Tin tức ngày 12/09/2013
U.S. Stocks Rise as Obama Weighs Syria Alternatives, Apple Drops
U.S. stocks rose, sending the Standard & Poor’s 500 Index to a one-month high, as diminishing concern over a military strike against Syria offset Apple Inc.’s biggest decline since April.
International Business Machines Corp. surged 2.2 percent after agreeing to sell its customer-care outsourcing business to Synnex Corp. (SNX) for $505 million. Marriott International Inc. increased 3.2 percent after a Chinese land developer said he wants to buy hotel-management companies in the U.S. Apple plunged 5.4 percent as the price of its new lower-cost iPhone disappointed analysts.
The S&P 500 rose 0.3 percent to 1,689.13 at 4 p.m. in New York, the seventh straight winning session and the highest level since Aug. 13. The Dow Jones Industrial Average, which includes IBM and not Apple, (AAPL) jumped 135.54 points, or 0.9 percent, to 15,326.60, also a one-month peak. About 5.8 billion shares changed hands on U.S. exchanges, 4 percent below the three-month average.
“We’re not out of the woods on news from Syria yet, but for the time being the market has digested the decision to delay action,” Russell Croft, who helps manage $900 million as a Croft-Leominster Inc. fund manager in Baltimore, said by phone. “Right now all eyes are on next week’s Fed meeting, that’ll be the big driver in the market with a few data points between now and then.”
The S&P 500 has advanced 3.4 percent so far in September, as reports showed China’s economy has strengthened, while concern abated that the U.S. will soon bomb Syria.
President Speaks
President Barack Obama said last night in an address from Washington that he will pursue a proposal by Russia for Syria to surrender its stockpiles of chemical weapons to international authorities. He had said he would ask Congress to authorize the use of military force against President Bashar al-Assad’s regime following a suspected chemical-weapons attack on Aug. 21 that the U.S. says killed more than 1,400 people.
The tensions over Syria have recently overshadowed investor concern that the Federal Reserve will pare back its record stimulus following its Sept. 17-18 meeting. The central bank is watching economic data as it considers reducing the monthly $85 billion in asset buying.
Economists estimate the Fed this month will taper its monthly bond buying by $10 billion, to $75 billion, according to the median of 34 responses in a survey. The stimulus has helped the S&P 500 rally as much as 153 percent since the beginning of the bull market in March 2009.
Stimulus Speculation
Speculation about the stimulus has whipsawed stocks since May, when Chairman Ben S. Bernanke first indicated cuts could start this year. The S&P 500 tumbled 5.8 percent from a record high on May 21 through June 24. It rebounded 8.7 percent to close at its latest all-time high of 1,709.67 on Aug. 2. The gauge then slumped as much as 4.6 percent before the current rally brought it back to within 1.2 percent of the record and above the May 21 peak.
Stanley Druckenmiller, who boasts one of the hedge-fund industry’s best long-term track records of the past three decades, said ending the bond buying over the next year will roil markets.
“I really don’t care whether we go to $70 billion or $65 billion in September,” Druckenmiller said today in an interview with Bloomberg Television. “But if you tell me quantitative easing is going to be removed over nine or 12 months, that is a big deal.”
Volatility Gauge
The Chicago Board Options Exchange Volatility Index (VIX), or VIX, dropped 4.9 percent to 13.82, the lowest in a month. The equity volatility gauge is down 19 percent in September after rallying 26 percent in August, the biggest monthly gain since May 2012.
Eight of 10 industries in the S&P 500 (SPX) advanced, with energy stocks and consumer-staples producers rising at least 0.8 percent. Newfield Exploration Co. jumped the most in the benchmark index for U.S. equities, gaining 7.5 percent to $26.07 as crude supplies in Cushing, Oklahoma, tumbled to the lowest since February 2012.
Apple dragged technology shares lower, dropping 5.4 percent to $467.71 for its biggest slide since April 17. The company introduced two models of its iPhone yesterday and was cut to neutral from buy at Bank of America Corp., which said that the lower-cost smartphone cost too much to increase sales in emerging markets.
Credit Suisse Group AG lowered the Cupertino, California-based company to neutral from outperform, UBS AG cut its rating on the stock to neutral from buy and Piper Jaffray Cos. lowered its 12-month price target on Apple’s shares to $640 from $655.
IBM Rally
IBM jumped 2.2 percent to $190.70 for the biggest gain in the Dow. The world’s largest computer-services provider agreed to sell the unit to Synnex to focus on more profitable investments. IBM is the largest Dow component by index weight.
An index of homebuilders rallied 2.5 percent to the highest since Aug. 5 as yields on 10-year Treasury notes declined after a $21 billion auction drew the biggest demand in six months.
Lennar Corp. jumped 3.4 percent to $34.61 and D.R. Horton Inc. gained 3.2 percent to $19.50 as all 11 members of the S&P Supercomposite Homebuilding Index advanced.
Facebook Inc. climbed 3.3 percent to a record close of $45.04. Investors bet the operator of the world’s most popular social-networking service, will benefit from growing demand for its mobile-advertising products.
Hotels, Phones
Marriott International added 3.2 percent to $42.96. Wang Jianlin, China’s richest man and the owner of the country’s biggest commercial land developer, said he has hired two investment banks to buy hotel-management companies.
Verizon Communications Inc. rose 0.1 percent to $46.52. The second-biggest U.S. telephone carrier began selling today $45 billion to $49 billion of bonds, more than twice the size of Apple’s unprecedented $17 billion issue in April. The company is raising money for its $130 billion acquisition of Vodafone Group Plc’s stake in Verizon Wireless.
The S&P 500 traded yesterday above its 150-day moving average for the 200th straight session. That’s the sixth longest streak since 1980 and the longest since 2004, according to Miller Tabak & Co.’s Jonathan Krinsky.
“We are in the midst of one of the greatest and steady bull markets we have seen in recent history,” the technical analyst wrote in a note today. “Eventually it will end. Until then, however, enjoy the ride.”
The index has rallied 21 percent through yesterday from the last time it traded below the trend line on Nov. 20, 2012.
In five prior instances, after crossing the 200-day mark, further gains were “rather limited” during four runs, while in the 1995-1996 streak, the S&P 500 rose another 15 percent, Krinsky wrote.
European Stocks Climb to Five-Year High Amid Syria Delay
European stocks rose to the highest level in more than five years as U.S. President Barack Obama postponed a decision on military action against Syria.
ARM Holdings Plc, which designs chips for Apple Inc.’s iPhones, rallied the most in four months after the U.S. company unveiled two new models of the device. EON SE and RWE AG surged more than 4 percent, leading a gauge of utilities higher. Kingfisher Plc retreated 2.7 percent after first-half pretax profit missed analysts’ estimates.
The Stoxx Europe 600 Index rose 0.4 percent to 310.88 at the close of trading, the highest level since June 2008. The benchmark gauge extended gains in the final minutes of trading, surpassing the 310.59-point closing high it reached in May. The measure has advanced 4.6 percent in September as Chinese manufacturing, industrial production and retail sales increased.
“Equity markets have had a good run so far this month,” Stewart Richardson, who helps oversee about $100 million as chief investment officer at RMG Wealth Management LLP said by phone. “The recent run of upward closes has been helped by good Chinese data and the lessening of the threat in Syria. Markets need a new catalyst, and may drift sideways towards the Federal Reserve meeting next week.”
The Stoxx 600 has rallied 11 percent this year as central banks around the world maintained stimulus measures and the global economy showed signs of recovery. The index had declined 11 percent from May 22 through June 24 after the Fed said it may start reducing the pace of asset purchases if the economy improves in line with its forecasts. Federal Open Market Committee officials hold their next meeting on Sept. 17-18.
Volume Gains
The volume of shares changing hands in Stoxx 600-listed companies was 23 percent higher than the 30-day average today.
Obama said yesterday in an address from Washington that he will pursue a proposal by Russia to have Syria surrender its stockpiles of chemical weapons to international authorities. He had previously said he would ask Congress to authorize the use of military force against Syrian President Bashar al-Assad following an Aug. 21 chemical attack that the U.S. says killed more than 1,400 people.
“It’s too early to tell whether this offer will succeed, and any agreement must verify that the Assad regime keeps its commitments,” Obama said in remarks from the White House. The initiative “has the potential to remove the threat of chemical weapons without the use of force, particularly because Russia is one of Assad’s strongest allies.”
National benchmark indexes gained in 13 of the 18 western European markets today. Germany’s DAX added 0.6 percent, while the U.K.’s FTSE 100 (UKX) and France’s CAC 40 each rose 0.1 percent.
ARM Advances
ARM jumped 4.8 percent to 986.5 pence, the biggest advance since April 23. Apple said late yesterday it will introduce two new iPhones, including a cheaper $99 version in bright colors and a high-end device.
The more expensive iPhone 5S will use ARM’s latest 64-bit technology, which carries a higher royalty rate and a greater chip value than current 32-bit technology, Andrew Dunn, an analyst at RBC Capital Markets, wrote in a report.
Nokia Oyj gained 3.9 percent to 4.42 euros after Berenberg Bank raised its recommendation on the Finnish phone maker to buy from sell, citing a stronger infrastructure business and an undervalued patent portfolio.
A gauge of utilities was the best performer among 19 industry groups in the Stoxx 600. EON, Germany’s largest utility, advanced 4.8 percent to 13.45 euros and RWE, the second-biggest, climbed 6.6 percent to 25.06 euros.
Banco de Sabadell SA, Spain’s fifth-largest bank, surged 9.7 percent to 2 euros. That was the biggest gain in a month and the largest advance in the Stoxx 600 today.
Kingfisher, SSAB
Kingfisher dropped 2.7 percent to 408.5 pence after Europe’s biggest home-improvement retailer said first-half adjusted pretax profit fell 1.6 percent to 365 million pounds ($574 million). That missed the 367 million-pound average forecast of analysts.
Gemalto NV, which provides near-field communications technology solutions that enable contactless payment for mobile phones, sank 6.4 percent to 78.65 euros for the biggest drop in two years. Apple yesterday refrained from incorporating such so-called NFC technology in its latest iPhone versions. The Dutch company has still surged 35 percent from its May 10 low.
“The rally in Gemalto was overdone,” said Hedy Talens, a trader at Waerdeveldt BV in Amsterdam. “It was disappointing that Apple didn’t have a big surprise and didn’t present NFC.”
Asia Stocks Swing as Benchmark Trades Near 3-Month High
Asia’s benchmark stock index swung between gains and losses after Japanese machinery orders accelerated less than expected and as investors await the outcome of the Federal Reserve’s meeting next week.
Toyota Motor Corp. dropped 0.8 percent in Tokyo, pacing losses among Japanese exporters as the yen rose for a second day. Sharp Corp. sank 5.7 percent after reports the television maker will announce a share sale. Qantas Airways Ltd. (QAN), Australia’s largest carrier, climbed 2.1 percent after the Australian Financial Review reported it may share its Sydney terminal with unit Jetstar Airways.
The MSCI Asia Pacific Index was little changed at 137.62 as of 10:16 a.m. in Tokyo, trading near a three-month The measure, which swung between gains and losses of 0.1 percent today, had climbed 6.6 percent in the past 10 days amid signs the global economy is improving. The rally drove the gauge’s 14-day relative strength index, an indicator of trading momentum, to 67 yesterday, near a threshold of 70 that signals to analyst shares may have risen too far.
“We’re in wait-and-see mode ahead of next week’s Federal Open Market Committee meeting,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co. in Tokyo. “While the situation in Syria has calmed for now and China looks like it’s seen the worst of its slowdown, buying after the Olympics news seems to have run its course and the yen has stopped weakening, making exporters less attractive.”
The Federal Reserve has said any reduction in stimulus will be tied to a sustained recovery in U.S. employment. The central bank will decide to cut its $85 billion in monthly bond purchases when it meets Sept. 17-18, according to 65 percent of economists.
New Zealand Rate
The Reserve Bank of New Zealand, which kept its key interest rate at a record-low 2.5 percent today, said it is likely to raise borrowing costs in 2014. The Bank of Korea also kept its benchmark rate unchanged. Indonesia and the Philippines also review rates today and the euro region is expected to report factory output fell in July. The U.S. issues jobless claims data.
Japan’s Topix index slipped 0.6 percent. The nation’s machinery orders rose 6.5 percent in July from a year earlier after rising 4.9 percent in the previous month, according to a government report released today. That missed economist estimates for a 7.7 percent increase.
Australia’s S&P/ASX 200 Index was little changed, trading near a five-year high. Australian employers probably added 10,000 jobs in August after shedding 10,200 in July, according to a survey of economists before data today.
Regional Gauges
South Korea’s Kospi index and Taiwan’s Taiex index were little changed. New Zealand’s NZX 50 Index added 0.1 percent. Singapore’s Straits Times Index gained 0.4 percent. Markets in China and Hong Kong have yet to open.
The Topix (TPX) surged 38 percent this year through yesterday, with Japanese equities performing the best among developed markets. Shares have jumped amid optimism Prime Minister Shinzo Abe and the Bank of Japan can lead the country out of deflation with stimulus and reforms.
The Hang Seng China Enterprises Index (HSCEI) of mainland Chinese companies traded in Hong Kong has climbed about 20 percent from a June 25 low, this week entering what some investors consider a bull market, as China’s manufacturing output accelerated to a 17-month high. Futures on the so-called H-Shares index added 0.2 percent. Contracts on the benchmark Hang Seng Index lost 0.2 percent.
Futures on the Standard & Poor’s 500 Index were little changed. The gauge gained 0.3 percent to a one-month high in New York yesterday as diminishing concern over a military strike against Syria offset Apple Inc.’s biggest decline since April after the company introduced a cheaper iPhone.
The MSCI Asia Pacific Index climbed 6.4 percent this year through yesterday. Shares on the Asia-Pacific gauge traded at 13.5 times estimated earnings, compared with 15.3 times for the S&P 500 Index
House Republican Delay on Spending Bill Risks Shutdown
House Republican leaders’ strategy for passing a U.S. spending bill lacks sufficient support from members, increasing the risk of a government shutdown.
The House leaders postponed a vote until next week as they work to persuade their rank and file to back the plan. A major sticking point is whether to strip funding for President Barack Obama’s health-care law.
 “There’s clearly going to be more work to be done with members,” Representative Tom Cole, an Oklahoma Republican, said in an interview. “We are not where we need to be or we would have voted on it.”
U.S. government funding expires on Sept. 30, and neither chamber has acted on legislation to extend it.
House Speaker John Boehner of Ohio and Majority Leader Eric Cantor of Virginia are lobbying their caucus to use a strategy that would force the Democratic-led Senate to vote on defunding Obama’s health-care law.
A number of House Republicans object, saying the leaders’ approach would allow for passage of a spending bill even if the Senate voted to keep funds for the Affordable Care Act. Those members insist on ending funds for the law.
One of those members, Representative Thomas Massie, a Kentucky Republican, said that about 50 to 80 Republicans are against the leadership’s strategy.
“The bill’s going to have to change,” Massie told reporters in Washington.
House Democrats
House Democratic leaders also oppose the plan, complicating the Republicans’ calculations.
“The American people are witnessing yet another sign that Republicans can’t get their own act together, even when a government shutdown hangs in the balance,” House Democratic Leader Nancy Pelosi of California said in a statement.
Second-ranking House Democrat Steny Hoyer of Maryland said yesterday he was urging colleagues to oppose the bill.
With a vote originally planned for tomorrow, Republican leaders notified members about the delay today, Ohio Republican Steve Chabot said in an interview.
Republican leaders plan to stick with their strategy on the stopgap measure and don’t intend to submit a different plan, according to a Republican leadership aide who wasn’t authorized to speak on the record. The aide said that leaders have a gap in their vote count and have yet to get to a 217-vote majority.
‘Time Left’
“We’ve got some time left here and conversations are taking place,” Representative Hal Rogers of Kentucky, chairman of the Appropriations Committee, told reporters. “It’s not time to panic.”
Right now, the House and Senate are scheduled to be in session together only next week during the rest of this month.
Many Republicans are calling for reductions in entitlement programs and an end to funding for the health-care law in exchange for the spending measure and raising the government’s debt ceiling. The U.S. will reach its debt limit as early as mid-October.
Also today, a Senate Democratic aide said leaders in the chamber’s majority party plan to tell Republicans they won’t accept added conditions to the stopgap government-funding bill or an increase in the U.S. debt limit.
Senate Majority Leader Harry Reid, a Nevada Democrat, at a meeting tomorrow with Boehner and other top congressional leaders, will tell Republicans that Democrats would agree to a measure that keeps current spending cuts, said the aide. The aide sought anonymity because the plans weren’t public.
‘A Non-Starter’
Dick Durbin of Illinois, the second-ranking Senate Democrat, dismissed the Republican strategy on the health-care law, calling it “clearly a non-starter in the Senate.”
If the plan fails, the risk of a federal government shutdown increases and Republicans’ leverage in talks to raise the nation’s debt ceiling could weaken.
“You know how we stumbled into World War I?” Representative Gerald Connolly, a Virginia Democrat, said in an interview yesterday. “I don’t think there is any design to have a government shutdown, but I think right now Cantor and company risk stumbling into a government shutdown.”
Boehner said earlier this week his goal was to “cut spending and to stop Obamacare,” not to shut down the government.
The House has voted 40 times to repeal, delay or defund all or part of the health-care law. The Senate has refused to take up almost all of those measures. The 2010 health-care law, upheld last year by the U.S. Supreme Court, is designed to expand coverage to at least 30 million people.
Reid and Boehner plan to meet tomorrow with Pelosi and Senate Minority Leader Mitch McConnell, a Kentucky Republican, to discuss government financing and the debt ceiling.
Druckenmiller Says Fed Exit Would Be Big Deal for Markets
Stanley Druckenmiller, who boasts one of the hedge-fund industry’s best long-term track records of the past three decades, said it would be a “big deal” for financial markets if the Federal Reserve were to completely end its asset purchases as outlined over the next 12 months.
 “How in the world does anyone think when the actual exit happens that prices are not going to respond?” Druckenmiller said today on Television’s “Market Makers” with Erik Schatzker and Stephanie Ruhle, given the selloff in bonds and emerging markets in the past few months on the mere hint that the Fed might taper its purchases.
The Fed is poised this month to start reducing unprecedented bond purchases that have fueled a four-year market rally, economists said. Chairman Ben S. Bernanke has said the central bank may end its bond-buying program in mid-2014 if the economy finally achieves sustainable growth.
Jeffrey Gundlach, manager of the $36 billion DoubleLine Total Return Bond Fund, said yesterday the Fed is making a “big mistake” by moving ahead with its exit plan without pegging it more closely to market conditions.
The Fed will probably reduce asset purchases to $75 billion this month from $85 billion previously, a survey of 34 economists showed. The Federal Open Market Committee will slow Treasury purchases to $35 billion from $45 billion while maintaining mortgage-bond buying at $40 billion, according to the survey.
Small Positions
“I really don’t care whether we go to $70 billion or $65 billion in September,” Druckenmiller said. “But if you tell me quantitative easing is going to be removed over nine or 12 months, that is a big deal.”
The purchases have subsidized all asset prices, he said, and completely stopping them would mean “the market will go down.”
Druckenmiller, who now runs a family office, said he has very small investment positions, including being long some Japanese equities and short the yen, with no big bets given the uncertainty over when the Fed might end its purchases. That depends in large part on who becomes the new Fed chairman, he said, as speculation focuses on possible candidates including Janet Yellen and Lawrence Summers.
“It’s pretty naive to say the next Fed chairman won’t matter,” he said. “It is a really, really important appointment” given the impact that the Fed has on financial markets.
Druckenmiller decided to stop managing client money in 2010 after three decades in the business, including more than 10 years as chief strategist for billionaire George Soros. From 1986 through 2010, he produced average annual returns of 30 percent at his hedge fund Duquesne Capital Management LLC.
U.S. can pursue mortgage fraud case versus Texas broker: judge
 A judge has rejected the former Allied Home Mortgage Capital Corp's effort to dismiss a lawsuit accusing it of defrauding the U.S. government into insuring tens of thousands of risky mortgage loans, hurting taxpayers and forcing thousands of homeowners from their homes.
In decisions made public on Tuesday, U.S. District Judge George Hanks in Houston said Allied, now known as Americus Mortgage Corp, should face claims it misled the U.S. Department of Housing and Urban Development into believing its loans qualified for insurance by HUD's Federal Housing Administration.
The judge also ruled that the government could pursue similar civil claims against Allied's chief executive, Jim Hodge, and compliance director Jeanne Stell.
But Hanks also dismissed the U.S. case against AllQuest Home Mortgage Corp, which bought many Allied assets and is also run by Hodge, citing Texas law on liability of successor companies.
He gave the government 14 days to amend its complaint. It is unclear how a dismissal might affect the recovery of damages.
Bruce Alexander, a lawyer at Weiner Brodsky Kider who represents the defendants, did not immediately respond on Wednesday to requests for comment.
AllQuest is based in Houston, as was Allied, which prior to the lawsuit had once called itself among the largest privately-held U.S. mortgage brokers.
The lawsuit was filed in November 2011, and sought civil fines and triple damages on various defaulted loans.
It is among several brought by the U.S. Department of Justice against lenders and executives it believes fueled the nation's housing crisis by creating risky home loans that should not have been made, insured or sold.
Quality Control Questioned
According to the government, Allied, which once had more than 600 branches, "operated with impunity for many years due to a culture of corruption created by Hodge."
It said Allied's problems included falsifying records, poor quality control, intimidation, the silencing of former workers with lawsuits, and representations that loans made by "shadow" branches that lacked HUD approval were eligible for insurance.
The government said 35,801, or 32 percent, of the 112,324 insured loans that Allied made from 2001 to 2010 defaulted, causing HUD to pay more than $834 million of insurance claims.
It said Allied even employed quality control staff in St. Croix, U.S. Virgin Islands who did not know what a mortgage was.
"The government has adequately alleged a fraudulent scheme by the defendants to deceive HUD through the use of shadow branches and induce it to insure loans that it otherwise would not have insured, and that HUD had to pay out on those loans," Hanks wrote. "The complaint further supports an inference of fraud by outlining the level of control Hodge maintained."
A spokeswoman for U.S. Attorney Kenneth Magidson in Houston did not immediately respond to requests for comment. Jennifer Queliz, a spokeswoman for U.S. Attorney Preet Bharara in Manhattan, who first announced the case, declined to comment.
The case was originally brought by whistleblower Peter Belli, a former Allied branch manager in Massachusetts.
It alleged violations of the federal False Claims Act and the Financial Institutions, Reform, Recovery and Enforcement Act, a 1989 law passed after that decade's savings-and-loan crisis.
FIRREA has a longer statute of limitations and lower burden of proof than other laws targeting financial fraud.
Americus had argued it was not covered by that law but Hanks disagreed, saying FIRREA's plain text made clear that it applied to "whoever" was "connected in any capacity with" HUD.
In 2012, the government settled False Claims Act mortgage cases for $1 billion with Bank of America Corp, $202.3 million with Deutsche Bank AG, $158.3 million with Citigroup Inc and $132.8 million with Flagstar Bancorp Inc. Another case is pending against Wells Fargo & Co.
The government is also pursuing a FIRREA lawsuit accusing Bank of America of fraud over the sale of billions of dollars of risky loans to Fannie Mae and Freddie Mac. That case is scheduled to go to trial in New York on September 24.
The case is U.S. ex rel. Belli v. Americus Mortgage Corp et al, U.S. District Court, Southern District of Texas, No. 12-02676.
G20 sherpa joins Russia's central bank
Russia's central bank appointed Group of 20 summit coordinator Ksenia Yudayeva on Wednesday to a monetary policy role in a move likely to tilt decision-making towards more rate cuts over the longer term.
The long-expected selection of U.S.-educated Yudayeva as first deputy in charge of monetary policy is likely to cement new central bank head Elvira Nabiullina's authority and underpin efforts to revive economic growth.
Yudayeva, 43, who received her doctoral degree in economics from the Massachusetts Institute of Technology, was picked by President Vladimir Putin last year to coordinate preparations for the G20 summit held last week in St. Petersburg.
"Yudayeva seems to have a less hawkish approach, judging from her comments so far," said Vladimir Kolychev, an economist at Rosbank in Moscow. "Already in spring she spoke in favor of easing monetary policy."
A former chief economist at state-controlled Sberbank, in her recent comments Yudayeva backed Nabiullina's criticism of calls for a weaker rouble to support the flagging economy.
Yudayeva will replace Alexei Ulyukayev, a former central bank "hawk," who moved to head the Economy Ministry this summer.
JPMorgan near settlement of credit card probes: source
JPMorgan Chase & Co (JPM.N) may settle probes by U.S. regulators into its credit card debt collection practices and sales of identity-theft products within weeks, according to a person familiar with the matter.
JPMorgan, the biggest bank based in the U.S., had previously disclosed the credit card and identity-theft product investigations. Reuters' source, who declined to be identified by name, said talks about a settlement have been on and off for months but have heated up recently.
A fine of less than $80 million for both matters is planned by the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau, according to Bloomberg News, which on Wednesday reported the possibility of a settlement being reached as early as next week. The report cited two people with knowledge of the matter.
JPMorgan could also settle soon a long-running government investigations into wrongdoing in its $6.2 billion "London Whale" derivatives loss last year, the source told Reuters.
On Monday JPMorgan chief financial officer Marianne Lake said at an investor conference that the company will boost its legal reserves this quarter by more than $1.5 billion as it tries to resolve multiple government investigations involving businesses including sales of mortgage securities, commodities and the setting of interest rate benchmarks.
Lake said the additional legal expenses are being booked in light of a "crescendo of activity in past weeks" involving the investigations.
Monte dei Paschi sets guidelines for new restructuring plan
Italy's Monte dei Paschi di Siena (BMPS.MI) said on Wednesday its board had discussed the guidelines for a new restructuring plan as it seeks to win a green light from the European Commission for a 4.1 billion euro ($5.45 billion) state bailout.
The new plan will be submitted to the board for approval on September 24, the lender said in a note, without giving any details.
Italy's third largest bank said earlier this week it would approve a tougher than initially expected restructuring plan to comply with European Union demands, confirming investor fears it is struggling to emerge from the euro zone debt crisis.
The EU told the bank over the weekend to carry out a 2.5 billion euro capital increase if it wants EU approval of the state bailout it received earlier this year.
The required cash call is more than twice the 1 billion euro capital increase initially planned by the bank and matches the lender's current market capitalization, raising the prospect of Monte dei Paschi falling under direct state control.
Speaking at a separate event late on Wednesday, Chief Executive Fabrizio Viola said the new plan would be very similar to the original one put together in June, but it included various strengthening measures to better respond to an economic scenario that has since worsened.
Asked if it would be possible to save the bank, he said: "It will be very difficult, but it is doable."
"The main hope is that the overall environment does not deteriorate and that in the medium to long term the market improves," he told journalists on the sidelines of a pharmaceuticals conference in Florence.
The latest financial woes compound ongoing legal troubles the 540-year-old lender is facing over its expensive acquisition of rival Antonveneta in 2008 and loss-making derivative trades the Siena-based bank made in the deal's aftermath.
Though the bank is the only Italian lender among several European banks to have got state aid, its woes have become a symbol of the deeper troubles of Italy's financial sector - an economy that has not grown in more than a decade and clumsy ownership structures often more focused on politics than business.
($1 = 0.7518 euros)
Deutsche Bank traders win unfair dismissal case
Four traders have won a case for wrongful dismissal against Deutsche Bank AG (DBKGn.DE), which had accused them of violating company policy by inappropriately communicating with other traders at the bank over the setting of interbank lending rates.
The four were responsible for setting Euribor and Libor interbank rates and their dismissal in February came amid a broader inquest into interbank rates. Three banks have been fined for manipulating Libor, a larger counterpart to Euribor, and investigations are continuing into the matter.
Rates such as Euribor and Libor are hugely important in financial markets, not just as key gauges of how much banks pay to borrow from their peers but also to set prices for financial products from mortgages to complex derivatives.
Announcing her ruling relating to the ex-Deutsche Bank traders on Wednesday, presiding judge Annika Gey told a Frankfurt labor court: "The termination was out of proportion".
She ordered Deutsche to reinstate the traders and pay them their salaries for the period since they were fired in February. The traders' lawyer said they did not wish to be named.
Deutsche Bank said in a statement: "We regret the court's decision and believe our action in this matter was justifiable .. . We wait for the written judgement and will then decide whether we will appeal the decision."
The bank had fired five Frankfurt-based traders suspected of inappropriate conduct following an internal investigation into possible manipulation of the Europe Interbank Offered Rate or Euribor. One had already reached a settlement with Deutsche Bank.
Deutsche had told the Frankfurt Labor court it had fired the five after discovering some staff appeared to have shown a willingness to consider the bank's own trading positions when they submitted their estimates for the Euribor and Libor rates.
But the traders said they were not aware of a ban prohibiting them from talking to other trading desks about interbank lending matters.
Deutsche's own trading positions at other desks within the bank could increase or decrease in value depending on what kind of interbank lending rate was determined by the money markets team.
Deutsche's lawyers told the court it was forbidden to discuss Euribor and Libor submissions with derivative dealers and said the traders should have submitted estimates for interbank lending rates in a manner which was totally objective.
German financial regulator BaFin and other regulators are investigating Deutsche Bank over allegations it helped manipulate benchmark interest rates such as Libor and Euribor. As part of its probe, BaFin had been focusing on organizational issues. It has said that a key question was whether banks reacted quickly enough once the Libor problems became known, and whether they reached the right conclusions.
The traders said they believed Deutsche had appeared to condone collaboration between different parts of the trading desk when it imported to Frankfurt a "short-term interest-rate trading" seating arrangement used in Asia, whereby money-market traders, swaps traders and derivative traders sat in close proximity.
The traders, speaking through their lawyer, said their discussions did not amount to collusion or manipulation so much as "an exchange of opinion about the state of the market."
One of the traders said it was impossible to be completely objective about submitting an inter-bank lending rate if you were also aware the bank held a trading position that could be influenced by a change in the direction of the benchmark rate.
"You cannot take this position out of your head. It is extremely important to know what the demand is like in the market," he said in court.
The judge said Deutsche had failed stop these interactions with specific guidelines or sanctions or make sufficiently clear that this was inappropriate behavior.
"At the time these contested communications occurred, Deutsche Bank had not implemented clear rules or controls to ensure a strict separation between submitters and derivatives traders," the judge said.
Furthermore, the court said Deutsche had operated a system with substantial conflicts of interest, since one trader who made a submission for interbank lending rates was also a derivatives trader.
The traders, speaking through their lawyer, told the court that both money market traders and derivatives traders were included on common e-mail exchanges which had up to 70 recipients. Traders from both groups were on common conference and video calls, they said.
On discovering signs of what it viewed as misconduct, Deutsche Bank had also failed to issue a formal warning to the traders and therefore to fire them at a later point was too severe, the judge said.
The traders, who appeared in court wearing dark blue and charcoal colored suits, said Deutsche had begun analyzing messages between traders in 2011 but had only fired the Frankfurt team in 2013.
The traders' lawyer said he was satisfied with the ruling.
Deutsche was among more than 40 banks contributing to setting Euribor. Deutsche Bank changed its rules about Libor submissions in March 2012, and its rules on Euribor in July 2012, the bank told the court.
Britain's jobless rate dips, prompting more bets on earlier rate rises
Britain's unemployment rate dropped in July to its lowest since late last year, adding to speculation that the Bank of England may raise interest rates earlier than it has predicted.
The rate dipped to 7.7 percent in the three months ending in July from 7.8 percent previously, the Office for National Statistics said on Wednesday. That was its lowest since the September-November period in 2012.
The Bank of England has set the unemployment rates reaching 7 percent as a target in its decision about raising interest rates. It suggests this won't be before the third quarter of 2016, but markets are betting it will be before this.
As a result, Wednesday's release caused a jump in the pound to its strongest level against the dollar in seven months, while the difference between British and German government borrowing costs widened back to the highest level in three years.
British Prime Minister David Cameron welcomed the fall in unemployment. Two days earlier, his finance minister, George Osborne, said the country's economy was turning a corner having struggled to recover from the financial crisis.
"It's another set of impressive figures," said Investec economist Victoria Clarke. "It suggests the jobs market is recovering much like the broader economy. It reinforces our view that unemployment will come down to 7 percent more quickly than the Bank of England expects."
Investors reckon joblessness will come down more quickly than the Bank does and have been pricing in the first rise in interest rates as soon as late 2014.
This risks a future confrontation between the Bank and the market.
The bets have led to rises in a range of market interest rates, including those that usually feed through to mortgages and other loans. Bank of England Governor Mark Carney has warned that the bank might provide more stimulus for the economy if Britain's recovery is threatened.
The Bank believes the jobless rate will on the whole fall slowly as firms squeeze more out of their current staff as the economy recovers. Surveys of British services and manufacturing last month backed up that view as employment grew more slowly than overall activity.
But in another sign of surprising strength in Britain's labor market, the number of people claiming jobless benefit - a narrower and timelier measure of unemployment - fell by 32,600 in August, much more than economists had expected. ECONGB
July's fall was also revised to show a drop of 36,300 - the steepest decline since June 1997.
Not all analysts see jobs improvement prompting earlier tightening.
"Although employment rose strongly, more timely evidence from the recent activity surveys suggests that firms are responding to higher demand more by boosting productivity than taking on new workers," Martin Beck, economist at Capital Economics, said.
Forecasting the path of Britain's unemployment rate has been complicated in recent years by older workers rejoining or remaining in the labor force, job cuts in the public sector and uncertainty about immigration levels.
The ONS said on Wednesday public-sector employment fell in the second quarter by 34,000 to 5.665 million.
The data also showed a record number of people working part-time because they could not find a full-time position.
Stronger productivity is unlikely to boost real wages anytime soon: the ONS said average weekly earnings growth including bonuses slowed to 1.1 percent in the three months ending in July compared with a year earlier. Excluding bonuses, pay grew 1.0 percent.
By contrast, inflation averaged 2.8 percent over the same period. Britain's opposition Labor party has made the fall in living standards a centerpiece of its challenge to the government's claims that its austerity helped the economy heal by keeping borrowing costs down.
Portugal government seeks to ease 2014 deficit goal
Portugal's government is trying to persuade its EU/IMF lenders to ease the budget deficit goal set for next year to 4.5 percent of GDP from 4 percent, Deputy Prime Minister Paulo Portas said on Wednesday.
Prime Minister Pedro Passos Coelho has said the country may require a further easing of the target set out under its bailout deal, but Portas' remarks are the strongest indicator yet that such talks may already be underway. He met representatives of the lenders in Brussels, Frankfurt and Washington last week.
"It's no secret that the government and the troika had different positions during the seventh bailout review about the deficit ... The government continues to think that 4.5 percent is the most adequate goal," he told a parliamentary commission.
The next review of the country's EU/IMF bailout begins on Monday. Its lenders have already eased this and next year's targets, in March, due to a steeper than expected recession in Portugal and Europe. This year's target is 5.5 percent. The deficit last year was 6.4 percent.
"Portugal has every interest to reach the 2014 end of the bailout meeting all its goals," Portas said.
He reiterated the government's stance that it wants to exit the bailout in mid-2014 as planned and avoid a similarly strict new program. Portas said a possible precautionary program would not be tantamount to a full bailout, which he said effectively makes Portugal an EU/IMF protectorate.
France to revise down 2014 growth forecast, raise deficits: report
France is to trim its growth forecast for 2014 from 1.2 percent to 0.9 percent and hike its budget deficit projections for this year and next, reflecting a slower-than-hoped recovery, Les Echos newspaper reported on Wednesday.
The government now targets a public deficit of 4.1 percent of output this year, up from an earlier forecast of 3.7 percent, and 3.6 percent next year, up from an initially projected 2.9 percent, the business daily said on its website of official 2014 budget projections due to be unveiled later.
The widely expected new forecasts, revised from April, put the government's projections more in line with those of the European Commission and the bulk of independent economists. France will thus be taking advantage of an extra two years given by the EU to rein in its deficit to below 3 percent of output in return for commitments to economic reforms.
Les Echos said the 2014 budget plan would show that 15 billion out of the total 18 billion euros of fiscal effort in 2014 would come from spending curbs, with the remainder from a rise in taxes. The full budget is due on September 25 but headline figures are expected to be announced later on Wednesday.
Greece will need help once more, possibly twice: ECB's Coene
Bailed out euro zone nation Greece will need further help at least once and possibly twice more, European Central Bank Governing Council member Luc Coene said on Wednesday.
"It's clear that we are not yet at the end of the Greek problem. We will need to make further efforts, certainly once, perhaps twice more. We will see how the situation develops," Coene told La Premiere radio station.
International lenders estimate that Greece will need around 10-11 billion euros from the second half of 2014, although several euro zone governments are reluctant to extend further loans because of negative public opinion.
"There is an improvement but it is very slow. Naturally the economic base of Greece is extremely small and it will take a lot of time gradually to put it back in order," Coene, who is governor of Belgium's central bank, continued.
"It is inevitable but it is no longer of a nature to call into question the whole edifice," Coene said referring to the euro zone, whose very future was put in doubt as financial markets tested the willingness of member states to aid sovereign debt crisis victims.
"The problem at the start was about the willingness of other countries to help. This has been resolved by the governments and also by the ECB," Coene told the radio station.
U.K. Companies Want Britain to Stay Part of EU, CBI Survey Says
Almost eighty percent of U.K. business leaders say Britain should remain a member of the European Union, according to a survey by the Confederation of British Industry.
Only 10 percent said it was in Britain’s interests to leave the bloc, the U.K.’s biggest business lobby said in a report published in London today.
“Firms want what is best for jobs and growth, and there is genuine concern that an exit would hit business investment and access to the world’s largest trading bloc,” CBI Director-General John Cridland said. “Businesses do have some serious concerns about the EU, but ultimately they want the U.K. inside the tent winning the argument for reform.”
U.K. Prime Minister David Cameron has promised a referendum on EU membership by the end of 2017 if a Conservative government is elected in the 2015 general election. The opposition Labour Party has yet to say whether it would hold a referendum if it wins.
The CBI survey found there is frustration among business leaders with Britain’s current relationship with the EU and the burden of regulation. The benefits of membership outweigh drawbacks, respondents said, with 71 percent saying it has a positive or very positive impact on their businesses.
The poll covered 415 companies and trade associations that between them employ more than 1.5 million people. The survey, conducted by YouGov Plc (YOU) between June 13 and July 30, had a response rate of 27.6 percent.
U.K. Banks Face $79 Billion Capital Boost in Future Basel Rules
The eight biggest U.K. banks by assets may need to boost their capital levels by 50 billion pounds ($79 billion) or shrink their balance sheets by 20 percent to meet tougher international rules in the future.
Regulators may require banks to meet a higher 5 percent leverage ratio, guidelines on transparency and tougher rules on how they weight assets for risk in the next round of capital regulations set by the Basel Committee on Banking Supervision, once the current standards are put in place by 2019, New York-based accounting firm KPMG LLP said in a report today.
 “Even before Basel III is fully implemented, Basel IV may be emerging from the mist,” KPMG said in the report.
International banks have raised about $500 billion in capital in the aftermath of the financial crisis and fall of Lehman Brothers Holdings Inc. five years ago and are moving closer to complying with global capital rules known as Basel III, Mark Carney, chairman of the Financial Stability Board and governor of the Bank of England, said in a speech last week.
Global banks had core capital reserves averaging about 9 percent of their risk-weighted assets at the end of 2012, more than the 7 percent required under the updated standards, the Basel committee said in a report last month. The minimum ratio of equity to debt, known as the leverage ratio, is 3 percent.
An “overzealous pursuit of simplicity and overreliance on standardized risk-weightings” could encourage banks “to hold riskier assets,” KPMG said in the study.
’Relentless’ Lobbying
Sheila Bair, the former chairwoman of the Federal Deposit Insurance Corporation, told Bloomberg Television yesterday that banks should be subject to a minimum leverage ratio of 8 percent. The level of bank lobbying of regulators on the leverage ratio has been “disheartening” and “relentless,” Bair said.
International standards set by the Basel committee require banks to meet minimum capital requirements, measured as a percentage of their assets. The amount of capital that must be held is linked to the riskiness of the assets, with large banks allowed to use their own models to calculate the likelihood of losses. This process is known as risk-weighting.
The Bank of England in June ordered the five largest U.K. lenders, including Barclays Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc, to plug a 13.4 billion-pound capital shortfall by the end of the year.
The Basel committee brings together bank regulators from nations including the U.K., U.S. and China.
Li Says China Rebound Not Yet on Solid Foundation
Chinese Premier Li Keqiang said the foundations of a growth rebound aren’t solid while cautioning that stimulus won’t help resolve deep-rooted issues in the world’s second-largest economy.
“The foundation of an economic recovery is not solid yet with many uncertain factors,” Li said in a speech yesterday at the World Economic Forum in Dalian, China. The nation is taking steps to stabilize growth and can achieve the main economic targets this year, Li said.
Policy makers have signaled they will defend a 7.5 percent expansion goal for 2013 and seek to ensure a pace of 7 percent in the coming years. Li pledged reforms that will ripple throughout the financial system as Communist Party leaders prepare for a November meeting to lay out a blueprint for sustaining long-term growth.
“An important part of economic-system reform is financial reform,” Li said in a question-and-answer session after the speech. “It is because it is such a complicated systematic project, it indicates China’s reform has entered a deep-water zone, or the most difficult phase.”
Li reiterated that China will push forward interest-rate and exchange-rate reforms and the internationalization of the yuan while promoting the currency’s convertibility under the capital account.
Risk Cost
Government data on Sept. 10 showed industrial production and aggregate financing, the nation’s broadest measure of new credit, rose more than estimated in August, in a sign leaders are committed to meeting economic goals even at the cost of adding financial risks. The government has used measures from tax cuts to extra spending on railways to respond to a growth slowdown.
Li said China is taking “targeted measures” to address the issue of local government debt that “people are all concerned about.” The State Council, or cabinet, headed by Li, awaits results from a nationwide audit of government borrowing ordered in July.
“We can say confidently that it is safe and controllable in general,” Li said.
Vice Finance Minister Zhu Guangyao said last week at a Group of 20 nations summit that while China needs to strengthen supervision of shadow banking, officials are aware that smaller businesses need access to finance.
Cash Squeeze
A government-engineered cash squeeze in June sent money-market interest rates to record highs and helped curb shadow banking, reducing longer-term dangers while adding to forces slowing economic growth. Now it appears that the crunch in liquidity and credit is over, Wang Tao, chief China economist at UBS AG in Hong Kong, said Sept. 10.
Analysts at UBS, Deutsche Bank AG and Citigroup Inc. boosted growth forecasts following this week’s economic data, which increased chances that Li will meet the goal for 7.5 percent annual expansion.
That pace would be the slowest in 23 years and follow a decade averaging more than 10 percent a year. Growth slowed for a second straight quarter to 7.5 percent in the April-June period.
The sustainability of China’s rebound is in question and growth may slow after November, said Gao Shanwen, chief economist at Essence Securities Co. in Beijing. August figures showed no significant change in government-dominated investment in infrastructure construction, Gao said on a conference call with clients Sept. 10.
Li said China has entered a phase of a “medium-high” rate of growth, down from a high rate, yet the pace is “still a high rate among major economies” around the world.
“It’s not easy for such a gigantic economy to realize long-term and continuous growth,” Li said. “We must make sure the fruits of reform and development can be shared by the broadest range of people.”
Diabetes Ailing 114 Million Chinese Risks Ravaging Health Budget
Diabetes may consume $22 billion, or more than half of China’s annual health budget, if all those afflicted with the condition get routine, state-funded care.
The disease is putting an “overwhelming burden” on the country, according to the International Diabetes Federation, which says China spent $17 billion, or about $194 a patient, on diabetes last year. A study released last week found China has 114 million diabetics or 21.6 million more than the Brussels-based federation estimated in November.
Extending average care to the enlarged population of diabetes sufferers would wipe out all of China’s additional investment in health. The government budgeted spending 260.25 billion yuan ($42.5 billion) this year, a 27 percent increase, on basic medical services and subsidies for a state-run health insurance program. China’s diabetes costs will balloon, with almost 500 million Chinese at risk of developing the disease.
“It’s very scary,” said T.H. Lam, a professor of public health at the University of Hong Kong. “This only represents the beginning of the diabetic epidemic. The worst is yet to come.”
Diabetes costs an average of $1,270 per patient globally and $8,478 in the U.S., according to the International Diabetes Federation. Treatment for the metabolic condition and its associated ailments is expensive because patients with poor blood-sugar control can develop complications ranging from heart disease and stroke to gangrenous foot ulcers, blindness and kidney failure.
Oblivious Diabetics
The most comprehensive nationwide survey for diabetes ever conducted in China showed 11.6 percent of adults have the disease. The study, published Sept. 3 in the Journal of the American Medical Association, also found that almost two-thirds of patients treated for diabetes in China don’t have adequate blood-sugar control and that for every person diagnosed with the condition, at least two more will be unaware they have it.
“People with diabetes who are not under treatment or have good control of their diabetes will quickly start to develop complications,” said Leonor Guariguata, a biostatistician at the International Diabetes Federation. “We know from studies in Europe that the first cardiovascular complication in a person with diabetes can increase the per-person annual costs associated with the disease by at least 50 percent and by 360 percent for a major cardiovascular event, such as heart attack or stroke.”
Obesity Link
Most of China’s diabetes sufferers have the type-2 form, which occurs when the body stops responding adequately to insulin, the hormone that regulates blood-sugar. Type-1 diabetes, prevalent in about 5 percent of all sufferers, is an autoimmune disease that results from the destruction of the body’s insulin-producing beta cells in the pancreas.
China’s diabetes prevalence is being spurred by diet and lifestyle changes linked to the country’s economic development, which have resulted in an increasingly overweight and obese population, said Barry Popkin, a professor in the department of nutrition at the University of North Carolina at Chapel Hill, who has studied weight trends in China.
“This is just the tip of the iceberg,” Popkin said in an interview. “We’re beginning to see a whole cohort of younger Chinese that are heavier, have greater rates of obesity as well as diabetes, and in the future this is going to go way up.”
15 Pounds Heavier
Chinese aged 10 to 30 are about 6-7 kilograms (15 pounds) heavier than that age group 20 years ago, mainly due to inactivity, and diets that comprise more sugary drinks, alcohol, refined rice, and less fiber, Popkin said. This puts them at higher risk of developing diabetes, he said.
Half of China’s adults, or 493.4 million people, have higher-than-normal blood-glucose levels, which put them in a pre-diabetic state that triples their risk of full-blown diabetes, said Guang Ning, lead author of last week’s study and director of the National Health and Family Planning Commission’s laboratory for endocrine and metabolic diseases.
“China is trying hard to control the cost of treating diabetes as much as possible,” said Ning, who is also head of endocrinology and metabolism at the Rui-Jin Hospital in Shanghai. “We have been able to do this by reducing the cost of drugs and by encouraging more people to get treatment locally.”
Thirty-five percent of Chinese citizens’ health-care costs were paid “out-of-pocket” in 2011, down from 58 percent in 2002, after the government expanded subsidies, according to a State Council report published in December.
Herbal Remedies
China’s doctors are encouraged to prescribe the generic medicine metformin as a first-line drug for diabetics, while patients who prefer traditional remedies are given huang lian su tablets, containing berberine, a plant extract shown to be effective in treating Type 2 diabetes, Ning said. Both these options are much cheaper than imported medicines, he added.
“The major way to reduce the economic burden is to have a good primary care system so many of these people can be treated there, reducing the hospital expenditure,” said the University of Hong Kong’s Lam. “There is a golden opportunity for early treatment or early prevention to make sure people can reduce their risk.”

Multinationals to get equal treatment in China: Premier Li

China's Premier Li Keqiang promised equal treatment for multinational companies operating in the country, as he opened a meeting of the World Economic Forum on Wednesday.

China's premier promised equal treatment for multinational companies operating in the country, as he opened a meeting of the World Economic Forum on Wednesday.
"China will continue to encourage foreign companies to invest and do business in China, and ensure that all companies have equal access... and equal treatment," Li Keqiang told business leaders and politicians in the northeastern Chinese city of Dalian.
His remarks came after Chinese authorities targeted foreign firms including pharmaceutical giant GlaxoSmithKline in a series of anti-graft investigations, while other multinational and domestic companies were targeted in a price-monitoring probe.

China's government said the investigations were aimed at rooting out corruption and lowering prices for consumers, but analysts said foreign companies were unfairly targeted as an example to local firms.

The European Chamber of Commerce in Beijing earlier this month said China was at risk of creating "unfair and inconsistent enforcement" of anti-corruption rules.

Known as the "Summer Davos", the annual World Economic Forum meeting in Dalian, on China's northeast coast, brings together around 1,600 political and economic leaders, experts and NGO representatives.

The Chinese premier's speech is the main set-piece of the event, and it was Li's first time delivering it, following his ascension to head of government in a power handover to a new generation of Communist leaders completed earlier this year.

The participants this year include Wang Jianlin, newly listed as China's richest person by both Forbes magazine and the Hurun Report, a luxury publisher in China.

Li said in his speech he was confident that China would meet its stated goal of 7.5 per cent economic growth in 2013.
China's economy grew 7.8 per cent last year, its lowest rate in over a decade.

Japan to raise sales tax next April

Prime Minister Shinzo Abe has decided to raise Japan's sales tax next year but plans to launch a $50-billion stimulus package to avoid hurting the nation's budding economic recovery, reports said Thursday.

Prime Minister Shinzo Abe has decided to raise Japan's sales tax next year but plans to launch a $50-billion stimulus package to avoid hurting the nation's budding economic recovery, reports said Thursday.
Jiji Press and Kyodo news agencies reported that Abe intended to raise the tax to 8.0 per cent from its current level of 5.0 per cent in April 2014 as earlier scheduled.
Legislation previously passed by parliament had given the government scope for the move if ministers felt the economy was strong enough.
There is another scheduled rise to 10 per cent in October 2015 but the reports did not make clear whether that further hike would be implemented.
Abe is also planning to launch an economic package worth about five trillion yen ($50 billion), Jiji and Kyodo said. Jiji did not name its sources while Kyodo quoted "a source" close to the prime minister.
The tax hike is seen as crucial to tackling a staggering national debt -- proportionately the worst among industrialised nations at more than twice the size of the economy -- but there are fears that higher taxes will hit consumer demand and blunt Japan's nascent recovery.
Recent data have confirmed the Japanese economy has been on a solid recovery path, believed to have cleared the way for the tax increase.

Japan hopes to reap economic benefits of 2020 Olympics

The Tokyo stock market is finally beginning to stabilise after two days of hefty buying following the IOC announcement that the capital would host the 2020 Olympic Games. Host cities however, do not necessarily reap many benefits from staging the Olympics.

The sweet joy of winning the bid to host the world's biggest sporting event can still be felt in the warm Tokyo air. Athletes and officials accredited for bringing the Olympics to Tokyo were given a warm welcome when they returned home.
Upon his return from the announcement in Buenos Aires, Prime Minister Shinzo Abe immediately tasked his cabinet to make sure Japan hosted an excellent event. The first step taken toward that goal is to streamline the roles of various ministries by forming a new sports agency.
Tokyo Metropolitan government has projected that hosting the games in Tokyo will bring in about 3 trillion yen -- boosting the services sector, as well as the retail, finance and the insurance sectors. About 152,000 new jobs will also be created.
However, many economists believe the economic impact will eventually be much greater.
Masamichi Adachi, a senior economist with JP Morgan Securities Japan, said: "My sense is that Japanese people like goals, targets that make people feel like 'we have to do it'. That makes more private investment come in to Tokyo. People feel that they should spend. That makes the economy in better shape, compared to without the Olympic Games."
Mr Abe's economic policy has already made ending Japan's 15-year run of deflation its first priority.
Could hosting the Olympics actually help achieve this?
Mr Adachi said: "I think the Tokyo Olympic Games is not enough. Japan needs more reforms, more of a sense of crisis. We have to grow more to make a sustainable path for society."
A possible cloud still hovering over the festive atmosphere has been caused by the continued safety concerns emerging from the Fukushima Daiichi nuclear plant.
In Buenos Aires, the Mr Abe pledged to IOC members that the matter was under control.
Professor Mikitaka Masuyama of the National Graduate Institute For Policy Studies said: "On the one hand, he explicitly assured that Fukushima is under control. On the other hand, we don't know for sure what's going to happen. If it turns out radioactive contaminated water is more widely spread than expected, it may have a tremendous negative impact on his credibility."
If he can indeed keep the Fukushima situation under control, many believe the Abe government will be a long-lasting one. And if that is the case, it would appear that Japan has a lot more to gain -- than to lose -- from hosting the 2020 Olympic Games.

ADB confident about Myanmar’s economic growth

The Asian Development Bank (ADB) on Wednesday remained bullish on Myanmar's economic prospects as it believes the country will achieve 6.8 per cent growth in fiscal 2014 compared to 5.5 per cent last year.

The Asian Development Bank (ADB) on Wednesday remained bullish on Myanmar's economic prospects as it believes the country will achieve 6.8 per cent growth in fiscal 2014 compared to 5.5 per cent last year.
The boost will be fuelled by strong export earnings from resources such as gas, hydropower and the boom in tourism.
After 2014, the Myanmar economy will grow seven to eight per cent annually through 2030, said ADB's vice president Zhao Xiaoyu.
The ADB predicted Myanmar, the rising star in Asia, will continue to shine if it maintains its growth momentum despite the challenges it will face as the country is well-positioned to accelerate its development.
The two key ways in which Myanmar can do that is to capitalise on its natural resources and enhance its potential in services and tourism.
Speaking to international and local participants at a convention centre in Naypyidaw, ADB encouraged Myanmar to establish greater linkages with neighbouring countries to boost its economic growth.
Increased cooperation can help Myanmar maximise its benefits through trade liberalisation and financial cooperation among the ASEAN members.
The ADB believed that with proper planning while implementing wide-ranging reforms, Myanmar will soon be able to attain the status of a middle-income nation.
Mr Zhao said: "Regional economic cooperation and integration offers significant opportunities to Myanmar. To capture these opportunities, however, the government must create an enabling and open environment. This, in turn, requires the establishment of regulations that provide good governance and transparency without restricting economic activity. These are the elements that can forge entrepreneurship and a vibrant private sector."
Myanmar has acknowledged the need to open its economy and has drawn up both long- and short-term plans to draw in foreign money.
Dr Kan Zaw, Myanmar's minister for National Planning and Economic Development, said: "The significant changes are taking place in order to ensure the creation of an investment-friendly climate, attractive towards potentially beneficial and responsible investments. With such developments, the interest towards Myanmar from foreign investors and interested parties is also growing exponentially."
Myanmar nationals said they are encouraged by the positive outlook on the country but many want to see how policies are executed because they have yet to see the full effect of the government initiatives. 
S'pore and Vietnam enjoy prospering economic ties: PM Lee
Singapore's Prime Minister Lee Hsien Loong arrived in Vietnam on Wednesday afternoon to commemorate the 40th anniversary of growing bilateral ties with the ASEAN member state.
Singapore's Prime Minister Lee Hsien Loong arrived in Vietnam on Wednesday afternoon to commemorate the 40th anniversary of growing bilateral ties with the ASEAN member state.
In an interview with the Vietnam News Agency ahead of his visit and published in several Vietnamese dailies today, Mr Lee said economic ties between both countries are prospering while trade and investment flows are also growing.
Mr Lee said it is timely to take bilateral cooperation to the next level and he is happy that this would be elevated to a "Strategic Partnership" during the three day official visit.
The Strategic Partnership reflects the shared commitment to expand cooperation into new areas like finance, aviation and the environment.
Mr Lee has urged both sides to continue exploring new partnerships which would meet evolving needs.
Mr Lee added that he also looked forward to more regular exchanges at all levels - between the leaders, business community and the people which he believes would strengthen and deepen cooperation on the basis of mutual respect and trust.
On the first day of his visit to Hanoi, Mr Lee will hold talks with his Vietnamese counterpart, Nguyen Tan Dung and jointly launch the Strategic Partnership ties.
Another major highlight of the visit is the launch of the fifth Vietnam-Singapore Industrial Park by both Prime Ministers in Central Vietnam on September 13.

India's exports jump as investors turn optimistic

Indian exports climbed by nearly 13 per cent in August on a 12-month basis in a sign the falling rupee is starting to help Asia's third-largest economy, data showed on Tuesday.

Indian exports climbed by nearly 13 per cent in August on a 12-month basis in a sign the falling rupee is starting to help Asia's third-largest economy, data showed on Tuesday.
In other positive news, shares climbed by nearly four per cent and the currency continued to gain in value against the dollar after hitting a string of record lows in recent months.
The trade deficit in August fell to $10.9 billion from $14.17 billion in the same month a year earlier, according to commerce ministry figures.
Merchandise exports climbed by 12.97 per cent in August to $26.14 billion from a year earlier while imports fell by 0.68 per cent year-on-year to $37.05 billion.
"Exports are on a firm, positive terrain now. I remain optimistic about exports being in positive territory," Trade Minister Anand Sharma said as he released the figures.
The rupee slid to a lifetime low of 68.85 against the dollar last month on concerns about India's capacity to fund a record current account deficit -- the broadest measure of trade.
But the currency began rallying last week after the appointment of a new central bank governor, Raghuram Rajan, a former International Monetary Fund chief economist.
Rajan sought to reassure markets, saying India faced tough challenges but its economy was "fundamentally sound" despite growing at five per cent last year -- its slowest pace in a decade due to high inflation and borrowing costs as well as weak business confidence.
India's currency jumped 1.5 per cent Tuesday from the previous trading day to 64.28 rupees to the dollar and is now down around 15 per cent this calendar year.
The rupee has also been lifted by weak US jobs data that has eased worries that the US Federal Reserve may start rolling back economic stimulus that has fuelled investor fund flows to emerging markets.
Shares leapt nearly four per cent, or 728.58 points, to 19,998.64 points.
Separately, India's car industry sales rebounded by 15 per cent in August on an annual basis, but the industry said the reprieve was temporary and that the sector was expected to contract for a second straight year.
Carmakers sold 133,486 cars in India in August, up 15.4 per cent from the same month in 2012, snapping a record nine months of declining sales, according to the Society of Indian Automobile Manufacturers (SIAM).
But the increase came off a low base due to weak output in the same month in 2012 caused by the temporary shutdown of a key car manufacturing plant.
"This is not a turnaround, it's going to be another year of negative growth in car sales," SIAM Deputy Director General Sugato Sen told AFP.
"That rise in the car sales headline figure is an illusion -- it does not reflect market realities," Sen said.
"We are still stuck in a tough market... the mood of consumers remains bad," he added.
Last year, domestic passenger car sales fell by 6.7 per cent to 1.89 million from a year earlier -- the first contraction in a decade.
Japan shouldn't exaggerate pain from tax hike: BOJ policymaker
Policymakers should not overreact to any blip in the economy from an expected sales tax hike next year, a Bank of Japan board member said, suggesting that no additional monetary stimulus is required as long as the downturn is short-lived.
Prime Minister Shinzo Abe on Tuesday ordered his government to craft measures to bolster the economy to cushion the impact of an increase in the sales tax. He is likely to formally decide early next month on implementing the tax.
A recent slew of positive economic data has heightened views the economy can weather the pain from the tax hike, although some market players say the central bank may come under pressure to loosen monetary policy further to soften the blow.
If the sales tax is increased in April, there will be a rush in consumer spending prior to then, followed by a slump which, taken together, will be neutral for the economy, BOJ board member Koji Ishida said on Wednesday.
"If we exaggerate the reactionary economic slump, it may affect public expectations and hurt sentiment. We should react calmly (to any such blip)," Ishida told a news conference after meeting business leaders in Aomori, northern Japan.
"We'll of course take preventative steps if the damage from the slump broadens ... Otherwise, we should respond calmly," he said, suggesting that further monetary easing would be required only if the shock from the tax hike is big and lasting enough to threaten efforts to end deflation.
The BOJ launched an intense burst of monetary stimulus in April, pledging to double the base money via asset purchases to achieve its 2 percent inflation target in roughly two years. It has stood pat on policy since then.
If Abe decides to proceed as scheduled, Japan will see the sales tax rise to 8 percent from 5 percent on April 1, and to 10 percent in October 2015. The premier is proceeding cautiously as many politicians blame the last tax hike, in 1997, for plunging the country into recession.
Ishida stuck to the central bank's assessment that the economy was recovering moderately, pointing to the resilience in personal consumption. But he warned a slow increase in exports is discouraging companies from boosting capital expenditure and weighing on factory output.
"Most of Japan's past economic recoveries were driven by exports," the former commercial banker told business leaders.
"The recovery now is spurred by domestic demand such as personal consumption, housing investment and public works spending, but exports must start to act as driving force."
Japan's economy expanded at an annualized 3.8 percent in the June quarter, a third straight quarter of growth, as the feel-good mood generated by Abe's reflationary policies lift household and corporate spending.
Big manufacturers' business sentiment hit a record high in July-September, a government survey showed on Wednesday, as auto and electronic makers enjoy the benefits of a weak yen that gives them a competitive advantage overseas.
Exports have been rising - but not as strongly as policymakers initially expected - due to the slowdown in emerging economies, particularly China.
The BOJ hopes that overseas growth will accelerate and boost exports in time to make up for any slowdown in household spending after the expected sales tax hike next April.
Ishida said while inflation would accelerate as robust spending encouraged companies to raise prices, household incomes had to rise in tandem if the economy was to keep improving.
And it was a rise in regular pay, which makes up about three-quarters of nominal wages, rather than bonuses that would drive the increase in consumption, he said.
Summer bonuses rose this year but regular pay continued to fall as companies were reluctant to boost monthly salaries due to expectations that deflation won't be eradicated easily.
Australia’s Jobs Drop Underscores Challenge for Abbott: Economy
Australia recorded its first back-to-back jobs decline in more than two years, sending the local currency lower and underscoring the challenge for Prime Minister-elect Tony Abbott to boost the nation’s economy.
The number of people employed fell 10,800 in August from the previous month, when it dropped a revised 11,400, the statistics bureau said in Sydney. That compares with the median estimate for a 10,000 increase in a survey of 28 economists. Unemployment (AULFUNEM) rose to 5.8 percent from 5.7 percent.
 “It’s softer than expected and disappointing,” said Justin Smirk, senior economist at Westpac Banking Corp. in Sydney. “It’s a sign the economy is not firing on all cylinders and there’s still a need for the Reserve Bank to lower rates.”
Labor market weakness complicates the task for Abbott’s coalition, which won office Sept. 7 pledging to lower taxes and cut red tape in order to spur the $1.5 trillion economy as a China-led mining investment boom crests. The Reserve Bank of Australia forecasts a softer labor market and below-trend growth and reduced the overnight cash-rate target by 2.25 percentage points since late 2011, including a quarter-point cut last month to a record-low 2.5 percent.
“We’ve had confirmation the economy is growing a little below trend,” Stephen Koukoulas, managing director of Canberra-based Market Economics Pty., who predicted a 10,000 drop, said before the release. “The trend softness in the labor market continued leading up to the election.”
The Australian dollar fell to 92.62 U.S. cents at 12:14 p.m. in Sydney from 93.42 cents before the report. Traders are pricing in a 40 percent chance the RBA will cut rates by the end of this year, compared with 38 percent before the release.
Lower Participation
The number of full-time jobs declined by 2,600 in August, and part-time employment fell by 8,200, today’s report showed. Australia’s participation rate, a measure of the labor force in proportion to the population, dropped to 65 percent in August from 65.1 percent a month earlier, it showed.
National Australia Bank Ltd.’s business confidence index released this week showed a slump in employment conditions in August to the weakest since May 2009, and capacity utilization remained subdued. Australia & New Zealand Banking Group Ltd.’s job ads series fell 2 percent in August, the sixth monthly decline. The nation expanded 2.6 percent in the second quarter from a year earlier, and the RBA this month said it expects growth will be “a bit below trend” in the near term “as the economy adjusts to lower levels of mining investment.”
Industry has been squeezed by a currency that held above $1 from mid-June last year to May 9, the longest stretch above parity with the U.S. dollar since the Aussie was freely floated in 1983. The local dollar declined 12 percent in the three months through June.
Elders Cuts
Elders Ltd. said this week it will cut about 10 percent of its workforce as the Australian agricultural company reorganizes and reduces debt. Newcrest Mining Ltd., an Australian gold producer, said in July it plans to cut staff and contractors at its Telfer mine as part of an operational review prompted by falling prices.
Abbott said in an Aug. 29 interview that Australian manufacturers have to find a way to cope with a “market-driven currency.” He told reporters the previous week that his government wouldn’t wave a “blank check” at automakers.
Ford Motor Co. announced in May it would end production in the country after nine decades, with the loss of 1,200 jobs. General Motors Co.’s Holden division said in April it will cut about 500 positions in Australia, citing the currency’s strength.
Bureaucrat Boom
Since Labor won office in November 2007 through May this year, a net 962,800 jobs were created. While the resources-investment boom has powered economic growth, the 122,300 mining jobs created is less than half the 303,500 in healthcare and social assistance roles. The manufacturing industry lost 112,400 workers over the period.
Elsewhere, New Zealand’s central bank said it expects to raise interest rates next year as the economy strengthens and inflation picks up after leaving the official cash rate at 2.5 percent. The Bank of Korea held its key rate steady, while the Philippines’ central bank is also likely to keep borrowing costs unchanged later today, economists predicted.
Euro zone industrial production data for July is scheduled for release. In the U.S., initial jobless claims climbed 7,000 to 330,000, according to the median estimate of economists.
Analysis: Emerging-market investors get picky with Fed set to taper
Investors bracing for the U.S. Federal Reserve to wind down its monetary stimulus have fled emerging markets in recent months, and while the impact of slow capital flows is likely to be felt for some time, some countries will fare much better than others.
The U.S. central bank is expected to begin trimming its massive $85 billion bond-buying program as early as next week. That will mean fewer Fed-created dollars sloshing around the global financial system.
Markets like Brazil and India, which must import capital to finance spending, will feel the squeeze. Mexico and South Korea, to name two, are less dependent and won't get hit as hard.
As a consequence investors hungry for the higher yields offered by emerging market stocks and bonds can no longer sink their money in the developing world indiscriminately, experts say. They will have to become much more selective.
For years, "many emerging markets have just had to sit back and watch the capital flow in. They haven't had to try very hard to attract it," said Morgan Stanley strategist James Lord. "Now they're going to have to work harder. That means reforms."
The MSCI Emerging Market Index fell some 12 percent between May and September. That was the worst four-month stretch in more than a year for the stock index, which did regain some ground in recent sessions. All told, investors have yanked $3.3 billion out of emerging bond funds since late May, according to Lipper, a Thomson Reuters company.
So far the pain has been most acute in places such as India, Turkey and Brazil. Those countries and others are also struggling with rising inflation and sluggish growth.
Other markets, while not untouched, have suffered less.
The Mexican peso and South Korean won have weakened about 2 percent each against the dollar this year, compared with 11 percent for Brazil's real and 18 percent for India's rupee.
Likewise, central banks in Indonesia, Turkey, Ukraine and India have seen the fastest erosion of foreign currency reserves since late May, according to Morgan Stanley calculations.
"When the hot money is gone, the tide will retreat and we will see who is naked on the beach," said Anjun Zhou, who helps manage $33 billion as head of asset allocation research at Mellon Capital Management.
"With less liquidity we will be more cognizant of which countries we pick, focusing more on their growth potential," she said, adding she favors Mexico, Russia and South Korea and is avoiding India and Brazil.
Ray Dalio, chairman and chief investment officer at Bridgewater Associates, one of the world's largest hedge funds, warned investors last week against wading into emerging markets in the near future. He said the sharp reduction in capital flows to countries such as India may lead to a crisis.
That's not to say investors will turn their backs on the developing world. While few emerging markets are growing at double-digit rates these days, they are still sure to outpace advanced markets for years to come. Some argue that most emerging countries are better prepared to weather the storm than they were during the emerging market crisis of 1997.
The International Monetary Fund still expects emerging market growth of 5 percent this year, about four times quicker than advanced economies, and 5.4 percent next year.
More flexible exchange rates and a larger stash of currency reserves - about $7.5 trillion as of March compared with about $600 billion in 1997 - also provides a cushion. Deficits and foreign currency debt, while worrisome, are not as large.
"The reality is things are going to be more challenging" for a lot of countries," added Andres Calderon, who helps oversee $4.4 billion in assets at Hansberger Global Investments. "But I would be very surprised if this turns into another crisis."
That said, simply muddling through by spending reserves and raising interest rates to prop up currencies won't be enough in the long run, especially for countries that need affordable access to foreign capital to service their deficits.
"These are temporary measures that can buy time," Lord said. "They're not a sustainable way of rebalancing the economy."
A better approach, investors said, is to get serious about long-term structural reforms.
Calderon said Brazil should focus on a more flexible labor market and major infrastructure reforms to attract foreign and local private capital.
Sean Lynch, global investment strategist at Wells Fargo Private Bank, said India could start helping itself by easing restrictions on foreign corporate ownership, a move that would attract stabilizing foreign direct investment.
Many investors urge policymakers to imitate Mexico, where the government has committed to sweeping reforms of the state-dominated energy sector, education and telecommunications.
While Mexico's IPC stock index has lost 6 percent this year, indexes are down by double digits in Brazil and Turkey, both current account deficit countries.
Still, it took a multi-year slump in the United States, Mexico's most important trading partner, to force action.
"Mexico felt a lot more pressure to tackle structural reform, and that put them ahead of the curve," said Calderon. "But I don't think they stand out as being uniquely enlightened. They just faced the pressure earlier."
Even so, it's all paying dividends now.
In Asia, capital is shifting from south to north, toward countries like China, South Korea and Taiwan, which could see trade gains as U.S. growth rebounds. Meanwhile commodity producers such as Indonesia and Malaysia have seen their finances worsen as metals prices have eased.
Peter Kohli, president of DMS Funds, said he launched two U.S.-listed mutual funds this year focused on Poland and the Baltic states - new European Union members with healthy finances and a commitment to reform.
"These markets are looking a lot more attractive," he said. "These countries seem to have their act together."
"A lot of countries have talked about reform but haven't delivered much," said Wells Fargo's Lynch, who helps oversees $170 billion in assets. "But I think the longer we see weakness in emerging markets, the more they will be forced to make meaningful reforms."
WTI Crude Little Changed After Rising First Time in Three Days
West Texas Intermediate traded little changed after rising for the first time in three days yesterday as stockpiles at Cushing, Oklahoma, fell to the lowest level since February 2012 and refinery utilization climbed.
Futures climbed as much as 23 cents. Supplies at Cushing, the delivery point for New York-traded futures, slid for a 10th week, matching the longest stretch of losses in almost two years, according to data from the Energy Information Administration. Refineries ran at 92.5 percent of capacity, the highest level for this time of year since 2006. The U.S. and Russia meet today to discuss a plan for Syria to surrender its chemical weapons.
WTI for October delivery was at $107.66 a barrel, up 10 cents, in electronic trading on the New York Mercantile Exchange at 9:55 a.m. Sydney time. The contract rose 0.2 percent to $107.56 yesterday. The volume of all futures traded was about 77 percent below the 100-day average.
Brent for October settlement increased 7 cents, or 0.1 percent, to $111.57 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $3.88 to WTI futures compared with $3.94 yesterday.
The Russian initiative to avert U.S. military strikes on Syria through a plan to eliminate the regime’s chemical weapons faces a first test when U.S. Secretary of State John Kerry meets in Geneva with his Russian counterpart, Sergei Lavrov. Oil prices fell early yesterday as President Barack Obama postponed a decision to take action against Syria.
Gold Drops Near Three-Week Low as Silver Declines on Taper Bets
Gold retreated to near a three-week low, heading for a third weekly decline, on speculation that the U.S. Federal Reserve will commit to reducing stimulus within days. Silver fell.
Gold for immediate delivery dropped as much as 0.5 percent to $1,359.21 an ounce, and traded at $1,362.18 at 9:43 a.m. in Singapore. Prices dropped to $1,356.35 yesterday, the lowest level since Aug. 22. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, were unchanged for a second day at 917.13 metric tons yesterday.
Gold has declined 19 percent this year amid expectations that the Fed will pare its $85 billion a month of bond-buying as the economy improves. While data today may show U.S. jobless claims rose for the first time in three weeks, a survey on Sept. 6 showed that the central bank will taper its quantitative easing by $10 billion at the Sept. 17-18 meeting. The U.S. and Russia meet today to discuss a plan for Syria to surrender its chemical weapons, averting a military strike.
“As geopolitical risks fade, the focus is shifting back to QE and the Fed meeting next week, and we expect the market to remain volatile till then,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage. “Although an immediate strike is unlikely, the market will continue reacting to headlines on Syria.”
Geneva Meeting
Gold reached a three-month high last month as tension in the Middle East escalated and oil rallied. U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov will meet in Geneva to discuss the crisis after President Barack Obama delayed a Congressional vote sanctioning military action.
Bullion for December delivery was 0.2 percent lower at $1,361.40 an ounce on the Comex. Global gold demand will fall to 2,237 tons in the second half from 2,309 tons in the same period a year earlier and 2,533 tons in the first six months as bar buying drops from a record and central banks add less, Thomson Reuters GFMS said.
Silver for immediate delivery fell as much as 0.8 percent to $23.0095 an ounce, before trading at $23.0555. Platinum lost 0.2 percent to $1,471.15 an ounce, while palladium was little changed at $692.15 an ounce.
Vietnam’s Rice Output Faces Slide on Crop Switch: Southeast Asia
Rice production in Vietnam is poised to drop next year for the first time in more than a decade as the second-largest shipper promotes other crops, lessening competition in the global export market.
The switch is designed to boost farmers’ incomes, and corn is one of the alternatives that will be favored because of good demand and high yields, according to Pham Dong Quang, deputy head of the government’s crop-production department. A plan to convert rice-growing areas will be approved by the Ministry of Agriculture and Rural Development before the end of the year, Quang said in an interview in Hanoi.
A reduction in supplies will benefit India and Thailand, Vietnam’s biggest export rivals, as global supplies increase to an all-time high. The three nations accounted for about two-thirds of worldwide shipments last year, according to data from the U.S. Department of Agriculture. The first decline in Vietnam’s crop may happen as early as next year, Quang said.
“If Vietnam’s rice production goes down, it will tend to benefit exporting countries and tend to hurt importing countries,” said David Dawe, a Bangkok-based senior economist at the Food & Agriculture Organization. The plan “sounds relatively good in the sense that they’re encouraging flexibility on the part of farmers,” said Dawe.
Vietnamese 5 percent-broken rice has dropped 3.4 percent this year to $400 a metric ton in August, according to USDA data. Rough-rice futures traded at $15.495 a 100 pounds in Chicago today, 2.1 percent higher in 2013.
Bigger Harvests
Milled output in Vietnam has increased every year since 2001, rising 34 percent to 27.4 million tons in the period, according to the USDA. Shipments surged from less than 100,000 tons in 1988 to 7.4 million tons in 2012-2013 as Vietnam promoted reform and embraced international trade. India shipped 9.7 million tons that year, as Thailand exported 7 million.
“Rice output may fall in the next few years because farmers will switch,” Quang said, without giving a forecast. While the issue of boosting rural incomes has been addressed for some years, it’s now become much more urgent amid the difficult economic situation and more competitive rice market, he said.
The $142 billion economy is expected to grow 5.4 percent this year, according to Vu Duc Dam, chairman of the government office. That would be a third year of expansion less than 6 percent, the worst run since 1988, according to data from the International Monetary Fund. Agriculture accounted for 17 percent of gross domestic product in 2012, data from the Hanoi-based General Statistics Office show.
The global harvest of the staple for half the world has grown to a record even as export demand stagnates. The crop will gain 1.9 percent to 477.9 million tons in 2013-2014, according to the USDA, which forecasts worldwide exports of 39 million tons this season, in line with the total in 2011-2012. The Philippines, previously the biggest importer, won’t buy any overseas rice in 2013 as it becomes self-sufficient, Agriculture Secretary Proceso Alcala said last year.
Thailand is among countries raising rice output as Prime Minister Yingluck Shinawatra’s government buys the crop at above-market rates to boost farmers’ incomes, with losses of about 137 billion baht ($4.4 billion) seen for last year. Thai stockpiles will gain 24 percent to a record 15.5 million tons this season, a USDA forecast shows. The government will sell 1.2 million tons to China over 12 months and seek further deals, Commerce Minister Niwattumrong Boonsongpaisan said yesterday.
Output in Cambodia, which borders Vietnam, will expand to the highest ever this season at 4.9 million tons. The country plans to increase its exports to 1 million tons by 2015, Kan Channmeta, undersecretary of state, told a conference in May.
Market Demand
The Vietnamese government won’t set targets for how much of each crop needs to be grown, leaving the choices to farmers and local governments, depending on market demand, Quang said. The government will provide growers across the country with technical training, seeds and suitable irrigation systems to support the conversion effort, he said.
The country has about 4 million hectares (9.9 million acres) of riceland, where farmers can also grow other crops, Quang said. The most fertile areas will still be reserved for rice and it will remain the key crop with the biggest growing area, he said.
Urbanization will cut into the 4 million hectares, and Vietnam plans to maintain 3.8 million hectares in 2020-2030, he said. Corn has yielded 9 tons to 10 tons per hectare in some test programs in the Mekong Delta, he said, referring to the region in the south.
While rice is not very lucrative, yields are relatively stable and it’s not that vulnerable to pests and diseases, the FAO’s Dawe said. Fruits and vegetables are more vulnerable to attacks and price fluctuations are high, creating additional risks for farmers, with risks for corn between the two, he said.
Coffee Rises Most in 8 Months on Brazil Supply Risk; Cocoa Gains
Coffee futures gained the most in eight months on speculation that dry weather will curb 2014 output in Brazil, the world’s largest producer. Cocoa also rose, while orange juice, sugar and cotton slid.
Flowers that bloomed on coffee trees during last week’s rain may be damaged by dryness this week in southern Zona da Mata, before precipitation resumes by Sept. 16, Overland Park, Kansas-based World Weather Inc. said in a report yesterday. The area is located in Minas Gerais, the biggest producing state. Prices slumped 16 percent this year on abundant global supply, including a bumper crop from the South American nation.
“There is some concern about dry weather in Brazil causing damage to trees that have already flowered,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said by e-mail.
Arabica-coffee for December delivery jumped 3.6 percent to settle at $1.208 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest gain for a most-active contract since Jan. 2. Prices earlier reached $1.211, the highest since Aug. 20.
In the week ended Sept. 3, money managers and other large speculators cut their net-short position, or bearish bets, by 1.3 percent to 22,717 futures and options, government data show.
This week, Brazil’s crop forecasting agency, called Conab, trimmed its estimate for 2013 output by 2.3 percent from a May projection and said that next year’s harvest may not match the record reaped in 2012, in part because farmers cut investments. In 2013-2014, world production will exceed demand for the fourth straight year, the U.S. government projects.
Upside ‘Limited’
“The reduced crop estimate is also supporting prices,” John Caruso, a senior commodities broker at RJO Futures in Chicago, said in a telephone interview. “The upside will be limited because global supplies remain ample.”
Cocoa futures for delivery in December rose less than 0.1 percent to $2,571 a metric ton, after reaching $2,599, the highest for a most-active contract in almost a year.
Orange-juice futures for November delivery tumbled 1.4 percent to $1.3505 a pound.
Hurricane Humberto, the first of the season in the Atlantic, is expected to turn north, away from orange groves in Florida, on track to sweep by Nova Scotia and strike Newfoundland later this week, according to Environment Canada. Florida is the world’s largest citrus grower after Brazil.
Raw-sugar futures for October delivery fell 0.1 percent to 17.17 cents a pound on ICE, snapping a four-session rally. Cotton futures for December delivery dropped 0.1 percent to 84.35 cents a pound.
Dollar Stays Lower as Traders Weigh Taper Odds Before Jobs Data
The dollar remained lower against the majority of its major peers as traders speculated whether the U.S. economy is strong enough for the Federal Reserve to decide as early as next week to start reducing stimulus.
The greenback traded near the lowest this month against the euro before a report forecast to show U.S. jobless claims rose. Demand for the dollar as a haven receded as the U.S. delayed a congressional vote on military action in Syria. The yen gained after Japan’s machinery orders stagnated. Australia’s dollar dropped as employers unexpectedly cut payrolls. The New Zealand dollar climbed as the Reserve Bank signaled it may raise interest rates earlier than previously expected.
“The Fed will start tapering next week, but I think they might also be a bit dovish, and that might see the U.S. dollar weaken again in a knee-jerk reaction,” said Joseph Capurso, a Sydney-based currency strategist at Commonwealth Bank of Australia (CBA), the nation’s biggest lender. “The Syria issue had supported the U.S. dollar, but it seems to have eased off a bit.”
The dollar was little changed at $1.3316 per euro as of 10:59 a.m. in Tokyo from yesterday, when it touched $1.3325, the weakest since Aug. 29. It declined 0.4 percent to 99.51 yen, following a 0.5 percent drop in New York. Europe’s common currency traded 0.4 percent weaker at 132.51 yen.
The U.S. Dollar Index, which tracks the greenback against 10 major peers, was little changed at 1,023.79, set for the lowest close since Aug. 20.
U.S. Jobs
U.S. jobless claims probably rose to 330,000 in the week ended Sept. 7, from 323,000 in the previous seven-day period, according to the median estimate of economists before today’s data.
The Federal Open Market Committee meets to decide policy on Sept. 17-18. The central bank is forecast to slow its monthly bond buying to $75 billion from the current $85 billion pace, according to the median estimate in a economist poll on Sept. 6.
Fed Bank of New York President William C. Dudley speaks today in Paris. He said in July that economic growth will probably quicken next year, possibly warranting a reduction in stimulus.
“I expect the Fed to alter its forward guidance to keep bond yields anchored while starting to taper monetary easing,” said Noriaki Murao, the New York-based managing director of the marketing group at the Bank of Tokyo-Mitsubishi UFJ Ltd. “There are few reasons for the dollar to rise as long as U.S. yields are capped.”
The benchmark Treasury 10-year note yielded 2.88 percent today, having dropped from 3.005 percent on Sept. 6, the highest since July 2011.
Avert Strike
A Russian initiative to avert U.S. military strikes on Syria through a plan to eliminate the Bashar al-Assad regime’s chemical weapons faces a first test when U.S. Secretary of State John Kerry meets in Geneva today with his Russian counterpart, Sergei Lavrov.
“This is a process that will take a certain amount of time, but it needs to be credible, it needs to be verifiable,” White House spokesman Jay Carney said in Washington yesterday.
In Japan, machinery orders were unchanged in July from June when they fell 2.7 percent, the Cabinet Office announced today in Tokyo. Economists predicted a 2.4 percent increase.
The result underscores limits on corporate investment as Japan’s Prime Minister Shinzo Abe tries to drive an economic revival in the world’s third-largest economy, and end 15 years of entrenched deflation.
Aussie Weakens
Australia’s dollar fell against all 16 major counterparts after the number of people employed in the country fell 10,800 last month, following a downwardly revised loss of 11,400 jobs in July, the statistics bureau said today in Sydney. Economists predicted a 10,000 increase in August.
New Zealand’s dollar strengthened against all its major peers after the RBNZ forecast bank bill rates will be higher than previously estimated in the first half of 2014, indicating the central bank may raise benchmark borrowing costs within that period.
“The RBNZ’s Monetary Policy Statement this morning was more hawkish than we had expected,” Imre Speizer, a market strategist in Auckland at Westpac Banking Corp. (WBC), wrote in a note to clients. “The initial market reactions should persist throughout the day.”
The Aussie slid 0.6 percent to 92.72 U.S. cents. The kiwi dollar jumped 0.6 percent to 81.27 U.S. cents after touching 81.51, the strongest since Aug. 19.

Dollar falls again on reduced Syria worries

The dollar on Wednesday continued to retreat against most major currencies as the improved chances of Syria diplomacy reduced the greenback's appeal as a safe-haven currency.

The dollar on Wednesday continued to retreat against most major currencies as the improved chances of Syria diplomacy reduced the greenback's appeal as a safe-haven currency.
Near 2200 GMT Wednesday, the euro traded at $1.3314, up from $1.3267 Tuesday.
The dollar fell to 99.92 yen from 100.43 yen.
The euro bought 133.03 yen, down from 133.24 yen.
The dollar has fallen in recent days as the US and other Syria critics have signalled their consideration of a Russian plan to place Syria's chemical weapons under international oversight.

President Obama cited the Russia plan in a televised address to the US on Tuesday night, even as he argued that a military strike still might be needed.
As the prospects for the Russia-led deal have risen and pushed lower the chance of a US military strike, the market has demonstrated greater appetite for the euro and other so-called "risk" currencies at the expense of the dollar, analysts said.
Traders are also gearing up for next week's meeting of a key US Federal Reserve monetary policy committee, which could scale back the Fed's $85 billion-a-month bond-buying programme.
Recent dollar weakness has suggested investors view an aggressive taper as less likely in like of a weak US jobs report for August.
"Currency players will keep one eye on the developments with Syria and the other on the Fed's coming meeting on Sept. 17-18," said Joe Manimbo, senior market analyst for Western Union Business Solutions.
"Uncertainty over both Syria and the outcome of the Fed meeting may keep the dollar and major currencies on a leash."
Some analysts predicted the British pound could see further strength in the days and weeks ahead after Britain's unemployment rate fell unexpectedly in July to the lowest level since late 2012.
The pound rose to $1.5826 Wednesday from $1.5731.
The dollar dipped to 0.9306 Swiss francs from 0.9346. 
Europe Gaining Confidence Among Investors in Global Poll
International investors are expressing renewed faith in the European economy, underpinning a mounting sense of confidence in the outlook for industrial nations, according to the latest Bloomberg Global Poll.
Forty percent of the responding investors, analysts and traders who are subscribers said the euro-area economy is improving, more than four times the number in May and a signal the region’s 3 ½-year debt crisis is ending. With sentiment also rising in the U.S. and Japan, 40 percent said the world economy is strengthening, the most since January 2011.
The bullishness five years since the collapse of Lehman Brothers Holdings Inc. is supporting a taste for risk as 52 percent anticipate stocks will offer the best return over the next year. Reflecting a shift in mood, the prospects of a Chinese slowdown and U.S. fiscal fight displaced Europe’s woes as the biggest global economic threats.
“A period of a surprising broad recovery seems to be under way,” Andreas Domke, a poll participant and portfolio manager at Allianz Global Investors Europe GmbH in Frankfurt, said in an e-mail.
The euroarea’s resurgence appears under way just weeks since it emerged from its deepest-ever recession and after the single currency’s very existence was thrown into doubt as cash-strapped governments from Greece to Spain tapped bailouts.
Best Opportunities
The larger European Union now offers one of the best investment opportunities for 34 percent of those polled, up from 18 percent in May and the most since that question was first asked in October 2009. Only 18 percent said the EU offers the worst prospects, an improvement from 45 percent in May.
The Euro Stoxx 50 Index will be higher six months from now in the view of 53 percent of poll participants, the first time a majority favored the market since the start of the poll in July 2009. Just 17 percent said Europe’s troubles pose the greatest risk to the global economy, compared to a third four months ago.
The risk of default is on the slide with about three-quarters saying Spain and Italy will avoid bankruptcy. Almost a third said Greece will dodge that fate too, the most optimistic since the question was first asked in June 2010. Still, 54 percent said Greece’s position in the euro area will be weaker once Germany’s elections pass this month.
“Structurally the issues that faced the euro and the design of monetary union are being addressed,” said Peter Kinsella, senior foreign exchange strategist at Commerzbank AG in London and a survey respondent. “The acid test is whether all of these changes will lead to job growth, which is what really matters.”
Investor Haven
The euro has become a haven for investors, advancing almost 5 percent this year against nine developed nations’ currencies to be the best performer on the Correlation-Weighted Index. In a sign that confidence has still to fully return in Europe, just 12 percent of poll respondents plan to buy euros and only 9 percent said they intend to purchase more of the region’s government debt.
The U.S. maintained its lead as the healthiest developed nation at a time when the Federal Reserve is considering a pullback in stimulus. Sixty-four percent said the world’s largest economy is improving, almost twice the number of a year ago.
Just over half said its markets are a best bet for the coming year and 58 percent predict the Standard & Poor’s 500 Index will extend its 18 percent gain so far in 2013 into the early months of 2014. In a warning against complacency, 26 percent cite political gridlock over fiscal policy as an obstacle for the world, second only to a weakening Chinese economy.
Japan Confidence
Investors also expressed confidence in Japan as Prime Minister Shinzo Abe seeks to end 15 years of deflation, although the percentage of those saying it offered one of the best returns fell to 26 percent from 33 percent. Fifty-nine percent said its economy is on the upswing, compared with 48 percent in May. Fifty-eight percent of investors tip the Nikkei 225 Stock Average to sustain its 39 percent rise of this year and a little more than a quarter name the country a top investment opportunity in the next 12 months.
As investors bank on a global recovery, stocks remain the most favored asset by some distance, with real estate the second most popular as 16 percent forecast it to offer the highest return over the next year. Just 4 percent select bonds to beat other assets and 48 percent back them to perform the worst. Nineteen percent are bearish on gold and 44 percent see it cheaper in six months.
’Little Risk’
“We measure global risk at the lowest levels seen in the post-crisis period,” said Marie Owens Thomsen, chief economist at Credit Agricole Private Banking in Geneva. “Investors see little risk of a systemic threat to the world. As long as that is the case, there ought to be ample scope for risky assets to climb.”
Fifty-two percent of respondents said they plan to increase their exposure to equities over the next six months, maintaining this year’s majority support albeit down from 63 percent in January. While the appeal of both fell from May, a third are looking to real estate and 37 percent like the U.S. dollar.
More than half are reducing their investments in U.S. Treasury bonds and 38 percent are fleeing corporate bonds. Those increasing their gold reserves halved from a year ago to 15 percent. A quarter are reducing their exposure to commodities.
Investors seem divided over emerging-market equities with 27 percent saying they are buying them and the same amount selling them. Six percent are looking to increase their exposure to the yen and 3 percent fancy Japanese government bonds.
Not Enough
The better economic outlook isn’t enough to buoy President Barack Obama’s standing among investors. Forty-one percent said they are optimistic in his policies toward the investment climate and half said they regard him favorably, both the softest in a year.
There is nevertheless a political dividend for a strengthening economy elsewhere. As she prepares for a Sept. 22 election, Angela Merkel’s policies won the endorsement of 65 percent of investors, the best since the survey began asking this question in September 2010.
Fifty percent said they are upbeat about the work of U.K. Prime Minister David Cameron, his best showing since May 2011. Abe was backed by 70 percent of respondents, up from 54 percent of the start of the year.
Less popular, Chinese President Xi Jinping’s policies are viewed optimistically by 47 percent and just 13 percent said the same of French President Francois Hollande’s.
The poll of 900 subscribers was conducted Sept. 10 by Selzer & Co., a Des Moines, Iowa-based firm. It has a margin of error of plus or minus 3.3 percentage points.
Pound Climbs to 7-Month High Versus Dollar as Unemployment Falls
The pound strengthened to a seven-month high against the dollar after a government report showed unemployment unexpectedly declined, adding to signs the U.K. economy is gaining momentum.
Sterling climbed to the strongest since January versus the euro as the jobless rate moved toward the 7 percent threshold at which the Bank of England said it will reassess it policy of keeping interest rates low. Central bank Governor Mark Carney along with fellow policy makers Paul Fisher, David Miles and Ian McCafferty will testify to parliament tomorrow. U.K. government bonds were little changed after benchmark 10-year yields climbed to the highest level in two years.
“The pound is likely to maintain its recent momentum in the near term,” said Peter Kinsella, a senior currency strategist at Commerzbank AG in London. “It will probably take another two years before the unemployment rate drops to the 7 percent target. Still, a decline in jobless claims will no doubt help in terms of sentiment.”
The pound advanced 0.5 percent to $1.5811 at 4:42 p.m. London time after rising to $1.5827, the highest since Feb. 8. The U.K. currency rose 0.2 percent to 84.16 pence per euro after appreciating to 83.83 pence, the strongest since Jan. 23.
Sterling has strengthened 7.6 percent in the past six months, the best performer among 10 developed-nation currencies tracked by Correlation-Weighted Indexes. The dollar gained 0.9 percent and the euro advanced 3.1 percent.
Jobless Rate
The U.K. unemployment rate as measured by International Labour Organization methods dropped to 7.7 percent in the three months through July from 7.8 percent in the second quarter, the Office for National Statistics said in London. The median forecast of economists was for 7.8 percent. In August, jobless claims fell 32,600, more than analysts had forecast.
The improving data may not bring an interest-rate increase forward, according to Capital Economics Ltd.
“Although employment rose strongly, more timely evidence from the recent activity surveys suggests that firms are responding to higher demand more by boosting productivity than taking on new workers,” said Martin Beck, a U.K. economist at Capital Economics in London. “We doubt today’s news significantly increases the chances of interest rates rising sooner rather than later.”
The 10-year gilt yield was at 3.02 percent after rising to 3.05 percent, the highest since July 2011. The price of the 2.25 percent bond maturing in September 2023 was 93.44. The two-year yield declined one basis point, or 0.01 percentage point, to 0.52 percent.
Carney’s Testimony
Bank of England officials introduced guidance on the path of interest rates last month and said they won’t raise borrowing costs until unemployment falls to 7 percent. While they don’t see that happening until late 2016, signs of strength in the economy have prompted investors to bet on an earlier increase.
The gilt reaction today “may also have been damped by the proximity of Carney’s testimony to the Treasury Committee tomorrow,” wrote Jamie Searle, a fixed-income strategist at Citigroup Inc. in London. “Carney is likely to be quizzed on guidance and perhaps what the MPC intends to do if the market continues to ignore” it, he said, referring to the central bank’s Monetary Policy Committee.
Gilts lost 5.1 percent this year through yesterday, according to World Bond Indexes. German bunds dropped 3 percent and U.S. Treasuries fell 4.1 percent.
Yen May Slip on Triangle, Credit Suisse Says: Technical Analysis
The yen may fall to the weakest versus the dollar in almost four months if a support level fails to hold, according to Credit Suisse Group AG.
“With a triangle-continuation pattern in place, we stay bullish” on the dollar against the yen, David Sneddon, global head of technical analysis in London at Credit Suisse, wrote today in a note to clients.
If the Japanese currency falls beyond 100.88 per dollar it will test support in the area from 101.54 to 101.61, the Fibonacci 78.6 percent retracement of the yen’s gain in May and June, Sneddon said. A move beyond that zone may result in the yen testing long-term support at 103.74, its weakest level since May 22, when it touched an almost five-year low.
The dollar-yen pair “should be allowed to cap at first, ahead of an eventual re-test of long-term resistance at 103.10 to 103.74.” Sneddon wrote.
The yen increased 0.4 percent to 99.96 per dollar in New York, after touching 100.61, its weakest level since July 22.
Japan’s currency has slipped 11 percent this year, making it the worst performer among 10 developed-market currencies tracked by Correlation-Weighted Indexes. The euro has added the most, increasing 4.9 percent, while the dollar’s 3.9 percent gain makes it the second-best performer.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Resistance refers to an area on a chart where sell orders may be clustered, and support is an area where there may be buy orders.
Fibonacci analysis, based on the work of 13th century mathematician Leonardo of Pisa, known as Fibonacci, is founded on the theory that prices rise or fall by certain percentages after reaching a new high or low.
Won Climbs to Six-Month High as BOK Holds Rate; Bonds Advance
South Korea’s won advanced to the strongest level in more than six months as the central bank kept its policy rate at the lowest since 2010 to support economic growth. Government bonds gained.
The Bank of Korea today held its seven-day repurchase rate at 2.5 percent, as predicted by all 15 economists in a survey, following a quarter percentage-point cut in May. The won also appreciated after Chinese Premier Li Keqiang said Asia’s largest economy can achieve its main economic targets this year. China is South Korea’s biggest export market.
“The central bank will keep a dovish tone for now because it may not have much leeway to cut interest rates from here,” given the risk to capital outflows from emerging markets, said Suresh Kumar Ramanathan, a regional currency strategist CIMB Investment Bank in Kuala Lumpur. “That will at least support growth, as there are expectations for Korea to ride on the coat tails of U.S. and Chinese economic recoveries.”
The won climbed 0.4 percent to 1,082.20 per dollar as of 10:12 a.m. in Seoul. It reached 1,081.90, the strongest level since Feb. 28. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell 26 basis points, or 0.26 percentage point, to 7.44 percent.
Government reports this month showed South Korean exports jumped 7.7 percent in August from a year earlier, versus a 2.6 percent increase in July. The economy, Asia’s fourth-largest, expanded 2.3 percent in the second quarter, the most in a year.
The won halted a three-day rally yesterday on speculation the government intervened in the market to prevent excessive gains. The authorities will take steps to check currency volatility if “herd behavior” causes drastic movements, the Finance Ministry said in a report to parliament in June.
The yield on South Korea’s 2.75 percent bonds due June 2016 declined three basis points to 2.92 percent, Korea Exchange Inc. prices show, the lowest level since Sept. 2.
Aussie Declines on Unexpected Jobs Drop; Kiwi Gains on Rate Bets
Australia’s dollar slid versus all its major counterparts after data showed payrolls unexpectedly fell and the unemployment rate climbed to a four-year high.
The Aussie declined for the first time in a week against the greenback, retreating from the strongest level in more than two months. The New Zealand dollar climbed for a fifth day, reaching the highest in more than three weeks, after the nation’s central bank signaled it may raise its key rate from a record low earlier than previously expected.
“You can see this as a genuinely soft employment report,” said Ray Attrill, the global co-head of currency strategy at National Australia Bank Ltd. “The unemployment rate did go up, even though the participation rate fell. The fall back in the Aussie is justified.”
Australia’s currency lost 0.6 percent to 92.77 U.S. cents as of 11:53 a.m. in Sydney, after earlier reaching 93.54 cents, the strongest since June 19. It bought 92.35 yen, down 0.9 percent from yesterday.
New Zealand’s dollar touched 81.51 U.S. cents, the highest since Aug. 19, before trading at 81.37 cents for a 0.7 percent gain. It advanced 0.3 percent to 80.98 yen.
The number of people employed in Australia decreased by 10,800 last month, after a revised 11,400 job losses in July, according to a statistics bureau report today. That compares with the median forecast for a 10,000 gain in a survey of economists. The jobless rate rose to 5.8 percent, the highest since June 2009.
Dow scores triple-digit gain, Apple drags down Nasdaq
US stocks closed mixed on Wednesday, with the Dow surging sharply higher and Apple dragging down the Nasdaq after its iPhone launch missed expectations.
US stocks closed mixed on Wednesday, with the Dow surging sharply higher and Apple dragging down the Nasdaq after its iPhone launch missed expectations.
The Dow Jones Industrial Average surged 135.54 points (0.89 percent) to 15,326.60.
The broad-market S&P 500 index advanced 5.14 points (0.31 percent) to 1,689.13, while the tech-rich Nasdaq dipped 4.01 points (0.11 percent) to 3,725.01.
After two days of gains, the stock indexes diverged as Apple took a beating a day after unveiling two new iPhones and dashing expectations that a media event in Beijing would reveal a deal with China Mobile, the country's biggest carrier.
The technology giant's shares sank 5.4 percent to $467.71.
"The company failed to impress the analyst community with its latest iPhone introductions and the lack of an announcement of a China Mobile deal," said Patrick O'Hare of Briefing.com.
Apple also suffered downgrades, including from Bank of America and UBS.
Wall Street had little reaction to President Barack Obama's televised address to the nation late Tuesday, when he opened the door to a diplomatic solution to a military strike on Syria, O'Hare said.
"The speech wasn't surprising and the relief that a diplomatic solution looks possible has been priced in."
The economic calendar was light. Mortgage applications fell 13.5 percent last week from the prior week, and refinancing applications dropped 20 percent to its lowest level since June 2009, amid rising interest rates, according to a Mortgage Bankers Association report.
Verizon Communications edged up 0.1 percent as it launched a $49 billion bond sale, by far the largest corporate bond sale in history.
Verizon is issuing new debt to help fund its $130 billion buyout of Vodafone's 45 percent stake in their joint venture Verizon Wireless.
Other tech stocks scored strong gains. On the Dow, IBM jumped 2.2 percent and Microsoft rose 1.1 percent.
Texas Instruments fell 0.7 percent after lowering its earnings and profit forecast for the third quarter.
General Motors slid 1.8 percent. The Canadian government and Ontario province announced they had sold about a fifth of their share in General Motors, four years after joining a US bailout of the auto giant.
Home furnishings retailer Restoration Hardware Holdings plunged 11.9 percent after reporting a swing into loss in its fiscal second quarter as sales fell 4.7 percent from a year earlier.
Bond prices rose. The yield on the 10-year Treasury fell to 2.91 percent from 2.96 percent late Tuesday, while the 30-year dropped to 3.85 percent from 3.89 percent. Prices and yields move inversely.
German Stocks Advance as Obama Postpones Syria Decision
German stocks advanced, with the benchmark DAX (DAX) rising to its highest level in more than three months, as U.S. President Barack Obama postponed a decision on whether to take military action against Syria.
Commerzbank AG added 3 percent after Citibank raised its earnings estimate for Germany’s second-largest lender. RWE AG (RWE) and EON SE each rose more than 4 percent as a gauge of utilities climbed the most of the 19 industry groups in the Stoxx Europe 600 Index. K+S AG (SDF) fell 0.7 percent after BMO Capital Markets downgraded its rating on the potash producer.
The DAX increased 0.6 percent to 8,495.73 at the close of trading in Frankfurt, for its sixth day of gains. The index climbed 2.1 percent last week as manufacturing growth in the U.S. and China beat projections. The broader HDAX Index rose 0.5 percent today.
“After the correction we saw in the second half of August, investors are looking for an excuse to buy back into the market and it seems relief around Syria is providing the excuse,” Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, which oversees about $22 billion, said in a telephone interview.
The DAX fell 4 percent from a monthly high on Aug. 14, amid speculation the Federal Reserve will pare stimulus measures and concern about possible U.S. military action against Syria.
The volume of shares changing hands in DAX-listed companies was 22 percent higher than the average of the last 30 days.
Russian Proposal
Obama said yesterday in an address from Washington that he will pursue a proposal by Russia to have Syria surrender its stockpiles of chemical weapons to international authorities. He had said that he would ask Congress to authorize the use of military force against Syrian President Bashar al-Assad’s regime following an Aug. 21 chemical attack that the U.S. said killed more than 1,400 people.
Commerzbank rose 3 percent to 9.35 euros, its highest price since Mar. 13. Citibank raised its 2014 earnings estimate by 3 percent, citing better second-quarter revenue at the lender’s corporate and markets division.
RWE and EON gained 6.6 percent to 25.06 euros and 4.8 percent to 13.45 euros, respectively.
K+S retreated 0.7 percent to 20.94 euros. BMO Capital Markets downgraded Europe’s biggest potash distributor to underperform, similar to a sell recommendation, from market perform. The financial services provider set a price target of 18 euros on the shares.
Dialog Semiconductor Plc (DLG) slumped 7.6 percent to 14.33 euros, its largest drop since April 17. Apple Inc., the company’s biggest customer for smartphone chips, yesterday unveiled two new iPhone models.
“With Apple apparently focusing on margins rather than volume, Dialog might be burdened near-term,” Deutsche Bank AG said in a note to clients.
Japan’s Topix Falls on Brokers, Tiremakers; Sharp Tumbles
Japan’s Topix index fell, with the gauge poised for a second day of losses, as brokerages and tiremakers led declines and investors awaited next week’s Federal Reserve meeting.
Daiwa Securities Group Inc., Japan’s No. 2 broker, lost 1.6 percent as securities companies fell the most among the 33 Topix industry groups. Bridgestone Corp., Asia’s largest tiremaker, slipped 1.4 percent as the yen advanced. Sharp Corp. sank 6 percent after reports the TV maker will announce a share sale. Mitsubishi Motors Corp. tumbled 6.8 percent as the Nikkei newspaper reported the carmaker is considering raising 200 billion yen ($2 billion) in a public offering of stocks.
The Topix slid 0.5 percent to 1,183.19 at the break in Tokyo, with volume 20 percent higher than the 30-day intraday average. The Nikkei 225 Stock Average fell 0.3 percent to 14,382.92. The Fed meets Sept. 17-18, with economists estimating the U.S. central bank will taper its monthly bond buying by $10 billion to $75 billion, according to the median of 34 responses in a survey.
“We’re in wait-and-see mode ahead of next week’s Fed meeting,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co. in Tokyo. “While the situation in Syria has calmed and China looks like it’s seen the worst of its slowdown, buying after the Olympics news seems to have run its course and the yen has stopped weakening, making exporters less attractive.”
The Topix climbed 3.8 percent last week and is up 3.1 percent since Sept. 6 amid optimism about Tokyo hosting the 2020 Summer Games. The gauge soared 38 percent this year through yesterday, with Japanese equities performing the best among developed markets.
Machinery Orders
Core machinery orders, an indicator of future capital spending, were unchanged in July from the previous month, the Cabinet Office said today in Tokyo. Economists expected a 2.4 percent increase. Orders rose 6.5 percent on the year, compared with forecasts for a 7.7 percent advance.
Japan’s currency, which yesterday touched 100.61 per dollar, its weakest level since July 22, trimmed losses and traded at 99.44 today.
“After the market’s recent gains the timing is right for some selling and the yen has started strengthening as well, so we’re seeing some profit-taking,” said Kenji Shiomura, a Tokyo-based senior strategist at Daiwa Securities. “The impact from machinery orders is limited as they’re very volatile. And while they missed estimates, they’re still recovering.”
Sales Tax
Prime Minister Shinzo Abe will announce that Japan will raise the sales tax to 8 percent in April as planned, the Yomiuri newspaper reported today without saying where it got the information. The prime minister will detail a 5 trillion yen stimulus package along with the levy increase, according to the report. Chief Cabinet Secretary Yoshihide Suga said today it isn’t true Abe has decided on the tax.
Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The gauge gained 0.3 percent to a one-month high in New York yesterday as diminishing concern over a military strike against Syria offset Apple Inc.’s biggest decline since April after the company introduced a cheaper iPhone.
The Topix’s historic volatility was at 23.72 yesterday, compared with its five-year median of 19.42.
China Stocks Fall from Three-Month High, Led by Material Shares
China’s stocks fell from a three-month high as losses for material and property companies overshadowed gains for consumer-discretionary companies.
Aluminum Corp. of China Ltd., also known as Chalco, dropped 3.3 percent, paring this week’s gain to 15 percent. Shanghai Zhenhua Heavy Industries Co. fell 2.8 percent after saying it has no inside information to disclose following a 23 percent rally in the past four days. Poly Real Estate Group Co. (600048) sank the most in three weeks on speculation the government will introduce a property tax to curb gains in housing prices.
The Shanghai Composite Index (SHCOMP) lost 0.4 percent to 2,231.80 as of 9:54 a.m. local time. The index’s 14-day relative strength index, measuring how rapidly prices have advanced or dropped during a specified time period, was at 79.6 yesterday. Readings above 70 indicate a price may be poised to fall.
“The market needs consolidation here for profit taking after the recent nice run,” said Li Jun, a strategist at Central China Securities Co. in Shanghai. “The upward trend for the market is still intact given good economic data.”
The Shanghai index has risen 14 percent since reaching this year’s low on June 27 as August data ranging from exports to industiral output showed growth is accelerating and as shippers and port operators rallied after the State Council approved Shanghai’s free-trade zone.
The Shanghai measure is valued at 9 times its projected 12-month earnings, the highest since June 11. Trading volumes for the index were 67 percent above the 30-day average today. The gauge had 162 stocks with the RSI higher than 70 as of yesterday, the highest since January.
Trade Zone
The CSI 300 Index fell 0.3 percent to 2,474.46. The Hang Seng China Enterprises Index (HSCEI) added 0.4 percent. The China-US Equity Index, the measure of the most-traded U.S.- listed Chinese companies, lost 0.4 percent in New York yesterday.
A gauge of material companies in the CSI 300 slid 1.5 percent, the most among 10 industry groups. Chalco, the biggest aluminum producer, dropped 3.3 percent to 3.86 yuan. Jiangxi Copper Co., the largest copper producer, declined for the first time in five days, losing 1.9 percent to 17.47 yuan.
Premier Li Keqiang said the foundations of a growth rebound aren’t solid while cautioning that stimulus won’t help resolve deep-rooted issues in the world’s second-largest economy.
“The foundation of an economic recovery is not solid yet with many uncertain factors,” Li said in a speech yesterday at the World Economic Forum in Dalian, China. The nation is taking steps to stabilize growth and can achieve the main economic targets this year, Li said.
Trade Zone
Shanghai Zhenhua, the world’s biggest maker of container cranes, fell 2.8 percent to 4.20 yuan. Shanghai International Port (Group) Co. slid 3.1 percent to 6.68 yuan. The stock had jumped 170 percent through yesterday since Aug. 22.
Investors should be selective in buying shares of companies that will benefit from the Shanghai Free-Trade Zone given recent equity rallies and the prospect earnings won’t get a boost until the medium term, according to Goldman Sachs Group Inc.
Poly Real Estate, China’s second-largest developer by market value, lost 2.2 percent to 11.09 yuan. China Vanke Co., the nation’s biggest, fell 1.1 percent to 10.10 yuan.
China should expand its property tax trial “as soon as possible” as real-estate markets in some regions are at a risk of overheating, according to a commentary in the China Securities Journal.
India’s Nifty Index Futures Rise on Foreign Buying, Rupee Rally
Indian stock-index futures gained as the rupee extended a rally and international investors bought the nation’s shares after three straight months of net sales.
SGX CNX Nifty Index futures for September delivery rose 0.5 percent to 5,961 at 10:01 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index climbed 0.3 percent to 5,913.15 yesterday. The S&P BSE Sensex closed unchanged. The Bank of New York Mellon India ADR Index of U.S.-traded shares fell 0.1 percent, the first drop in six days. One-month rupee forwards rose for a sixth day to 63.99 per dollar.
India’s rupee rose for a fifth day yesterday, the longest winning streak since October, on speculation the supply of dollars into India is increasing after global funds boosted holdings of local stocks. International investors bought a net $421 million of Indian shares on Sept. 10, the most since May 21, data from the market regulator showed yesterday. That boosted this year’s net inflow to $12.2 billion, the second-highest among 10 Asian markets.
“Foreign fund-buying is supporting the market to a great extent,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd., said by e-mail.
Foreign investors bought a net $344 million of Indian (SENSEX) stocks last week, the most since the week ended May 31. They pulled $3.7 billion from local equities in the three months to Aug. 31. Capital fled the country amid the slowest economic growth in a decade, an unprecedented current-account deficit and a weakening currency, and on speculation the U.S. Federal Reserve would pare its record stimulus program.
RBI Governor
The Sensex climbed 3.5 percent last week, the most since the five days ended April 19, after the new Reserve Bank of India Governor Raghuram Rajan announced plans to boost the financial sector and support the rupee, which dropped to an all-time low on Aug. 28.
The rupee has rallied 5.9 percent, the most among Asian currencies, since Rajan took over at the central bank on Sept. 4.
The Sensex has increased 2.9 percent this year in local currency terms and is valued at 14.2 times projected 12-month earnings, compared with the five-year average of 14.1 times. It has lost 12 percent this year in dollar terms. The MSCI Emerging Markets Index trades at 10.5 times.
Emerging Stocks Seen Overbought as Jump Makes Brazil Bull Market
The biggest rally in developing-nation stocks in a year is showing signs of reversing to analysts following technical indicators.
The MSCI Emerging Markets Index rose for six straight days by a total 6.2 percent, the most for the period since September 2012, as prospects for an imminent U.S. strike on Syria eased and economic data for China improved. The relative strength index for the gauge reached 69.9 -- approaching the threshold of 70 that signals a security is poised to decline -- for the first time since Jan. 14. That level preceded an 18 percent slump in five months.
While developing shares advanced 12 percent since reaching their 2013 low in June and Brazil’s Ibovespa entered a bull market this week, shares are still down 6 percent this year. The MSCI gauge is headed to its biggest annual underperformance since 1998 versus the developed-nation index, which is up 15 percent in 2013. Emerging-market stocks traded at 10.6 times estimated earnings on Sept. 10, the highest since May.
“Investors are pausing for a breather,” Joseph Dayan, the London-based head of markets at BCS Financial Group, the biggest trader of stocks in the Moscow Exchange, said by e-mail. “There is not much more than that at this point.”
The MSCI Emerging Market Index breached the upper boundary of its Bollinger band on Sept. 10, another technical indicator signaling it could be due for a reversal.
‘Some Correction’
Declines provided an opportunity for “profit taking” for “short term players who bought in the last week or so,” Julian Mayo, who helps manage $2.5 billion in emerging-market assets as the co-chief investment officer at Charlemagne Capital Ltd. (CCAP) in London, said by e-mail. “After a 5 to 10 percent gain in some emerging markets in such a short time, some correction is always likely.”
The latest economic data from China to Brazil point to improved growth conditions in developing economies and should help bolster demand for emerging-market assets, according to Regis Chatellier, a strategist at Societe Generale SA in London.
China’s factory production rose 10.4 percent from a year earlier, while the country’s exports climbed more than estimated in August and inflation stayed below a government target, helping Premier Li Keqiang sustain a rebound in the second-largest economy from a two-quarter slowdown.
Brazil GDP
Brazil’s gross domestic product expanded 1.5 percent during the April to June period, or an annualized 6 percent, the national statistics agency said on Aug. 30. That was the most since the first quarter of 2010 and more than all 44 forecasts from analysts, whose median estimate was 0.9 percent.
“Until recently, the U.S. was clearly leading the way on the growth front, with little signs that the backdrop in EM was improving,” Chatellier said in an e-mail yesterday. “This is still early days, but this has changed.”
Even as Chinese economic fundamentals improve, boosting the outlook for the country’s stock market, emerging-market volatility should remain high as the Federal Reserve scales back monetary stimulus, according to Saharat Chudsuwan, the Bangkok-based senior vice president at Tisco Asset Management Co., which has about $4.7 billion of assets. The MSCI Emerging Market Index’s 90-day volatility reached 17.5 yesterday, the highest level in about a year.
Fed Stimulus
“Emerging-market equities will still have high volatility in the next few months,” Chudsuwan said by phone on Sept. 11. “I am still overweight shares of developed markets such as the U.S. and Japan, where the economies show sustainable growth and monetary policies facilitate domestic consumption.”
The MSCI index has lost 5.4 percent since May 22, when the Fed signaled its asset-buying program could be trimmed if the U.S. economy showed a sustained recovery. Investors withdrew about $44 billion from emerging-market stock and bond funds since the end of May, Cambridge, Massachusetts-based EPFR Global, which tracks money flows, said Aug. 23.
In India alone, foreign funds pulled $3.7 billion from the stock market in the three months to August, the most since the global financial crisis in 2008. Standard & Poor’s reiterated last week it may cut India’s BBB- credit rating to junk because of the government’s failure to tackle its fiscal and current-account deficits.
More Stress
Fed policy makers will resume a debate on when to pare $85 billion in monthly bond purchases on their Sept. 17-18 meeting. The U.S. central bank is likely to reduce asset purchases to $75 billion this month, according to a survey of 34 economists.
Even after their tumble this year, emerging-market stocks still aren’t more attractive than equities in developed nations, according Marc Desmidt, the head of alpha strategies for Asia Pacific at BlackRock Inc., the world’s largest asset manager.
“It’s a reality that some of these markets have been oversold, probably pessimism does look a little bit high,” Desmidt said in a Sept. 11 interview on Television in Hong Kong. “It’s not surprising to see some bounces there. But more generally I think there is probably more stress for EM.”
Protesting rubber-growers face risk of losing support
The five demands presented to the government by the protesting rubber and oil-palm growers indicate a shift away from their original goal of seeking higher prices for their produce.
The growers got much backing when they first took to the streets to rally for higher prices. But their closure of railway and road sections in the South, as well as the violent clash with police in Prachuap Khiri Khan, has cost their protest legitimacy.
The five demands, made by leaders of growers from 16 southern provinces, are difficult to follow. They want the government to subsidise the rubber price at Bt90 or Bt95 a kilogram, while giving Bt1,260 in fertiliser subsidy to the growers for every rai of plantation, as offered by the government. It appears that having been given an inch, they intend to take a mile.
In addition, the protesters want the government to raise the rubber price to Bt120 a kilogram within six months. They also want Prime Minister Yingluck Shinawatra to meet their representatives and sign an agreement by tomorrow (September 13), although she is on an overseas trip and will not be back until Sunday.
Their demand for the government not to pursue legal cases against the demonstrators and their leaders indicates that they are aware that there is a question over whether their protest was peaceful.
The violent clash with police, which left some policemen seriously injured, is a criminal case and the government has no authority to make a decision in such a case. Yet the protesters have demanded compensation from the government for the death and injuries of protesters, as well as the damage done to them.
Although the government has agreed to raise the fertiliser subsidy to Bt2,520 a rai (Bt15,750 a hectare), many protesting growers do not appear to be satisfied. Some of them have threatened to close a major border checkpoint in Songkhla’s Sadao district and a main intersection in Chumphon. This threat certainly has dissatisfied many southerners, who will be affected by the closures. The Sadao border checkpoint is important to the region’s economy.
There are other groups of people in the South besides rubber and oil-palm growers. Many of those people are in the tourism industry and retail business, which are main arteries of the South’s economy.
The government says the growers’ protest has caused a large revenue loss for the southern provinces where street rallies were held: Bt22 million for Prachuap Khiri Khan, Bt95 million for Chumphon, Bt158 million for Nakhon Si Thammarat, Bt141 million for Surat Thani and Bt22 million for Phatthalung.
For many southerners, the protesting growers’ actions are a case of cutting off one’s nose to spite one’s face.
A protest tends to succeed when it can create sympathy and support among others, which in turn can be used to increase pressure on the government. It is not a good idea to cause suffering among prospective supporters by making threats and resorting to violence. This way, the power of the rally will keep diminishing and the rally’s original cause will be forgotten.
India Natural Rubber production likely to be lower than expected: Rubber Board
However, the increase in tapped area from 504,000 ha in 2012-2013 to 518,000 ha in 2013-14 and the higher level of moisture content in the soil may increase the production in the coming months. The projected closing stock of NR in 2013 -14 is 270,000 tonnes, said the Chairman.
KOCHI (Commodity Online): India natural rubber (NR) production during the current fiscal (2013-2014) is likely to be lower than what was projected earlier, said Sheela Thomas, Chairman, Rubber Board.
She was delivering the presidential address in the 172nd meeting of the Rubber Board held at Kottayam on Wednesday. Intensive rains and the widespread incidence of abnormal leaf fall are the reasons for decline in production.
However, the increase in tapped area from 504,000 ha in 2012-2013 to 518,000 ha in 2013-14 and the higher level of moisture content in the soil may increase the production in the coming months. The projected closing stock of NR in 2013 -14 is 270,000 tonnes, said the Chairman.
Domestic production of NR during April – August 2013 is 265,000 tons. Consumption during this period was 408,805 tons. Consumption of NR for the year 2013-14 is projected at 945,000 tons. Import and export of NR during April to August 2013 were 128,465 and 2319 tons respectively.
As per the report from International Rubber Study Group (IRSG), the world production of NR during April to August declined by 0.9 per cent owing mainly to adverse weather conditions.
The growth in NR consumption during the period was minimal at 1.1 per cent. World economy is beset with challenges of economic recession and geopolitical concerns. The present situation indicates that the NR market is likely to remain volatile, Chairman added.
The Board evaluated the activities since the last meeting in Guwahati in April 2013. The Board discussed about the control to be exercised for assuring the quality of rubber planting materials. The meeting mourned the demise of Adv. T.V. Abraham and Prof. K.K. Abraham, members of the Board
Tokyo rubber futures fall 1 pct on higher yen (Sept 12)
Benchmark TOCOM rubber futures fell nearly 1 percent on Thursday as the yen gained against the U.S. dollar, which came under pressure as investors wound back the size of an expected tapering of U.S. stimulus measures.
* The key Tokyo Commodity Exchange (TOCOM) rubber contract for February delivery was down 2.6 yen, or 0.9 percent, at 280.4 yen per kg at 0120 GMT, after settling 0.6 yen higher on Wednesday.
* The Federal Open Market Committee meets next Tuesday and Wednesday. While it is expected to start scaling back its $85 billion monthly asset-buying programme, Friday’s disappointing jobs data prompted many to believe the reduction will be more modest than some had previously expected.
* A Reuters survey earlier this week showed most economists see the U.S. central bank trimming its monthly asset purchases by about $10 billion.
* Thai rubber farmers have called off demonstrations planned for the weekend after the government doubled its subsidy for production and offered help for people arrested in protests last week, a farmers’ leader said on Wednesday.
* Volkswagen is taking further steps to beef up its overseas operations as the German carmaker increasingly feels the pinch of slumping demand in ailing European markets.
TOCOM Rubber Futures Prices on Thursday, September 12, 2013 (yen/kilogram)
Month Last Settlement Price Open High Low Current Change Volume
Sep 2013 270.0 269.8 269.8 267.8 267.8 -2.2 15
Oct 2013 270.9 272.0 272.0 269.0 269.0 -1.9 22
Nov 2013 273.3 274.2 274.5 270.2 270.2 -3.1 16
Dec 2013 276.2 277.7 277.8 272.6 273.0 -3.2 79
Jan 2014 279.8 280.3 281.3 275.7 276.3 -3.5 544
Feb 2014 283.0 283.5 284.3 278.5 279.2 -3.8 2,859
Total   3,535
* The dollar bought 99.80 yen, down about 0.1 percent. It moved away from Wednesday’s high of 100.60 yen, which was the highest since July 22, according to Reuters data.
* Japan’s benchmark Nikkei stock average rose 0.2 percent in early Thursday trade.
* U.S. crude futures inched towards $108 a barrel in light trade on Thursday, with investors uncertain about the outlook for supply from the Middle East.
* The 19-commodity Thomson Reuters-Jefferies CRB index rose by a marginal 0.2 percent on Wednesday after markets weighed the U.S. plan to hold back an attack on Syria if Damascus surrenders its chemical weapons.
China: Natural rubber prices on September 11, 2013
Unit: RMB/mt
Product East China (RMB/mt) North China (RMB/mt) South China (RMB/mt)
SCRWF (Hainan) 18700 (state, old resources) - -
SCR5 (Hainan) 17200 (private) - -
SCRWF (Yunnan) 20100 (state) 19300-19400 (private) -
SCR10 (Yunnan) 17100 (state) 17100-17200 (private) -
Thai RSS3 19600 (17% VAT) 18500 (no tax) -
SVR3L 18200 (17% VAT) 17300 (no tax) 17200 (no tax)
Thailand: Natural Rubber prices on September 11, 2013
Baht / kg
Official  Noon Price  – RRIT,DOA
Type / Grade F.O.B. Price 
October 2013 November 2013
Bangkok Songkhla Bangkok Songkhla
RSS 1 87.55 87.30 87.75 87.50
RSS 2 86.95 86.70 87.15 86.90
RSS 3 86.40 86.15 86.60 86.35
RSS 4 86.10 85.85 86.30 86.05
RSS 5 85.65 85.40 85.85 85.60
STR 5L 82.70 82.45 82.90 82.65
STR 5 80.80 80.55 81.00 80.75
STR 10 80.10 79.85 80.30 80.05
STR 20 79.70 79.45 79.90 79.65
Concentrated Latex * 55.30 55.05 55.50 55.25
Remark : Concentrated Latex quote in Bulk
TOCOM (12/09/2013)
Current Trading (17:00 - 15:30) As of Sep 12, 2013 12:15 JST
Trade Date: Sep 12, 2013   Prices in yen / kilogram  
Month Last Settlement Price Open High Low Current Change Volume Settlement
Sep 2013 270.0 269.8 269.8 267.8 268.0 -2.0 16 -
Oct 2013 270.9 272.0 272.0 268.4 269.5 -1.4 30 -
Nov 2013 273.3 274.2 274.5 270.2 271.2 -2.1 22 -
Dec 2013 276.2 277.7 277.8 272.6 273.0 -3.2 82 -
Jan 2014 279.8 280.3 281.3 275.7 276.8 -3.0 597 -
Feb 2014 283.0 283.5 284.3 278.5 279.8 -3.2 3,350 -
Total   4,097  
SHANGHAI (12/09/2013)
  2013-09-12 10:45:55 Contract Last Chg Open Interest Volume Turnover Bid-Ask Pre-clear Open Low High Lastv Comment ru1309 18510 -195 5198 68 12596500 18405/18530 18705 18600 18405 18610 【tick】 ru1310 18700 -215 414 48 8973500 18715/18780 18915 18750 18650 18750 【tick】 ru1311 18860 -195 3234 188 35434300 18870/18900 19055 18935 18715 18970 【tick】 ru1401 20540 -80 186982 270336 55452845500 20540/20545 20620 20615 20370 20660 44 【tick】 ru1403 20770 -115 146 14 2910000 20775/20865 20885 20900 20695 20900 【tick】 ru1404 20870 -100 180 24 5012900 20890/20950 20970 21015 20780 21015 【tick】 ru1405 21030 -90 44388 38938 8172271400 21025/21030 21120 21095 20825 21140 【tick】 ru1406 21045 -220 142 14 2954000 21090/21195 21265 21200 21045 21200 【tick】 ru1407 21130 -50 84 0 21120/21390 21180 【tick】 ru1408 21165 -240 148 2 423300 21130/21310 21405 21165 21165 21165 【tick】
AFET (12/09/2013)
RSS3 (Natural Rubber Ribbed Smoked Sheets No 3)  Click for RSS's 3 bid & offer price Click for RSS3's relevant date Click for RSS3's historical chart Click for TOCOM's price Click for Auction's price contract = 5,000 kg; price quotation = Baht/kg Contract
Month Open High Low Bid
Vol. Bid Offer Offer
Vol. Last Last
Vol. Chg. Settle. Price Volume Open Interest Prev. New Chg. Total* EFP
Req. Prev. Curr. Chg. OCT 13       4 81.60 85.70 1       85.60     0   301     NOV 13       1 85.50 87.00 1       86.50     0   209     DEC 13       1 86.55 87.45 1       88.00     0   162     JAN 14       1 87.00 88.00 1       88.10     0   193     FEB 14 88.00 88.00 88.00 1 87.50 88.50 2 88.00 1 -0.50 88.50     1   511     MAR 14 88.50 88.50 88.50 1 88.05 88.50 1 88.50 1 -0.80 89.30     2   569     APR 14 89.50 89.50 89.00 2 88.90 89.20 1 89.00 2 -1.00 90.00     24   468     Total 27   2,413
SICOM –STR20 (12/09/2013)
Contract MonthLastChg From Prev SettleBidAskOpenHighLowCloseVolOpen IntSettlePrev. Day SettleE10 13243.5-3.5241.9244.5244.0244.2243.5-1283,929-247.0E11 13243.3-3.2243.4244.1243.9244.0243.3-574,858-246.5E12 13244.0-3.4244.1244.7246.7246.7243.9-664,167-247.4E1 14244.1-3.1244.0244.6246.5246.6243.8-1412,685-247.2E2 14244.5-3.0244.3245.1247.0247.0244.5-713,208-247.5E3 14244.0-3.2244.2245.0245.5245.5244.0-25917-247.2E4 14244.8-3.3244.2245.1244.8244.8244.8-5420-248.1E5 14--244.5245.2-----339-248.4E6 14--244.5245.3-----308-248.4E7 14--244.5245.3-----75-248.5E8 14--244.5245.5-----30-248.6E9 14--244.5245.6-----0-248.8
Commodity Currency Last Change % Change Trade Date/Time
LIGHT CRUDE CON1  Sep13 USD 107.62 +0.06 +0.06% 09/10 23:05
NO 2 HT OIL CON1  Sep13 USD 3.08 +0.00 +0.14% 09/10 23:07
NATURAL GAS CON1  Sep13 USD 3.56 -0.01 -0.28% 09/10 23:06
100 OZ GOLD CON1  Sep13 USD 1,360.00 -3.90 -0.29% 09/10 22:58
SILVER 5000 CON1  Sep13 USD 23.14 +0.02 +0.08% 09/10 20:04
HG COPPER CON1  Sep13 USD 3.25 -0.01 -0.20% 09/10 22:31
CORN CON1  Sep13 USC 479.50 -0.25 -0.05% 09/10 21:42
WHEAT CON1  Sep13 USC 632.75 +1.25 +0.20% 09/11 14:07
SOYBEANS CON1  Sep13 USC 1,408.00 +2.75 +0.20% 09/10 22:19
SUGAR 11 CON1  Sep13 USC 17.14 -0.04 -0.23% 09/11 13:59
COFFEE C CON1  Sep13 USC 116.00 +3.65 +3.25% 09/11 11:49
COCOA CON1  Sep13 USD 2,533.00 -11.00 -0.43% 09/11 10:43
FROZEN OJ CON1  Nov13 USC 135.30 -1.70 -1.24% 09/11 13:59
COTTON NO 2 CON1  Oct13 USC 84.90 +0.05 +0.06% 09/11 14:12
LIVE HOGS CON1  Oct13 USC 90.57 +0.28 +0.30% 09/10 23:07
LIVE CATTLE CON1  Oct13 USC 125.15 +0.10 +0.08% 09/10 23:05
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