Tuesday, April 19, 2011

20110419 0933 Global Market Related News.

DJIA chart reading : side way range bound.







Hang Seng chart reading : correction range bound upside biased.

G-20 Targets ‘Too Big to Ignore’ Economies as Growth Will Outweigh Shocks (Source: Bloomberg)
The U.S., China and five other large economies will face deeper scrutiny from their peers to ensure their policies don’t derail a global expansion that finance chiefs bet is strong enough to absorb recent shocks.

Asian Stocks Retreat as U.S. Credit Outlook Cut; Tepco Slides on Radiation (Source: Bloomberg)
Asian stocks fell, leading the benchmark index lower for a third day, after Standard & Poor’s Ratings Service cut the U.S. long-term credit outlook, fueling concern that a recovery in the global economy may slow.

Sales Increases at More U.S. Companies Signal Payroll Gains, Survey Shows (Source: Bloomberg)
More U.S. companies than at any time since 1994 reported sales gains in the first quarter, a sign they’ll keep hiring and investing, a survey showed. The percentage of businesses reporting an increase in sales in the past three months climbed to 63 percent, while fewer companies said revenue fell, according to a survey issued today by the National Association for Business Economics.

Standard & Poor’s Puts ‘Negative’ Outlook on U.S. AAA (Source: Bloomberg)
Standard & Poor’s put the U.S. government on notice that it risks losing its AAA credit rating unless policy makers agree on a plan by 2013 to reduce budget deficits and the national debt.

China Must Cut Foreign-Exchange Reserves, PBOC’s Zhou Says (Source: Bloomberg)
China needs to reduce its foreign- exchange reserves as they exceed the level the nation requires, central bank Governor Zhou Xiaochuan said. The management and diversification of the holdings, which topped $3 trillion at the end of March, should be improved, Zhou said after a speech at Tsinghua University in Beijing late yesterday. The rapid accumulation is putting pressure on the sterilization operations of the People’s Bank of China, he said.

China Crops in Short Supply as Fewer Farms Spur Food Futures (Source: Bloomberg)
Across the road from Zhao Yuanyi’s wheat field in China’s Shandong province, Chonche Group is expanding a rail-car factory on what used to be 227 hectares of farms. Nearby, Geely Automobile Holdings Ltd. makes sedans on an 87 hectare site that four years ago was covered by crops. The factories sprawling from Jinan city, 350 kilometers (220 miles) south of Beijing, put Zhao on the front line of a clash between a policy of food self-sufficiency and industrial growth that made China the world’s second-biggest economy. Industrialization is winning, signaling prices for crops like wheat and corn will rise as China is increasingly unable to feed itself and vies for supplies on global markets.

China Housing Price Gains Slow in Beijing, Shanghai Amid Increased Curbs (Source: Bloomberg)
China’s new home price growth slowed in Beijing and Shanghai in March as the government intensified property curbs, sending the property stock index to one-month high. New home prices in the capital of Beijing rose 4.9 percent in March from a year earlier, easing from a 6.8 percent gain in February, the statistics bureau said on its website today. In Shanghai, the country’s financial hub, prices climbed 1.7 percent last month, down from 2.3 percent growth in February. Of the 70 cities monitored by the government, 67 cities posted gains, down from 68 in the first two months, the data showed.

China regions face power shortage even before summer peak
BEIJING, April 18 (Reuters) - Central China's Hubei province has joined a growing list of regions facing coal shortages, with a warning on Monday that it is very likely to start rationing power this month if coal supplies remain tight and low water stocks continue to curb hydropower generation.
China has warned that power shortages this summer could be the worst for years, with power generation and transmission systems unable to cope with rising demand. The east, north and south of China are likely to be hit the hardest.

Yen Strengthens Versus Dollar, Euro Amid Sovereign Debt Concerns (Source: Bloomberg)
The yen rose against the dollar and euro for a fourth day as investors flocked to safer assets on concern Europe’s debt crisis is worsening and after Standard & Poor’s changed its credit outlook on the U.S. to negative.

Japan’s 10-Year Yields at Two-Week Low as Asia Stocks Extend Global Slide (Source: Bloomberg)
Japan’s benchmark bond yields were at a two-week low as local shares extended a sell-off around the world after Standard & Poor’s cut the U.S.’s credit outlook to negative. Bond futures rose for a fifth day as the yen appreciated, clouding the earnings outlook for Japanese exporters. Demand for the relative safety of government securities was also bolstered on concern Greece will be unable to avoid a default.

Robots Find High Radiation as Tokyo Electric Lays Out Plan to End Crisis (Source: Bloomberg)
Robots sent into two buildings at Japan’s crippled Fukushima Dai-Ichi nuclear station detected radiation still too toxic for humans as the plant operator set out a plan to end the crisis in six to nine months.

Greek Default Drive Risks Reviving Euro-Region Contagion as Bonds Plunge (Source: Bloomberg)
European investors and politicians prodding Greece to restructure its debt may end up wishing they hadn’t. Talk of restructuring spurred by Germany risks re-igniting Europe’s debt crisis, enveloping Spain just weeks after European leaders said bailouts of Greece, Ireland and Portugal ended contagion. Under a Greek default, Europe’s financial system would strain as banks in and outside Greece and holders of Greek bonds, such as the European Central Bank and domestic pension funds, tally losses.

ECB Officials Signal More Rate Increases This Year as Economy Strengthens (Source: Bloomberg)
European Central Bank Governing Council members signaled they will keep tightening monetary policy this year to curb inflation as the economy strengthens. Investor expectations that the benchmark interest rate will be increased by another 50 basis points in 2011 are “well- founded,” Austria’s Ewald Nowotny told Bloomberg News in Washington on April 16. Luc Coene of Belgium said in an interview yesterday that monetary “conditions are too accommodative.”

Wellink Calls ECB Rate Increase a Signal to Anchor Inflation Expectations (Source: Bloomberg)
European Central Bank Governing Council Member Nout Wellink said the central bank’s April 7 interest rate increase sent to investors an “extremely important” signal aimed at preventing expectations of higher inflation. While Wellink didn’t explicitly ratify market and economist forecasts that the ECB’s policy rate will rise a further 50 basis points this year to 1.75 percent, he made it clear the central bank will keep inflation control its main policy goal.

Investment Funds Claim Banks Conspired to Manipulate London Interbank Rate (Source: Bloomberg)
Three European asset management firms accused banks including Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), HSBC Holdings Plc (HSBA), Barclays Bank Plc, Citibank NA and Credit Suisse Group AG (CSGN) of conspiring to manipulate the London interbank offered rate. The banks sold Libor-based futures, options, swaps and derivative instruments “at artificial prices that defendants caused,” harming investors, FTC Capital GmbH of Vienna, FTC Futures Fund SICAV of Luxembourg and FTC Futures Fund PCC Ltd. of Gibraltar said in an April 15 complaint in New York federal court.

European Stocks Retreat After S&P Revises U.S. Rating Outlook to Negative (Source: Bloomberg)
European stocks dropped the most in three weeks as Standard & Poor’s Ratings Service revised its credit outlook for the U.S. to negative and speculation escalated that Greece needs to restructure its debt.

Spanish Borrowing Costs Rise at Auction of Treasury Bills as Demand Falls (Source: Bloomberg)
Spain sold 4.66 billion euros ($6.68 billion) of bills, and its borrowing costs rose as investors increased bets Greece will restructure its debt and a euro-skeptic party increased its support in Finnish elections. The Treasury said it sold 3.5 billion euros of 12-month bills at an average yield of 2.77 percent, compared with 2.128 percent at the previous auction on March 15. It also sold 1.15 billion euros of 18-month bills at 3.364 percent, compared with 2.436 percent in March.

Kenny Says Ireland Won't Default on Debt as Greece Investor Concerns Mount (Source: Bloomberg)
Irish Prime Minister Enda Kenny said the nation won’t default on its debt as he tries to rebuild confidence at a time when investors speculate Greece may struggle to pay back its borrowings.

Australian, N.Z. Dollars Weaken for Second Day on Sovereign Debt Concerns (Source: Bloomberg)
The Australian and New Zealand dollars fell for a second day versus the greenback after Standard & Poor’s cut the U.S. long-term credit outlook to negative, damping demand for higher-yielding assets.

FOREX-Euro slides broadly; debt troubles resurfacing
LONDON, April 18 (Reuters) - The euro fell broadly in thin trade on Monday, testing an area of key support against the dollar on increased talk that Greece will be forced to restructure its debt and uncertainty over a bailout for Portugal.
The euro  fell to an 11-day low around $1.4274, down over one percent on the day, though traders expected further losses to be restricted by demand from central banks looking to recycle dollar proceeds.

Euro falls on profit taking, Asian stocks flat (Source: Reuters)
The euro weakened on a broad wave of profit-taking though could rebound later in the day, while stocks in Asia ex-Japan remained flat, with investors unconvinced that China's latest moves to cool its economy would hurt the global recovery. "This probably mostly has to do with market sentiment. In the end, I think what it probably boils down to is that there are still some long positions in the euro," said Koji Fukaya, director of global foreign exchange research for Credit Suisse Securities in Tokyo, referring to the euro's drop.

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