusted annual rate of 4.94 million last month, the National Association of Realtors said.

The NAR revised downward its November estimate to 4.99 million, from an initial 5.04 million.

The December sales reading was weaker than the 5.10 million pace expected by analysts.

But on a 12-month basis, sales marked a 12.8 per cent increase from the December 2011 level, a fresh sign that the housing market has turned the corner six years after prices collapsed.

Total sales in 2012 was 4.65 million, up 9.2 per cent from 2011, the strongest increase since 2004, the NAR said.

The 2012 sales volume was the highest since 2007, boosted by record low mortgage interest rates, an improving job market and pent-up demand six years after the market collapsed.

The median home price rose for the 10th consecutive month year-over-year in December to US$180,800, a robust 11.5 per cent higher.

Limited inventory pushed 2012 median home prices 6.3 per cent higher to US$176,600, the biggest annual increase since 2005.

"The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices," said NAR chief economist Lawrence Yun.

"Likely job creation and household formation will continue to fuel that growth," he said, predicting gains in sales and prices in 2013.

 
 
 
 
Bernanke won't be back in 2014, say economists
Economists believe we have only one more year of Ben Bernanke's tumultuous tenure as chairman of the Federal Reserve. And most think that's bad news for the economy.
More than two-thirds of economists surveyed by CNNMoney said Bernanke likely won't be back for a third term. His current term ends on Jan. 31, 2014. Many believe the choice to stay or go will be his.
"He is likely to opt to leave after his term expires in 2014," said Lynn Reaser, chief economist for Point Loma Nazarene University. "He would be reappointed if he chose to stay." Several economists said they believe Bernanke would prefer to return to teaching at Princeton University.
But most of those surveyed say it would be better for the economy if he did return for another term.
"This has been the most complex time for monetary policy in history," said Russell Price, senior economist at Ameriprise Financial. "Who better to unravel these extraordinary programs than the man that designed and advocated for them in the first place?"
Related: Fed was blind to crisis
The Fed chairman has dodged questions about whether he wants or expects a third term. At the most recent Fed press conference he said, "I am very much engaged in these difficult issues that we're discussing today, and I have not been spending time thinking about my own future."
It may be a while before it's known if Bernanke will be back. President Obama waited until August of 2009 to announce that he would nominate him for a second term. Bernanke did say in December that he had not yet spoken to the president about his plans.
Related: Bernanke -- Get rid of the debt ceiling
Despite the fact that he is a Republican first picked by President George W. Bush, Bernanke has faced much criticism from Republican lawmakers during his tenure. His confirmation for a second term got more "no" votes than any previous Fed chairman. Republican presidential candidate Mitt Romney made it clear during the campaign that he would not reappoint Bernanke, although Glen Hubbard, his chief economic adviser, endorsed Bernanke getting another term.
Economists are much more split as to what will happen to Fed policy in the coming year.
The Fed has indicated it intends to keep buying assets such as Treasuries in order to stimulate the economy, a policy known as quantitative easing, until the labor market improves "substantially."
But even though economists predict unemployment will still be at 7.5% at the end of this year, little improved from the current 7.8% rate, about half of those surveyed believe the Fed will stop its purchase program this year.
The rest expect purchases to stop next year. Those surveyed expect unemployment to be at 6.9% at the end of 2014. One economist, Bill Watkins, executive director of the Center for Economic Research and Forecasting at Cal Lutheran University, thinks the Fed will keep buying assets until at least 2015.
 
 
 
Geithner to leave Treasury secretary post on Friday
US Treasury Secretary Timothy Geithner, who steered the administration of President Barack Obama through the financial crisis, will step down from his post Friday.

Geithner had said he would leave the department after the conclusion of Obama's first four-year term. The president was sworn in on Sunday for a second term.

Obama has nominated longtime Washington insider Jack Lew, his current chief of staff, to succeed Geithner. His nomination requires Senate approval.

Deputy treasury secretary Neal Wolin is to serve as acting secretary pending Lew's confirmation.

Geithner, the former head of the Federal Reserve Bank of New York, took the helm at Treasury in 2009. He had a rocky start, but has since emerged as one of the more high-profile people to hold the job in recent years.

His departure comes amid a major reshuffling of Obama's cabinet for his second term.

Several cabinet heavyweights, including Secretary of State Hillary Clinton and Defense Secretary Leon Panetta, have announced plans to leave the administration.

Also on Tuesday, US Trade Representative Ron Kirk announced he would depart his post in late February.

Under Kirk's watch, the US signed bilateral trade agreements with South Korea, Colombia and Panama, even as wide-sweeping talks under the World Trade Organization's Doha round languished.

Kirk announced earlier this month that the US would join a group of 20 trading partners to attempt to negotiate a global agreement on services.

In a statement, Obama praised Kirk for his progress on international talks and for serving as a "tremendous advocate for the American worker" in striving to crack down on unfair trade practices around the world.


 
 
 
Draghi Says ‘Darkest Clouds’ Over Europe Have Subsided
European Central Bank President Mario Draghi suggested the worst of the sovereign debt crisis may be over, saying the “darkest clouds’ over the euro area have receded due to decisive policy steps last year.
“We can begin 2013 on a more confident note, precisely because significant progress was made during 2012,” Draghi said in a speech in Frankfurt late yesterday. “The darkest clouds over the euro area subsided. Europe’s leaders recognized that monetary union needs to be complemented by a financial union, a fiscal union, a genuine economic union and eventually a deeper political union.”
Draghi’s comments are the latest to indicate the ECB chief is increasingly confident that the three-year debt crisis has been contained and that the 17-nation currency bloc can emerge from recession later this year. He defended the ECB’s so-far untapped bond-purchase plan, which has calmed fears of a euro break-up on financial markets, saying it is fully in line with the central bank’s price-stability mandate and doesn’t threaten its independence.
“The ECB remains steadfastly committed to its primary mandate of ensuring price stability,” he said. “All of our measures are designed to achieve this goal. And looking at current and expected inflation rates, there is simply no evidence that could substantiate fears about any deviation from price stability.”
The euro was little changed at $1.3315 after Draghi spoke.
Economic Recovery
While the ECB expects the euro-area economy to shrink 0.3 percent in 2013, Draghi said this month he expects a “gradual recovery” to begin later in the year.
Many countries are making solid progress in bringing their public finances under control and making structural reforms to increase competitiveness, he said yesterday.
“We need patience,” Draghi said. “I am very well aware that for many people in the countries under adjustment, the personal economic situation can be very difficult. But there is simply no alternative to the path of reform.”
Europe is making progress that some commentators had thought impossible only a year ago, he said, citing the Economist magazine’s prediction at the start of 2012 that a United States of Europe was “utterly beyond reach.”
Making the ECB a single European bank supervisor this year is a “major organizational challenge” and “probably the most significant integration step since the Maastricht Treaty,” he said.
In most areas where more integration is needed, “Europe is moving forward or is already there,” Draghi said. “The ambition is not utterly beyond reach.”
 
 
 
Davos: Too soon to celebrate
The euro survived. Washington is expected to muddle through its fiscal crises. China is heading for a soft landing, and markets and corporate earnings are recovering.
Nearly five years after the banking meltdown, the world economy is back on track, right?
As policymakers and senior executives fly off for a week of brainstorming and partying in the Swiss mountain resort of Davos, they may be tempted to pat themselves on the back.
Yet many are more pessimistic about the future than they were 12 months ago, according to a survey by the World Economic Forum, host of the annual Davos shindig from January 23 to 27. Clouds over Davos include anemic growth, rising social tensions and increased volatility in emerging markets.
"We face a new reality of sudden shocks and prolonged global economic malaise, particularly in major economies experiencing economic austerity," said WEF founder Klaus Schwab.
For the second year running, over 1,000 industry leaders and experts surveyed by the WEF rated wealth gaps and unsustainable government debt as the most prevalent risks to the world economy.
It will take years for the debt of most major economies to fall. And growth won't recover enough this year to lend a hand or dull the pain -- the World Bank expects the global economy to grow by 2.4%, barely changed from 2012.
Some states are borrowing more, not less. Japan is tapping bond markets to fund part of a stimulus program aimed at ending decades of stagnation, adding to debt that is twice as big as the economy.
Whatever happens in Washington next month, a compromise is likely to see the U.S. debt ceiling raised again. And most Americans will end up paying more taxes.
Related: U.S. economy to dominate Davos 2013
The European Union, crucible of the debt crisis in 2012, is in the middle of an austerity drive that has left 26 million people out of work, almost 19 million in the eurozone. In Spain, every other worker under 25 is out of a job.
While recession has forced governments and lenders to relax debt targets and ease deadlines, there's no hint of a change in the overall austerity push.
"Our patient may be out of intensive care, but it will still take some time before she can be given a clean bill of health," said Olli Rehn, the EU's top economic official, in a recent speech. "That's why any lapse into complacency would be unforgiveable."
Initiatives such as the launch of a bailout fund, the first tentative steps toward a banking union, and the ECB's pledge to buy short-term debt from struggling eurozone members have gone a long way to reassure investors that the euro is not about to disintegrate.
Related: Davos 2013: Economic mood map
But the pace of reform this year could slacken as the backlash against austerity grows, Germany and Italy go to the polls, and market pressure for change subsides.
"In 2013, the risks shift from threat of financial crisis to a loss of momentum in creating the institutional and policy frameworks for a redesigned union," political risk consultancy Eurasia Group wrote in its annual outlook.
Governments may also find reform of labor and product markets to restore European competitiveness hard going.
"That's where action is needed, and will continue to be needed in the future," ECB President Draghi said last week.
Credit rating agency Standard & Poor's says the need for further reform will challenge Europe's leaders, and strain the political consensus if the pain isn't more evenly shared and vulnerable citizens aren't better protected.
"Safeguards to the social contract may be necessary to assist in the cohesion of those member states suffering from high unemployment, excessive private leverage, and stagnating or falling living standards," said S&P analyst Moritz Kraemer.
Related: New year, same old problems?
Emerging markets could provide a bright spot -- their share of global economic growth is forecast to rise to 75% by 2020 -- but as their role grows so will the risk of increased volatility.
China's future, particularly the ability of its new leaders to manage the rising clamor for access to information, is critical, argues Eurasia Group.
"Uncertainty over China's short- to medium-term trajectory is an order of magnitude greater than that of any other major global economy," Eurasia Group said.
If that wasn't enough to upset the most upbeat of optimists, the WEF survey found concerns about rising greenhouse gas emissions and the impact of climate change have increased significantly.
That may not come as a surprise after Hurricane Sandy, fires in Australia and flooding in China. 2012 was the warmest year yet in the United States, and the cost of weather disasters could end up topping 2011's record $60 billion.
Economic and climate stress makes it harder to find solutions to either. Against that backdrop, Davos delegates may be forgiven for grabbing a few moments to simply enjoy the snow. To top of page
 
 
 
 
 
 
 
German investors turn bullish
 
Investor sentiment in Germany rose to a 32-month high in January, according to a survey released Tuesday.
The ZEW indicator of economic sentiment now stands at 31.5, marking its highest level since May 2010, said the Center for European Economic Research.
The increase suggests that investors are more optimistic about the outlook for the German economy over the next six months.
It also reflects increased confidence that the euro currency union will remain intact, the center said.
Germany is the largest economy in the euro area and the long-running debt crisis in the currency zone has taken a toll on the nation's exporters. In the fourth quarter, German gross domestic product shrank by about 0.5% as exports and investment fell.
Related: Too soon to celebrate in Davos
The improved tone in German financial markets reflects hopes that German companies will begin ramping up investments that had been delayed during the thick of the crisis last year, according to ZEW president Wolfgang Franz. But the tepid outlook for economic growth outside of Germany means demand for German-made goods will remain weak, he added.
"This suggests that the German economy will further grow at a moderate level in 2013," said Franz.
Investors have also been encouraged by the European Central Bank's more aggressive stance, said Ashraf Laidi, chief global strategist at City Index in London.
Laidi noted that the ZEW index's 7.6-point increase in January was the largest point gain since February 2012, when the ECB announced its second long-term refinancing operation.
The gain in January "is a fitting reflection of investor sentiment with regards to recovering market conditions, rather than improving macroeconomic dynamics," said Liadi. To top of page
 
 
 
 
 
 
 
 
Europe's 'milestone' financial tax wins approval
European Union finance ministers Tuesday gave 11 nations a final go-ahead to launch a controversial financial transactions tax seen by many as a way of making the finance sector pay for the economic crisis.

"For the first time ever, the financial transaction tax will be applied at regional level," said the EU's tax commissioner Algirdas Semeta after the ministers gave their green light.

The new tax will be "a milestone", the commissioner said. "A block representing around two-thirds of EU GDP (gross domestic product) will implement this fair tax together, answering the long-time calls of their citizens."

The European Commission and European Parliament gave their blessing to the introduction of an FTT, respectively in October and November.

The 11 were authorised to go ahead with the planned levy under what is known as "enhanced cooperation", a rare procedure enabling a minimum of nine EU nations to work together without the rest of the 27 EU states when there is no general agreement.

Enhanced cooperation was first used in the field of divorce law and was last year approved a second time in the field of patents. This will be its third use.

Britain notably was opposed but did not stand in the way of the creation of an FTT, initially proposed by France and Germany, then joined by Austria, Belgium, Estonia, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.

The 11 eurozone states will now need the European Commission to draft legislation enacting a tax that is expected to call for a harmonised minimum 0.1 per cent tax rate for transactions in all types of financial instruments, except derivatives, at 0.01 per cent.

The tax aims to curb the market excesses that led to the 2008 global financial crisis but the notion failed to gain overall EU support, in part due to British concerns over the City of London's future.

As many hailed a step forward to the introduction of a so-called "Robin Hood tax", Oxfam said "the historic vote sends a clear message that Europe's biggest economies are ready to make the financial sector pay to clear up the mess it helped to cause."

"It is indeed about time that the financial institutions contribute to the repair of the crisis that they have triggered," said the leader of the Socialist group in the European parliament Hannes Swoboda.

Junior French Finance Minister Benoit Hamon welcomed Tuesday's approval as "an important step" in "beginning to design a world post Lehman-brothers," in reference to the US investment bank that collapsed in September 2008.

And in Berlin, German Finance Minister Wolfgang Schauble said "the financial sector must be associated in a reasonable way to the costs of the financial crisis."

Tuesday's green light was "a good step towards that aim," he added.

But what to do with the proceeds is likely to cause discord.

France and Austria have suggested a part of the tax could finance "an education fund" in the EU but Germany is opposed to the proceeds being handled by the EU.

"It will involve significant negotiations among the member states," said Ireland's Finance Minister Michael Noonan. "We act as honest brokers."

Oxfam estimated the tax could bring in 37 billion euros annually, and that if half went to development it could help 550 million of the world's poorest people to access free healthcare.


 
 
 

Analysis: No respite for euro zone in long rebalancing slog

The euro zone crisis is entering a new, treacherous phase for governments, which can only cross their fingers that slow-burn reforms will pay off before voters get fed up with austerity and high unemployment.
On the face of it, 2013 should be a much less traumatic year than 2012 for the 17-nation single-currency area.
Financial conditions have improved enormously since the European Central Bank promised to do whatever it takes to preserve the euro. Yields on the bonds of highly indebted peripheral countries have fallen sharply, bank funding strains have eased and stock markets have rallied.
Countries on the southern rim of the euro zone have made big strides in reducing their budget and trade deficits. They are no longer living way beyond their means. They have also introduced politically touchy structural reforms, notably to make their labor markets more flexible.
But demand is likely to remain weak, while unemployment, already at a record 11.8 percent, is forecast to rise further before it comes down. Recovery will be slow.
"They've taken the medicine, but they're not going to jump out of bed straight away," said Sebastian Barnes at the Organisation for Economic Cooperation and Development in Paris.
"The problem is bridging the gap over the next two or three years when you're putting in place the right policies but they're not quite bearing fruit. So it's a question of managing public expectations," Barnes, adviser to the rich-country forum's chief economist, added.
RISKS REMAIN
Berenberg Bank said all forward-looking indicators point to a resumption of growth this spring, which should further reduce the euro zone's aggregate fiscal deficit to below 2.5 percent of GDP in 2013. It stood around 3.4 percent last year, down from 4.1 percent in 2011.
What's more, Italy, Spain, Portugal, Ireland and Greece shrank their combined current account deficit to an estimated 1.5 percent of GDP in 2012 from 7 percent in 2008 and look set to balance their external accounts this year.
But Holger Schmieding, the bank's chief economist, said the single currency was not out of the woods yet.
"Despite impressive progress, serious risks remain. The euro zone needs growth in its major markets abroad and the political patience to stay the course at home," he said in a note.
A nagging worry is that the euro zone is making up for its economic mistakes through what Barnes calls "bad rebalancing".
So, while rising exports have played a role, the improvement in the periphery's current account has been achieved mainly by slashing imports.
And the reduction in relative wage costs needed to bring about ‘internal devaluation' - the only devaluation available in the absence of exchange rate flexibility - has so far been engineered disproportionately through a rise in unemployment rather than wage moderation.
Ireland is a notable exception - as is Britain outside the euro zone - and Barnes said there were encouraging signs elsewhere, for example in Spain.
Italy, however, has barely touched its wage bargaining system. "The problem there is that wages have run ahead of productivity," he said.
LET'S GET STRUCTURAL
Gilles Moec, an economist with Deutsche Bank in London, also frets about Italy. Italy has its government deficit under control, but Moec sees signs of a growing ‘employment overhang', linked to what he says is extremely slow financial rebalancing by the private sector since the onset of the crisis.
This is reflected in a rise in employee compensation in Italy as a percentage of corporate value-added to 57.7 percent from 52.5 percent in 2007.
By contrast, in Spain, where unemployment of 25 percent is more than twice as high as Italy's, the wage share dropped over the same period to 55.9 percent from 64.7 percent.
Rebalancing, in short, is far from complete. That is true for creditor countries, too. Germany's current account surplus is stuck at a stubbornly high 6 percent of GDP, reflecting weak investment and consumption.
Goldman Sachs has attempted to measure the progress being made in ironing out the imbalances by updating its estimates of the real exchange rate changes needed to bring countries' net debt positions - the result of accumulated annual current account deficits and surpluses - back into broad equilibrium.
In keeping with improvements in their current accounts, Greece, Portugal and Spain now require an inflation-adjusted depreciation that is about eight to 10 percentage points lower than two years ago, Goldman reckons.
Still, the remaining adjustment is huge - about 25-30 percent in the case of Spain and around 15-25 percent not only in Greece and Portugal but also in France, where employers and unions this month agreed on a package of labor reforms to restore competitiveness.
Germany, incidentally, requires a real appreciation of 15-25 percent.
Instead of higher unemployment and lower wages, structural reforms offer a less painful path to rebalancing, Goldman said.
Switching resources to exports from domestic sectors such as construction in Spain and public services in France would reduce the need for further real exchange rate depreciation.
"But adopting such reforms is not painless: the potential loss of political capital from vested groups standing to lose existing privileges can prevent politicians from implementing the necessary reforms. This remains true across most of the periphery, in France and Germany," wrote Goldman economist Lasse Holboell W. Nielsen.
Barnes with the OECD said all countries could do more, but the lack of reform in bigger economies, including France and Germany, was a particular concern.
The OECD's research suggests that, contrary to received wisdom, structural reforms can yield positive results within a year or two, notably by catalyzing investment and jobs. In turn, that can have an impact on public perceptions.
"I don't think in any of these countries the reforms are sufficient for what they should be achieving in the long run," Barnes said. "But just getting reform on the agenda and getting people to recognize that the system needs to change, and is going to change, is very important."

 

 

 

Cameron to promise Britons straight choice on EU exit

Minister David Cameron will promise on Wednesday to give Britons a straight referendum choice on whether to stay in the European Union or leave, provided he wins an election in 2015.
Cameron will end months of speculation by announcing in a speech the plan for a vote sometime between 2015 and 2018, shrugging off warnings that this could imperil Britain's diplomatic and economic prospects and alienate its allies.
In extracts of the speech released in advance by his office, Cameron said public disillusionment with the EU is at "an all-time high".
"It is time for the British people to have their say. It is time to settle this European question in British politics," he said in the extracts, adding that his Conservative party would campaign for the 2015 election promising to renegotiate Britain's EU membership.
"And when we have negotiated that new settlement, we will give the British people a referendum with a very simple in or out choice to stay in the EU on these new terms; or come out altogether. It will be an in-out referendum."
Whether Cameron will ever hold the referendum remains as uncertain as the Conservatives' chances of winning the next election due in 2015.
They trail the opposition Labour party in opinion polls, and the coalition government is pushing through painful public spending cuts to try to reduce Britain's large budget deficit that are likely to upset voters in the meantime.
Cameron's promise looks likely to satisfy much of his own party, which has been split on the issue, but may create uncertainty when events could put his preferred option - a looser version of full British membership - out of reach.
The move may also unsettle other EU states, such as France and Germany. European officials have already warned Cameron against treating the bloc as an "a la carte menu" from which he can pick and choose membership terms.
His speech in London is also likely to disappoint the United States, a close ally, which has said it wants Britain to remain inside the EU with "a strong voice".
Nor is it likely to help heal rifts with his pro-European Liberal Democrat junior coalition partners.
Cameron said he would prefer Britain, the world's sixth biggest economy, to remain inside the 27-nation EU but he also made clear he believes the EU must be radically reformed.
A new EU must be built upon five principles, he said: competitiveness, flexibility, power flowing back to - not just away from - member states, democratic accountability and fairness.
The euro zone debt crisis is a main reason why Britain must reassess its relationship with the wider EU. "The European Union that emerges from the Eurozone crisis is going to be a very different body," he said.
"It will be transformed perhaps beyond recognition by the measures needed to save the Eurozone. We need to allow some time for that to happen - and help to shape the future of the European Union, so that when the choice comes it will be a real one."
"WAFER THIN" CONSENT
Earlier advance extracts, released last Friday when Cameron had to postpone the speech, showed he felt the EU faced three main problems: the debt crisis, competitiveness and faltering public support.
On Wednesday, he will say that democratic consent for the EU in Britain is now "wafer thin", reflecting the results of many opinion polls that have shown a slim majority would vote to leave the bloc, as well as the success of the rival UK Independence Party that favors complete withdrawal.
"Some people say that to point this out is irresponsible, creates uncertainty for business and puts a question mark over Britain's place in the European Union," said Cameron. "But the question mark is already there and ignoring it won't make it go away."
Avoiding a referendum would make an eventual British exit more likely, not less, he said. This would risk bottling up resentment towards the EU, compounding people's feeling that "the EU is heading in a direction that they never signed up to".
"Simply asking the British people to carry on accepting a European settlement over which they have had little choice is a path to ensuring that when the question is finally put - and at some stage it will have to be - it is much more likely that the British people will reject the EU."
Many Britons resent the EU's interference in their daily lives and its "unnecessary rules and regulations", he added.
Cameron's speech has been marked by long delays, diplomatic rows and the postponement due to the Algerian hostage crisis.
"The Curse of TutanCameron's Europe speech" was how one political magazine summed up the situation in a headline over a picture of a golden-faced Cameron superimposed on the death mask of ancient Egyptian pharaoh Tutankhamen.
 
 
 

Analysis: Cameron leading Britain into minefield on EU

Prime Minister David Cameron is leading Britain into a minefield in seeking to renegotiate its terms of membership of the European Union. His gamble could easily end in a bust.
Cameron postponed a landmark speech on Europe, due to have been delivered in Amsterdam last Friday, because of a hostage crisis in Algeria, but he had already disclosed the thrust of his plan to try to change London's relationship with the EU.
Extracts from the undelivered speech released by his office show he planned to say Britain would "drift towards the exit" unless the EU reformed itself. That sounded reminiscent of a 1930s British newspaper headline: "Fog in the Channel, the continent cut off".
The excerpts did not mention a referendum, which Cameron has indicated he would hold later in the decade after negotiating a "new settlement" with Europe.
His strategy is bound to open a prolonged period of uncertainty in which events could put his preferred option -- a looser version of full British membership -- out of reach.
First, all Britain's 26 partners must be willing to negotiate on Cameron's agenda, which despite some expressions of goodwill is by no means a given. Euro zone states may prefer to press ahead with closer integration without reopening the EU treaties, or refuse to unravel past agreements.
Second, they would have to be confident in the prime minister's ability to win a national vote and make an agreement stick over the long term to justify significant concessions. But many EU officials are not convinced Cameron's Conservatives will win a 2015 general election. There is no incentive to give him more than polite sympathy until then.
Third, EU partners would have to be able to win the consent of their own voters or parliaments for any special deal with Britain that could involve watering down European social and employment rights and giving London a lock on EU financial services legislation.
Many are worried that an a-la-carte Europe would lead other countries to demand opt-outs.
Finally, the whole process must proceed free from the kind of unpredictable clashes, political accidents or media scares that have dogged London's ties with the EU for decades.
No rational gambler would bet on all those stars staying aligned. Despite Cameron's declared intention of keeping Britain in Europe, you don't have to be an astrologer to see how this could end in divorce.
Britain has renegotiated its terms twice since it joined the European Economic Community in 1973, yet it remains a reluctant, semi-detached and often obstructive member.
Prime Minister Harold Wilson won some cosmetic trade concessions that were endorsed in a 1975 referendum on staying in. Margaret Thatcher secured a large, permanent annual rebate on London's EU budget contribution in 1984, which remains a source of resentment for many partners to this day.
Despite obtaining opt-outs from Europe's single currency and the Schengen zone of passport-free travel, the British public and Conservative politicians have turned ever more hostile to the EU, depicted in much of the British media as a malevolent, meddling foreign bureaucracy.
With the exception of a couple of short-lived honeymoons during the construction of the European single market in the mid-1980s and the launch of a European security and defense policy in the late 1990s, relations have always been fraught.
It is hard to recall that 15 years ago, Prime Minister Tony Blair was publicly proclaiming his intention to lead Britain into the euro as soon as economic conditions were right.
For most of the time, successive British governments have fought tooth-and-nail to thwart or slow moves towards "ever closer union", the goal enshrined in EU treaties since 1957.
No wonder that despite their leaders' public pledges of support for keeping Britain in, many European officials and diplomats privately wonder if the EU would not be more united and freer to advance if the British could be managed out.
"There's a feeling that it might be best to use the next inter-governmental conference (on EU treaty reform) to organize the UK's exit," a French official said, speaking anonymously because he was expressing a personal view.
Former European Commission President Jacques Delors, who clashed frequently with Thatcher, has suggested publicly Britain should leave the Union and be offered "a different form of partnership" based on the European Economic Area.
Officially, no EU government takes that line. But imagine some of the events that could intervene to change the game.
What if the UK Independence Party, which advocates complete withdrawal, were to win next year's European Parliament elections in Britain or outpoll Cameron's Conservatives despite his renegotiation and referendum pledge?
That could force the prime minister to ratchet up demands to repatriate powers from Brussels to lure back anti-EU protest voters in the 2015 general election. It could also undermine EU partners' belief that any concessions would be sufficient to secure a "yes" vote in Britain.
If, confounding opinion polls, Scotland votes to leave the United Kingdom in a referendum next year, where would that leave the more Eurosceptical English?
Scottish First Minister Alex Salmond has said Scotland would want to stay in the EU, but Brussels lawyers say a seceding Edinburgh would likely have to apply from scratch, negotiate membership terms and win unanimous acceptance to join.
Other factors could intervene to complicate negotiations.
A dispute over mad cow disease in Britain in 1996 caused a crisis between London and its partners, with the British boycotting EU business for months in anger at a ban on beef exports to the continent.
Now, Britain may clash with Brussels over tighter financial regulation sought by the euro zone countries.
Another serious risk is that public expectations of change in Britain's EU membership terms grow unrealistically high and the deal that Cameron is able to negotiate is dismissed by Eurosceptical politicians and media as a sham or a joke.
Even if none of these landmines is detonated, there remains the strong possibility that voters given the first choice in a generation to vote "no" to the European Union choose to do so.
Experience with referendums in France, the Netherlands and Ireland shows voters may cast a protest vote against an unpopular government, or simply express a general dislike of Europe, regardless of the question they are asked.
 
 
 
Spain Says It May Cover 13% of 2013 Funding in January
Spain’s Treasury aims to cover as much as 13 percent of its planned gross debt issuance for 2013 in January after investors bought 7 billion euros ($9.3 billion) of 10-year bonds in a syndicated sale that saw record demand.
The Treasury may end the month with total issuance of 27 billion euros depending on the final results of bill sales, the Economy Ministry in Madrid said in an e-mailed statement late yesterday. That compares with a goal of 215 billion to 230 billion euros of bonds and bills for the whole year.
Foreign investors bought more than 60 percent of a new benchmark 10-year bond issued yesterday. Around a quarter of the allotted amount was bought by investors from the U.K., 17 percent from euro-region nations, 7 percent from Nordic countries, 3 percent from the Middle East and 3 percent from the U.S., according to the statement.
Spain is taking advantage of a rally in securities of so- called peripheral countries to fast-track debt sales as it faces a 24 percent increase in net funding needs this year. The European Central Bank’s pledge to help nations bring down yields may curb borrowing costs until a recovery, Prime Minister Mariano Rajoy said last month.
The yield on Spain’s 10-year benchmark bond yesterday fell four basis points to 5.115 percent compared with a euro-era record of 7.75 percent on July 25, before ECB President Mario Draghi pledged to backstop the region’s fourth-largest economy.
Record Volume
The security, which matures on Jan. 31, 2023, and has a 5.4 percent coupon, was sold by six banks at 365 basis points more than the mid-swap rate, or an average yield of 5.403 percent, according to Spain’s Treasury. That compares with 5.290 percent when it last auctioned 10-year debt on Dec. 5.
Demand was around 22.7 billion euros and was shared among more than 350 investor accounts, the highest volume in the history of the Treasury’s syndicated sales, the ministry said.
The sale bodes well for the country’s issuance plans in the short term, said Lyn Graham-Taylor, a fixed-income strategist at Rabobank International in London. Spain will probably seek to sell more long-dated bonds, although it is hard to see issuance of debt dated much longer than 10 years, he said by telephone.
Asset managers represented 40 percent of the amount placed yesterday and banks 34 percent, the ministry said. Pension funds and insurance companies bought 13 percent and central banks 7 percent.
Sign of Credibility
The Treasury decided to go ahead with the syndication after Spain’s short-term borrowing costs dropped and it saw high demand at a sale of 2.8 billion euros of bills, the ministry said. Economy Minister Luis de Guindos yesterday told reporters in Brussels that the debt sales are “a clear indication of the Spanish economy’s credibility.”
De Guindos said 2012 budget data expected in the coming weeks will be “positive.” Still, the European Commission yesterday said the nation will probably miss its deficit target of 6.3 percent of output in 2012 even if the most recent budget cuts produce their full impact in the last quarter.
“What will stand out in the end is the huge effort Spain has made to reduce its public deficit in a very complicated environment,” de Guindos said. Spain’s planned austerity measures through 2014 will be sufficient, he said.
Economists forecast Spain’s recession will deepen in 2013, the fifth year of its economic slump. That will undermine efforts to tackle the second-largest deficit in the euro area, at 9.4 percent of gross domestic product in 2011, they say.
 
 
 
Bank Splits Should Be Paired With Shadow Bank Curbs, Koenig Says
Germany’s top markets regulator said a plan to split bank trading and deposit-taking activities would need to be paired with other measures to supervise global financial activities.
Bafin President Elke Koenig told reporters regulation of the banking industry can only be effective if entities that provide so-called shadow banking, including money market funds, are globally supervised as well.
Koenig’s comments come after the regulator asked Deutsche Bank AG (DBK), Germany’s biggest bank, to simulate a split of its consumer banking and trading businesses, according to two people familiar with the matter. A European Union-commissioned group last year called for banks to put trading and deposit-taking activities into separately capitalized units to prevent a repeat of the taxpayer-led bailouts of 2008.
“A structural division alone isn’t enough to rid the world of systemic risks,” Koenig said at the regulator’s annual New Year’s reception yesterday. “We would win little security if we pushed evasive actions into the weakly regulated or unregulated market.”
Koenig also questioned whether efforts to reform the way interest benchmarks such as the London interbank offered rate and Euribor will be successful. Regulators have sought to overhaul the rates after investigations began into whether more than a dozen banks altered their rate submissions to profit from derivative trades or to appear more financially stable.
Rates based on estimates from market participants are vulnerable to manipulation, especially in times of reduced market activities, she said.
“We not only need to work on a general restructure of the systems, we also need to work on a substitute for the system,” Koenig said.
Systematic risks are also coming from money market funds as a part of shadow banking, the Bafin chief said. Some shadow banking actors are “very big global players,” she said without identifying any particular company.
 
 
 
Bank of Japan adopts 2% inflation target, open-ended easing
The Bank of Japan on Tuesday adopted a two percent inflation target demanded by the country's new government while also launching an open-ended easing policy aimed at boosting the economy.

"The bank sets the 'price stability target' at two percent in terms of the year-on-year rate of change in the consumer price index," the BoJ said in a statement.

"The Bank will pursue aggressive monetary easing ... through a virtually zero interest rate policy and purchases of financial assets," it added.

"With respect to the Asset Purchase Program, the Bank will introduce a method of purchasing a certain amount of financial assets every month without setting any termination date," it said.

Japan's new government, led by the hawkish Shinzo Abe, swept to power last month on a pledge to fix the economy with big spending and pressure the BoJ into aggressive action to kickstart the world's third-largest economy.

The BoJ's announcement of the inflation target was set out in a rare joint statement with the government.

Also Tuesday, the BoJ lifted its growth forecast for the country's economy, predicting gross domestic product would expand by 2.3 percent in the year ended March 2014, up from an earlier 1.6 percent estimate.


 
 
Bank of Japan boosts fiscal 2013 GDP growth forecast
The Bank of Japan on Tuesday lifted its growth forecast for the country's economy in the fiscal year starting in March, a glimmer of positive news as the country struggles to cement a recovery.

The BoJ said it now expected Japan's gross domestic product to expand by 2.3 percent in the year ended March 2014, up from an earlier 1.6 percent forecast.
 
 
 
 
 
 
 
 
 
BoJ meeting expected to usher in fresh easing measures
The Bank of Japan wraps up a two-day policy meeting Tuesday with the under-pressure central bank widely expected to usher in fresh easing measures aimed at boosting the nation's limp economy.

The yen has been in a steep decline as markets bet the BoJ will inflate its 101 trillion yen ($1.13 trillion) asset-buying programme in what would be the first time in nearly a decade that the BoJ has expanded monetary policy after two consecutive policy meetings.

An expansion of the programme, the bank's main policy tool with rates near zero, would also be its fourth major move since September after the BoJ's US and European counterparts ushered in huge measures to battle slowing growth.

Japan's new government, led by the hawkish Shinzo Abe, swept to power last month on a pledge to fix the economy with big spending and pressure the BoJ into aggressive action to kickstart the world's third-largest economy.

Observers were also expecting the bank to set a two percent inflation target -- a key government demand -- in a bid to vanquish the deflation that has haunted the economy for years.

"Anything less and the markets would now be sorely disappointed," London-based Capital Economics said in a note.

But an expected 10 trillion yen boost to the programme, after an expansion of the same amount in December, "would be just an extension of what the BoJ has been doing and might not be enough to satisfy Prime Minister Abe", said Daisuke Karakama, senior market economist at Mizuho Corporate Bank.

Tensions have run high between BoJ policymakers and Abe's administration, with the 58-year-old premier having openly said he would like to turf out BoJ Governor Masaaki Shirakawa, whose terms ends in April, and threatening to change a law mandating the bank's independence if it does not fall into line.

Japan's new finance minister, Taro Aso, has also weighed in, accusing the bank last month of being "slow in its response to deflation".

On Monday, Bundesbank chief Jens Weidmann lashed out at what he called government meddling in the affairs of central banks in industrialised nations such as Japan and Hungary.

"We are witnessing disturbing abuses, for example in Hungary or in Japan, where the new government is interfering massively in the affairs of the central bank, calling forcefully for a more aggressive monetary policy," said the top German central banker.

Aso, the BoJ's chief and economic revitalisation minister Akira Amari were reportedly to hold a rare joint press briefing on Tuesday.

Japan has been beset by deflation since the 1990s. It continues to hurt the economy as falling prices cut into corporate profits, leading firms to slash jobs and put off growth-generating capital investment.

It also dents demand because it encourages consumers to delay purchases in the hope of paying less later.

As part of its economic offensive, Tokyo has also unveiled a $226.5 billion stimulus plan with spending aimed at job creation, rebuilding areas hit by the 2011 quake-tsunami disaster and strengthening the military.

The policy meeting started at 8:00am (2300 GMT Monday). A press conference is expected later in the day.


 
 
 
 
 
 
 
Japan's inflation gambit targets growth
Japan raised its inflation target and announced open-ended purchases of government bonds in a bold gamble to end two decades of stagnation in the world's third biggest economy.
The Bank of Japan had come under intense political pressure to take more aggressive action to stimulate the economy since the election of Prime Minister Shinzo Abe in December.
Abe wants to drive the Japanese economy out of recession through a combination of increased government spending on public works and a further relaxation of monetary policy.
Tuesday's announcement was made jointly by the Bank of Japan and the Japanese government.
The bank said it was adopting a 2% inflation target, effectively doubling its previous goal of 1%, and introducing an "open-ended" asset purchase program, removing the previous 2013 termination date.
It said it was aiming to achieve the inflation target as soon as possible. Bank of Japan forecasts suggest it will be 2014 before inflation begins to approach that level.
The announcement was widely expected and market reaction was muted. The yen has fallen some 14% against the dollar since October on expectations of further monetary easing, boosting the coffers of the country's exporters.
A fall in value of just one yen -- slightly more than 1% against the dollar -- adds hundreds of millions of dollars to the operating profit of Japanese carmakers such as Toyota and Nissan.
The Nikkei index of leading shares, which has gained 6% over the past month, slipped 0.35%. The yen rallied off recent lows to trade at around 88.6 to the dollar.
Some investors were disappointed that the change in approach will only mean additional asset purchases from 2014, and that the volume of bond-buying next year will be less than in 2013.
"Although the 2% inflation target was introduced, as fully expected, and the shift to open-ended asset purchases was a positive surprise, the magnitude of the actual additional purchases fell short of expectations," strategists at Nomura said in a research note.
While the news may have fallen short of some expectations, it is not without risk for Japan. A weaker yen will help exports but will also increase the cost of imported fuel. And economic stimulus without a plan to bring down Japan's soaring debt, which is more than twice the size of the economy, could unsettle investors.
Japan's international partners will also be watching nervously. Some policymakers have already warned that competitive devaluations could have a destabilizing effect.
Jens Weidmann, president of Germany's Bundesbank, warned in a speech Monday that political pressure on central banks including Japan threatened their independence, and could lead to a "politicization of exchange rates." To top of page
 
 
 
 
 
 
 
Shirakawa Leaves Onus on Abe for Stimulus as BOJ Action Deferred
The Bank of Japan (8301)’s decision to hold off on fresh monetary stimulus for a year puts pressure on the Abe administration to revive growth through fiscal measures and risks capping losses in the yen that aid export competitiveness.
Governor Masaaki Shirakawa, whose term ends in less than 11 weeks, yesterday agreed to set the 2 percent inflation target urged by Prime Minister Shinzo Abe, while stopping short of immediate action to achieve it. The BOJ plans to start open- ended asset purchases in January next year.
Abe, elected last month on a platform calling for an end to two decades of deflation, hailed the BOJ commitment to consumer- price increases that would raise prospects for higher corporate revenues and tax receipts. His optimism in face of yesterday’s slump in stocks may reflect recognition that stronger measures must wait for a new BOJ chief.
“The decisions were disappointing but no one thinks this is over -- one of the reasons the BOJ did little today must be that they wanted to keep room for more action under the new governor,” Hiroshi Shiraishi, senior economist at BNP Paribas SA in Tokyo, said yesterday. For now, “with the BOJ moving gradually, the yen-weakening impetus from monetary-policy expectations may deflate,” said Shiraishi, who has analyzed the Japanese economy for about a decade.
The yen rose 1.2 percent, the most since May, to 88.57 per dollar as of 6:30 p.m. in Tokyo yesterday. The Nikkei 225 Stock Average (NKY) fell 0.4 percent to 10,709.93, paring its gain since Nov. 14 to about 24 percent. The currency has slid and shares climbed for 10 straight weeks in anticipation of the BOJ joining Abe’s administration in strengthening measures to lift the economy.
Disaster Recovery
Japan’s efforts to sustain a recovery from the earthquake and tsunami of 2011 have been weighed down by weakness in exports, exacerbated by a territorial dispute with China and strength in the yen. The government needs to fuel growth without worsening a debt burden that the International Monetary Fund estimated at 237 percent of gross domestic product last year. The IMF forecasts the Japanese economy will grow 0.8 percent this year.
The government said last week it will add 10.3 trillion yen ($116 billion) in spending, which it predicts will increase gross domestic product by about 2 percentage points and create about 600,000 jobs. Citigroup Inc. estimates that 100,000 jobs will be created, while BNP Paribas forecasts 150,000.
Abe has a chance to reshape the nation’s central bank with the conclusion of Shirakawa’s five-year term in April and that of his two deputies in March. Shirakawa said the BOJ had preserved its “independence,” while Chief Cabinet Secretary Yoshihide Suga said a statement jointly released by the BOJ and government had diminished the need to revise the law governing the central bank.
Nominee Package
The government should present its BOJ nominees in a package to parliament by the end of next month to allow time for the ruling Liberal Democratic Party to negotiate with opposition groups in the upper house, Masashi Waki, the LDP’s upper house parliamentary affairs chief, said in a Jan. 21 interview.
Among potential successors to Shirakawa is former Deputy Governor Toshiro Muto, who said in a Jan. 21 interview that no potential monetary measure should be considered “taboo,” and Asian Development Bank President Haruhiko Kuroda, a former head of currency affairs at Japan’s Finance Ministry, who in 2002 advocated “innovative” BOJ policies and a 3 percent inflation target.
Heizo Takenaka, the banking-crisis czar under former Prime Minister Junichiro Koizumi who criticized BOJ actions after the March 2011 earthquake, was hailed as a potential successor to Shirakawa this month by Your Party, a group whose votes in the upper house could help the government win confirmation for its nominee.
Foreign Bonds
Former BOJ Deputy Governor Kazumasa Iwata has advocated a proposal for the bank to buy foreign bonds, an idea that the LDP said last year it would consider.
Abe may be biding his time until he can appoint a replacement who favors a deeper policy shift.
“Abe will replace him and his deputies with doves,” said Klaus Baader, chief Asia Pacific economist at Societe Generale SA in Hong Kong. “Abe was elected on a platform very much weighted toward the economy and won in a landslide.”
Shirakawa has for years indicated that the BOJ cannot achieve its inflation target on its own. He said at a business conference in 2010 that lack of demand was the “root cause of deflation” and there was no “magic wand” policy makers could wave to stamp out falling prices.
‘Bold’ Policy
“I have strong expectations for the Bank of Japan to proceed with bold monetary policy in order to achieve its 2 percent inflation target at the earliest possible date,” Abe said yesterday at a meeting of his fiscal policy council. “I would like the Bank of Japan to take responsibility for achieving this price target.”
Yesterday’s BOJ action, which follows the U.S. Federal Reserve’s expansion of bond purchases in December, puts a planned 13 trillion yen a month in extra securities buying on hold until next January.
In July, Abe will face elections for the upper house of parliament where the LDP lacks a majority.
“Abe needs to have the yen at least at the 95-100 level against the dollar and the Nikkei above 12,000 to gain strong support before the upper house election,” said Masamichi Adachi, senior economist at JPMorgan Securities in Tokyo and a former BOJ official.
Sharp Corp., which is facing back-to-back annual losses, said on Jan. 7 that a weaker yen would help to improve earnings. A steel industry lobby group said the same day that an ideal yen level is between 90 and 100 per dollar.
Fund Target
Currently, the central bank buys securities such as government bonds and exchange-traded funds through a fund targeted to reach 76 trillion yen in assets in December 2013. The 13 trillion yen initiative unveiled yesterday will include about 2 trillion yen in Japanese government bonds and about 10 trillion yen in treasury bills.
JPMorgan’s Adachi said he’s skeptical of what the BOJ can do. “It’s very difficult for the BOJ to achieve the 2 percent inflation target by 2015,” he said. “I call it Mission: Impossible.”
 
 
 
 
 
 
 
Australia Core Consumer Prices Rise Less-Than-Estimated 0.6%
Australian consumer prices gained less than economists forecast last quarter on cheaper food and health care, pushing down the local dollar and providing the central bank scope to reduce interest rates.
The trimmed mean gauge of core prices rose 0.6 percent from the prior quarter, the Bureau of Statistics said in Sydney today, compared with the median forecast of 26 economists for a 0.7 percent gain. The consumer price index advanced 0.2 percent from three months earlier, half the forecast increase.
The data give Reserve Bank of Australia Governor Glenn Stevens leeway to reduce the key rate to a record-low 2.75 percent next month. He lowered borrowing costs six times since November 2011 -- for a total of 1.75 percentage points -- as policy makers seek to rebalance a two-speed economy where mining regions in the north and west thrive while manufacturers, retailers and builders in the south and east struggle.
“Inflation is obviously not a problem,” said Paul Bloxham, chief economist for HSBC Holdings Plc in Sydney and a former RBA official who forecast a trimmed mean CPI rise of 0.6 percent. The RBA will keep rates on hold in February, he said. “They’ll feel like they’ve done enough for now.”
The nation’s currency weakened, buying $1.0557 at 12:11 p.m. in Sydney compared with $1.0559 immediately before the report. Investors see a 42 percent chance the RBA will reduce the benchmark rate at its Feb. 5 meeting, compared with 46 percent prior to the release,.
Grocery Wars
Competition between Australia’s two largest supermarket chains, Woolworths Ltd. (WOW) and Wesfarmers Ltd.-owned Coles, has also driven grocery discounts. A push to sell milk at A$1 ($1.05) a liter contributed to a 27 percent profit fall at the dairy and drinks division of Kirin Holdings Co.’s Lion unit, the company said in August.
Today’s report showed food and non-alcoholic beverages dropped 0.1 percent in the fourth quarter as vegetable prices declined 5.7 percent. Health-care costs slumped 0.9 percent as pharmaceutical products fell 3.5 percent, it showed.
Prices for transportation gained 0.7 percent as fuel advanced 2.6 percent, the report showed. Clothing and footwear increased 0.8 percent.
The weighted-median gauge of inflation, a separate core measure that excludes the largest price increases and declines, advanced 0.5 percent in the fourth quarter, compared with economists’ estimates for a 0.6 percent gain. That took the annual rate to 2.3 percent versus a forecast 2.4 percent rise.
Annual Inflation
On an annual basis, the trimmed mean gauge advanced 2.3 percent, compared with economists’ forecasts for a 2.4 percent increase.
The central bank aims to keep inflation in a 2 percent to 3 percent range on average, and typically uses as its guide the core measures -- those that strip out items with the biggest price moves. The RBA’s official cash rate is 3 percent, matching a half-century low set during the 2009 global recession.
The CPI increased 2.2 percent in the fourth quarter from a year earlier, compared with economists’ estimates for a 2.4 percent increase.
The statistics bureau released a seasonally adjusted consumer price index that showed an 0.5 percent increase last quarter, for an annual gain of 2.2 percent.
 
 
 
 
 
 
 
Oil Rises as Global Investor Confidence Increases
Oil increased to a four-month high as German investor confidence climbed more than economists expected and a Bloomberg survey showed that international optimism about equities gained.
Futures rose 0.7 percent after Germany’s ZEW Center for European Economic Research said its index of investor and analyst forecasts climbed to 31.5 from 6.9 last month. Global investors are the most bullish on stocks in at least 3 1/2 years, with almost two-thirds planning to boost holdings during the next six months.
“We’re seeing a slow steady return of confidence in the economy,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “There’s been a return of bullish sentiment to almost all markets.”
Crude oil for February delivery rose 68 cents to $96.24 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. 17. February futures expired today. The more-active March contract gained 64 cents to settle at $96.68.
Yesterday’s transactions in New York will be booked with today’s trades for settlement purposes as there was no floor trading because of the Martin Luther King Jr. Day holiday.
Brent oil for March settlement gained 71 cents, or 0.6 percent, to end the session at $112.42 a barrel on the London- based ICE Futures Europe exchange.
The European benchmark traded at a $15.74 premium to West Texas Intermediate crude futures traded in New York. The spread was $15.16 on Jan. 17, the narrowest level based on closing prices since July 24.
Narrowing Spread
The spread has shrunk since Enterprise Products Partners LP (EPD) and Enbridge Inc. (ENB) resumed service of the Seaway pipeline running from Cushing to the Gulf Coast on Jan. 11 at a capacity of 400,000 barrels a day, up from 150,000 barrels. The link provides an outlet for record supplies in the central U.S.
“The improvement of the economy is helping WTI, along with the continued narrowing of the Brent spread,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.4 billion. “As new lines open up, relieving the bottleneck in the middle of the country, WTI will gain strength.”
The ZEW index, which aims to predict German economic developments six months in advance, climbed to the highest level since May 2010 and showed the biggest gain in 11 months. Economists forecast an increase to 12, according to the median of 39 estimates.
“We’re getting a boost from increasing investor confidence both in Germany and, as a Bloomberg survey shows today, in the rest of the world,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “There should be an increasing investment flow, boosting prices.”
Watching Equities
The Bloomberg Global Poll also showed that 53 percent of respondents say equities will offer the highest return in the next year. That’s a 17 percentage point jump from the last poll in November and the most since the quarterly survey of investors, analysts and traders who subscribe to Bloomberg began in July 2009.
The Standard & Poor’s 500 Index (SPX) and the Dow Jones Industrial Average climbed 0.3 percent.
Republicans in the House of Representatives plan a vote tomorrow on a plan to raise the government’s borrowing limit until May 19. The Treasury Department has said the U.S. will exceed its $16.4 trillion borrowing authority sometime between mid-February and early March.
“The threat of a debt default in the next few months has been put off for at least a few months, which will be good for the markets,” Kilduff said. “The economy should do better and that will be good for oil demand.”
North Africa
Futures climbed last week as an attack on the BP Plc- operated gas field last week in Algeria led to concern that militants may carry out a similar assault on energy facilities elsewhere in the region.
Neighboring Libya, which holds Africa’s biggest crude reserves, is producing 1.1 million barrels a day, Oil Minister Abdulbari Al-Arusi said in an interview in Tripoli yesterday. That’s less than the International Energy Agency’s estimate for last month of 1.4 million barrels. The country’s daily output may rise to 2 million barrels in two years, he said.
Goldman Sachs analysts, led by Stefan Wieler in New York, said today that West Texas Intermediate oil will average $96.50 in 2014, down from an estimate of $98 on Dec. 20.
Electronic trading volume on the Nymex was 472,943 contracts as of 3:26 p.m. Volume totaled 563,464 contracts Jan. 18, 15 percent above the three-month average. Open interest was 1.49 million.
 
 
 
 
 
 
 
 
Oil Trades Near Four-Month High as German Confidence Increases
Oil traded near the highest price in four months in New York after German investor confidence jumped and U.S. lawmakers prepared to vote on lifting the debt limit in the world’s largest crude consumer.
March futures were little changed after gaining 0.7 percent yesterday as the ZEW Center for European Economic Research in Mannheim, Germany, said its index of investor and analyst expectations rose to the highest since May 2010. President Barack Obama’s administration said it welcomes a move by House Republicans to vote today on lifting the nation’s debt ceiling through mid-May. U.S. crude stockpiles probably increased last week, according to a survey before a government report tomorrow.
“The German data provides support for the market,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “There’s a little bit of support coming through for oil.”
West Texas Intermediate crude for March delivery was at $96.59 a barrel, down 9 cents, in electronic trading on the New York Mercantile Exchange at 12:51 p.m. Sydney time. The average volume of all futures traded was 67 percent above the 100-day average. The February contract expired yesterday at $96.24, the highest close since Sept. 17, 2012.
Brent for March settlement was at $112.32 a barrel, down 10 cents, on the London-based ICE Futures Europe exchange. The number of futures exchanged was 3.2 percent below the 100-day average. The European benchmark contract traded at a premium of $15.71 to WTI. The gap was $15.16 on Jan. 17, the narrowest in almost six months.
Fuel Supplies
U.S. crude stockpiles probably rose by 2.5 million barrels to 362.8 million in the seven days ended Jan. 18, according to the median of seven analyst estimates before a report from the Energy Department. All respondents forecast a gain.
U.S. gasoline stockpiles probably rose 1.5 million barrels, and distillate supplies, a category that includes heating oil and diesel, increased 500,000 barrels, according to the survey.
The government data is being released a day later than usual because of the Martin Luther King Jr. Day holiday on Jan. 21 in the U.S. The industry-funded American Petroleum Institute is scheduled to release separate inventory figures today.
The ZEW Center said its index, which aims to predict economic developments six months in advance, jumped to 31.5 from 6.9 in December. Economists forecast an increase to 12, the median of 39 estimates in a survey show.
 
 
 
 
 
 
 
 
Oil rises on better economic sentiment
Oil prices jumped Tuesday on signs of stronger economic growth in Europe and fresh economic stimulus measures announced by the Japanese central bank.

The price of a barrel of US benchmark West Texas Intermediate rose 68 cents to settle at US$96.24 a barrel.

A barrel of Brent futures traded in London closed 71 cents higher at US$112.42 a barrel.

A survey published on Tuesday showed that German investor sentiment has struck the highest levels since the start of the eurozone debt crisis in 2010 as the outlook for Europe's top economy continues to brighten.

Analysts Tuesday described a greater embrace of the market of so-called "risk-on" trading after the Bank of Japan announced a stimulus program comparable to the US Federal Reserve's plan.

The Bank of Japan on Tuesday adopted a two-per cent inflation target and issued plans for indefinite monetary easing in a policy shift that Japan's new premier hailed as "epoch making."

The moves -- set out in a rare joint statement by the central bank with the government -- followed stern calls from the country's new administration led by Shinzo Abe to become more aggressive in kick-starting the nation's anaemic economy.

"Crude is seeing support today on news overnight from the Bank of Japan that it plans open-ended asset purchases to start in January 2014 to stimulate its economy," said Brian Swan, an analyst with Schneider Electric.

Oil prices also received support following approval of a revised Keystone XL pipeline route by the governor of the US state of Nebraska, which was seen as giving the controversial project a boost. The project still needs approval from the US State Department.

The move is "another step to the hopes that the pipeline will be approved," said David Bouckhout, analyst at TD Securities. "That would help alleviate a lot of the supply situation."
 
 
 
Gold Trades Near One-Month High as BOJ Announces Stimulus
Gold futures rose in New York after the Bank of Japan (8301) announced stimulus measures, increasing demand for the precious metal as a store of value.
The central bank said today it will buy about 13 trillion yen ($146 billion) in assets per month from January 2014 and set a 2 percent inflation target. Bullion gained 7 percent last year as stimulus programs in the U.S., Europe and Japan enhanced the appeal of the precious metal as an alternative to currencies.
“This is definitely bullish for gold,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview.
Gold futures for February delivery rose 0.4 percent to settle at $1,693.20 an ounce at 1:44 p.m. on the Comex in New York. Last week, prices jumped 1.6 percent and climbed to $1,697.80, the highest price for a most-active contract since Dec. 18. The exchange was closed yesterday for a public holiday.
India, the biggest bullion consumer in 2011, raised import duties on gold and platinum to 6 percent immediately from 4 percent. Physical gold purchases will probably slow significantly after being very strong early this year, said Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd. (ANZ)
“We will definitely see the effect of this news on physical demand,” Optionsellers.com’s Cordier said.
Silver futures for March delivery climbed 0.8 percent to $32.177 an ounce in New York.
On the New York Mercantile Exchange, platinum futures for April delivery gained 1.5 percent to settle at $1,698.50 an ounce. The metal has rallied 10 percent this month on concern supplies will tighten. Anglo American Platinum Ltd., the world’s biggest producer, said on Jan. 15 it will cut jobs and output in South Africa.
Palladium futures for March delivery rose 1 percent to $729.90 an ounce on the Nymex, the highest settlement for a most-active contract since Sept. 16, 2011.
 
 
 
 
 
 
 
 
Gold Near One-Month High Before Lawmakers Vote on Debt Ceiling
Gold traded little changed near the highest level in more than a month before U.S. House Republicans vote on suspending the debt limit until May 19. Platinum was near the most expensive in more than three months.
Gold for immediate delivery was at $1,693.20 an ounce at 9:50 a.m. in Singapore. Prices reached a four-week high of $1,696.28 on Jan. 17. Bullion for February delivery was little changed at $1,692.80 an ounce on the Comex in New York.
House Republicans are scheduled to vote today on the temporary suspension of the $16.4 trillion debt ceiling. The proposal is intended to prompt the Democratic-controlled Senate to approve an annual budget, something it hasn’t done in four years, by withholding lawmakers’ pay if a budget isn’t passed by April 15. The state of the U.S. government’s finances is the greatest risk to the world economy.
“They’ll have to do something,” said David Lennox, a resources analyst at Fat Prophets in Sydney, referring to U.S. lawmakers. “Every time that the U.S. goes deeper into debt, it influences gold prices to the upside.”
Gold rallied for a 12th year in 2012 on global stimulus. The Bank of Japan said yesterday it will buy 13 trillion yen ($146.7 billion) in assets a month next year and set a 2 percent inflation target. In the U.S., the Federal Reserve is purchasing $85 billion of government and mortgage debt a month.
Bullion may climb over the next three months as U.S. lawmakers attempt to tackle the debt ceiling and the world’s largest economy slows, Goldman Sachs Group Inc. said in a report dated Jan. 18, advising investors to place bets on gains.
Cash bullion of 99.99 percent purity rose 0.2 percent to 340.40 yuan a gram ($1,701.23 an ounce) on the Shanghai Gold Exchange. Silver for immediate delivery in London declined 0.2 percent to $32.1775 an ounce after rising to $32.3438 yesterday, the costliest since Dec. 18.
Spot platinum gained 0.1 percent to $1,697.75 an ounce and traded near the highest level since Oct. 9. Holdings in exchange-traded products backed by the metal climbed 0.4 percent yesterday to a record 54.1719 metric tons. Palladium was little changed at $727.25 an ounce.
 
 
 
 
 
 
 
Copper Drops From One-Week High on Record Production in China
Copper declined from the highest level in more than a week as China’s output of the refined metal climbed to a record.
Metal for delivery in three months dropped as much as 0.4 percent to $8,099.75 a metric ton on the London Metal Exchange before trading at $8,106 at 9:56 a.m. Shanghai time. It climbed to $8,144.50 yesterday, the highest since Jan. 11. Futures for delivery in May on the Shanghai Futures Exchange lost 0.3 percent to 58,730 yuan ($9,446) a ton.
Refined copper production jumped 22 percent in December from a year ago to 580,000 tons, data from the National Bureau of Statistics showed. That was a record. Total output in 2012 rose 11 percent to 6.06 million tons, said the bureau.
“A surplus is going to persist in China,” Xiong Dabiao, an analyst at Minmetals Futures Co., said by phone from Shanghai. “There will be more smelting and refining capacity coming on stream, adding to record inventory levels.”
Inventories in bonded and SHFE warehouses exceeded 1 million tons at the beginning of 2013, Barclays Plc said in a report on Jan. 18.
Copper for delivery in March on the Comex in New York fell 0.4 percent to $3.69 per pound. On the LME, aluminum also declined, while lead and nickel advanced.
 
 
 
 
 
 
 
 
Freeport Earnings Beat Estimates on Higher Copper Sales
Freeport-McMoRan Copper & Gold Inc. (FCX), which agreed in December to buy two energy companies for $9 billion, reported fourth-quarter earnings that beat analysts’ estimates as copper sales rose more than expected and costs fell.
Profit excluding an environmental expense and an insurance gain was 74 cents a share, beating the 72-cent average of 20 estimates compiled by Bloomberg. Copper sales rose 18 percent to 972 million pounds, the Phoenix-based company said today in a statement. That beat Freeport’s Oct. 22 forecast of 930 million pounds.
Metal volumes were better than expected because of higher production in North and South America, Freeport said. Copper and gold sales increased from a year earlier when the company’s Grasberg mine in Indonesia, its biggest operation, was affected by a strike. The company’s net cash costs declined to $1.54 a pound of copper from $1.57 a year earlier. Jorge Beristain, an analyst at Deutsche Bank AG in Stamford, Connecticut, had estimated costs of $1.63.
Freeport, the world’s biggest publicly traded copper producer, fell 16 percent on Dec. 15, the day it announced an agreement to buy Plains Exploration & Production Co. (PXP) and McMoRan Exploration Co. (MMR) for cash and stock. Freeport said at the time it couldn’t find a suitable copper acquisition.
Gold Increase
“The fourth-quarter volumes and fourth-quarter costs were slightly better than management had guided on its third-quarter earnings call, but the eventual ramifications of the Plains and McMoRan deals obviously overwhelm any incremental good news or bad news from a single quarter,” Daniel Rohr, an analyst with Morningstar Inc. (MORN) in Chicago, said in a telephone interview.
Freeport rose 4.6 percent to $35.19 at the close in New York.
Fourth-quarter net income increased to $743 million, or 78 cents a share, from $640 million, or 67 cents, a year earlier. Revenue climbed 8.4 percent to $4.51 billion.
Gold sales were 254,000 ounces in the period, up from 133,000 ounces in the fourth quarter of 2011.
Copper for delivery in three months on the London Metal Exchange averaged $7,924 a metric ton in the quarter, 5.2 percent more than a year earlier.
Cobalt Deal
Freeport, which also operates in Africa, repeated its 2013 copper sales forecast of 4.3 billion pounds. The company plans to increase copper output from 3.66 billion pounds in 2012 to more than 5 billion pounds a year in 2015, it said in the statement.
Freeport and Lundin Mining Corp. (LUN), its partner in the Tenke Fungurume copper and cobalt mine in the Democratic Republic of Congo, agreed yesterday to buy OM Group Inc. (OMG)’s cobalt unit for as much as $435 million.
Freeport will own 56 percent and Lundin 24 percent of a joint venture acquiring the cobalt chemical refinery and sales business in Kokkola, Finland, and La Generale des Carrieres et des Mines, the Congolese state mining company, will own the remainder.
 
 
 
 
 
 
 
 
Rubber Glut Shrinks From Record as China, U.S. Growth Rebounds
The global surplus for natural rubber may contract this year and next from a record in 2012 because of rising demand in the U.S. and in China, the biggest consumer, according to the International Rubber Study Group.
Production is set to outpace consumption by 179,000 metric tons this year and 153,000 tons in 2014, said senior economist Lekshmi Nair, who estimates last year’s glut at 460,000 tons. The Singapore-based IRSG is an inter-governmental group of 35 producing and consuming nations and 120 industry members.
Rubber, used in tires and gloves, surged 51 percent from a three-year intraday low in August as growth in China accelerated last quarter for the first time in two years and U.S. housing starts jumped to a four-year high in December. Thailand, Indonesia and Malaysia, the biggest shippers, agreed in August to limit exports to boost prices, increasing costs for tiremakers such as Bridgestone Corp. (5108), the world’s largest.
“Continued expansion in Asia, especially in China, will drive prices higher,” said Prachaya Jumpasut, managing director of The Rubber Economist in London, who has studied the commodity for more than 30 years.
Rubber for delivery in June lost 0.1 percent to end at 311.3 yen a kilogram ($3,506 a metric ton) on the Tokyo Commodity Exchange yesterday. Futures dropped to 205.6 yen on Aug. 14, the lowest since October 2009.
Demand in China may rise 7.2 percent this year after growing 4.5 percent in 2012, according to IRSG. Consumption in the U.S. will expand 4.5 percent after contracting 6.3 percent last year, the group estimates.
‘Pent-up Demand’
“Consumption is recovering because of pent-up demand” from last year when growth stagnated, said Nair in a phone interview yesterday. “That will help narrow the surplus.”
Global demand and production have climbed every year to record levels since 2010, according to IRSG. Consumption will increase to 11.6 million tons this year and to 12.3 million tons in 2014, the group estimates. Production will advance to 11.8 million tons this year and to 12.5 million tons in 2014. Demand was 10.9 million tons last year and output was 11.4 million tons.
Global stockpiles at the end of 2012 may have risen to 2 million tons, the highest level since 2005, from 1.56 million a year earlier because of the export curbs by the Southeast Asian countries, representing 67 percent of world supply, Nair said.
The countries agreed to limit shipments by 300,000 tons from October to March to boost prices and to cut down aging trees, aiming to remove another 150,000 tons of annual output.
Supplies in the first quarter will probably be lower than that of last year because of the program to limit sales is in place during a seasonally low production period, which stretches from February through May, Nair said without providing estimates.
 
 
 
 
 
 
 
 
US Dollar falls against yen after Bank of Japan move
The US dollar fell against the yen Tuesday as markets reacted negatively to the Bank of Japan's new moves to spur the tepid economy.

Around 2200 GMT, the US dollar bought 88.68 yen, down from 89.60 yen at the same time Monday.

The European currency partly wiped out its losses against the yen but still was lower, fetching 118.14 yen compared with 119.28 yen late Monday.

Against the US dollar, meanwhile, the euro inched up to US$1.3321 from US$1.3313.

The Bank of Japan, under pressure from Japanese Prime Minister Shinzo Abe to devalue the yen, on Tuesday adopted a 2.0 per cent inflation target and announced plans to begin open-ended asset purchases next year.

"The 2014 timing of the asset purchase program was a disappointment to the market, which had very high expectations, thus sparking a rally in the yen and a sell-off in Japanese stocks," said Jason Ball, a forex analyst at Wells Fargo Bank.

There was little economic news out of the United States, except for a weaker-than-expected report on December sales of previously owned homes.

The euro, meanwhile, found some support after a German survey showed investor sentiment in Europe's biggest economy had hit the highest levels since the start of the eurozone debt crisis in 2010.

The US dollar fell to 0.9285 Swiss francs from 0.9325 francs late Monday.

The pound ticked up to US$1.5836 from US$1.5830.
 
 
 
 
 
 
 
 

Yen rises against dollar, euro after Bank of Japan disappoints

The yen soared 1 percent against the dollar and euro on Tuesday after the Bank of Japan said its open-ended commitment to buy assets would kick in only next year, disappointing those who had expected more aggressive monetary easing.
But the euro pared some losses against the yen and recovered versus the dollar after a German ZEW survey showed that economic sentiment was at the highest since May 2012.
The common currency had fallen to a session low against the dollar and yen on speculation that some large German banks could be asked to split their investment banking operations, driving European shares lower.
But the biggest mover was the yen, with the Bank of Japan once again falling short of expectations. The yen rose in the aftermath, even as some traders said the move higher would be limited.
"A dominate yen outshined its rivals after actions by the Bank of Japan were considered by many to be underwhelming and disappointing," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
Japan's central bank, which has been under intense political pressure to overcome deflation, doubled its inflation target to 2 percent, as had been widely expected.
It also said it had decided to switch to an open-ended approach of buying a certain amount of assets each month next year, without setting a deadline for completing the purchases.
The dollar was down 0.9 percent against the yen at 88.74. Earlier, it had fallen past reported stops at 88.50 yen to hit a session low of 88.35.
Traders cited bids at 88.00-88.20 yen while chart support was at the January 16 low. The dollar had risen to 90.06 yen immediately after the BOJ decision, not far from its 2-1/2-year high of 90.25 yen, but later retreated.
The yen's recovery was likely to be short-lived and the dollar would rise against the yen in the coming months, analysts said.
"The general upward move in dollar/yen will continue due to expectations of more easing after a new BoJ governor is appointed in April," said Bernd Berg, global FX strategist at Credit Suisse, adding that the dollar could rise to 92 yen in the next few months.
Current BoJ Governor Masaaki Shirakawa's term ends in April and markets are positioned for further yen weakness as most expect him to be replaced by someone whose stance on aggressive policy easing matches that of Prime Minister Shinzo Abe's.
EURO RECOVERS
The euro was down 1 percent on the day at 118.16 yen, though off a session low of 117.31. The euro was hurt against the yen by a German newspaper report saying Germany's regulator had ordered large banks to simulate a break-up.
A report showing U.S. home resales unexpectedly fell in December added to volatility and pressure on the euro and dollar, though the data was not seen as enough to derail the boost housing will likely provide to the economy this year.
Against the dollar, the euro was little changed at $1.3317.
While the euro has struggled to break above the $1.34 level since it hit a near 10-month high a week ago, strategists said it was likely to remain firm as concerns around the euro zone crisis ease.
The German ZEW figures beat all expectations, a sign that the euro zone crisis was no longer hitting Europe's largest economy as hard as it was last year.
"The euro can cross the $1.34 mark to reach $1.35 as early as the end of this week if data out of Germany continues to be strong," said Joerg Angele, FX strategist at Raiffeisen Bank International in London.
But Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, cautioned that failing to breach $1.34 may mean a near term-top is in place for the euro.
 
 
 
 
 
 
 
Yen Holds 2-Day Gain on Prospects Consumer Prices Dropped
The yen remained higher following a two-day advance on speculation Japanese inflation data this week will add to evidence that the central bank’s monetary stimulus is failing to increase consumer prices.
Japan’s currency was supported as technical indicators signaled its recent losses were too fast. The Bank of Japan (8301) increased its price-gain target to 2 percent yesterday and announced open-ended asset purchases to start next year. It predicted inflation will accelerate 0.9 percent in the fiscal year beginning April 2014. The euro was 0.7 percent from its highest in almost 11 months on forecasts data will show signs of improvement in manufacturing and services in the currency bloc.
“It’s hard to sell the yen on hopes that inflation will rise,” said Junya Tanase, chief currency strategist at JPMorgan Chase & Co. in Tokyo. “The BOJ’s outlook for consumer prices was only slightly higher than previously forecast,” Tanase said in reference to the bank’s projection in October for a 0.8 percent gain in prices next fiscal year.
The yen was little changed at 88.67 per dollar as of 10:50 a.m. in Tokyo after climbing 1 percent yesterday to 88.71, the biggest advance since May. It fetched 118.02 per euro. Europe’s shared currency bought $1.3313 after touching $1.3404 on Jan. 14, the highest level since February.
Japan’s consumer prices excluding fresh food probably fell 0.2 percent in December from a year earlier, following a 0.1 percent decline in the previous month, according to the median estimate in a survey before the data due on Jan. 25. That would be the biggest decline since August.
‘Upward Correction’
The 14-day relative strength index for the yen versus the dollar was at 39 yesterday, near the 30 level that some traders see as a sign an asset has fallen too far, too fast and may be due to reverse course. Against the euro, it was at 38.
“The yen currently is in an upward correction phase after it weakened rapidly in the past two months,” said Noriaki Murao, managing director of the marketing group in New York at Bank of Tokyo-Mitsubishi UFJ Ltd. “The market was somewhat disappointed in that no deadline has been set for the inflation target and that the open-ended asset purchases don’t start until 2014.”
The yen fell 5.4 percent in the past month, the biggest decline among 10 developed-nation currencies tracked by Correlation-Weighted Indexes. The euro gained 1.3 percent and the dollar added 0.2 percent.
A preliminary reading of a composite index based on a survey of purchasing managers in euro-area manufacturing and services will probably show a gain to 47.5 this month from 47.2 in December, according to the median estimate in a survey. A reading below 50 indicates contraction. Markit Economics will release the data tomorrow.
 
 
 
 
 
 
 
 
Yen Advances as BOJ Delays Open-Ended Asset Buying
The yen advanced the most in eight months against the dollar after the Bank of Japan (8301) said it will conduct open-ended asset purchases starting in January 2014, disappointing investors who expected bolder action sooner.
Japan’s currency advanced from almost its weakest versus the dollar since June 2010 as the BOJ under outgoing Governor Masaaki Shirakawa said it will buy 13 trillion yen ($146.6 billion) in assets a month next year and set a 2 percent inflation target. The New Zealand and Australian dollars rose. The euro pared a drop to the lowest in almost a week versus the dollar after German investor confidence climbed.
 “They have broken new ground by raising inflation,” Shahab Jalinoos, a senior currency strategist for UBS AG in Stamford, Connecticut, said in a telephone interview. “The problem is that the actual measures they’re using to reach those targets appear too weak to actually have the effect on inflation that the target would require.”
The yen gained 1 percent to 88.71 per dollar at 5 p.m. New York time and rallied as much as 1.4 percent, the most since May 17. It reached 90.25 yesterday, the weakest since June 23, 2010. Japan’s currency added 0.9 percent to 118.18 per euro and appreciated as much as 1.7 percent. The 17-nation common currency rose 0.1 percent to $1.3322 after dropping 0.4 percent earlier to $1.3267, the weakest level since Jan. 16.
Forint Drops
Hungary’s forint weakened versus the dollar and euro as Goldman Sachs Group Inc. forecast a slump in the currency on concern a change in leadership at the central bank may bring monetary loosening via unconventional methods. The currency sank 0.3 percent to 220.75 per dollar and lost 0.4 percent to 294.09 to the euro.
The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against currencies of six major U.S. trading partners, pared a loss after sales of existing homes in the U.S. unexpectedly dropped in December. The index was down 0.2 percent to 79.858 after dropping as much as 0.4 percent.
Existing-home sales fell 1 percent to a 4.94 million annual rate, figures from the National Association of Realtors showed. The reading was still the second-highest since November 2009. A survey forecast a 1.2 percent rise to 5.1 million.
The New Zealand and Australian dollars gained versus most major counterparts amid speculation the BOJ’s stimulus plan will increase global-growth prospects. The Aussie rose 0.5 percent to $1.0566. The kiwi, as New Zealand’s dollar is nicknamed, appreciated 0.6 percent to 84.10 U.S. cents.
Technical Levels
Japan’s currency may advance to a the strongest level in more than two weeks versus the dollar based on technical levels before resuming a bearish path, according to JPMorgan Chase & Co., citing trading patterns.
“The dollar-yen can correct a bit more over the short term and retrace into the 87.80-86.80 yen zone,” Niall O’Connor, a technical analyst at JPMorgan Securities, wrote in an e-mail. The yen last reached 86.80 on Jan. 3.
The Japanese currency has slid 5.5 percent over the past month versus nine developed-nation currencies tracked by Correlation-Weighted Indexes after Prime Minister Shinzo Abe’s Liberal Democratic Party swept to power. Abe is pushing to boost the economy and has called for “bold monetary policy” to defeat deflation and drive the yen lower.
“The Abe administration painted the Bank of Japan in a box with the 2 percent inflation target,” Greg Anderson, New York- based head of Group 10 currency strategy at Citigroup Inc., said today on Bloomberg Television’s “Lunch Money” in an interview. “The BOJ’s way of resisting was pushing asset purchases off until 2014.”
BOJ Decision
Shirakawa and six of nine BOJ board members voted for a 2 percent inflation target, to be achieved “at the earliest possible time” -- a pace not sustained in Japan since the early 1990s. While judging that the economy is “relatively weak,” and that consumer prices will be flat for the time being, the BOJ refrained from adding immediate stimulus.
“The timing is the factor that caused the market to be a little disturbed,” said Jeremy Stretch, head of foreign- exchange strategy at Canadian Imperial Bank of Commerce in London, referring to the decision to buy assets from next January. “We haven’t seen the big bazooka being taken out in terms of the weakening of the yen, which is implicit in getting anywhere near that inflation target.”
Shirakawa’s five-year term as governor concludes in April, and the terms of his two deputies end in March, giving the government that took office last month a chance to reshape the nation’s central bank.
Bullish Investors
Investors are the most bullish on Japan’s markets in more than three years and confident that Abe will weaken the yen. Respondents who see Japan offering the best opportunities worldwide over the next year rose to 21 percent this month from September’s 5 percent in a global poll of investors.
The euro erased an earlier drop against the dollar after the ZEW Center for European Economic Research in Mannheim said its index of German investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 31.5 this month, the highest since May 2010.
 
 
 
 
 
 
 
 
Yen’s Rise Will Probably Be Temporary, Citigroup’s Anderson Says
The yen probably won’t gain more than another percentage point or two versus the dollar before reversing course as the Bank of Japan (8301) moves closer to open-ended asset purchases, according to Citigroup Inc.’s Greg Anderson.
The Japanese currency rose the most in eight months today after the central bank said it will conduct open-ended asset purchases starting in January 2014, disappointing investors who expected bolder action sooner, and doubled its inflation target to 2 percent. Prime Minister Shinzo Abe, who took office last month, is pushing to boost the economy and has called for “bold monetary policy” to defeat deflation and drive the yen lower.
“The Abe administration painted the Bank of Japan in a box with the 2 percent inflation target,” Anderson, head of Group 10 currency strategy at Citigroup in New York. “The BOJ’s way of resisting was pushing asset purchases off until 2014.”
The yen has lost 12 percent against the greenback over the past six months. It gained 1 percent to 88.74 per in New York today and rallied as much as 1.4 percent, the most since May 17.
While the yen may strengthen to 87 per dollar over the next two weeks, it will weaken to the mid-90s versus the dollar by year-end, Anderson said.
“Once they actual begin expanding balance sheet, you will see the yen weaken further,” he said.
The bank said today it will buy 13 trillion yen ($146.6 billion) in assets a month starting next year.
BOJ Governor Masaaki Shirakawa is scheduled to conclude a five-year term in April, and the terms of his two deputies end in March, giving Abe’s government a chance to chance to reshape the central bank.
 
 
 
 
 
 
 

Bank of Japan to buy assets, S&P 500 sets new five-year high

The yen rose against the dollar and euro on Tuesday after the Bank of Japan said its open-ended commitment to buy assets would kick in only next year, but the prospect of more monetary accommodation by a central bank appeared to lend support to a broad range of financial assets, including stocks, gold and oil.
Analysts said the yen's rise would likely be short-lived and that on a medium-term basis, it would weaken.
The euro benefited from a surprisingly sharp jump in investor sentiment in Germany. Analysts said, however, that the currency's recent climb could put the euro zone at a competitive disadvantage when its economy needs to grow.
Hopes that the global economy would improve allowed cyclical sectors to lead the Standard & Poor's 500 to a five-year high.
Investors waited for earnings results from technology companies due after the closing bell and were not disappointed.
IBM (IBM.N) reported fourth-quarter earnings and revenue that beat analysts' forecasts [ID:nL1N0AR76R] and Google Inc (GOOG.O) said net revenue in its core Internet business increased more than 20 percent in the fourth quarter.
Shares of Google were up roughly 4.5 percent at $734.46 in after-hours trading.
"Especially with the lull in economic data this week, earnings will be a big driving force for equities this week," said Jonathan Garber, macro analyst at Briefing.com in Chicago.
A catalyst from positive earnings results is needed for stocks to move still higher, he said, while mixed earnings with "lower guidance" would make another upward move more difficult.
Signals that Republican leaders in the U.S. House of Representatives would pass a nearly four-month extension of the U.S. debt limit were also helpful for riskier assets.
Global stock markets were mixed. Japanese equities .N225 and world indices rose on the BoJ news, but European shares fell on a potential price war in French telecommunications.
The euro pared sharp losses against the yen and the dollar after a German ZEW survey showed economic sentiment at its highest since May 2012.
Front-month Brent crude oil futures rose 71 cents to settle at $112.42 a barrel, supported by Bank of Japan plans for asset buying and strong investor confidence data from Germany [ID:nEAP10NM00].
Gold rose as the Bank of Japan's pledge to launch an economic stimulus effort and a five-year high in U.S. equities prompted nervous investors to buy gold. Spot gold was up 0.1 percent at $1,691.24 an ounce by 3:29 p.m. EST (2029 GMT).
Japan's central bank, under intense political pressure to overcome deflation, doubled its inflation target to 2 percent. [ID:nL4N0AR1G6] The BoJ also said it had decided to switch to an open-ended approach to buying assets each month next year, setting no deadline for completing the purchases.
"The yen strengthened after weakening since mid-November in anticipation of the BoJ's plan," Garber said.
Though the yen appreciated on Tuesday, Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said its medium-term trend downward was intact.
Current BoJ Governor Masaaki Shirakawa's term ends in April and since he is expected to be replaced by someone whose stance on aggressive policy easing matches that of Prime Minister Shinzo Abe, markets expect the yen to weaken.
On Tuesday, however, the dollar slipped against the yen to 88.68.
The euro was down 1.3 percent on the day at 117.78 yen, though off a session low of 117.31 yen. The euro was hurt by a German newspaper report saying Germany's regulator had ordered large banks to simulate a break-up.
Against the dollar, the euro was down 0.1 percent at $1.3300.
The euro hit a near 10-month high a week ago and some strategists said it would likely stay firm as concerns around the euro zone crisis ease. Supporting that view was a surprisingly strong German ZEW reading on investor sentiment, a sign the euro zone crisis was no longer hitting Europe's largest economy as hard as it did last year.
But Douglas Cote, chief market strategist at ING U.S. Investment Management, with $170 billion in assets under management, said the euro's rise since the start of the year could pose a problem for the euro zone and the global economy.
"Europe has a growth crisis," he said. "Their currency is rising at the absolute worst possible time, hurting its global competitiveness."
U.S. housing data has surprised on the positive side over the last few months, but news that U.S. existing home sales fell in December temporarily weakened stock prices. It also allowed safe-haven U.S. debt to erase early losses and edge higher.
The benchmark 10-year Treasury note rose 1/32, leaving its yield at 1.84 percent, slightly lower than 1.85 percent at the close on Friday.
The Dow Jones industrial average .DJI rose 62.51 points, or 0.46 percent, at 13,712.21. The Standard & Poor's 500 Index .SPX was up 6.58 points, or 0.44 percent, at 1,492.56. The Nasdaq Composite Index .IXIC was up 8.47 points, or 0.27 percent, at 3,143.18.
European shares, testing two-year highs in recent days, weakened. Telecom shares slipped after Vivendi's (VIV.PA) SFR mobile operator said it was cutting prices by as much as 25 percent.
The pan-European FTSEurofirst 300 .FTEU3 closed down 0.1 percent at 1,165.49.
Frankfurt's DAX .GDAXI fell as much as 1.4 percent on the talk but then erased about half of that loss.
The MSCI world index .MIWD00000PUS was up 0.26 percent.
 
 
 
Canada Dollar Falls as Central Bank Forecast to Hold 1%
The Canadian dollar traded at almost the lowest level this year against its U.S. counterpart as the Bank of Canada is projected to maintain its benchmark interest rate at one percent in a decision tomorrow.
The currency weakened versus the majority of its most- traded peers after a report showed Canadian retail sales slowed in November. Canada’s dollar fell against the yen, trimming a gain this month, after the Bank of Japan (8301) said it will conduct open-ended asset purchases starting in 2014, later than estimated.
“We’re a long way from getting back to normal interest rates,” said Aaron Fennell, a futures specialist at Bank of Nova Scotia (BNS)’s ScotiaMcLeod unit, by phone from Toronto. “If they do start raising rates in Canada, they’re going to do so very cautiously, 25 basis points at a time. They’ll probably do it two times and then lay off for a while to see what happens.”
The loonie, as the Canadian dollar is known for the image of the waterfowl on the C$1 coin, rose 0.1 percent to 99.19 cents per U.S. dollar at 5 p.m. in Toronto, after falling to 99.46. It reached 99.47 on Jan. 18, the lowest level since Dec. 31. One loonie buys $1.0082.
It fell 0.9 percent to 89.43 per yen, paring a 2.3 percent gain this month.
Options Data
Options traders became more bearish on the Canadian dollar. The three-month so-called 25-delta risk reversal rate, which measures the premium charged for the right to buy the U.S. dollar against the loonie versus contracts to sell, traded as high as 0.92 percentage point, the most since Nov. 27. It averaged 1.5 percentage points during the past 12 months.
Futures of crude oil, Canada’s biggest export, rose 0.7 percent to $96.24 per barrel and the Standard & Poor’s 500 stock Index rose 0.4 percent.
Canada’s benchmark 10-year bonds rose, pushing the yield down two basis points, or 0.02 percentage point, to 1.91 percent. The 2.75 percent note maturing in June 2022 added 19 cents to C$107.16.
The Bank of Canada will announce further details on Jan. 24 for a Jan. 30 10-year note auction.
The central bank will keep the benchmark interest rate at one percent when it announces its policy decision at 10 a.m. tomorrow, according to the median forecast of 24 economists in a survey. The Bank of Canada has kept its policy interest rate at 1 percent since September 2010, the longest pause since the 1950s, and has said since April that borrowing costs may rise.
Economic Data
Retail sales rose 0.2 percent to C$39.4 billion ($39.7 billion) after October’s gain was revised down to 0.5, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News forecast that retail sales would be unchanged from the previous month, according to the median of 23 forecasts. Retail sales less autos fell 0.3 percent, from a projected gain of 0.1 percent in a survey of 19 economists.
“I think for retail sales it was kind of a mixed report in the sense that there were revisions to the October report and so the upward surprise on headline was counterbalanced by a downward surprise less autos, which was all counterbalanced by what happened to the previous month’s revisions,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia, by phone from Toronto. “So the market might have been a bit confused by retail sales.”
Yen Trade
The Bank of Japan said it will conduct open-ended asset purchases of 13 trillion yen a month starting next year and set a 2 percent inflation target in a bid to weaken its currency and end two decades of stagnation, disappointing investors who had expected more immediate action to drive down the currency.
“There’s been so much yen weakness over the last two months or so, I think it was natural to see some profit-taking after the Bank of Japan announcement,” said Elsa Lignos, senior currency strategist at Royal Bank of Canada, by phone from London. Investors are “beginning to question whether the Bank of Japan can really do enough to weaken the yen.”
Japan’s five-year note yield fell to 0.15 percent, the lowest level since the government started selling the debt in February 2000.
The loonie has fallen 1.7 percent during the past six months versus nine developed-nation peers tracked by Correlation-Weighted Indexes. The euro has gained 6 percent while the greenback has dropped 4.6 percent.
 
 
 
 
 
 
 
 
Canada Dollar Falls as Central Bank Forecast to Hold 1%
The Canadian dollar traded at almost the lowest level this year against its U.S. counterpart as the Bank of Canada is projected to maintain its benchmark interest rate at one percent in a decision tomorrow.
The currency weakened versus the majority of its most- traded peers after a report showed Canadian retail sales slowed in November. Canada’s dollar fell against the yen, trimming a gain this month, after the Bank of Japan (8301) said it will conduct open-ended asset purchases starting in 2014, later than estimated.
“We’re a long way from getting back to normal interest rates,” said Aaron Fennell, a futures specialist at Bank of Nova Scotia (BNS)’s ScotiaMcLeod unit, by phone from Toronto. “If they do start raising rates in Canada, they’re going to do so very cautiously, 25 basis points at a time. They’ll probably do it two times and then lay off for a while to see what happens.”
The loonie, as the Canadian dollar is known for the image of the waterfowl on the C$1 coin, rose 0.1 percent to 99.19 cents per U.S. dollar at 5 p.m. in Toronto, after falling to 99.46. It reached 99.47 on Jan. 18, the lowest level since Dec. 31. One loonie buys $1.0082.
It fell 0.9 percent to 89.43 per yen, paring a 2.3 percent gain this month.
Options Data
Options traders became more bearish on the Canadian dollar. The three-month so-called 25-delta risk reversal rate, which measures the premium charged for the right to buy the U.S. dollar against the loonie versus contracts to sell, traded as high as 0.92 percentage point, the most since Nov. 27. It averaged 1.5 percentage points during the past 12 months.
Futures of crude oil, Canada’s biggest export, rose 0.7 percent to $96.24 per barrel and the Standard & Poor’s 500 stock Index rose 0.4 percent.
Canada’s benchmark 10-year bonds rose, pushing the yield down two basis points, or 0.02 percentage point, to 1.91 percent. The 2.75 percent note maturing in June 2022 added 19 cents to C$107.16.
The Bank of Canada will announce further details on Jan. 24 for a Jan. 30 10-year note auction.
The central bank will keep the benchmark interest rate at one percent when it announces its policy decision at 10 a.m. tomorrow, according to the median forecast of 24 economists in a survey. The Bank of Canada has kept its policy interest rate at 1 percent since September 2010, the longest pause since the 1950s, and has said since April that borrowing costs may rise.
Economic Data
Retail sales rose 0.2 percent to C$39.4 billion ($39.7 billion) after October’s gain was revised down to 0.5, Statistics Canada said today in Ottawa. Economists forecast that retail sales would be unchanged from the previous month, according to the median of 23 forecasts. Retail sales less autos fell 0.3 percent, from a projected gain of 0.1 percent in a survey of 19 economists.
“I think for retail sales it was kind of a mixed report in the sense that there were revisions to the October report and so the upward surprise on headline was counterbalanced by a downward surprise less autos, which was all counterbalanced by what happened to the previous month’s revisions,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia, by phone from Toronto. “So the market might have been a bit confused by retail sales.”
Yen Trade
The Bank of Japan said it will conduct open-ended asset purchases of 13 trillion yen a month starting next year and set a 2 percent inflation target in a bid to weaken its currency and end two decades of stagnation, disappointing investors who had expected more immediate action to drive down the currency.
“There’s been so much yen weakness over the last two months or so, I think it was natural to see some profit-taking after the Bank of Japan announcement,” said Elsa Lignos, senior currency strategist at Royal Bank of Canada, by phone from London. Investors are “beginning to question whether the Bank of Japan can really do enough to weaken the yen.”
Japan’s five-year note yield fell to 0.15 percent, the lowest level since the government started selling the debt in February 2000.
The loonie has fallen 1.7 percent during the past six months versus nine developed-nation peers tracked by Correlation-Weighted Indexes. The euro has gained 6 percent while the greenback has dropped 4.6 percent.
 
 
 
 
 
 
 
 
N.Z., Australian Dollars Strengthen Amid Bets on Global Growth
The Australian and New Zealand dollars gained versus most major currencies as commodities rose after the Bank of Japan (8301) said it would expand monetary stimulus, fueling bets the global economy will expand.
The Aussie’s gained before a report forecast to show the nation’s consumer prices rose 2.4 percent in the fourth quarter from a year earlier. The two South Pacific currencies fell against the yen as it rose against all of its 16 most-traded peers after the BOJ’s announcement of open-ended asset purchases starting in January 2014 disappointed investors who expected bolder action sooner. Asian and U.S. stocks rose.
“A positive session for risk, with most stocks and commodities notching solid gains, added to the Aussie and kiwi’s upbeat tone,” Joe Manimbo, a market analyst at Western Union Business Solutions, said via e-mail.
New Zealand’s dollar, nicknamed the kiwi, rose 0.6 percent to 84.10 U.S. cents in New York trading yesterday and touched 84.31 cents, the strongest level since Jan. 15. The kiwi fell 0.4 percent to 74.60 yen.
The Australian dollar gained 0.5 percent to $1.0566 and touched $1.0579, the highest since Jan. 16, and fell 0.5 percent to 93.73 yen.
Standard & Poor’s GSCI Index of 24 raw materials increased 0.5 percent. The S&P 500 Index rose 0.4 percent, and the MSCI AC Asia Pacific Index gained 0.5 percent.
BOJ Decision
The BOJ said yesterday it will buy 13 trillion yen ($146.6 billion) in assets a month starting next year 2014 and set a 2 percent inflation target. Prime Minister Shinzo Abe, who took office last month, has called for “bold monetary policy” to defeat deflation and drive the yen lower.
Australia’s consumer price index rose 2.4 percent in the fourth quarter from a year earlier, a survey of economists forecast a Bureau of Statistics report will show today. Prices gained 0.4 percent from the third quarter, economists projected.
The Aussie dollar has increased 2.1 percent this month among the 10 developed-nation currencies monitored by the Correlation-Weighted Indexes. The kiwi has gained 1.9 percent, and the U.S. dollar is up 0.2 percent. The yen has lost 2.2 percent.
 
 
 
 
 
 
 
 
Aussie Declines After Consumer Prices Gain Less Than Forecasts
Australia’s dollar dropped, halting a two-day gain, after data showed consumer prices increased last quarter by less than economists forecast, giving the Reserve Bank scope to cut borrowing costs further.
The so-called Aussie fell against all 16 of its major counterparts after the Bureau of Statistics said the consumer price index advanced 0.2 percent from the previous three months, compared with the median forecast of economists in a News survey of a 0.4 percent increase. The trimmed mean gauge of core inflation rose 0.6 percent from the previous quarter, compared with a forecast gain of 0.7 percent.
The inflation data “does allow the RBA to ease further if it seems necessary,” said Annette Beacher, head of Asia-Pacific research for TD Securities Inc. in Singapore. “The Australian dollar has fallen on the headline just because the outcome was marginally lower than consensus.”
Australia’s dollar dropped 0.3 percent to $1.0535 as of 1:30 p.m. in Sydney from the close yesterday. It fell 0.3 percent to 93.43 yen. New Zealand’s dollar traded little changed at 84.09 U.S. cents and 74.58 yen.
Yields on Australia’s 10-year government bonds declined four basis points, or 0.04 percentage point, to 3.32 percent.
Traders see about a 47 percent chance the Reserve Bank of Australia will lower its key rate by a quarter percentage point to a record low 2.75 percent at a Feb. 5 meeting, little changed from yesterday.
Aussie-Yen
Today’s inflation figures are unlikely to trigger an immediate reduction in borrowing costs, according to TD’s Beacher. The RBA has cut its benchmark by 1.5 percentage points since the beginning of November 2011.
The Aussie fell against the yen for a fourth day amid speculation the Bank of Japan (8301) failed to meet market expectations for monetary stimulus.
The BOJ yesterday agreed to set a 2 percent inflation target urged by Prime Minister Shinzo Abe, while pushing back open-ended asset purchases until next year.
Australia’s currency gained 14 percent over the past three months versus its Japanese counterpart and reached 95.03 yen on Jan. 18, the most since August 2008.
“Policy measures put in place by the BOJ, on balance, probably disappointed the market,” said Andrew Salter, a currency strategist in Sydney at Australia & New Zealand Banking Group Ltd. (ANZ) “I think we’ve had a near-term peak in the Aussie- yen.”
 
 
 
 
 
 
 
Ringgit Rises From Two-Week Low as German Data Spur Risk-Taking
Malaysia’s ringgit rebounded from near a two-week low as a pickup in German investor confidence allayed concern about Europe’s growth outlook and spurred risk- taking. Government bonds gained before inflation data today.
The ZEW Center for European Economic Research in Mannheim said yesterday its index of investor and analyst expectations jumped to 31.5 in January, the highest in 2 1/2 years. The ringgit declined 1 percent in the last two days on concern Malaysia’s government will call an early election that may loosen its grip on power. The currency is still 0.6 percent stronger for the month.
“Fears of Europe’s core slipping into a deep recession are” receding, said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd. “It’s not like the European situation has turned completely rosy, but at least there won’t be an imminent implosion.”
The ringgit strengthened 0.2 percent, the most since Jan. 17, to 3.0374 per dollar as of 9:25 a.m. in Kuala Lumpur. The currency touched 3.0493 yesterday, the weakest level since Jan. 8. One-month implied volatility, a measure of expected moves in exchange rates used to price options, increased one basis point to 5.38 percent.
Inflation Data
Prime Minister Najib Razak must dissolve parliament by April 28. His approval rating dropped to a 16-month low in December, the Merdeka Center for Opinion Research said in a Jan. 10 statement. The benchmark FTSE Bursa Malaysia KLCI Index of shares rose 0.3 percent today, after sliding 2.9 percent in the last two days.
Malaysian consumer prices gained 1.4 percent in December from a year earlier, after advancing 1.3 percent in November, according to the median estimate of economists before official figures due today.
The yield on the government’s 3.172 percent bonds due July 2016 fell two basis points, or 0.02 percentage point, to 3.13 percent, according to Bursa Malaysia.
 
 
 
 
 
 
 
 
Japan Stocks Head for Longest Losing Streak in Two Months
Japan shares declined, with the Nikkei 225 Stock Average (NKY) headed for its first three-day decline since elections were called, as the yen climbed after the Bank of Japan (8301) said it will wait a year to add open-ended stimulus.
Nissan Motor Co. and Hitachi Ltd. led declines among exporters after Japan’s currency yesterday rose to its highest since May. Component-maker TDK Corp. (6762) lost 3.2 percent on a Nikkei newspaper report that profit may fall on weaker demand for smartphones. Nippon Paper Group Inc., Japan’s second-biggest maker of the material, lost 4 percent after its rating was cut at Nomura Holdings Inc. Chiba Bank Ltd. jumped 2.9 percent after CLSA Asia Pacific Markets recommended buying the regional lender’s shares.
The Nikkei 225 lost 0.8 percent to 10,627.46 at the midday break in Tokyo, headed for its longest losing streak since the seven days through Nov. 13 before elections were called. Volume on the gauge was 8.8 percent lower than its 30-day average. The broader Topix Index fell 0.7 percent to 895.09, with all but six of its 33 industry groups falling.
“The BOJ policy measures were as expected and it was already priced into stocks,” said Kiyoshi Ishigane, a Tokyo- based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of about $70 billion. “Stocks have been rising without a real break since elections were announced last year, so it’s a good time to do a bit of profit- taking.”
The Topix rose 24 percent since elections were announced on Nov. 14, and last week capped its longest weekly winning streak since 1986 on optimism the central bank will ease policy amid pressure from Abe’s new government. The gauge is trading at 1.06 times book value, compared with 2.05 for the Standard & Poor’s 500 Index and 1.15 for the Stoxx Europe 600 Index.
BOJ Announcement
Japan’s central bank yesterday agreed to set a 2 percent inflation target urged by Prime Minister Shinzo Abe, while waiting to start open-ended asset purchases until January next year. Abe, elected last month on a platform calling for an end to two decades of deflation, pressured the BOJ to commit to consumer-price increases that would raise prospects for higher corporate revenues and tax receipts.
The Bank of Japan meeting “marked yet another faltering step on the path toward reflation,” said David Homan, New York- based director of macro strategy at Credit Suisse Group AG. The decision “leaves a lot of steps still to come. The reality for reflation still looks more like a slow-burning fuse.”
The yen rose to its strongest against the dollar since May yesterday, and is gaining for a third day today. A stronger Japanese currency cuts the value of earnings for exporters.
Nissan, which gets 32 percent of its revenue from North America, sank 2 percent to 849 yen. Toyota Motor Corp. (7203), the world’s biggest carmaker, fell 1.2 percent to 4,190 yen. Hitachi lost 1.3 percent to 533 yen.
TDK Drops
Among other stocks that fell, TDK sank 3.2 percent to 3,150 yen. Full-year operating profit may fall 30 percent to 5 billion yen on weaker demand for smartphone components, the Nikkei reported, without citing anyone. Analysts had expected operating profit of 8.4 billion yen.
Nippon Paper dropped 4 percent to 1,167 yen. Oji Holdings Corp., Japan’s biggest paper maker by market value, fell 3.5 percent to 274 yen. Nomura analyst Takaomi Kono cut investment ratings on the stocks, citing prospects for a weaker yen to raise import costs for raw materials.
Among stocks that gained, Chiba Bank advanced 2.9 percent to 561 yen, headed for its highest close since March 2011, after CLSA raised its rating to buy from underperform. The bank posted the second-biggest advance on the Nikkei 225.
The 25-day historic volatility on the Nikkei 225 reached 21.27 today, its highest level since December 2011. The Nikkei Stock Average Volatility Index fell 10 percent to 22.24, indicating traders expect a swing of about 6.4 percent on the benchmark gauge over the next 30 days.
 
 
 
 
 
 
 
 
China’s Stock-Index Futures Advance; Solar Companies May Rise
China’s stock-index futures rose, signaling gains for the benchmark index.
Futures on the CSI 300 Index (SHSZ300) expiring in February, the most active contract, added 0.3 percent to 2,600.40 as of 9:17 a.m. local time. EGing Photovoltaic Technology Co. (600537) may advance among solar companies after the Shanghai Securities News said the government may soon announce new rules for entry into the industry. The Conference Board is scheduled to release its leading index for China’s economy for December at 10 a.m.
The Shanghai Composite Index (SHCOMP) dropped 0.6 percent to 2,315.14 yesterday. The CSI 300 Index declined 0.5 percent to 2,596.90. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong gained 0.6 percent. The  China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, added 0.1 percent in New York.
The Shanghai Composite has risen 18 percent since approaching a four-year low on Dec. 3 amid signs of an economic recovery and on speculation urban development will increase construction demand. The index is valued at 12.8 times reported profit, near the highest level since May.
Average trading volumes in the Shanghai Composite were 25 percent higher than the 30-day average yesterday. Its 30-day volatility was at 20.4, compared with last year’s average of 17.1.
The Conference Board’s leading index rose 1.1 percent in November, compared with a revised 1.6 percent gain in the previous month. HSBC Holdings Plc and Markit Economics are due to release a preliminary manufacturing index for January tomorrow. The gauge may rise to 51.7 from 51.5 last year, according to the median estimate of 4 analysts in a survey. A reading above 50 indicates expansion.
CSRC Reform
China will accelerate the development of a more mature and stronger capital market, the Shanghai Securities News cited China Securities Regulatory Commission Chairman Guo Shuqing as saying at a national securities and futures supervision meeting yesterday.
Guo listed 10 main tasks for the regulator this year including building a “multilayer” capital market and deepening reform of initial public offerings, the report said.
Solar stocks may be active today. China may soon announce rules for entering the solar and photovoltaic industry, the Shanghai Securities News reported, citing the new energy department of National Energy Administration. There will be requirements on research and development capabilities, production scale and patents, the report said.
Chinese solar stocks rose in New York yesterday after U.S. President Barack Obama called for the development of sustainable energy in his inauguration speech, boosting the outlook for panel manufacturers. The iShares FTSE China 25 Index Fund, the largest exchange-traded fund in the U.S., was little changed at $41.74.
 
 
 
 
 
 
 
India Nifty Futures Advance, Signaling Benchmark Indexes to Gain
Indian (SENSEX) stock-index futures gained, signaling an advance in the nation’s benchmark indexes.
SGX S&P CNX Nifty Index futures for January delivery rose 0.3 percent to 6.076 at 10:21 a.m. in Singapore. The underlying S&P CNX Nifty (NIFTY) Index lost 0.6 percent to 6,048.50 yesterday. The BSE India Sensitive Index, or Sensex, fell 0.6 percent to 19,981.57. The Bank of New York Mellon India ADR Index of U.S.- traded shares rose 0.4 percent.
India’s finance minister said yesterday the government will introduce a goods and services tax, deepening an economic-policy overhaul that has helped lured record foreign inflows into Indian stocks this year. Only two out of 11, or 18 percent, of Sensex companies that have reported earnings for the December quarter have trailed forecasts, compared with 40 percent in the previous two quarters.
“Liquidity and a probable rate cut, along with third- quarter results, are key factors which will be driving the near- term trend,” Rakesh Goyal, senior vice president at Bonanza Portfolio Ltd., wrote in an e-mail yesterday.
The Reserve Bank of India will cut borrowing costs at its next policy meeting on Jan. 29 to spur growth after inflation eased in December to the slowest in three years. The bank will reduce its benchmark interest rate to 7.75 percent from 8 percent, according to the median estimate of 14 analysts in a survey. That would be the first reduction since April.
Foreign Flows
Overseas funds were net buyers of Indian stocks for a 17th straight day on Jan. 21, purchasing a net $160 million of shares, according to data from the market regulator. Foreigners have bought a net $2.67 billion of the nation’s stocks so far this year, a record for the period.
GAIL India Ltd. (GAIL), the country’s biggest natural gas distributor, may report today net income of 10.2 billion rupees for the quarter ended Dec. 31, according to the median estimate of 30 analysts in a survey. That compares with 10.6 billion rupees a year earlier.
Reliance Communications Ltd. (RCOM), India’s third-largest mobile- phone company by subscribers, may report quarterly profit dropped to 1.62 billion rupees from 1.86 billion a year earlier, according to the median of 16 analyst estimates.
Hindustan Unilever
Shares of Hindustan Unilever Ltd. (HUVR), the Indian unit of the world’s second-biggest consumer-goods company, may be active after the stock was upgraded to buy from hold at BNP Paribas SA. The company’s “growth challenges appear narrow and temporary,” BNP analysts Vijay Chugh and Tapan Joshi wrote, after quarterly net income missed analyst estimates and royalty payments to parent company Unilever rose.
Credit Suisse Group AG cut its rating on the stock to neutral from outperform and Emkay Global Financial Services Ltd. lowered its recommendation to reduce from hold.
The Sensex has risen 2.9 percent this year, after jumping 26 percent in 2012. The gauge is valued at 15.8 times estimated earnings, the highest since February 2012 and the most expensive among the BRIC nations.
Brazil’s Bovespa Index is valued at 11.6 times estimated profit, Russia’s Micex Index (INDEXCF) at 5.3 times and China’s Shanghai Composite Index (SHCOMP) at 9.9 times. The MSCI Emerging Markets Index is trading at 11 times.
 
 
 
 
 
 
 
Malaysian Stocks to Be Volatile Until Elections, Citigroup Says
Malaysian stocks, which fell to a six-week low yesterday on speculation elections will be held soon, will probably stay volatile until polling day, according to Citigroup Inc.
The benchmark FTSE Bursa Malaysia KLCI Index (FBMKLCI) slumped 2.9 percent in the past two days on concern the ruling coalition may lose seats. There was speculation the vote would be held during school holidays at the end of March, Fiona Leong, a Kuala Lumpur-based analyst at Citigroup, wrote in a note today.
The KLCI index gained 0.3 percent as of 10:23 a.m. in Kuala Lumpur after valuations fell to 14.5 times estimated profit, the lowest level since June 5. The gauge rose to a record on Jan. 7 after gaining 4.9 percent last month, the most since October 2011.
“We see selling pressure easing but stock prices are likely to remain volatile until polling day,” Leong wrote. “The heightened speculation and the KLCI’s strong performance in December 2012 and early January triggered broad-based de- risking by investors.”
The stock index’s 30-day historical volatility climbed to 10.4 on Jan. 21, surpassing the MSCI Emerging Markets Index for the first time since May 2008. The gauge’s volatility reading was at 10 today.
Value is emerging in UEM Land Holdings Bhd. (ULHB), IJM Corp. and Genting Malaysia Bhd. (GENM), which Citigroup rates buy, the analyst said. The bank recommends selling Telekom Malaysia Bhd. (T) and Maxis Bhd. (MAXIS) on slowing growth and “stretched” valuations, Leong wrote.
 
 
 
 
 
 
 
 
Emerging ETF Volatility Plunges to Decade Low on Global Growth
A measure of price swings in the exchange-traded fund tracking developing-nation shares slipped to the lowest level in at least 10 years as economic data from the U.S. and China showed signs of improvement.
Fifty-day volatility on the iShares MSCI Emerging Markets Index dropped to 11.59, the lowest level since at least January 2003. The ETF slipped 0.2 percent to $44.71 in New York today, declining for the first time in three days.
China’s economic growth accelerated for the first time in two years last quarter amid government efforts to revive demand, data released Jan. 18 showed. In the U.S., initial jobless claims for the week ended Jan. 12 fell to a five-year low, pointing to further improvement in the labor market, while housing starts climbed 12.1 percent in December. European Central Bank President Mario Draghi said today that the “darkest clouds” over the euro area have subsided.
“You’ve got increased global risk appetite on the back of better Chinese news flow, better-than-expected U.S. data and the fact that Europe appears to be stabilizing,” Alec Young, a global equity strategist at S&P Capital IQ, said by phone in New York. “When there’s more nervousness around you see more volatility, but it’s been nice and steady recently.”
 
 
 
 
 
 
Tokyo rubber futures edge lower before BOJ policy decision (Jan. 22)
Key TOCOM rubber futures fell slightly on Tuesday, extending the previous day’s 1.5-percent decline, with a recent selloff in the yen halting ahead of the outcome of a Bank of Japan policy meeting, with expectations running high for bold monetary easing.
FUNDAMENTALS
* The key Tokyo Commodity Exchange rubber contract for June delivery <0#2JRU:> was down 1.6 yen, or 0.5 percent, at 310.0 yen per kg as of 0030 GMT.
* The contract hit a peak of 317.6 yen during the evening session on Friday, the highest since it reached a 9-month high of 321.0 yen on Jan 11.
* The BOJ is set on Tuesday to unveil its most determined effort yet to beat years of economic stagnation, but the big challenge will be how to impress markets already pricing in a doubling of its inflation target and further asset buying.
* Bold measures by the BOJ could increase investor appetite for riskier assets such as commodities, although expectations of such steps have already been propping up prices.
* U.S. financial markets were closed on Monday for the Martin Luther King Jr. holiday
MARKET NEWS
* The yen’s recent violent selloff came to an abrupt halt Tuesday, with the dollar trading around 89.60 yen, off a 2-1/2-year high of 90.25 yen marked on Monday.
* The Nikkei share average barely budged at Tuesday’s open ahead of the end of the BOJ’s two-day gathering.
* Brent crude oil slipped below $112 a barrel on Monday, ending a three-day rally, as pessimism over global economic growth returned traders’ focus to healthy supply levels, offsetting fears of unrest in North Africa.
 
 
 
 
 
 
 
Rubber Climbs as Bank of Japan May Add Stimulus, Weakening Yen
Rubber advanced as expectations grow that the Bank of Japan (8301) will increase monetary stimulus when it concludes a two-day meeting today, weakening the Japanese currency and raising the appeal of yen-based contracts.
Rubber for delivery in June gained as much as 0.9 percent to 314.5 yen a kilogram ($3,507 a metric ton) before trading at 313.5 yen on the Tokyo Commodity Exchange at 10:53 a.m. Futures have advanced 3.6 percent this year.
The BOJ will today adopt the 2 percent inflation target that Prime Minister Shinzo Abe has called for, according to 21 of 23 economists surveyed by Bloomberg News. Ending consumer- price declines would give companies and households more incentive to borrow, helping the world’s third-biggest economy to pull out of a contraction. The central bank is forecast to increase its asset purchases by 10 trillion yen, according to the poll.
“Expectations are growing for additional stimulus by the BOJ, which will weaken the yen further and boost rubber futures in Tokyo,” Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo, said by phone today.
Japan’s currency has tumbled 12 percent in the past three months, the biggest decline among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.
Rubber for delivery in May added 1.1 percent to 26,045 yuan ($4,186) a ton on the Shanghai Futures Exchange.
Thai rubber free-on-board was unchanged at 98.70 baht ($3.32) a kilogram yesterday, according to the Rubber Research Institute of Thailand. The world’s largest producer has spent 17.4 billion baht in buying 182,446 tons of rubber from farmers above market rates, Thailand government spokesman Tossaporn Serirak said yesterday.
 
 
 
 
 
THAILAND PHYSICAL (22/01/2013)
 
 
Baht / KG.
Type / Grade F.O.B. Price 
February 2013 March 2013
Bangkok Songkhla Bangkok Songkhla
Ribbed
Smoked
Sheet
RSS 1 100.10 99.85 100.30 100.05
RSS 2 99.50 99.25 99.70 99.45
RSS 3 98.95 98.70 99.15 98.90
RSS 4 98.65 98.40 98.85 98.60
RSS 5 98.20 97.95 98.40 98.15
Standard
Thai
Rubber
STR 5L 94.25 94.00 94.45 94.20
STR 5 92.35 92.10 92.55 92.30
STR 10 91.65 91.40 91.85 91.60
STR 20 91.25 91.00 91.45 91.20
Concentrated Latex * 60.10 59.85 60.30 60.05
Remark : Concentrated Latex quote in Bulk
     
 
 
 
 
 
 
 
 
TOCOM (23/01/2013)
Day Session (9:00 - 15:30) As of Jan 23, 2013 12:50 JST
 
Trade Date: Jan 23, 2013   Prices in yen / kilogram  
 
Month Last Settlement Price Open High Low Current Change Volume Settlement
Jan 2013 295.2 293.0 293.1 291.8 292.5 -2.7 48 -
Feb 2013 298.4 297.0 299.0 297.0 298.3 -0.1 39 -
Mar 2013 300.5 300.8 302.3 299.2 299.2 -1.3 204 -
Apr 2013 305.3 304.9 306.1 303.1 303.1 -2.2 123 -
May 2013 308.1 306.3 309.8 305.5 306.2 -1.9 321 -
Jun 2013 311.3 309.8 313.0 309.3 309.3 -2.0 2,663 -
Total   3,398  
 
 
 
 
 
 
 
 
 
SHANGHAI (23/01/2013)
Contract Last Chg Open Interest Volume Turnover Bid-Ask Pre-clear Open Low High Lastv Comment
ru1303 25620 -20 4168 248 63649600 25605/25635 25640 25750 25620 25750   【tick】
ru1304 25850 -35 250   0 25805/25860 25885         【tick】
ru1305 26070 5 136158 98542 25734875600 26065/26070 26065 26190 26030 26230 32 【tick】
ru1306 25895 0 590 18 4681200 25870/25900 25895 26100 25895 26100   【tick】
ru1307 25910 -20 132   0 25845/25950 25930         【tick】
ru1308 26100 -75 168 4 1046000 26050/26110 26175 26200 26100 26200   【tick】
ru1309 26090 -20 32334 11842 3095649000 26090/26095 26110 26230 26055 26250 8 【tick】
ru1310 25820 0 180   0 25735/25915 25820         【tick】
ru1311 25460 -20 1036 84 21419800 25455/25495 25480 25510 25435 25545   【tick】
ru1401 26070 70 194 2 521400 25990/26180 26000 26070 26070 26070   【tick】
 
 
 
 
 
 
 
 
 
SICOM (23/01/2013)
Contract Month Last Chg From Prev Settle Bid Ask Open High Low Close Vol Open Int Settle Prev. Day Settle
E Feb 13 - 0 327.0 329.0 - - - - - 74 - 328.0
E Mar 13 - 0 327.0 331.5 - - - - - 65 - 331.0
E Apr 13 - 0 335.1 341.0 - - - - - 108 - 338.5
E May 13 - 0 343.0 346.7 - - - - - 193 - 344.0
E Jun 13 - 0 344.0 349.0 - - - - - 94 - 345.0
E Jul 13 - 0 346.0 350.0 - - - - - 92 - 346.0
E Aug 13 350.5 +1.0 349.0 350.9 350.5 350.5 350.5 - 2 224 - 349.5
E Sep 13 - 0 315.1 354.0 - - - - - 44 - 349.7
E Oct 13 - 0 315.6 356.0 - - - - - 50 - 350.0
E Nov 13 - 0 316.1 358.0 - - - - - 50 - 351.0
E Dec 13 - 0 331.6 360.0 - - - - - 20 - 351.5
E Jan 14 - 0 - - - - - - - - - 346.0
 
 
 
 
 
 
 
 
 
COMMODITY FUTURES
Commodity Currency Last Change % Change Trade Date/Time
LIGHT CRUDE CON1  Feb13 USD 96.55 -0.13 -0.13% 01/21 22:40
NO 2 HT OIL CON1  Jan13 USD 3.07 -0.00 -0.10% 01/21 22:38
NATURAL GAS CON1  Jan13 USD 3.57 +0.01 +0.42% 01/21 22:33
100 OZ GOLD CON1  Jan13 USD 1,691.90 +6.20 +0.37% 01/22 15:27
SILVER 5000 CON1  Jan13 USC 3,223.00 +24.50 +0.77% 01/22 15:45
HG COPPER CON1  Jan13 USC 368.85 +2.75 +0.75% 01/22 13:21
CORN CON1  Mar13 USC 726.75 -1.75 -0.24% 01/21 22:40
WHEAT CON1  Mar13 USC 773.75 -5.50 -0.71% 01/21 22:39
SOYBEANS CON1  Jan13 USC 1,447.50 -4.25 -0.29% 01/21 22:40
SUGAR 11 CON1  Feb13 USC 18.17 -0.20 -1.09% 01/22 13:59
COFFEE C CON1  Mar13 USC 148.95 -7.35 -4.70% 01/22 13:59
COCOA CON1  Mar13 USD 2,223.00 -62.00 -2.71% 01/22 13:59
FROZEN OJ CON1  Mar13 USC 115.45 +0.90 +0.79% 01/22 13:59
COTTON NO 2 CON1  Mar13 USC 79.80 -0.13 -0.16% 01/22 22:36
LIVE HOGS CON1  Feb13 USC 85.75 +0.05 +0.06% 01/21 21:55
LIVE CATTLE CON1  Feb13 USC 125.88 +0.15 +0.12% 01/21 21:52
 
 
 
 
 
 
 
 
Market Indices
DOW 13,712.21 +62.51 +0.46%
S&P 500 1,492.56 +6.58 +0.44%
NASDAQ 3,143.18 +8.47 +0.27%
TR US Index 135.57 +0.65 +0.48%
FTSE 100 6,179.17 -1.81 -0.03%
DAX 7,696.21 -52.65 -0.68%
CAC 40 3,741.01 -22.02 -0.59%
TR Europe 148.34 -0.35 -0.24%
Nikkei 10,616.77 -93.16 -0.87%
Hang Seng 23,617.87 -41.12 -0.17%
Sensex 19,981.57 -120.25 -0.60%

Currencies

EUR/USD 1.3314 -0.04%
GBP/USD 1.5827 -0.06%
USD/JPY 88.650 -0.05%
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Commodities

 
Gold 1,691.90 +6.20 +0.37%
Oil 96.55 -0.13 -0.13%
Corn 726.75 -1.75 -0.24%
 
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