Thursday, May 5, 2011

20110505 0946 Global Market Related News.

  DJIA chart reading : pullback correction upside biased.

Hang Seng chart reading : downside biased with possible pullback correction.

Asia's growth to cool as inflation heats up
SINGAPORE May 4 (Reuters) - Soaring food and energy prices may temper Asia's economic outlook this year, putting central bankers in a tight spot as they try to cap inflation without choking off growth, Reuters polling data shows.
Economists have marked down 2011 growth forecasts for India and Australia since the start of the year, while they pushed up both growth and inflation forecasts for China. Growth estimates also brightened a bit for countries including Indonesia, Malaysia and Taiwan.

Asian Stocks Drop on Concern U.S. Economic Recovery is Waning (Source: Bloomberg)
Asian stocks declined, dragging a regional benchmark index lower for a third day, as reports that showed lower-than-forecast growth in U.S. service industries and employment sparked concern the recovery in the world’s biggest economy is faltering.

ADB Says 3 Billion People in Asia May Reach Europe-Level Incomes by 2050 (Source: Bloomberg)
Asia’s growth can propel three billion people to affluent levels by 2050 should policy makers successfully narrow inequalities and avoid falling into a so- called middle-income trap, the Asian Development Bank said. Successful national and regional policies may boost Asia’s gross domestic product to $148 trillion by mid-century, making up 51 percent of global output in 2050, the Manila-based lender said in a report today. In another scenario, where countries such as China, India, Indonesia and Vietnam see growth slow and others fail to stoke their expansions, the region would account for 32 percent, or $61 trillion, of global GDP in 2050, it said.

ADP Estimates U.S. Companies Added 179,000 Jobs in April (Source: Bloomberg)
Companies in the U.S. added workers in April, signaling the labor market is strengthening, data from a private report based on payrolls showed today. Employment increased by 179,000 in April from a revised 207,000 the prior month, according to figures from ADP Employer Services. The median estimate in the Bloomberg News survey called for a 198,000 advance this month.

Treasuries Rise After Report of Services Slump; Bill Rates Fall to Record (Source: Bloomberg)
Treasuries rose, pushing 10-year note yields to a six-week low, as private reports showed service industries in the U.S. expanded less than forecast in April and companies added fewer jobs last month than projected. Six-month bill rates reached a record low for a third consecutive day with the U.S. reducing sales of short-term securities as lawmakers negotiate an increase in the $14.3 trillion federal debt ceiling. The Treasury said it will auction $72 billion in 3-, 10- and 30-year debt next week even with the U.S. likely to exceed its borrowing capacity before or after Aug. 2. Federal Reserve Bank of Boston President Eric Rosengren said stimulus is necessary to spur the “anemic” economy.

U.S. factories busy in March, car sales up
WASHINGTON, May 3 (Reuters) - U.S. factory orders surged in March, posting a fifth straight monthly increase that showed a healthy manufacturing sector well placed to support economic recovery.
The Commerce Department said on Tuesday new orders for manufactured goods rose 3 percent to a seasonally adjusted $463 billion, well above Wall Street economists' forecasts for a 1.9 percent pickup.

U.S. Service Industries Expand at Weakest Pace Since August as Orders Cool (Source: Bloomberg)
Service industries in the U.S. expanded in April at the slowest pace in eight months as companies cut back in response to higher energy costs.

U.S. Treasury to Sell $72 Billion in Long-Term Debt, Sees ‘Steady’ Sales (Source: Bloomberg)
The U.S. Treasury Department plans to sell $72 billion in its quarterly sales of long-term debt next week and anticipates auction sizes will “remain steady” as Congress and the White House debate raising the debt limit.

Fed’s Williams Says High Inflation Is ‘Very Unlikely’ as Commodities Ease (Source: Bloomberg)
Federal Reserve Bank of San Francisco President John C. Williams said a period of high inflation is “very unlikely” because rising commodity prices spurred by global demand aren’t likely to keep climbing. “The economy today faces many pitfalls, but I don’t believe that runaway inflation is one of them,” the regional bank chief said today in his first policy speech as a central bank official. Even so, “one of the most important policy questions we are grappling with at the Fed has to do with inflation.”

Employers in U.S. Announced 4.8% Fewer Job Cuts in April, Challenger Says (Source: Bloomberg)
U.S. employers announced fewer job cuts in April than the same month last year, a sign that the labor market is firming. Planned firings decreased 4.8 percent to 36,490 last month from April 2010, according to a report today from Chicago-based Challenger, Gray & Christmas Inc. Government agencies accounted for the biggest cutbacks by industry.

California Tax Revenue $2.3 Billion Ahead of Plan, May Help Shave Deficit (Source: Bloomberg)
California has collected $2.3 billion more from income taxes this fiscal year than was projected, a gain that may help Governor Jerry Brown and lawmakers fill what remains of a $26 billion deficit. Income-tax collections, which compose about 55 percent of general-fund revenue, were 5.1 percent above what was anticipated for July 1 through April 30, the nonpartisan Legislative Analyst’s Office said in a report today. At the same time, corporate taxes were $654 million below projections.

China’s ‘Hawkish’ Central Bank May Tighten Even as Economic Growth Cools (Source: Bloomberg)
China’s central bank said taming inflation is its top priority, signaling that more tightening is possible even after a manufacturing survey showed that growth may be moderating in Asia’s biggest economy. “Stabilizing prices and managing inflation expectations are critical,” the People’s Bank of China said in a first- quarter monetary policy report published yesterday. Bank reserve requirements have no “absolute ceiling,” the report said, restating Governor Zhou Xiaochuan’s comment on April 16.

China inflation to ease in second half -c.banker
BEIJING, May 4 (Reuters) - Chinese inflation will moderate in the second half of the year as government measures to curb price rises hit their mark, a vice central bank governor said in remarks published on Wednesday.
The official China Securities Journal also cited Yi Gang as saying that China would keep mopping up excess cash in the economy by raising banks' required reserves and issuing central bank bills.

Trichet’s ‘Close Call’ Decision May Signal How Fast ECB Will Raise Rates (Source: Bloomberg)
European Central Bank President Jean- Claude Trichet today may indicate just how fast he’s prepared to raise interest rates over the coming months. While policy makers meeting in Helsinki will keep the benchmark rate at 1.25 percent, according to all 48 economists in a Bloomberg News survey, any pledge by Trichet for “strong vigilance” would signal an increase as soon as June. The Frankfurt-based central bank in April raised borrowing costs from a record low for the first time in almost three years.

Greece Should Get Loan Terms Extended to Avoid Restructuring, Adviser Says (Source: Bloomberg)
Greece doesn’t need to restructure its debt for now and should only consider an extension of its international loans, said Herakles Polemarchakis, an economic adviser to Greek Prime Minister George Papandreou. “The debt has to be addressed,” Polemarchakis said in an interview at an event late yesterday at the London School of Economics. “I think that the rescheduling -- or re-profiling as it is called sometimes -- of the 100 billion euros given by the International Monetary Fund and the European Union, that’s something that could easily be done.”

Lagarde Says Euro’s Strength Brings Benefits by Cutting Raw-Material Costs (Source: Bloomberg)
A strong euro benefits the region’s companies as it cuts costs of raw materials priced in dollars and forces European firms to seek additional ways to boost competitiveness, French Finance Minister Christine Lagarde said. The euro is doing “extremely well” Lagarde said in an interview with Bloomberg Television in Hanoi, even as she added that she would like to see a “strong dollar.” The European currency has advanced 11 percent against the dollar so far this year as the European Central Bank raised rates and the Federal Reserve continued to pledge “exceptionally low” borrowing costs.

U.K. House Prices Fell for the First Time in Three Months, Nationwide Says (Source: Bloomberg)
U.K. house prices fell in April for the first time in three months and values will probably remain unchanged or decline “modestly” during the rest of this year, Nationwide Building Society said. The average cost of a home declined 0.2 percent from March to 165,609 pounds ($273,800), Britain’s biggest customer-owned lender said in an e-mailed report today. That’s the first decrease since January and compares with the median forecast for a 0.1 percent increase in a Bloomberg News survey of 14 economists.

Russia to Resist Rushing Higher Rates Even as Prices Climb, Economists Say (Source: Bloomberg)
Russia will avoid speeding up interest-rate increases even after inflation accelerated last month as central bankers seek to avoid choking economic growth, economists said. The inflation rate climbed to 9.6 percent from 9.5 percent in March, matching the fastest pace since October 2009, a report showed yesterday. The central bank unexpectedly raised its main interest rates last week for a second time this year to rein in price growth. At 8.25 percent, the refinancing rate remains negative when adjusted for inflation.

Euro Snaps Decline Versus Yen on Speculation ECB Will Signal Higher Rates (Source: Bloomberg)
The euro snapped a two-day decline versus the yen on speculation European Central Bank President Jean-Claude Trichet will signal more interest-rate increases after a policy meeting today. The single currency traded within 0.3 percent of a 13-month high versus the pound before a German report that economists said will factory orders gained for a third month, adding to signs the region is picking up. New Zealand’s dollar rose after a government report showed employers added more jobs in the first quarter than economists forecast.

Mexico, Russia, Thailand Add $6 Billion of Gold to Reserves, IMF Data Show (Source: Bloomberg)
Mexico, Russia and Thailand added gold now valued at about $6 billion to their reserves in February and March as prices advanced to a record, the dollar weakened and Treasuries lost investors money. Mexico bought 93.3 metric tons since January, adding to holdings of about 6.9 tons, according to International Monetary Fund data. Russia increased its reserves by 18.8 tons to 811.1 tons in March and Thailand expanded assets by 9.3 tons to 108.9 tons in the same month, the data show.

FOREX-Euro holds slim gains vs dollar, awaits Portugal news
NEW YORK, May 3 (Reuters) - The euro was up slightly against the dollar on Tuesday in choppy trading and was likely to post further gains this week on institutional buying as investors expected more euro zone rate hikes.
But weakness in stocks and commodities has limited gains in the euro, with investors paring back risky trades amid fears of a geopolitical backlash following the death of al Qaeda leader Osama bin Laden.

Stocks dip; Portugal yields fall after bailout
LONDON, May 4 (Reuters) - World stocks fell further from last week's three-year high as falling commodity prices and concerns about signs of economic slowdown in China prompted investors to scale back their risky positions. Portuguese bond yields fell after Portugal agreed a three-year 78-billion-euro ($116 billion) bailout with the European Union and IMF on Tuesday, becoming the third euro zone country in a year, after Ireland and Greece, to seek financial aid.

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