U.K. Inflation Quickens More Than Forecast (Bloomberg)
U.K. inflation accelerated to match a record high in September, a surge Bank of England policy makers set aside as they shifted their focus to combating the threat of another recession. Consumer prices rose 5.2 percent from a year earlier, compared with 4.5 percent in August, the Office for National Statistics said in London today. That matched the record high reached in September 2008, which was the highest since comparable records began in 1997. The median estimate of 35 economists in a Bloomberg News survey was 4.9 percent. Bank of England Governor Mervyn King has said consumer-price growth will probably peak in September and slow “sharply” in 2012.
The Bank of England restarted asset purchases on Oct. 6 to protect Britain’s recovery from risks related to the euro-area debt crisis, and some officials have since signaled they may add to the emergency stimulus if needed. King will deliver a speech in Liverpool later today and minutes of the decision showing how policy makers voted this month will be published tomorrow.
Moody's warns France on possible negative outlook (Reuters)
Moody's warned on Monday it may slap a negative outlook on France's Aaa credit rating in the next three months if the costs for helping to bail out banks and other euro zone members stretch its budget too much. The warning comes as European Union leaders are discussing measures to protect the region's financial system from an expected Greek debt default. Those measures should include injection of capital into banks with exposure to Greek debt. France and Germany are the two strongest economies among the 17 euro zone members, and they are spearheading a plan to be presented at an EU summit on Sunday to help resolve the region's debt crisis. France's progress on crucial fiscal and economic reforms as well as potential adverse developments in financial markets or the economy will also be taken into account under the review, Moody's said.
A negative outlook would be a sign that Moody's could downgrade its rating on France in the next couple of years. Moody's had placed the United States's Aaa rating on negative outlook in August. "The deterioration in debt metrics and the potential for further contingent liabilities to emerge are exerting pressure on the stable outlook of the government's Aaa debt rating," Moody's said in a statement.
China’s Stocks Drop Most this Month After Economy Slows More than Expected (Bloomberg)
China’s stocks fell, sending the benchmark index to its biggest loss in almost a month, after the economy grew at the slowest pace in two years and Germany damped expectations for a fast resolution to Europe’s debt crisis. PetroChina Co. and Jiangxi Copper Co., the nation’s largest oil and copper producers, led declines by commodity producers after gross domestic product expanded less than analysts’ estimates. China Vanke Co., the biggest developer, slid 2 percent after home prices gained in fewer than half of 70 cities as sales eased. Sinohydro Group Ltd., the nation’s largest builder of hydroelectric dams, jumped 17 percent in China’s biggest initial public offering this year. “The economic growth number wasn’t too bad but the European crisis is still a hangover for the stock market,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “A lack of cash also caps gains in stocks.”
Hong Kong Stocks Retreat Most in a Month as China Growth Misses Estimates (Bloomberg)
Hong Kong’s Hang Seng Index (HSI) tumbled toward its biggest drop in four weeks after China reported the slowest economic growth since 2009 and Germany doused expectations of a quick fix to Europe’s debt crisis. Aluminum Corp. of China Ltd. fell 7.7 percent after commodities prices slid on concern global growth will slow. China Overseas Land & Investment Ltd. (688), a builder controlled by the nation’s construction ministry, dropped 9.5 percent, leading developers lower after lenders in cities across the country raised mortgage rates. Industrial & Commercial Bank of China (601398) Ltd., the world’s largest lender by market value, retreated 7 percent after mainland economic growth slowed.
The Hang Seng Index dropped 4.8 percent to 17,972.79 as of 3:36 p.m. local time, headed for its biggest decline since Sept. 22. All but two stocks fell on the 46-member gauge, which accelerated its drop as European shares sank. The Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong plunged 5.8 percent to 9,280.92.
European Stocks Fall on Debt Crisis, China (Bloomberg)
European stocks fell for a second day amid growing concern the region’s leaders are struggling to contain the debt crisis and as China’s economy grew at the slowest pace in two years. Asian shares and U.S. futures slid. The benchmark Stoxx Europe 600 Index lost 1.4 percent to 232.99 as of 8:11 a.m. in London. The gauge retreated 1 percent yesterday as a German government spokesman said that euro-area leaders will not provide a complete fix to the debt crisis at their next meeting. The gauge has slumped 20 percent since this year’s high on Feb. 17 amid concern Europe’s sovereign debt crisis will dampen economic growth. “The renewed prospect of failure is going to keep the euro zone story very much in focus,” said Cameron Peacock, a market analyst at IG Markets in Melbourne. “Even the occasional shock on the corporate agenda is unlikely to shift attention away from sovereign debt.”
The MSCI Asia Pacific Index retreated 2.5 percent today, while Standard & Poor’s 500 Index futures declined 0.1 percent before companies from Johnson & Johnson to Bank of America Corp. and Goldman Sachs Group Inc. report earnings.
German comments, China slowdown drag stocks lower
TOKYO, Oct 18 (Reuters) - Asian stocks and commodities fell after Germany's finance minister cautioned against hopes for a quick fix to Europe's debt problem, and news that China's economic growth slowed a tad in the third quarter added to concerns.
"The pace of moderation has so far been measured, and today's numbers reinforce our view that a soft landing is in sight," said Connie Tse, Economist at Forecast in Singapore.
Worries Persist for IBM (The Wall Street Journal)
Tech Bellwether's Profit Up 7%, but Contracts Disappoint
International Business Machines Corp.'s quarterly profit and sales rose amid growth in emerging markets, but the technology giant failed to dispel investors' concerns about the health of technology spending. IBM has been hampered by concerns over weak technology spending, particularly by governments. IBM, one of the first big tech companies to post quarter results, is seen as a barometer for investment in technology by governments and corporations. While IBM has benefited from a push toward higher-margin businesses, such as data-analysis services, worries have emerged that the weak global economy is having a negative impact on tech spending, particularly by governments.
Those worries were exacerbated Monday by a disappointing number of signed service contracts, an indication of future business, and a sequential decline in the company's backlog, which measures the current value of work under contract. IBM on Monday reported new service contracts worth $12.3 billion, up 12% from the previous year, but below $14.3 billion in the second quarter. Meanwhile, IBM's services backlog slipped to $137 billion from $144 billion in the second quarter.
FOREX-Euro off 1-mth high as crisis plan optimism ebbs
SINGAPORE, Oct 18 (Reuters) - The euro rose on Tuesday but remained below the previous day's one-month high, having taken a hit after Germany tempered hopes that European leaders would soon come up with a quick, comprehensive solution to the euro zone's debt crisis.
The euro regained some ground after a 1 percent drop the previous day, with market positioning and some technical signals suggesting that its recent short-covering rally may be running out of steam.
Soybeans, corn fall as harvest weighs
KUALA LUMPUR, Oct 18 (Reuters) - U.S. soybeans and corn fell, weighed down by a pickup in harvest and a gloomy economic outlook that raised concerns demand will slow.
U.S. soy futures for November delivery on the Chicago Board of Trade declined for a second straight day, dropping 0.4 percent to $12.47-3/4 a bushel by 0056 GMT after hitting a two-week high on Friday.
Weather points to record Paraguay soy crop-industry
ASUNCION, Oct 17 (Reuters) - Paraguay could produce a record soy crop of between 8.5 million and 9 million tonnes this season due to forecasts for more rains than expected over the next few months, an industry official said on Monday.
Farmers in the world's No. 4 soybean exporter had feared that dry weather related to the La Nina weather anomaly could limit 2011/12 soy production.
Mexico coffee exports rise in 10/11, Nicaragua down
MEXICO CITY, Oct 17 (Reuters) - Mexico exported 2.7 million 60-kg bags of coffee in the 2010/11 harvest, which drew to a close last month, 6 percent higher than the previous season; nearby Nicaragua saw exports fall in the same period.
Nicaragua exported 1.5 million bags of coffee in the October-September coffee growing year, down 9.5 percent from the 2009/10 harvest, the national export board said on Monday.
Rains hamper Brazil's cane harvest but should ease
SAO PAULO, Oct 17 (Reuters) - Persistent rains over the past few days have hindered cane harvesting in Brazil's main center-south cane producing region, but the weather should turn dry again soon, meteorologists Somar said on Monday.
More than 20 mills out of about 350 in the region have finished crushing for the 2011/12 season, about twice as many as a year ago, as the center-south posts its first drop in output in 11 years.
Drenched Brazil soy fields to dry out - Somar
SAO PAULO, Oct 17 (Reuters) - A wave of rains drenched Brazil's soy belt over the past several days, which will favor planting as skies clear this week, local forecasters Somar said on Monday.
After a slow start to rains over Brazil's main center-west soy producing states, showers pushed into the region over the past week with greater consistency, bringing ample moisture to some regions.
Vietnam raises 2011 rubber exports forecast
HO CHI MINH CITY, Oct 17 (Reuters) - Vietnam, the world's fourth largest natural rubber exporter, has raised its rubber export forecast for this year to 780,000-800,000 tonnes from a prior projection of 770,000 tonnes due to higher output, an industry official said on Monday.
"The output is rising as the planting area has been expanded," General Secretary Tran Thi Thuy Hoa of the Vietnam Rubber Association said.
Brent slips below $110 as China growth slows
SINGAPORE, Oct 18 (Reuters) - Brent crude futures fell below $110, after China's economy grew a shade below expectations in the third quarter, failing to dispel fears of slowing growth in the world's second largest oil consumer.
"I wouldn't call it a downside surprise, the numbers still indicate a soft landing, but not enough to lift commodity prices in the current environment," said Ric Spooner, chief market analyst with CMC Markets in Sydney.
Libya oil fields face guerrilla war threat
LONDON, Oct 17 (Reuters) - Pro-Gaddafi fighters may resort to hit-and-run guerilla attacks against Libyan politicians, foreign workers and oil installations in the remote southwestern Fezzan district if they are driven from their last bastions, risk consultants say.
A full-scale insurgency like the one that erupted in Iraq following the ouster of Saddam Hussein by U.S.-led forces is unlikely, but a determined guerrilla campaign could make life difficult for Libya's new rulers and foreign oil companies considering a return.
Copper falls after German comments, China GDP weighs
SHANGHAI, Oct 18 (Reuters) - Copper extended losses after German comments that the European Union summit would not produce a miracle cure for the euro zone's debt crisis, while China's economic growth data that came in a shade lower than expected also weighed on sentiment.
"I doubt that the price downturn today was due to pessimism over China's GDP. I will put it more to the German minister's comments last night. Copper is highly sensitive to negative news in the global economy and today's fall reflects this," said CIFCO Futures analyst Zhou Jie.
Freeport Indonesia mine halts copper output
JAKARTA, Oct 17 (Reuters) - Freeport-McMoRan Copper & Gold halted production at its Grasberg mine in Indonesia on Monday because of security fears and worker blockades, in the worst supply disruption since a strike began a month ago.
Freeport said the main pipe carrying copper concentrate to its port from Grasberg, the world's second-biggest copper mine, was cut earlier on Monday, helping copper prices to rise.
Azerbaijan to restart aluminium, alumina output
BAKU, Oct 17 (Reuters) - Azerbaijan has launched a new aluminium plant with an annual capacity of 50,000 tonnes and plans to restart production of alumina later this year at another plant, an official from the company, which manages both plants, said on Monday.
An old Soviet-era aluminium plant in the town of Sumgait was closed down in February 2009 due to the global financial crisis, dragged down by debt obligations it could not meet.
Aluminium stocks double at Rotterdam
LONDON, Oct 17 (Reuters) - Stocks of aluminium have almost doubled at the port of Rotterdam in the last three to six months, Jouke Schaap, director of breakbulk at the port, said on Monday.
"We have got 2.0-2.5 million tonnes of stocks of aluminium lying around the port right now, and that's never a good sign," he told Reuters on the sidelines of a Metal Bulletin steel conference, adding that compared with levels of around 1 million to 1.5 million tonnes usually.
Major market developments in September
LONDON, Oct 17 (Reuters) - Aluminium prices were pounded in September by growing concerns for global demand prospects and, while the market has steadied above those lows, some analysts expect it to fall back to levels where producers will start to curb output.
"I think metals prices generally will move up in the next week or so, but after that they'll fall again," said Fastmarkets analyst Will Adams, unconvinced that efforts to deal with the euro zone debt crisis will succeed.
China Sept steel output up 16.5 pct y/y - stats bureau
BEIJING, Oct 18 (Reuters) - China produced a total of 56.7 million tonnes of crude steel in September, up 16.5 percent against the same month of 2010, but down 3.5 percent compared with August, figures from the country's statistics bureau showed on Tuesday.
On a daily basis, output stood at 1.89 million tonnes, down slightly from 1.895 million tonnes in the previous month, according to Reuters calculations.
Chile 2011-2018 mining investment, output up-Sonami
SANTIAGO, Oct 17 (Reuters) - Chilean mining production is seen jumping between 2010 and 2018 as the world's top copper exporter boosts its output of the red metal, gold and iron, an industry group said on Monday.
Copper output is seen increasing from 5.4 million tonnes in 2010 to 8.0 million tonnes in 2018, as new projects and mine revamps help boost production hit by lower ore grades, labor strife and weather disruptions.
Major market developments in September
LONDON, Oct 17 (Reuters) - Nickel prices recorded heavy losses in September, but have since steadied helped by optimism that the euro zone's debt crisis will be dealt with successfully, but further weakness could prompt higher cost producers to act.
"I expect nickel to fall below $18,000 again and if prices stay there for any length of time then it would get some support from NPI production being cut," said Will Adams of Fastmarkets.
World Steel Dynamics downgrades output forecast
LONDON, Oct 17 (Reuters) - Forecaster and consultant World Steel Dynamics has revised its steel production forecast for 2011 and 2012 downwards, as the gloomier economic outlook is reducing manufacturers' optimism, its managing parters said on Monday.
WDS cut its global steel production forecast for the last quarter to 369 million tonnes, down 4.5 percent from its previous forecast at the beginning of the summer, and only 3.7 percent above the figure for the fourth quarter of 2010, Peter Marcus and Karlis Kirsis told a Metal Bulletin steel conference.
Major market developments in September
LONDON, Oct 17 (Reuters) - Zinc prices fell sharply in September and while the ensuing rebound has been muted by the prospect of at least another year of over-supply, the downside for the market may be limited.
Giles Lloyd of consultancy CRU Group said there would be some support from cuts in high-cost mine production in China.
Major market developments in September
LONDON, Oct 17 (Reuters) - Lead prices fell sharply in September as fears for global economic prospects grew, but they have since steadied above those lows, and the onset of the replacement battery season may lend the metal some level of immunity to wider developments.
Lead-acid batteries used in cars and other vehicles are much more prone to failing in extreme weather such as harsh winters, making the metal at least partially recession-proof.
METALS-Copper falls after German comments, China GDP weighs
SHANGHAI, Oct 18 (Reuters) - Copper extended losses on Tuesday after German comments that the European Union summit would not produce a miracle cure for the euro zone's debt crisis, while China's economic growth data that came in a shade lower than expected also weighed on sentiment.
Strikes at two Freeport-McMoran Copper & Gold mines, including one of the world's largest copper mines in Indonesia, are expected to lend some support to prices.
PRECIOUS-Gold steady after Germany warns about debt deal
SINGAPORE, Oct 18 (Reuters) - Gold prices held steady on Tuesday, with investors looking out for more clues from the euro zone on whether the bloc will come up with a concrete plan to solve the debt crisis, after Germany cautioned against any definitive solution.
Germany said on Monday that a summit of EU leaders next Sunday would not produce a miracle cure for the euro zone's sovereign debt crisis, a warning that pushed down markets after a rise in the past week on expectations of a breakthrough.
Gold steady after Germany warns about debt deal
SINGAPORE, Oct 18 (Reuters) - Gold prices held steady, with investors looking out for more clues from the euro zone on whether the bloc will come up with a concrete plan to solve the debt crisis, after Germany cautioned against any definitive solution.
"It will not be the end of problems there," said Mark Pervan, Global Head of Commodity Research of ANZ. "There will be residue risk in the market, and the market would have to long gold."
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