20120312 1818 FCPO EOD Daily Chart Study.

FCPO closed : 3317, changed : -35 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : turned downward, buyer taking profit.
Support : 3300, 3270, 3250, 3200 level.
Resistance : 3350, 3420, 3450, 3470 level.
Comment :
FCPO fall lower with improving volume changed hand. Soy oil price currently pulling back lower after last Friday closed rallied higher while crude oil price trading lower.
Price corrected lower after recent rallies as traders decided to lock in profit. Meanwhile MPOB official released unexpected higher Feb 2012 inventories level while both cargo surveyor released better export data.
Daily Chart reading revised to suggesting a pullback correction upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120312 1731 FKLI EOD Daily Chart Study.

FKLI closed : 1565 changed : -12 points, volume : higher.
Bollinger band reading : correction range bound little upside biased.
MACD Histrogram : falling lower, seller taking exposure.
Support : 1565, 1550, 1540, 1530 level.
Resistance : 1570, 1580, 1590, 1600 level.
Comment :
FKLI closed recorded loss with little improved volume exchanged near on par with cash market that also closed lower. Last Friday U.S. markets closed slightly higher and today Asia markets ended mostly in negative side while European markets currently trading little lower.
Most global markets pullback lower after recent rally after news on China reported slower than estimate export growth despite better Japan machinery orders and U.S. jobs data.
Daily chart reading adjusted to recommending a correction range bound little upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120312 1656 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : correction range bound little upside biased.

 Hang Seng chart reading : correction range bound little upside biased.

KLCI chart reading :  correction range bound little upside biased.

20120312 1602 Palm Oil & Soy Oil Related News.

Palm Oil Drops From Nine-Month High on Malaysian Stockpiles
2012-03-12 04:31:43.536 GMT


By Ranjeetha Pakiam
    March 12 (Bloomberg) -- Palm oil fell on speculation that a
decline in Malaysian stockpiles will be within expectations and
as a rally last week to the highest level in nine months
prompted some investors to sell.
    May-delivery palm oil slipped as much as 0.6 percent to
3,331 ringgit ($1,101) a metric ton on the Malaysia Derivatives
Exchange, and was at 3,347 ringgit at the close of the morning
session in Kuala Lumpur. Futures reached 3,368 ringgit on March
9, the highest for a most-active contract since June 7 and rose
2.9 percent last week.
    Reserves in Malaysia, the second-biggest supplier, fell 5.4
percent to 1.9 million tons last month, dipping below two
million tons for the first time since August, after output
extended a drop, according to a Bloomberg survey last week.
Production fell 8.3 percent to 1.18 million tons, the lowest
since February last year, the survey showed. The Malaysian Palm
Oil Board is scheduled to release official data at 12:30 p.m.
    “Stocks will fall definitely, but it won’t have much of an
impact on the market,” Chandran Sinnasamy, trading head at
Kuala-Lumpur based LT International Futures (M) Sdn., said by
phone today. Prices are also down after climbing to a nine-month
high, he said.
    The March 9 report by the U.S. Department of Agriculture on
U.S. soybean inventories was also “bearish” for palm oil,
Chandran said. U.S. soybean end-stockpiles estimates were
unchanged from the 275-million bushels forecast in February for
the 2011-2012 marketing year, he said. “They cut the South
American crop as expected, but they didn’t increase the exports
from the U.S. as rising prices may curb demand, so they left
their stocks unchanged.”

                       Soybean Harvest
                             
    Brazil will harvest 68.5 million tons, down from 72 million
projected in February and 75.5 million a year ago, the USDA said.
Argentina’s estimated output was cut to 46.5 million, from 48
million last month and 49 million in the previous year.
    Malaysia’s palm oil exports jumped 30 percent to 444,259
tons in the first 10 days of March, from the same period in
February, independent market surveyor Intertek said March 10.
    Soybeans for May delivery were little changed at $13.39 a
bushel on the Chicago Board of Trade. It reached $13.555 on
March 9, the highest since Sept. 19. Soybean oil for the same
month gained 0.2 percent to 54.36 cents a pound.
    Palm oil for delivery in September dropped 0.3 percent to
8,546 yuan ($1,352) a ton on the Dalian Commodity Exchange.
Soybean oil for delivery in the same month declined 0.5 percent
to 9,530 yuan a ton.

20120312 1600 Global Market & Commodities Related News.

Indonesia's rich bulge on commodities boom leaves many behind
JAKARTA, March 12 (Reuters) - Fitria Yusuf is a bag lady, but you won't find her sleeping rough in Jakarta.Her bag of choice is Hermes, a  French brand so coveted in the Indonesian capital it can cost as much as a luxury car.
"Back in 2006, seeing a Hermes bag was like seeing Halley's comet," said Yusuf, the 29-year-old co-author of "Hermes Temptation," which chronicles how the bag made by French luxury group Hermes International SCA  has become "a must-have item" for Jakarta's burgeoning high society.

Shares pause after U.S. jobs, monetary policy in focus
TOKYO, March 12 (Reuters) - Asian shares fell as investors paused to assess the effect of strong U.S. jobs data, which scaled back expectations for more easing ahead of this week's Federal Reserve meeting, while uncertainty over Chinese growth also weighed on sentiment.
"The markets were due for a correction after rising too strongly so far, bringing prices to levels which wouldn't be sustainable," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory Co.

FOREX-Dollar hits 3-week high vs euro after jobs data
SINGAPORE, March 12 (Reuters) - The dollar hit a three-week high versus the euro on Monday after last week's upbeat jobs data suggested the U.S. economy may not be in dire need of further monetary stimulus from the Federal Reserve.  
The euro struggled after facing what traders described as a buy-the-rumour-sell-the-fact fall on Greece's bond swap deal with private creditors which will clear the way for a new bailout.

US soy, corn tick up on lower S.America supply
SYDNEY, March 12 (Reuters) -Chicago soybean and corn futures edged higher, supported by forecasts of lower supplies from South America following a drought earlier this year.
Drought in South America reduced the soybean crop in Brazil, the world's No. 1 exporter, by 9 percent in the past three months and the crop in Argentina by 11 percent, the USDA  said, with the cuts larger than traders had expected.

India ends export ban on cotton
NEW DELHI, March 11 (Reuters) - India will lift a controversial ban on cotton exports just a week after imposing it, allowing more supplies into a global market that is oversupplied and which is likely to further push down international prices.
The ban, announced unexpectedly on March 5, after a record 9.5 million bales had been shipped, ran into criticism from the influential farm minister, Sharad Pawar, and China, the biggest buyer of cotton from the world's second-largest producer.

Argentina tweaks system for corn exports
BUENOS AIRES, March 9 (Reuters) - Argentina's government is modifying its unpopular corn export system, scrapping incremental quotas that farmers said depressed prices but keeping a cap on total sales abroad to ensure domestic needs are met.
Agriculture Minister Norberto Yauhar said on Friday that officials will announce on April 18 the bulk of 2011/12 corn exports to be authorized. The remainder of what can be shipped abroad will be unveiled at a later date.
 
Argentina soy harvest gets started - gov't
BUENOS AIRES, March 9 (Reuters) - Farmers have begun harvesting the 2011/12 soy crop in Argentina, the world's No. 3 soybean exporter and its top soyoil and soymeal supplier, the local Agriculture Ministry said on Friday.
A drought earlier in the season cut soy output estimates by about 10 percent and slashed the outlook for corn by nearly 30 percent, although rains that began falling in mid-January later brought relief.
 
Informa raises US 2012 corn, soy acreage forecasts
CHICAGO, March 9 (Reuters) - Private analyst Informa Economics raised its forecast of U.S. 2012 corn plantings to 95.513 million acres from its previous estimate of 94.748 million, trade sources said Friday.
If realized, the firm's corn forecast would represent the most U.S. corn seedings since 1937, when farmers planted 97.174 million acres.
 
Drought hits S.America soy crop harder than expected
WASHINGTON, March 9 (Reuters) - South America's drought withered Brazil's big soybean crop by 9 percent in the past three months, and the crop in Argentina by 11 percent, the U.S. government said Friday, more than traders had expected.
The smaller crops in Brazil and Argentina, which combined grow nearly half of the soybeans in the world, means slightly smaller but still ample global stocks, the Agriculture Department said in its monthly assessment of crops worldwide.
 
Cold spell may cut French wheat by 1.9 mln t-Agritel
PARIS, March 9 (Reuters) - Damage to wheat crops in France caused by freezing weather in early February could reduce this year's harvest by 1.9 million tonnes, or about 5 percent of the initial crop potential, grains consultancy Agritel said on Friday.
"This survey highlights damage that is above what was suggested by first estimates in previous weeks, notably in wheat," Agritel said in a note. "Durum, rapeseed and winter barley fare better than expected."

Euro Coal-Prices dip 25c, Apr Newc trades at $105/T
LONDON, March 9 (Reuters) - Prompt physical coal prices fell slightly by around 25 cents a tonne on Friday as buyers pulled back and in line with weaker oil values.
Brent crude fell 57 cents to $124.77 a barrel on Friday after key U.S. jobs data beat expectations, lifting the dollar broadly to multi-month highs against other currencies.

Brent crude falls towards $125 as China data spur demand worry
SINGAPORE, March 12 (Reuters) - Oil fell for the first time in four sessions, with Brent slipping towards $125 as global demand concerns took centrestage following weak Chinese exports, countering support from supply disruption worries in the Middle East and Africa and a brightening U.S. economic outlook.
"It's hard for prices to rise sharply higher, although they are well supported because of the Iran situation and better economic data from the United States," said Ken Hasegawa, a Tokyo-based commodity sales manager at brokerage Newedge Japan.

Japan diplomat says to keep buying Iran oil
DUBAI, March 11 (Reuters) - Japan will continue to import as much Iranian crude oil as it needs, the Japanese ambassador to Tehran was quoted by Iranian media on Sunday as saying.
Japan has been put under pressure to reduce its use of Iranian crude by the United States which has imposed tough sanctions against Iran's energy and banking sectors to force Tehran to curb its nuclear activities.
 
Saudi oil supply at 9.4mbpd in Feb- Industry source
DUBAI, March 10 (Reuters) - Top oil producer Saudi Arabia supplied 9.4 million barrels per day (bpd) of crude to the market in February steady from January, an industry source familiar with the matter told Reuters on Saturday.
"Production from the kingdom was in the range of 9.85 million bpd also steady from the previous month," the industry source added.

Copper weakens as China demand worry persists
SINGAPORE, March 12 (Reuters) - London copper edged lower as persistent concerns about sluggish demand in China took the
momentum out of a three-day rally, but optimism on the global economy after upbeat U.S. jobs data is likely to cushion the price slide.
"Theoretically we are in the peak consumption season but it doesn't feel like it this year," said a Shanghai-based physical copper trader, "Factories are not in any rush to stockpile the material, as the overall economic situation has weakened."

China Feb copper output up from Jan, on track to rise
HONG KONG, March 9 (Reuters) - China's refined copper production rose 1 percent during the shorter month of February after the Lunar New Year holiday lowered output in January, reflecting producers' expectations that domestic demand would pick up after the seasonal slowdown.
Combined output for the month of January and February also saw year on year increases due to higher capacity in China, the world's top consumer and producer of most metals.

China Feb crude steel output up 3.3 pct to 55.88 mln T
BEIJING, March 9 (Reuters) - China's crude steel output in February rose 3.3 percent from a year earlier to 55.88 million tonnes, the National Bureau of Statistics said on Friday.
In the first two months of this year, the country produced 112.62 million tonnes of steel, up 2.2 percent from a year ago, it said.

Brazil sees U.S. as fertile ground for exports
BRASILIA, March 9 (Reuters) - The United States will become an increasingly important trade partner for Brazil as declining prices for raw materials dim the value of Brazil's trade with China, a Brazilian government officials told Reuters.
A commodity-hungry China overtook the United States as the South American nation's top trade partner in 2009 as prices surged for key Brazilian products such as iron ore and soy.

China imported iron ore stocks rise in wk ending March 9
BEIJING, March 9 (Reuters) - Inventories of imported iron ore at major Chinese ports rose 1.2 percent this week to end at 99.93 million tonnes, the first increase in more than a month, according to industry consultancy Mysteel.
Stocks from all the three major supplier countries -- Australia, Brazil and India -- increased over the week.  

China Feb daily steel output at 1.93 mln T as sentiment improves
BEIJING, March 9 (Reuters) - China's daily crude steel runs reached 1.926 million tonnes in February, up from 1.83 million tonnes in January as mills began ramping up operations ahead of a predicted recovery in demand in March and April.
The figures -- the first to be released for 2012 -- suggest a more rapid increase in output than predicted and could help allay at least some of the gloom that has descended on China's steel sector, with daily runs recovering from 1.6827 million tonnes in December.

China's metals output drops as growth eases
SHANGHAI, March 9 (Reuters) - China's demand for base metals is being blunted by slower economic activity, the latest production data showed on Friday, but expectations of policy easing in coming months had led steel mills to ramp up production.
Copper output in both January and February slumped to the lowest since the first quarter of 2011, with February output at 437,000 tonnes, up slightly from 433,000 tonnes in January, data from the National Bureau of Statistics showed.

China's metals output drops as growth eases
SHANGHAI, March 9 (Reuters) - China's demand for base metals is being blunted by slower economic activity, the latest production data showed on Friday, but expectations of policy easing in coming months had led steel mills to ramp up production.
Copper output in both January and February slumped to the lowest since the first quarter of 2011, with February output at 437,000 tonnes, up slightly from 433,000 tonnes in January, data from the National Bureau of Statistics showed.

Indonesia stands ground with foreign miners
JAKARTA, March 9 (Reuters) - Indonesia's government offered a clearer view on Friday of a new regulation that limits foreign ownership in mines to no more than 49 percent, saying the rule applies to existing as well as new contracts.
The comments by senior officials in the Ministry of Energy and Minerals could unnerve foreign companies owning mines in Indonesia, including Australian miners who have played down the impact of the rule signed last month by President Susilo Bambang Yudhoyono.

China Feb copper output up from Jan, on track to rise
HONG KONG, March 9 (Reuters) - China's refined copper production rose 1 percent during the shorter month of February after the Lunar New Year holiday lowered output in January, reflecting producers' expectations that domestic demand would pick up after the seasonal slowdown.  
Combined output for the month of January and February also saw year on year increases due to higher capacity in China, the world's top consumer and producer of most metals.

METALS-Copper weakens as China demand worry persists
SINGAPORE, March 12 (Reuters) - London copper edged lower on Monday as persistent concerns about sluggish demand in China took the momentum out of a three-day rally, but optimism on the global economy after upbeat U.S. jobs data is likely to cushion the price slide.
Copper rallied about 2 percent on Friday, after better-than-expected U.S. labour market data boosted confidence in the recovery of the world's largest economy, and Greece's success with a debt swap deal eased fears about euro zone debt crisis for the time being.

Iron Ore-Spot prices inch up amid faint recovery signs
BEIJING, March 12 (Reuters) - Spot iron ore prices in China, the world's biggest market, edged up on Monday amid signs that steel demand was starting to pick up, but investors remained cautious.
Australian Pilbara fines with 61.5 percent iron content were being offered at $141-144 per tonne, up $1 since Friday, according to industry consultancy Umetal.

Gold extends gains on equities, eyes on Fed meeting
SINGAPORE, March 12 (Reuters) - Gold rose further as gains on the Nikkei helped it offset pressure from a firm U.S. dollar, but some investors were likely to stay on the sidelines ahead of a U.S. Federal Reserve meeting this week, which could potentially weigh on the precious metal.
"We will see more data coming out of the U.S., and whether or not there will be a QE3," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, referring to a possible third bond-buying programme to lower interest rates.

Ghana gold output to rebound in 2012 - Chamber
ACCRA, March 9 (Reuters) - Ghana's full-year gold production declined by a few percentage points last year but is expected to rise in 2012, the head of its Chamber of Mines said on Friday.
Ghana is Africa's second largest gold producer after South Africa and produced 2.97 million ounces of gold in 2010. Output was originally seen rising in 2011 but in the end shrunk as a number of firms focused on longer-term maintenance and expansion projects rather than maximising existing production.

METALS-Copper weakens as China demand worry persists
SINGAPORE, March 12 (Reuters) - London copper edged lower on Monday as persistent concerns about sluggish demand in China took the momentum out of a three-day rally, but optimism on the global economy after upbeat U.S. jobs data is likely to cushion the price slide.
Copper rallied about 2 percent on Friday, after better-than-expected U.S. labour market data boosted confidence in the recovery of the world's largest economy, and Greece's success with a debt swap deal eased fears about euro zone debt crisis for the time being.

PRECIOUS-Gold extends gains on equities, eyes on Fed meeting
SINGAPORE, March 12 (Reuters) - Gold rose further on Monday as gains on the Nikkei helped it offset pressure from a firm U.S. dollar, but some investors were likely to stay on the sidelines ahead of a U.S. Federal Reserve meeting this week, which could potentially weigh on the precious metal.  
Gold has risen more than 9 percent this year, building on 11 consecutive years of increases, after the Federal Reserve said it would keep rates near zero until at least 2014. But the Fed may have to reconsider any plans for additional monetary easing when it meets on Tuesday if there are more signs the U.S. economy is recovering.  

Baltic index up for 12th day, smaller vessels firm
March 9 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, climbed on Friday for the twelfth consecutive day, as higher rates for smaller vessels countered weakness in capesizes.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser climbed 12 points to 824 points, highs last seen in January.

20120312 1147 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares pause after US jobs, eyes monetary policy
TOKYO, March 12 (Reuters) - Asian shares fell on Monday as investors paused to assess the effect of strong U.S. jobs data, which scaled back expectations for more easing ahead of this week's Federal Reserve meeting, while concerns over China's slowdown also weighed on sentiment.
"Although we do not expect any significant changes in policy, a reiteration of dovish rhetoric may help maintain the underlying support for risky assets ... An improving US labour market has reduced the likelihood of QE3 further. As a result, other low-yielding currencies such as the JPY and CHF will remain under pressure against the USD," they said.

COMMODITIES-Oil, gold end up on US jobs data; defy dollar rally
NEW YORK, March 9 (Reuters) - Oil ended up for a third straight day on Friday despite a strong dollar as positive U.S. jobs data inspired hopes for more energy demand, and soybeans hit 5-1/2 month highs on lower-than-expected crop forecasts before easing on profit-taking.
"The (U.S.) economy, while nowhere near fully healed, has enough momentum to move forward on its own and seems to be gaining strength," said Megan Ellis, economist at John Hancock Financial Services in Boston.

Rising gasoline prices point to mid-year slowdown
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, March 9 (Reuters) - Analysts at leading banks have been out in force to reassure investors the U.S. economy is in better shape to weather rising gasoline prices this year than in the first half of 2011 or 2008, when increases at the pump helped push the economy into a slowdown.
Many commentators have pointed to the continuing robustness of data on employment and confidence to argue the U.S. economy will shrug off rising fuel prices.

OIL-Oil up on U.S. jobs data, posts weekly gain
NEW YORK, March 9 (Reuters) - Oil prices rose  on Friday for a third straight day and also posted weekly gains as data showing rising U.S. employment countered pressure from a stronger dollar and fading euphoria from Greece's debt swap deal.
"Today's U.S. employment report for February was positive across the board and confirms that improvements in the U.S. job market are real," said Jason Schenker, president of Prestige Economics LLC in Austin, Texas.

NATURAL GAS-Short covering lifts US natgas from near 10-yr low
NEW YORK, March 9 (Reuters) - U.S. natural gas futures ended slightly higher on Friday, buoyed by technical buying after prices failed for a second day to sink to a 10-year low despite mild weather forecasts and record high supplies.
"The bears may be getting a bit uneasy and a modest round of short covering has occurred since yesterday. But by no means does it suggest that the (bearish) trend has changed," Energy Management Institute's Dominick Chirichella said in a report, noting gas has been in a technical downtrend for nearly a year.

Euro Coal-Prices dip 25c, Apr Newc trades at $105/T
LONDON, March 9 (Reuters) - Prompt physical coal prices fell slightly by around 25 cents a tonne on Friday as buyers pulled back and in line with weaker oil values.
"The situation is broadly unchanged, much as it has been for the past couple of weeks, some buying but today the offers were unrealistically high," one European trader said.

Japan diplomat says to keep buying Iran oil
DUBAI, March 11 (Reuters) - Japan will continue to import as much Iranian crude oil as it needs, the Japanese ambassador to Tehran was quoted by Iranian media on Sunday as saying.
Japan has been put under pressure to reduce its use of Iranian crude by the United States which has imposed tough sanctions against Iran's energy and banking sectors to force Tehran to curb its nuclear activities.

Saudi oil supply at 9.4mbpd in Feb- Industry source
DUBAI, March 10 (Reuters) - Top oil producer Saudi Arabia supplied 9.4 million barrels per day (bpd) of crude to the market in February steady from January, an industry source familiar with the matter told Reuters on Saturday.
"Production from the kingdom was in the range of 9.85 million bpd also steady from the previous month," the industry source added.

China Feb implied oil demand rebounds to record high
BEIJING, March 10 (Reuters) - China's implied oil demand in February rebounded to a record high rate last seen in December after a dip in January, official data showed on Saturday, as refineries continued with fairly hefty runs while net imports of oil products surged from a month earlier.
Implied demand, the combination of crude oil throughput and net fuel imports, rose about 2 percent from a year earlier to 9.71 million barrels per day (bpd) last month, the same as in December, according to Reuters calculations based on preliminary government data.

20120312 0958 Local & Global Market Related News.

Malaysia: BNM holds rate on inflation risk
Malaysia left interest rates unchanged for a fifth straight meeting as economic growth risks diminished and rising oil prices revive inflation pressure. Bank Negara Malaysia Governor Zeti Akhtar Aziz kept the benchmark overnight policy rate at 3%. The nation joined Indonesia and South Korea in holding rates as easing concern of a euro-area meltdown and higher oil prices give policy makers room to pause from adding stimulus. The IMF predicts economic growth may slow to 4% in 2012, and Zeti said last month the central bank will keep interest rates “accommodative” as the outlook for the global economy remains uncertain. (Bloomberg)


China’s consumer price inflation slowed to 3.2% yoy in Feb (4.5% in Jan), while producer price inflation was unchanged from a year ago (0.7% in Jan). (Bloomberg)

China’ industrial production rose 11.4% yoy in Feb (13.9% in Jan), lower than the 12.3% growth called by economists. (Bloomberg)

China’s urban fixed asset investment rose 21.5% yoy in Feb (23.8% in Jan). (Bloomberg)

Retail sales in China grew 14.7% yoy in Feb, moderating from 17.1% in Jan. (Bloomberg)

New yuan loans in China rose Rmb710.7bn in Feb (Rmb 738.1bn in Jan), lower than the market forecast of Rmb750bn. Money supply (M2) increased 13% yoy in Feb (12.4% in Jan). (Bloomberg)

China: Biggest trade shortfall since 1989 on Europe turmoil

China had its largest trade deficit since at least 1989 last month as Europe’s sovereign-debt turmoil damped exports and imports rebounded after a weeklong holiday, with the shortfall standing at USD31.5bn. Imports rose 39.6% y-o-y, after a 15.3% slump in January, while exports increased 18.4%.Data in the first two months are distorted by the timing of the Lunar New Year holiday, which fell in January this year and February in 2011. Including seasonal adjustments, exports in February rose 4% y-o-y while imports gained 9.4%. (Bloomberg)

India: RBI unexpectedly cuts reserve ratio to ease cash shortage
India’s central bank unexpectedly cut the amount of deposits lenders need to set aside as reserves to ease a cash squeeze in the banking system that threatens to deepen an economic slowdown. The Reserve Bank of India (RBI) reduced the cash reserve ratio to 4.75% from 5.5% and will add INR480bn (USD9.6bn) into lenders. The unscheduled step before a 15 Mar policy review underscores the RBI’s concern that a shortage of cash in the banking system will hurt the economy. (Bloomberg)


Credit growth in the Philippines eased to 16.6% yoy in Jan (16.4% in Dec), while bank lending net of RRPs eased to 19.1% yoy in Jan from 19.3% in Dec. Money supply (M3) rose 7.2% in Jan (6.3% in Feb) (Bloomberg)

Thailand’s foreign exchange reserves declined to US$180bn in the week ending 2 Mar, from US$180.6bn the previous week. (Bloomberg)

Investors holding 85.8% of Greece’s private debt have agreed to participate in the country‘s €206bn debt restructuring, clearing the way for Athens to complete the world‘s largest ever sovereign debt default. Participation would rise to 95.7% after collective action clauses are activated to force hold-out investors to participate. (FT)

The Greek economy shrank by 7.5% in 4Q11, worse than the previous estimate of 7%, with the economy in recession for a fifth year, official data showed. (AFP)

The International Monetary Fund intends to contribute €18bn in fresh funds to the second aid package for Greece, representing 14% of the €130bn in total – less than its 27% (€30bn) aid in Greece‘s initial bailout in May 2010. This comes after Greece announced that a large majority of the country's private creditors had agreed to a debt swap aimed at erasing €107bn worth of debt. (AFP, Bloomberg)


EU: Greek credit swaps payouts to be expedited after trigger ruling
A committee of credit-default swaps traders will expedite an auction to settle about USD3bn of contracts tied to Greece after the nation took steps to force investors to participate in the biggest sovereign-debt restructuring in history. The viability of credit swaps as a hedge for about USD257bn of government debt was questioned after ISDA rejected a request on 1 Mar to declare whether the swaps were triggered because the restructuring effectively subordinated private investors to the European Central Bank. Greece’s use of collective action clauses (CAC), in its debt restructuring triggers payouts on the contracts, and investors with 95.7% of Greece’s privately held bonds will participate in the swap. (Bloomberg)

EU: German January exports rebound while February inflation accelerates
German exports rebounded in January as the global economy showed signs of recovery. Exports, adjusted for work days and seasonal changes, increased 2.3% m-o-m, when they dropped a revised 4.4%. Imports increased 2.4% after declining 3.9%. The trade surplus widened to EUR13.1bn from EUR12.9bn in December. Meanwhile, inflation in Germany accelerated in February as tensions in the Middle East fueled oil prices. Inflation, quickened to 2.5% from 2.3% in January. (Bloomberg)

US: Payroll gain caps job market’s best six months since 2006
Employers in the US took on more workers than forecast in Feb, completing the best six months for payroll growth since 2006. The 227,000 increase followed a revised 284,000 gain in Jan that was bigger than first estimated. The jobless rate held at a three-year-low of 8.3% even as 476,000 more workers sought employment. Some 1.2m jobs were created in the past six months, the most since the same period ended May 2006. Employment climbed by 428,000 in February, while the labor force rose by 476,000. (Bloomberg)

US: Trade deficit widens to largest since October 2008
The trade deficit in the US widened in January to the largest since October 2008 as imports rose to a record high. The gap increased 4.3% to USD52.6bn, more than forecast, from a revised USD50.4bn in December. Exports of capital goods, as well as cars and automobile parts, climbed to a record. Imports may keep rising as labor market gains put consumers in a better position to continue spending while businesses rebuild stockpiles and replace outdated equipment. Rising energy costs may also keep the trade gap widening. (Bloomberg)


The US Federal Reserve’s extension of the average maturity of its holdings under Operation Twist is comparable to its two rounds of asset purchases in lowering borrowing costs, and may lower the Treasury 10-year note yield by about 0.85%, according to the Bank for International Settlements. (Bloomberg)

20120312 0957 Malaysia Corporate Related News.

Datuk Seri Shahrizat leaving as Women, Family and Community Development Minister
Datuk Seri Shahrizat Abdul Jalil has announced that she will step down as minister when her senatorship ends on 8 Apr. UMNO leaders, including its president Datuk Seri Najib Tun Razak, welcomed her decision, saying it was an appropriate thing to do. Wanita UMNO leaders lamented that Shahrizat’s resignation was a big loss but were grateful that she was still their chief. (The Star)

RM139bn boost for Johor
A total of 59 projects are expected to bring in RM139.3bn in investments by 2020 and create 68,000 job opportunities in Johor, said Prime Minister Datuk Seri Najib Tun Razak. He noted that the projects, under the Economic Transformation Programme (ETP), would not only change Iskandar Malaysia’s landscape but also Pangerang in the South East and Mersing in the North East. The 27 entry point projects (EPP) would cover the education, tourism and the oil and gas sectors while the 32 Quality Living Projects under the Johor Baru transformation plan would cover safety and security, improvements in living standards in the city and also its road and transport systems. (The Star)

Qantas plan in jeopardy as MAS talks fail on trade terms
Qantas Airways Ltd’s plans to set up a full-service carrier in Asia to reverse losses on international routes have been set back after talks with Malaysian Airline System Bhd collapsed. The companies couldn’t agree on commercial terms, the Sydney-based airline said in a statement last Friday. The company said it will examine other opportunities for a venture in Asia involving minimal capital. (Malaysian Reserve)

Eversendai has bid for RM800m worth of jobs locally
Eversendai Corp Bhd has another RM800m worth of jobs that it has bid for in Malaysia, which includes some work for the new MRT line. Fresh from its Tanjung Bin project win, group managing director Datuk AK Nathan said of the RM12bn it has bid for, about 10% is for businesses in Malaysia while the rest are mainly in the Middle East. He added that financing for its projects would mainly be via banks. (BT)

Eng Kah moves into China with Cosway
Eng Kah Corp Bhd, one of the largest contract manufacturers for personal care and household products in the country, is banking on a joint venture partner Cosway Corp Ltd’s aggressive expansion in China to further boost its bottom line. The two companies, Cosway and Eng Kah, via a 70:30 joint venture company, have set up a plant in China to manufacture personal care and household products for Cosway’s stores there. (Financial Daily)

DRB-Hicom, VW target 40% local content in 12-18 months
Volkswagen AG and DRB-Hicom are targeting at localizing 40% of the automotive components in the next 12 to 18 months, said Dr Christof Spathelf, senior vice-president, group manufacturing overseas of Volkswagen AG. The Passat 1.8 TSI is the first of a few Volkwagen vehicles to be assembled at the DRB-Hicom Automotive Complex in Pekan and the group is currently investigating the potential export of Passat to other countries of Asean. (Financial Daily)

Putrajaya is reviewing the eight-month-old Malaysia Airlines-AirAsia alliance as it has failed to show any promised improvement or lift the morale of the 20,000-strong staff in the flag carrier that lost RM2.52bn in 2011. The Najib administration is also considering taking MAS private by directing state asset manager Khazanah Nasional Berhad buy back a 20.5% stake exchanged with Tune Air Sdn Bhd, the majority owner of AirAsia, for 10% stake in Southeast Asia‘s largest budget carrier. ―Datuk Seri Najib Razak is not happy with MAS‘s performance which he was told would improve after the share swap,‖ a government source told The Malaysian Insider. He confirmed that the MAS Employees Union (Maseu) had met and urged the prime minister to unravel the deal, which will break MAS into separate long- and short-haul operations. ―The prime minister wants to see the full picture of the deal and find the best way forward for MAS especially since the union has expressed concerns.‖ The MAS management, under managing director Ahmad Jauhari Yahya, has had townhall meetings with the staff, some of whom are unhappy with Rashdan‘s management style. ―There are some valid concerns as they feel he isn‘t a people person and that is important in a service industry,‖ the source said. Another area of concern is the talk of being redeployed outside MAS to the short-haul premium airline headed by Rashdan as that would mean a loss of benefits. MAS has slightly more than 20,000 staff although former MD Datuk Seri Idris Jala had cut it down to 17,000 when he left in 2009. Industry analysts say the flag carrier could just do with one-third of its current staff especially with cuts in routes in the past six months. Cutting staff could improve costs but is seen as a major political liability in Selangor, where MAS has most of its operations and the state that Najib wants to win back in the next elections. MAS hopes to finalise and announce a plan to raise funds and strengthen its balance sheet within the next 60 days. This is critical as the carrier‘s plan to deploy 23 new aircraft this year would cost some RM6bn. (Malaysian Insider)

AirAsia X will reportedly face a financial penalty if it withdraws from Kuala Lumpur-Christchurch sector before April 2013. Christchurch International Airport stated the carrier would need to refund the airport for costs of a joint marketing plan if it cancels the service before it has been operated for two years. AirAsia X reportedly plans to withdraw from the route but has not yet made an official announcement. The service was launched on 1 April 2011. (Fairfax NZ News)

Securities Commission (SC) MD Datuk Ranjit Ajit Singh has been appointed chairman of the regulator with the retirement of Tan Sri Zarinah Anwar, whose term expires on March 31. Ranjit is recognised internationally for his expertise in securities regulation. The SC said in a press release that Prime Minister Datuk Seri Najib Razak had appointed Ranjit to succeed Zarinah as chairman while fellow managing director Datuk Dr Nik Ramlah Mahmood had been appointed to the post of deputy chief executive. Their appointments take effect from April 1. (Starbiz)

Independent local palm oil refiners are pushing for the abolishment of duty-free export quota for crude palm oil (CPO) and crude palm kernal oil (CPKO), given yearly to selected local plantation companies with refineries overseas. Palm Oil Refiners Association of Malaysia (PORAM) chief executive officer Mohamad Jaaffar Ahmad said they support the abolishment to help secure a steady supply of feedstock for local refiners affected by Indonesia's latest low palm oil export duty structure. Total operating refining capacity in Malaysia, currently at 23.97m tonnes, was more than enough to refine the total CPO production in the country. However, at the current forecast CPO production of 19.36m tonnes minus about 3m tonnes of CPO duty-free export quota, local palm oil refiners would only have an average refining capacity utilisation rate of 68%. Last year, Malaysia imported a total 1.30m tonnes of CPO, mainly from Indonesia. Mohamad Jaaffar Ahmad pointed out that if Indonesia's refining capacity improved and the export duty differential continued to favour processed palm oil in the republic, local refiners did not expect Indonesia to export more CPO this year. The average refining margin for 2011 was only 1.4% or RM45.14 to the cost of one tonne of CPO. However, the margin turned negative this year to -RM18.81 in January and -RM18.66 in February. (StarBiz)

Felda Global Ventures Holdings Bhd (FGVH) and its partners are looking to sell their controlling 17% stake in Australia Agricultural Co Ltd (AAco), the largest beef-cattle producing company Down Under, sources said. "The block has been up for sale for some time now, and FGVH hopes to conclude the sale before its planned initial public offering," the source said. Australia-listed AAco now trades at around A$1.30 per share, with a market capitalisation of A$410m (RM1.3bn). The reason for the sale, however, is not clear. (StarBiz)

Malaysia Smelting Corp (MSC) has entered into a Strategic Alliance Agreement with Optima Synergy Resources to boost its business prospects in the Indonesian mining sector. The alliance is to enable its 75%-owned mining and smelting company PT Koba to secure an extension on an existing contract of work from the Indonesian government or a new mining permit over the existing work area for 10 years, through joint efforts between ORSL and MSC. (Malaysian Reserve)

The Employees Provident Fund (EPF), which is charged to lead the development of the proposed prime township sited at Rubber Research Institute of Malaysia (RRIM) land in Sungai Buloh, Selangor, is expected to start distributing portions of the long-awaited project by June. EPF CEO Tan Sri Azlan Zainol said it will start calling for tenders, which are open to all strong property developers in the country to participate in. "The project is going through some legal issues and then it will go through the bidding process. "The development will be spread out over several phases and each phase will be around 12.15ha-20.25ha portions for the development of projects from commercial, residential, industrial, affordable housing and shophouses," he told BT in an interview at EPF's headquarters here recently. Previously managed by RRIM, the 1,215ha land was slated for development over the next 10-15 years, as announced in the 2010 Budget , but until now the project has not taken off. On May 12, 2010, the government had approved the proposal for the development of the Sungai Buloh land by Kwasa Land Sdn Bhd, a wholly-owned subsidiary of the EPF. (BT)

British American Tobacco announced the retirement of its chairman and director Tan Sri Abu Talib Othman. Abu Talib currently holds a direct interest in the company through 51,000 shares. (Malaysian Reserve)

With close to 2,600 high-end condominiums scheduled for completion in Kuala Lumpur this year, the outlook for the luxury condominium market in the capital city is expected to be challenging. ―Bank Negara is keeping a close eye on the mortgage loan market on concerns of rising household debt-to-gross domestic product levels and has issued new guidelines to further tighten lending with effect from Jan 1,‖ said property consultancy Knight Frank, in its Second Half 2011 Real Estate Highlights report. ―This will inevitably have a negative impact on this sector as demand turns cautious with further pressure expected on prices and rentals of high-end condominiums in selected locations and schemes.‖ (Starbiz)

SP Setia, which made two bids of £262m (RM1.2bn) and £324m (RM1.5bn) last year for London's Battersea Power Station site, is said to be keen to make a fresh bid for the ongoing sales tender exercise for the 15.8ha (39.1 acres) freehold site. (Starbiz)

Parkson Holdings Bhd will invest some RM3bn to develop a chain of 10 shopping complexes by 2020. The development and management of the mall, which will be under Festival City Sdn Bhd, will open in major cities within the country and carry the Festival City brandname. Group MD Datuk Alfred Cheng this is a natural extension of its enormous retail experience and to create a new and steady source of income. ―Within the next three years, we expect to have two more malls and, within 10 years, 10 malls in total in Malaysia,‖ he said. It was reported that Parkson was finalising a second mall that will be located in Malacca. ―Each mall will cost between RM250m and RM300m,‖ Cheng said. ―We will only be in major cities for a start,‖ he added. Cheng also did not discount the fact that it could buy an existing mall but said that it would focus on developing its own mall. Meanwhile, Cheng said KL Festival City will post a earnings before tax and interest of RM20m in the first year of operations. The mall's tenants are expected to rake in a total of RM300m in sales in during the same period. (BT)

Tesco Stores (Malaysia) Sdn Bhd plans to invest RM60m in the next two years to open new stores and refresh some of its existing stores. However, Tesco Malaysia, which operates 45 stores in the country, did not provide further details on its upcoming stores. (Starbiz)

Naim Holdings expects to rope in RM300m in sales this year on the back of an ‗aggressive‘ property develop plan. The group is in the midst of making inroads in the upcoming Bintulu property market by leveraging its landbank in the prime location of the Bintulu Airport. To date, the group owns approximately 2,900 acres of landbank in Sarawak, with about 1,000 acres in Bintulu. (Malaysian Reserve)

Malaysian retailers sold RM83.2bn worth of items in 2011, as retail sales grew higher than the anticipated 8.1% growth. Nevertheless, the projected retail sales growth for 2012 will remain at 6% translating into RM88.2 bn in value as the European debt crisis and job uncertainties linger and credit card spending reduces. Retail Group Malaysia (RGM) tabulated retail sales numbers on behalf of the Malaysia Retailers Association (MRA). The data did not take into account big ticket items like houses and cars. The Malaysia Retail Industry Report this year showed that retailers remained optimistic of businesses for the first quarter of 2012 after chalking 11.5% growth in the fourth quarter of 2011. For the January to March 2012 period, retailers see sales rising by 12.1% while RGM remains a little conservative and expects that retail sales will grow by a tenth. (BT)

Honda Malaysia targets to achieve sales of 46,500 units this year, 31% higher than last year‘s 32,482 units. The target was based on the continuity of buyers sentiment and exciting line-up of new models for both regular and hybrid vehicles in the pipeline. Honda estimates the total industry volume to reach more than 618,000 units and targeting to achieve 7.5% of the TIV. (Bernama)

20120312 0938 Global Market Related News.

Most Asian Stocks Rise on Improving U.S. Jobs Data, Japan Machinery Orders (Source: Bloomberg)
Most Asian stocks rose after a rebound in Japan’s machinery orders and better-than-expected U.S. jobs data eased concern a slowdown in Europe and China will derail global economic growth. Hitachi Construction Machinery Co. (6305), a maker of bulldozers and cranes, rose 2.4 percent in Tokyo. Panasonic Corp., an electronics company that gets about 10 percent of its sales in the U.S., climbed 1.4 percent after the dollar strengthened against the yen. Samsung Electronics Co., South Korea’s No. 1 consumer electronics exporter, fell 1.1 percent in Seoul after Apple Inc. claimed the company violated a court order in a patent-infringement case. The MSCI Asia Pacific Index fell 0.1 percent to 126.80 as of 9:39 a.m. in Tokyo, with about three stocks advancing for every two that dropped. Two of 10 industry groups in the measure advanced. Japan’s Nikkei 225 Stock Average (NKY) rose 0.7 percent after the nation’s machinery orders rebounded in January, signaling company investment will help to drive a return to growth.
Australia’s S&P/ASX 200 slipped 0.4 percent, while South Korea’s Kospi Index slid 0.5 percent.

Japanese Stocks Advance For Third Day as U.S. Employment Data Lifts Dollar (Source: Bloomberg)
March 12 (Bloomberg) --　Japanese stocks rose for a third day, extending a rally of five consecutive weeks, after better- than-expected U.S. jobs data pushed the dollar to a 10-month high against the yen, boosting exporters’ earnings outlook. The Nikkei 225 Stock Average (NKY) rose 0.9 percent to 10,021.51 as of 9:01 a.m. in Tokyo. The broader Topix Index gained 0.5 percent to 853.13. The gauge added 1.3 percent last week, capping its fifth weekly gains.

European Stocks Decline as Best Annual Start Since 1998 Seen as Overdone (Source: Bloomberg)
European stocks fell this week as investors speculated the Stoxx Europe 600 Index’s best start to a year since 1998 has overshot the outlook for the economy. Enel SpA sank to a record low as Italy’s largest utility cut its dividend target to reduce debt. PSA Peugeot Citroen sank 7.8 percent after Europe’s second-biggest carmaker announced a 1 billion-euro ($1.3 billion) rights offer. Salzgitter AG lost 7 percent after the steelmaker said it was“impossible” to provide an earnings forecast. The benchmark Stoxx 600 (SXXP) slid 0.7 percent to 265.44 this past week, the biggest drop since Feb. 10. The gauge rose for the past three days as Greece persuaded most bondholders to accept a debt exchange, rebounding from the biggest two-day drop since November earlier in the week. The index had climbed 9.3 percent from the start of the year through March 2 as the European Central Bank lent the region’s lenders more than 1 trillion euros and U.S. data topped forecasts.
“The force of the move into the new year really took the market into extended overbought conditions; technically it looked like there was a need for some consolidation,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. in London. “We could see more of a consolidation phase going forward, but the fundamental picture is still looking more supportive than before.”

S&P 500 Caps Fourth Weekly Advance as Employment Growth Exceeds Forecasts (Source: Bloomberg)
U.S. stocks rose, capping the fourth straight weekly rally for the Standard & Poor’s 500 Index, after a government report showing stronger-than-forecast payroll growth bolstered optimism in the world’s largest economy. Financial shares had the biggest gain among 10 groups in the S&P 500 as Greece’s private creditors agreed to a debt swap. JPMorgan Chase & Co. (JPM) and BB&T Corp. (BBT) added at least 1.2 percent. Lennar Corp. (LEN) and D.R. Horton Inc. rallied more than 3 percent, pacing gains in homebuilders, after Credit Suisse Group AG raised its recommendations for the companies. Starbucks Corp. (SBUX) rose 2.9 percent on plans to introduce a new single-cup brewer.
The S&P 500 added 0.4 percent to 1,370.87 at 4 p.m. New York time. The index rose 2.1 percent in four weeks. The Dow Jones Industrial Average gained 14.08 points, or 0.1 percent, to 12,922.02. The Russell 2000 Index of small companies jumped 1.3 percent to 817. About 6.2 billion shares changed hands on U.S. exchanges, or 6.4 percent below the three-month average. “The jobs report was solid, but not spectacular,” said James McDonald, chief investment strategist at Northern Trust Corp. in Chicago. His firm manages $663 billion. “This helps depict the U.S. as the standout Western economy continuing to slowly, but steadily repair. We didn’t see any improvement in the unemployment rate. That tells me the Fed is going to stay accommodative. The path of least resistance for stocks is up.”

Emerging-Market Equity Funds Record 10th Week of Inflows, EPFR Global Says (Source: Bloomberg)
Emerging-market stock funds took in $907 million in the week ended March 7, the 10th week of inflows and the longest run of gains since 2010, according to EPFR Global. Inflows were lured as an easing in tensions with Iran outweighed the prospect of slower growth in China, according to EPFR. Net investment into developing-nation equity funds has totaled $22.6 billion in 2012, compared with outflows of $19.6 billion for the same period of 2011, according to a report e- mailed today by the Cambridge, Massachusetts-based data provider. So-called Global Emerging-Market funds, or GEM funds, recorded net inflow for the week of $1.3 billion, the data show. Asian funds excluding Japan recorded a net outflow of $418 million, Cameron Brandt, EPFR director of research, said by e- mail today. China cuts its economic growth target to 7.5 percent on March 5, from an 8 percent goal in place since 2005.

Retail Sales Likely Rose on Autos, Fuel (Source: Bloomberg)
Retail sales in the U.S. probably rose in February by the most in five months, spurred by the strongest demand for automobiles since 2008, economists said before reports this week. The 1.1 percent rise would follow a 0.4 percent gain in January, according to the median forecast of 67 economists surveyed by Bloomberg News ahead of Commerce Department figures due March 13. Industrial production picked up in February, while inflation excluding food and energy remained in check. Sales at retailers like Gap Inc. (GPS) and Target Corp. (TGT) last month beat analysts’ estimates, a sign an improving job market is helping bolster consumer spending, the biggest part of the economy. A pickup in payrolls, accompanied by limited wage growth, may not be enough to satisfy Federal Reserve officials, who this week will probably reaffirm their commitment to keeping interest rates low through 2014.
“Retail sales could be pretty strong for February,” said Omair Sharif, an economist at RBS Securities LLC in Stamford, Connecticut. “The better job growth numbers are helping. Fed policy makers are going to sit back and take stock” rather than make any new moves.

Operation Twist’s Impact on U.S. Yields Comparable to Fed Easing, BIS Says (Source: Bloomberg)
The Federal Reserve’s extension of the average maturity of its holdings is comparable to its two rounds of asset purchases in lowering borrowing costs, according to the Bank for International Settlements. The program known as Operation Twist may lower the Treasury 10-year note yield by about 85 basis points, or 0.85 percentage point, compared with a reduction of 164 basis points under the Fed’s $2.3 trillion purchases of assets known as quantitative easing, a report from the Basel, Switzerland-based BIS said. Operation Twist “may have a significant impact on the 10- year Treasury bond yield, comparable to that of outright asset purchases,” Jack Meaning, an economics doctoral candidate at the University of Kent, and Feng Zhu, a BIS economist, wrote in the report, which was released today.
They said part of Operation Twist’s reduction of yields may be erased by the Treasury Department, which has increased its average debt maturity to 62.8 months, the highest level since 2002. The U.S. government’s increase in the average maturity of outstanding debt added 41 basis points to the 10-year note yield, Meaning and Zhu wrote.

China Has Biggest Trade Shortfall Since 1989 on Europe Turmoil (Source: Bloomberg)
China had its largest trade deficit since at least 1989 last month as Europe’s sovereign-debt turmoil damped exports and imports rebounded after a weeklong holiday. The shortfall was $31.5 billion, the customs bureau said yesterday. Imports rose 39.6 percent from a year earlier, after a 15.3 percent slump in January, while exports increased 18.4 percent, the bureau said. Data in the first two months are distorted by the timing of the Lunar New Year holiday, which fell in January this year and February in 2011. The data, along with lower-than-forecast inflation, industrial output and retail sales reported March 9, raise the odds PremierWen Jiabao will ease policies to support growth in the world’s second-biggest economy. Commerce Minister Chen Deming’s warning last week that boosting trade by 10 percent this year will require “arduous efforts” may also signal a slower pace of yuan gains as policy makers seek to aid exporters.
“Easing inflation and weakening economic activity send a strong signal for further loosening in the upcoming months,” said Shen Jianguang, Hong Kong-based chief greater China economist for Mizuho Securities Asia Ltd.

China Slowdown May Portend Easing as Asia Considers Options for Stimulus (Source: Bloomberg)
China’s economic growth slowed in the first two months of the year, with both exports and domestic demand moderating faster than analysts had forecast, building the case for Premier Wen Jiabao to accelerate stimulus measures. The world’s second-largest economy had the biggest trade deficit last month in at least 22 years, the weakest January- February factory-production gain since 2009 and retail sales below the median economist estimate, government data showed March 9 and 10. Inflation and lending growth also slowed, leaving Wen with more scope to loosen credit. The nation may cut interest rates for the first time since 2008 or lower banks’ required reserves a third time in four months as policy makers across Asia balance preserving firepower for a deterioration in Europe’s debt crisis with controlling inflation. India last week unexpectedly reduced its cash reserve ratio, while Australia’s central bank said it has scope to lower rates and South Korea and Indonesia held off from stimulus.
“Across Asia, the focus of macroeconomic policies is shifting towards supporting growth,” said Eswar Prasad, a former China division chief at the International Monetary Fund who’s now a senior fellow at the Brookings Institution in Washington. “Many economies are holding some policy room in reserve as they brace for possible spillovers from external shocks.”

Japanese Machinery Orders Signal Investment to Aid Rebound (Source: Bloomberg)
Japan’s machinery orders rebounded in January, signaling that company investment will help to drive a return to growth in the world’s third-biggest economy. Bookings (JNMOCHNG), an indicator of future capital spending, rose 3.4 percent from a month earlier, the Cabinet Office said in Tokyo today. The median estimate of 30 economists surveyed by Bloomberg News was for a 2.3 percent increase. In December, orders fell 7.1 percent. The Nikkei 225 Stock Average exceeded 10,000 for the first time in seven months on March 9 as Greece secured a rescue package, boosting prospects for European demand for Japanese exports. A weakening of the yen since the start of February will aid exporters such as Panasonic Corp. (6752) and Sony Corp. (6758) and the economy is set for a boost from reconstruction work after the earthquake a year ago.
“Global manufacturing activity is gaining momentum, and that’s positive for capital investment in Japan,” said Hiroshi Shiraishi, an economist at BNP Paribas in Tokyo. “We’re also seeing signs of improved overseas demand, particularly from Asia and the U.S., so that’s also good news.”

BRICs Fastest Inflation Accelerating Puts Subbarao on Hold: India Credit (Source: Bloomberg)
Indian inflation, the fastest among the biggest emerging markets, is poised to accelerate as oil costs rise for a nation that depends on imports for 80 percent of its energy requirements, interest-rate swaps show. The cost of locking in rates for five years rose to 7.49 percent in Mumbai on March 9, the highest in almost five months, according to data compiled by Bloomberg. Wholesale prices rose 6.69 percent last month after increasing 6.55 percent in January, according to the median forecast of economists in a Bloomberg survey before data due on March 14. That would compare with levels of 6.2 percent in Brazil, 3.2 percent in China and 3.7 percent in Russia. Reserve Bank of India Governor Duvvuri Subbarao on March 9 unexpectedly slashed the amount of deposits lenders need to set aside as reserves to ease a cash squeeze in the banking system.
He’ll refrain from lowering borrowing costs at this week’s policy meeting, a separate survey showed, as this year’s 16.4 percent rise in Brent threatens to fuel inflation in a nation where 80 percent of the population lives on less than $2 a day. “Oil prices are becoming a big concern and will aggravate inflation,” Killol Pandya, the Mumbai-based head of fixed- income investment at the local unit of Daiwa Asset Management Co. that oversees $225 million, said in an interview on March 9. “A rate cut is unlikely to happen this month.”

Philippines Central Bank May Pause After Its Two Rate Cuts, Tetangco Says (Source: Bloomberg)
The Philippine central bank may pause after reducing the benchmark interest rate at both of its meetings so far this year as elevated oil prices threaten to spur inflation, Governor Amando Tetangco said. “Pausing gives us time to digest and monitor the impact of past policy actions and to consider other relevant data,” Tetangco said in an e-mailed reply to questions March 10. “A pause is always on the table, as are other policy moves.”
Bangko Sentral ng Pilipinas cut interest rates by a quarter-percentage-point at each of its past two policy meetings, taking the overnight borrowing rate to 4 percent, the lowest level in a year. The Philippines reduced borrowing costs in a bid to shore up faltering growth and stave off the destabilizing effects of Europe’s debt crisis on the global economy. Crude oil prices have gained more than 8 percent so far this year, a jump that risks spurring price pressures in a nation that imports almost all its requirements, even as inflation cooled to its slowest pace in more than two years in February.

European Finance Ministers Set to Approve Greek Aid Payout, Examine Spain (Source: Bloomberg)
Euro-area finance ministers seeking to step past the largest sovereign debt restructuring in history will attempt to gain a foothold this week as they grapple with implementing the latest Greek bailout. Ministers from the 17 nations that share the euro will gather in Brussels today to sign off on the 130 billion-euro ($170 billion) second package for Greece after bondholders agreed last week to take a loss on the country’s debt. They’ll also focus on Spain’s budget-cutting efforts and Portugal’s aid program, underscoring their desire to prevent contagion. The debt swap seeks to wipe more than 100 billion euros off Greece’s books and contain an economic collapse in the country as European overseers work to hold Greek leaders to their commitments. The difficulties the government in Athens will confront in meeting creditors’ demands have prompted speculation of still further assistance.
“You have to see it very realistically,” Austrian Central Bank Governor Ewald Nowotny told state broadcaster ORF March 10 when asked about the possibility of a third Greek package. “It would be foolish to rule such a thing out completely, but I don’t see the necessity at this time.”

IMF Scales Back Aid to Greece in Nation’s 2nd Rescue Package (Source: Bloomberg)
The International Monetary Fund intends to contribute 18 billion euros ($23.6 billion) in fresh funds to the second aid package for Greece, scaling back IMF help for the nation that triggered Europe’s debt crisis. The planned IMF contribution disclosed yesterday represents 14 percent of the 130 billion-euro second rescue of Greece being arranged with the euro area. The IMF accounted for 27 percent -- or 30 billion euros -- of Greece’s initial 110 billion-euro bailout in May 2010. “The IMF is trying to manage a difficult balance between staying involved in the rescue package for Greece while limiting the risk to its own funds,” Eswar Prasad, a senior fellow at the Brookings Institution in Washington and a former IMF official, said in an e-mail. The IMF is “increasing its overall exposure to Greece. This poses both financial and political risks for the fund.”

India’s Central Bank Cuts Reserve Ratio as Cash Squeeze Threatens Economy (Source: Bloomberg)
India’s central bank unexpectedly cut the amount of deposits lenders need to set aside as reserves to ease a cash squeeze in the banking system that threatens to deepen an economic slowdown. The Reserve Bank of India reduced the cash reserve ratio to 4.75 percent from 5.5 percent, according to an e-mailed statement yesterday. The move, the first such action outside a policy meeting since July 2010, will add 480 billion rupees ($9.6 billion) into lenders, it said. The bank last reduced the ratio by 50 basis points, or 0.5 percentage point, on Jan. 24. The unscheduled step before a March 15 policy review underscores the RBI’s concern that a shortage of cash in the banking system will hurt the economy, forecast to expand at the slowest pace in three years in the fiscal period ending March 31. Asian nations including China and the Philippines have eased monetary policy to spur growth amid Europe’s debt crisis.
“The strong and surprise action by the RBI is aimed at ensuring that the rapid deterioration in growth momentum is arrested,” said Shubhada Rao, chief economist at Yes Bank Ltd. (YES) in Mumbai. “The CRR cut will help alleviate the stress in the banking system and guide the liquidity deficit to lower levels.”

Egypt Reports February Inflation Accelerated on Increases in Food Prices (Source: Bloomberg)
Egypt’s inflation rate accelerated in February on rising food prices, one of the causes of unrest that toppled President Hosni Mubarak in 2011. The annual inflation rate in urban parts of Egypt, the gauge the central bank monitors, increased to 9.2 percent from 8.6 percent in January, the official statistics agency said on its website today. Food and beverage costs, the biggest component of the consumer-price index, increased an annualized 12.6 percent compared with 11.2 percent in January. February’s higher inflation figure follows “a depreciated exchange rate as compared to the previous year,” said Nada Farid, a Cairo-based economist at investment bank Beltone Financial. “We believe the Central Bank of Egypt will keep policy rates unchanged” at its upcoming meeting, “to balance between slight inflationary pressures and still-weak economic prospects.”
Gross domestic product expanded 0.4 percent in the three months ended Dec. 31, compared with growth of 0.2 percent in the previous quarter and 5.6 percent a year earlier, according to a Ministry of Planning and International Cooperation report. The economy grew 1.8 percent in the fiscal year through June, the slowest pace in at least a decade.

Dubai Shares Advance Most in Two Years on Oil Price, U.S. Employment Gains (Source: Bloomberg)
Dubai’s shares surged the most in more than two years as oil rose and investors bet stronger-than- forecast U.S. jobs data will bolster global growth, helping the emirate’s benchmark index extend a rally. Arabtec Holding Co. (ARTC), the United Arab Emirates’ biggest construction company, surged the most since 2010. Dubai Financial Market PJSC (DFM) soared 9.7 percent. The DFM General Index (DFMGI) rallied 4.7 percent, the largest advance since December 2009, to 1,686.66, at the 2 p.m. close in the emirate. The Bloomberg GCC 200 (BGCC200) Index of Persian Gulf stocks added 1.1 percent. Dubai’s shares have rallied 25 percent so far this year after improved earnings and dividends boosted investor confidence. They posted their first weekly drop since January last week, tumbling 5.4 percent amid speculation the surge may have been overdone. A U.S. report showing the best six-month streak of job growth since 2006 helped lift the Standard & Poor’s 500 Index (SPX) 0.4 percent on March 9.
“With international markets performing well, local sentiment has picked up,” said Ziad Dabbas, a financial analyst at National Bank of Abu Dhabi PJSC, the U.A.E.’s second-biggest bank by assets. “After the strong correction last week, some believe this is an opportunity to go back in. We feel the market may ultimately continue to improve in the long term.”

20120312 0936 Global Commodities Related News.

Hedge Funds Trim Bullish Bets Before Prices Rally on Economy: Commodities (Source: Bloomberg)
Hedge funds reduced bets on higher commodity prices for the first time in seven weeks after China cut its growth target, just as prices rallied on signs the U.S. economy is improving and Greece is containing its debt crisis. Money managers reduced combined bullish positions across 18 U.S. futures and options by 1.1 percent to 1.17 million contracts in the week ended March 6, Commodity Futures Trading Commission data show. Investors cut bets on copper by the most in two months and those on oil by the most since December. China uses more copper and energy than any other nation. Commodities fell 1.5 percent in the week ended March 6, a day after China cut its economic-growth target to 7.5 percent, from 8 percent, the lowest since 2004. Prices rebounded 2.1 percent in the following three days, extending this year’s advance to 9.7 percent, as Greece and bond investors agreed to the biggest sovereign restructuring in history and the U.S. added more jobs than economists were expecting.

EU Governments Still At Odds On Approval Process For GMOs (Source: CME)
European Union environment ministers were deadlocked once more, as they failed to reach agreement on a proposal that would give national governments the power to restrict or ban cultivation of genetically modified crops. "It has been a long discussion, it has been a hard discussion, it has been a heated discussion," Ida Auken, the Danish environment minister who chaired the talks, said in a news conference. "I am of course disappointed...the status quo is something that nobody could prefer." Ministers were discussing a proposal by the European Commission--the EU's executive body--that would give member states the power to restrict or ban GMO crops, even after an EU approval procedure based on health and environment risk assessment has given a green light.
But ministers weren't able to agree as some, like Germany, questioned the compatibility of the plan with rules regulating the EU single market, while others voiced concern that the proposal wouldn't provide a sound enough legal basis for the bans, exposing them to potential challenges. The EU stance on GMOs has been highly controversial. Under current regulations, which have exasperated the EU's major trading partners such as the U.S. and caused friction with the World Trade Organization, any modified crop must undergo a strenuous approval process that often varies significantly between countries. A decade-long opposition by some member countries--who have to back the authorization by qualified majority--has been slowing approvals, with decisions ultimately falling on the commission because of continued disagreements in national governments.
This has led to the approval of only two genetically modified products, an anti-pest strain of corn developed by Monsanto Co. (MON), called Monsanto 810, and a starch potato, called Amflora, developed by Germany's BASF SE (BAS.XE). European public opinion is also sharply divided on the issue and nongovernmental organizations have been campaigning to oppose use of GMOs. The proposed new rules will have to get the green light from the EU Parliament and a large majority of member countries to become law.

Corn (Source: CME)
Corn futures rise amid speculation China is buying US product, though any large purchase during the ongoing annual meeting of China's congress would be unusual. Corn also get a boost from tight cash markets. "When you've got March corn over May corn and May corn over July corn, your spreads are screaming that we've got a little tighter cash market out there," says Jason Britt at Central States Commodities. Friday's USDA report had limited impact on corn. CBOT May futures ends up 9 1/2c at $6.45/bushel.

Wheat (Source: CME)
US wheat futures climb as the USDA lowered its outlook for domestic year-end supplies by 2.4% on increased exports. Larger global demand for wheat, with the largest increase in need coming from Iran, aided the advances. The market managed to ward off pressure from sharp gains in the US dollar as traders focused on corn in anticipation of increased feed usage of wheat caused by high-priced corn, analysts say. CBOT May wheat ended up 8 1/4c at $6.43/bushel, May KCBT rose 1/4c to $6.84 and May MGEX climbed 1 1/2c to $8.05.

Rice (Source: CME)
US rice futures end higher, rebounding after recent setbacks, with concerns about 2012 acreage generating modest support in a thinly traded market. CBOT May rice ends up 22 1/2c or 1.6% at $14.15 1/2 a hundredweight.

Soy at 5-month top on Chinese buying, wheat rebounds
SYDNEY, March 9 (Reuters) - Chicago soy futures rose to their highest in more than 5 months, on track for a fourth straight week of gains as the market was supported by strong U.S. export sales led by demand from China.
"The focus is on the USDA report and according to most forecasters, we are likely to see a contraction in oilseed numbers," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia.  

German farmers see 2012 wheat crop up 6.3 percent
HAMBURG, March 8 (Reuters) - Germany's 2012 wheat crop of all types will rise 6.3 percent on the year to 24.2 million tonnes from 22.7 million tonnes in 2011, the German Farm Cooperatives Association said on Thursday in its first harvest forecast.
Germany's 2012 winter rapeseed crop will to rise 25.6 percent to 4.8 million tonnes from 3.8 million tonnes in 2011, the cooperatives forecast.

Spain imports Brazil wheat under quota, US seen next
MADRID, March 8 (Reuters) - Spain has imported wheat from Brazil under a special quota to help fill its grain deficit, trade sources said Thursday, and shipments of U.S. wheat are expected in the coming weeks.
Spanish dealers usually use so-called tariff-rate quota (TRQ) permits to import from Black Sea countries such as Ukraine and Russia, but reported hold-ups due to cold weather and competitive pricing in recent weeks diverted interest to across the Atlantic.

USDA Cuts Outlook For S American Soybean Crop, US Wheat Supplies (Source: CME)
Federal forecasters cut their outlook for the South American soybean crop, predicting prices to rise and demand to slow as global supplies shrink. Soybean prices have been at six-month highs as dry weather curbs production in Brazil and Argentina, respectively the second and third largest exporters of crop after the U.S. The latest U.S. Department of Agriculture forecast provided little fuel for the market rally, confirming widespread expectations of crop damage from drought conditions. The USDA said Brazil, the world's second largest soybean-producing nation behind the U.S., is now expected to produce 68.5 million metric tons of soybeans this year, a 4.9% drop from the February forecast. Argentina's production was lowered by 3.1% to 46.5 million metric tons. "The lower numbers were in the ballpark of trade estimates, but more aggressive," said Bill Nelson, an analyst with Doane Advisory Services in St. Louis.
Still, the USDA left its forecast for U.S. supplies unchanged, not expecting export demand to pick up even as South America has less soybeans to ship to major buyers like China. Federal forecasters said smaller soybean supplies in South America are boosting prices, and those higher prices will tamp down global demand for imports. The USDA now expects soybean prices for the current crop year ending Aug. 31 to average $11.40 to $12.60 a bushel, up 30 cents from a month ago. Although leaving U.S. supplies the same, the agency did lower its outlook for world soybean supplies. The USDA now expects global inventories at 57.3 million metric tons, down from last month's forecast for 60.3 million metric tons. As for corn and wheat, the report gave a boost to both markets. Wheat for May delivery recently traded up 14 1/4 cents, or 2.2%, to $6.49 a bushel, while corn for May delivery climbed 13 1/2 cents, or 2.1%, to $6.49 a bushel.
The USDA lowered its outlook for U.S. wheat supplies by 2.4% to 825 million bushels, seeing exports of the grain picking up. Global demand for wheat imports is up, forecasters said, with the largest increase in need coming from Iran. Still, the agency sees domestic demand for wheat weakening, pointing to recent flour production data. The USDA changed little in its forecast for corn, leaving U.S. supplies the same, while slightly lowering world supplies. Analysts said some of the strength in market Friday came from traders buying contracts to exit positions speculating corn prices would fall on the crop report.

Global Wheat, Soy and Corn Reserves Decline as Demand Grows, Crops Falter (Source: Bloomberg)
Global inventories of wheat and soybeans are falling more than forecast, while U.S. corn reserves head to a 16-year low, as farmers fail to keep pace with rising demand for food, livestock feed and biofuel. The U.S. Department of Agriculture today cut its forecast of world wheat stockpiles on May 31 by 1.7 percent to 209.6 million metric tons, less than all 21 estimates collected in a Bloomberg survey. Soybean reserves on Aug. 31 will drop to a three-year low of 57.3 million tons, while the amount of corn held in the U.S., the world’s top grower and exporter, will slip to the lowest since at least since 1996, the agency said. U.S. farm exports rose to a record $136.3 billion in 2011 on surging demand for grain and meat in Asia. The government today boosted its forecast of U.S. wheat exports by 2.6 percent from February, which will send domestic stockpiles to a three- year low.
Global food prices tracked by the United Nations rose for a second consecutive month in February on higher costs for cereals, cooking oils and sugar. “This was probably one of the best reports we’ve seen in wheat in six or seven months,” Mike Zuzolo, the president of Global Commodity Analytics & Consulting in Lafayette, Indiana, said in a telephone interview. “Corn is getting replaced by wheat in the feed rations and some of the food rations even, because of the price discount.”

Argentina grains exchange trims corn estimate
BUENOS AIRES, March 8 (Reuters) - The Buenos Aires Grains Exchange on Thursday cut its estimate for Argentina's 2011/12 corn harvest to 20.8 million tonnes from 21.3 million tonnes previously due to the impact of a drought.
Recent showers have delayed corn and soy gathering after a long dry spell raised questions about how much corn would be available for export from the No. 2 global supplier.

ICE cocoa surges, arabicas drop to 16-month low
NEW YORK/LONDON, March 8 (Reuters) - Cocoa futures on ICE rose more than 5.5 percent on Thursday in a largely technical rally while arabica coffee slid to a 16-month low after an initial advance sputtered.  
"There's no (fundamental) scare," said Nick Gentile, chief trader at commodity fund Atlantic Capital Advisors in New Jersey. "It's a technical move."

Thailand should free sugar prices for single market -millers
BANGKOK, March 9 (Reuters) - The Thai government should start to liberalise the domestic sugar trade by floating retail prices to avoid possible shortages when Southeast Asian countries launch their single market, scheduled for 2015, millers said on Friday.
The Association of Southeast Asian Nations (ASEAN), combining 10 countries and 583 million consumers, is working to form the ASEAN Economic Community (AEC), in which goods, services and labour are supposed to move freely across borders.

Indonesia exchange halts trading in cocoa producer Davomas
JAKARTA, March 9 (Reuters) - Indonesia's stock exchange halted trading in shares of cocoa producer PT Davomas Abadi  on Friday because of a "failure of debt coupon payment", the exchange said in a statement and requested an explanation from the company.
The company is one of the main cocoa grinders in Southeast Asia's largest economy.

China association blasts Indian cotton export ban
BEIJING, March 9 (Reuters) - China's cotton industry association has criticised India's decision to ban cotton exports, saying it was "irresponsible" and would disrupt the global market.
India, the world's second largest cotton producer, said on Monday it had stopped exports with immediate effect to ensure supplies for domestic mills, fuelling speculation that main consumer China would have to turn to other sources.

India allows cotton exports approved up to March 4
NEW DELHI, March 9 (Reuters) - India will allow cotton exporters to ship out cargoes that had been cleared by customs for overseas sales before March 4, a commerce ministry statement said on Friday.
The world's second-largest cotton producer banned exports unexpectedly on Monday as domestic demand threatened to outstrip availability, boosting global prices.

India Decides to End Cotton-Export Ban After Protests From Growers, China (Source: Bloomberg)
India, the world’s second-biggest cotton producer, scrapped a one-week-old ban on exports of the fiber after protests from growers, traders and China, the nation’s biggest buyer. “Keeping in view the interests of the farmers, industry, trade, a balanced view has been considered by the Group of Ministers to roll back the ban,” Trade Minister Anand Sharma said in an e-mailed statement yesterday. The ministry will publish details for repealing the March 5 ban today, Sharma said. India barred exports to secure domestic supplies after sales exceeded the government’s estimate of the country’s exportable surplus. The resumption of international sales may add to global supplies and pressure futures, which have fallen 55 percent in New York in the past year.
“This will help farmers get a higher price immediately, at least 10 percent more, and encourage cotton planting for next year,” Dhiren Sheth, president of the Cotton Association of India, said in a phone interview yesterday. “The government decision will help avoid disputes and arbitration in international markets.”

India Allows Exceptions To Ban On Cotton Exports (Source: CME)
India's ban on cotton exports imposed earlier this week will continue, as a ministerial panel's meeting to review the move remained inconclusive. However, the government eased the freeze on shipments by allowing some exceptions via an order earlier in the day. "As of now discussion were held, but they are inconclusive and the final decision will be taken later [by the panel]," Textiles Secretary Kiran Dhingra told reporters. "Further discussions will be needed." She said a decision on the issue is likely to be taken shortly. The trade ministry banned cotton exports Monday for a second time in nearly two years, citing concerns that lower stocks could put upward pressure on local prices. The government decided to review the ban after Farm Minister Sharad Pawar raised objections against the move, saying it would harm farmers. Earlier in the day, the government issued a notification allowing shipments of the consignments for which paperwork had been completed by March 4, the day before the ban was imposed.
"We welcome the move," said Dhiren Seth, president of the Cotton Association of India, adding that the quantities shipped under the exception would be small. In India, an exporter must register the shipment quantity with the government and obtain customs clearance before shipping cargo. The country is the world's second-largest cotton exporter after the U.S. The ban sent cotton prices on ICE Futures in the U.S. higher earlier this week. But the prices have eased due to the move to review the ban. The ban on cotton exports announced Monday, aimed at ensuring sufficient domestic supplies and stable prices, was the second in less than two years. In addition to domestic opponents of the ban, the China Cotton Association this week strongly protested it, describing it as a "no-win" decision that will seriously disrupt international trade. China is the largest importer of Indian cotton, taking 1 million metric tons in 2011.
The Trade Ministry said this week that the ban was imposed because exporters had already shipped 9.4 million bales of cotton, more than the 8.4 million bales of exports projected for the marketing year that started Oct. 1. One bale is equal to 170 kilograms.

Cotton Imports by China May Jump Amid State Stockpiling, Association Says (Source: Bloomberg)
Cotton (CCUIIQTL) imports by China, the largest consumer, will increase this year as government buying absorbs domestic production, according to the China Cotton Textile Association. “We’ve got a shortfall,” Sun Yingan, deputy president of the association, said in an interview with Bloomberg News today in Beijing. Shipments may gain to as much as 4 million metric tons as state stockpiling has shrunk the amount available on the domestic market, Sun said. The group has more than 700 members whose yarn and cloth account for 60 percent of China’s output, according to its website. Increased buying by China may help curb a 57 percent tumble in prices over the past year after farmers boosted output to a record. Imports may jump by 54 percent to 18.5 million 480-pound bales (4 million tons) this year, according to a March estimate by the U.S. Department of Agriculture. China may turn to the U.S. and Australia to secure supplies amid an Indian ban on exports, according to Yong An Futures Co.

Rains shaky as Brazil coffee crop heads for finish line
BRASILIA, March 8 (Reuters) - Overly-dry weather in Brazil's main coffee areas will give way to helpful regular showers in the final weeks of the crop's development, forecasters said on Thursday, but a renewed dry spell in the last six weeks may hold yields down.
The world's top coffee grower should begin harvesting from May a good-sized crop that has battled through a rare frost, then alternating dryness and heavy rain that briefly enabled bacterial disease to take hold in important regions.

Oil Drops From Highest Settlement in More Than a Week in New York Trading (Source: Bloomberg)
Oil for April delivery slid as much as 45 cents, or 0.4 percent, to $106.95 a barrel in electronic trading on the New York Mercantile Exchange and was at $107.03 at 9:23 a.m. Tokyo time. The contract climbed 82 cents to settle at $107.40 a barrel on March 9, the highest close since March 1. Brent oil for April settlement dropped 37 cents to $125.61 a barrel on the London-based ICE Futures Europe exchange.

Brent rises above $125 on Greece debt hopes, China data
SINGAPORE, March 9 (Reuters) - Brent crude rose above $125 a barrel, posting its sixth weekly gain in seven, as Greece successfully closed its bond swap offer for creditors, a key step towards securing an international bailout to avoid a messy default.  
"Europe has a big impact on Brent prices and the market has been pricing in a more positive outcome and is also closely watching sentiment data out of the United States," said Natalie Robertson, an analyst at ANZ Bank.

Gold for April Delivery in New York Advance for a Fourth Day, Gaining 0.3% (Source: Bloomberg)
Gold for April delivery climbed for a fourth day on the Comex in New York, gaining as much as 0.3 percent to $1,717.40 an ounce. It traded at $1,716.90 an ounce at 6:05 a.m. Singapore time. Cash gold was little changed at $1,714.68 an ounce. May-delivery silver rose for a fourth day, adding as much as 0.5 percent to $34.375 an ounce, before trading at $34.37 an ounce on Comex. Spot metal also increased for a fourth day, advancing 0.2 percent to $34.3725 an ounce.

20120312 0938 Global Market Related News.

Most Asian Stocks Rise on Improving U.S. Jobs Data, Japan Machinery Orders (Source: Bloomberg)
Most Asian stocks rose after a rebound in Japan’s machinery orders and better-than-expected U.S. jobs data eased concern a slowdown in Europe and China will derail global economic growth. Hitachi Construction Machinery Co. (6305), a maker of bulldozers and cranes, rose 2.4 percent in Tokyo. Panasonic Corp., an electronics company that gets about 10 percent of its sales in the U.S., climbed 1.4 percent after the dollar strengthened against the yen. Samsung Electronics Co., South Korea’s No. 1 consumer electronics exporter, fell 1.1 percent in Seoul after Apple Inc. claimed the company violated a court order in a patent-infringement case. The MSCI Asia Pacific Index fell 0.1 percent to 126.80 as of 9:39 a.m. in Tokyo, with about three stocks advancing for every two that dropped. Two of 10 industry groups in the measure advanced. Japan’s Nikkei 225 Stock Average (NKY) rose 0.7 percent after the nation’s machinery orders rebounded in January, signaling company investment will help to drive a return to growth.
Australia’s S&P/ASX 200 slipped 0.4 percent, while South Korea’s Kospi Index slid 0.5 percent.

Japanese Stocks Advance For Third Day as U.S. Employment Data Lifts Dollar (Source: Bloomberg)
March 12 (Bloomberg) --　Japanese stocks rose for a third day, extending a rally of five consecutive weeks, after better- than-expected U.S. jobs data pushed the dollar to a 10-month high against the yen, boosting exporters’ earnings outlook. The Nikkei 225 Stock Average (NKY) rose 0.9 percent to 10,021.51 as of 9:01 a.m. in Tokyo. The broader Topix Index gained 0.5 percent to 853.13. The gauge added 1.3 percent last week, capping its fifth weekly gains.

European Stocks Decline as Best Annual Start Since 1998 Seen as Overdone (Source: Bloomberg)
European stocks fell this week as investors speculated the Stoxx Europe 600 Index’s best start to a year since 1998 has overshot the outlook for the economy. Enel SpA sank to a record low as Italy’s largest utility cut its dividend target to reduce debt. PSA Peugeot Citroen sank 7.8 percent after Europe’s second-biggest carmaker announced a 1 billion-euro ($1.3 billion) rights offer. Salzgitter AG lost 7 percent after the steelmaker said it was“impossible” to provide an earnings forecast. The benchmark Stoxx 600 (SXXP) slid 0.7 percent to 265.44 this past week, the biggest drop since Feb. 10. The gauge rose for the past three days as Greece persuaded most bondholders to accept a debt exchange, rebounding from the biggest two-day drop since November earlier in the week. The index had climbed 9.3 percent from the start of the year through March 2 as the European Central Bank lent the region’s lenders more than 1 trillion euros and U.S. data topped forecasts.
“The force of the move into the new year really took the market into extended overbought conditions; technically it looked like there was a need for some consolidation,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. in London. “We could see more of a consolidation phase going forward, but the fundamental picture is still looking more supportive than before.”

S&P 500 Caps Fourth Weekly Advance as Employment Growth Exceeds Forecasts (Source: Bloomberg)
U.S. stocks rose, capping the fourth straight weekly rally for the Standard & Poor’s 500 Index, after a government report showing stronger-than-forecast payroll growth bolstered optimism in the world’s largest economy. Financial shares had the biggest gain among 10 groups in the S&P 500 as Greece’s private creditors agreed to a debt swap. JPMorgan Chase & Co. (JPM) and BB&T Corp. (BBT) added at least 1.2 percent. Lennar Corp. (LEN) and D.R. Horton Inc. rallied more than 3 percent, pacing gains in homebuilders, after Credit Suisse Group AG raised its recommendations for the companies. Starbucks Corp. (SBUX) rose 2.9 percent on plans to introduce a new single-cup brewer.
The S&P 500 added 0.4 percent to 1,370.87 at 4 p.m. New York time. The index rose 2.1 percent in four weeks. The Dow Jones Industrial Average gained 14.08 points, or 0.1 percent, to 12,922.02. The Russell 2000 Index of small companies jumped 1.3 percent to 817. About 6.2 billion shares changed hands on U.S. exchanges, or 6.4 percent below the three-month average. “The jobs report was solid, but not spectacular,” said James McDonald, chief investment strategist at Northern Trust Corp. in Chicago. His firm manages $663 billion. “This helps depict the U.S. as the standout Western economy continuing to slowly, but steadily repair. We didn’t see any improvement in the unemployment rate. That tells me the Fed is going to stay accommodative. The path of least resistance for stocks is up.”

Emerging-Market Equity Funds Record 10th Week of Inflows, EPFR Global Says (Source: Bloomberg)
Emerging-market stock funds took in $907 million in the week ended March 7, the 10th week of inflows and the longest run of gains since 2010, according to EPFR Global. Inflows were lured as an easing in tensions with Iran outweighed the prospect of slower growth in China, according to EPFR. Net investment into developing-nation equity funds has totaled $22.6 billion in 2012, compared with outflows of $19.6 billion for the same period of 2011, according to a report e- mailed today by the Cambridge, Massachusetts-based data provider. So-called Global Emerging-Market funds, or GEM funds, recorded net inflow for the week of $1.3 billion, the data show. Asian funds excluding Japan recorded a net outflow of $418 million, Cameron Brandt, EPFR director of research, said by e- mail today. China cuts its economic growth target to 7.5 percent on March 5, from an 8 percent goal in place since 2005.

Retail Sales Likely Rose on Autos, Fuel (Source: Bloomberg)
Retail sales in the U.S. probably rose in February by the most in five months, spurred by the strongest demand for automobiles since 2008, economists said before reports this week. The 1.1 percent rise would follow a 0.4 percent gain in January, according to the median forecast of 67 economists surveyed by Bloomberg News ahead of Commerce Department figures due March 13. Industrial production picked up in February, while inflation excluding food and energy remained in check. Sales at retailers like Gap Inc. (GPS) and Target Corp. (TGT) last month beat analysts’ estimates, a sign an improving job market is helping bolster consumer spending, the biggest part of the economy. A pickup in payrolls, accompanied by limited wage growth, may not be enough to satisfy Federal Reserve officials, who this week will probably reaffirm their commitment to keeping interest rates low through 2014.
“Retail sales could be pretty strong for February,” said Omair Sharif, an economist at RBS Securities LLC in Stamford, Connecticut. “The better job growth numbers are helping. Fed policy makers are going to sit back and take stock” rather than make any new moves.

Operation Twist’s Impact on U.S. Yields Comparable to Fed Easing, BIS Says (Source: Bloomberg)
The Federal Reserve’s extension of the average maturity of its holdings is comparable to its two rounds of asset purchases in lowering borrowing costs, according to the Bank for International Settlements. The program known as Operation Twist may lower the Treasury 10-year note yield by about 85 basis points, or 0.85 percentage point, compared with a reduction of 164 basis points under the Fed’s $2.3 trillion purchases of assets known as quantitative easing, a report from the Basel, Switzerland-based BIS said. Operation Twist “may have a significant impact on the 10- year Treasury bond yield, comparable to that of outright asset purchases,” Jack Meaning, an economics doctoral candidate at the University of Kent, and Feng Zhu, a BIS economist, wrote in the report, which was released today.
They said part of Operation Twist’s reduction of yields may be erased by the Treasury Department, which has increased its average debt maturity to 62.8 months, the highest level since 2002. The U.S. government’s increase in the average maturity of outstanding debt added 41 basis points to the 10-year note yield, Meaning and Zhu wrote.

China Has Biggest Trade Shortfall Since 1989 on Europe Turmoil (Source: Bloomberg)
China had its largest trade deficit since at least 1989 last month as Europe’s sovereign-debt turmoil damped exports and imports rebounded after a weeklong holiday. The shortfall was $31.5 billion, the customs bureau said yesterday. Imports rose 39.6 percent from a year earlier, after a 15.3 percent slump in January, while exports increased 18.4 percent, the bureau said. Data in the first two months are distorted by the timing of the Lunar New Year holiday, which fell in January this year and February in 2011. The data, along with lower-than-forecast inflation, industrial output and retail sales reported March 9, raise the odds PremierWen Jiabao will ease policies to support growth in the world’s second-biggest economy. Commerce Minister Chen Deming’s warning last week that boosting trade by 10 percent this year will require “arduous efforts” may also signal a slower pace of yuan gains as policy makers seek to aid exporters.
“Easing inflation and weakening economic activity send a strong signal for further loosening in the upcoming months,” said Shen Jianguang, Hong Kong-based chief greater China economist for Mizuho Securities Asia Ltd.

China Slowdown May Portend Easing as Asia Considers Options for Stimulus (Source: Bloomberg)
China’s economic growth slowed in the first two months of the year, with both exports and domestic demand moderating faster than analysts had forecast, building the case for Premier Wen Jiabao to accelerate stimulus measures. The world’s second-largest economy had the biggest trade deficit last month in at least 22 years, the weakest January- February factory-production gain since 2009 and retail sales below the median economist estimate, government data showed March 9 and 10. Inflation and lending growth also slowed, leaving Wen with more scope to loosen credit. The nation may cut interest rates for the first time since 2008 or lower banks’ required reserves a third time in four months as policy makers across Asia balance preserving firepower for a deterioration in Europe’s debt crisis with controlling inflation. India last week unexpectedly reduced its cash reserve ratio, while Australia’s central bank said it has scope to lower rates and South Korea and Indonesia held off from stimulus.
“Across Asia, the focus of macroeconomic policies is shifting towards supporting growth,” said Eswar Prasad, a former China division chief at the International Monetary Fund who’s now a senior fellow at the Brookings Institution in Washington. “Many economies are holding some policy room in reserve as they brace for possible spillovers from external shocks.”

Japanese Machinery Orders Signal Investment to Aid Rebound (Source: Bloomberg)
Japan’s machinery orders rebounded in January, signaling that company investment will help to drive a return to growth in the world’s third-biggest economy. Bookings (JNMOCHNG), an indicator of future capital spending, rose 3.4 percent from a month earlier, the Cabinet Office said in Tokyo today. The median estimate of 30 economists surveyed by Bloomberg News was for a 2.3 percent increase. In December, orders fell 7.1 percent. The Nikkei 225 Stock Average exceeded 10,000 for the first time in seven months on March 9 as Greece secured a rescue package, boosting prospects for European demand for Japanese exports. A weakening of the yen since the start of February will aid exporters such as Panasonic Corp. (6752) and Sony Corp. (6758) and the economy is set for a boost from reconstruction work after the earthquake a year ago.
“Global manufacturing activity is gaining momentum, and that’s positive for capital investment in Japan,” said Hiroshi Shiraishi, an economist at BNP Paribas in Tokyo. “We’re also seeing signs of improved overseas demand, particularly from Asia and the U.S., so that’s also good news.”

BRICs Fastest Inflation Accelerating Puts Subbarao on Hold: India Credit (Source: Bloomberg)
Indian inflation, the fastest among the biggest emerging markets, is poised to accelerate as oil costs rise for a nation that depends on imports for 80 percent of its energy requirements, interest-rate swaps show. The cost of locking in rates for five years rose to 7.49 percent in Mumbai on March 9, the highest in almost five months, according to data compiled by Bloomberg. Wholesale prices rose 6.69 percent last month after increasing 6.55 percent in January, according to the median forecast of economists in a Bloomberg survey before data due on March 14. That would compare with levels of 6.2 percent in Brazil, 3.2 percent in China and 3.7 percent in Russia. Reserve Bank of India Governor Duvvuri Subbarao on March 9 unexpectedly slashed the amount of deposits lenders need to set aside as reserves to ease a cash squeeze in the banking system.
He’ll refrain from lowering borrowing costs at this week’s policy meeting, a separate survey showed, as this year’s 16.4 percent rise in Brent threatens to fuel inflation in a nation where 80 percent of the population lives on less than $2 a day. “Oil prices are becoming a big concern and will aggravate inflation,” Killol Pandya, the Mumbai-based head of fixed- income investment at the local unit of Daiwa Asset Management Co. that oversees $225 million, said in an interview on March 9. “A rate cut is unlikely to happen this month.”

Philippines Central Bank May Pause After Its Two Rate Cuts, Tetangco Says (Source: Bloomberg)
The Philippine central bank may pause after reducing the benchmark interest rate at both of its meetings so far this year as elevated oil prices threaten to spur inflation, Governor Amando Tetangco said. “Pausing gives us time to digest and monitor the impact of past policy actions and to consider other relevant data,” Tetangco said in an e-mailed reply to questions March 10. “A pause is always on the table, as are other policy moves.”
Bangko Sentral ng Pilipinas cut interest rates by a quarter-percentage-point at each of its past two policy meetings, taking the overnight borrowing rate to 4 percent, the lowest level in a year. The Philippines reduced borrowing costs in a bid to shore up faltering growth and stave off the destabilizing effects of Europe’s debt crisis on the global economy. Crude oil prices have gained more than 8 percent so far this year, a jump that risks spurring price pressures in a nation that imports almost all its requirements, even as inflation cooled to its slowest pace in more than two years in February.

European Finance Ministers Set to Approve Greek Aid Payout, Examine Spain (Source: Bloomberg)
Euro-area finance ministers seeking to step past the largest sovereign debt restructuring in history will attempt to gain a foothold this week as they grapple with implementing the latest Greek bailout. Ministers from the 17 nations that share the euro will gather in Brussels today to sign off on the 130 billion-euro ($170 billion) second package for Greece after bondholders agreed last week to take a loss on the country’s debt. They’ll also focus on Spain’s budget-cutting efforts and Portugal’s aid program, underscoring their desire to prevent contagion. The debt swap seeks to wipe more than 100 billion euros off Greece’s books and contain an economic collapse in the country as European overseers work to hold Greek leaders to their commitments. The difficulties the government in Athens will confront in meeting creditors’ demands have prompted speculation of still further assistance.
“You have to see it very realistically,” Austrian Central Bank Governor Ewald Nowotny told state broadcaster ORF March 10 when asked about the possibility of a third Greek package. “It would be foolish to rule such a thing out completely, but I don’t see the necessity at this time.”

IMF Scales Back Aid to Greece in Nation’s 2nd Rescue Package (Source: Bloomberg)
The International Monetary Fund intends to contribute 18 billion euros ($23.6 billion) in fresh funds to the second aid package for Greece, scaling back IMF help for the nation that triggered Europe’s debt crisis. The planned IMF contribution disclosed yesterday represents 14 percent of the 130 billion-euro second rescue of Greece being arranged with the euro area. The IMF accounted for 27 percent -- or 30 billion euros -- of Greece’s initial 110 billion-euro bailout in May 2010. “The IMF is trying to manage a difficult balance between staying involved in the rescue package for Greece while limiting the risk to its own funds,” Eswar Prasad, a senior fellow at the Brookings Institution in Washington and a former IMF official, said in an e-mail. The IMF is “increasing its overall exposure to Greece. This poses both financial and political risks for the fund.”

India’s Central Bank Cuts Reserve Ratio as Cash Squeeze Threatens Economy (Source: Bloomberg)
India’s central bank unexpectedly cut the amount of deposits lenders need to set aside as reserves to ease a cash squeeze in the banking system that threatens to deepen an economic slowdown. The Reserve Bank of India reduced the cash reserve ratio to 4.75 percent from 5.5 percent, according to an e-mailed statement yesterday. The move, the first such action outside a policy meeting since July 2010, will add 480 billion rupees ($9.6 billion) into lenders, it said. The bank last reduced the ratio by 50 basis points, or 0.5 percentage point, on Jan. 24. The unscheduled step before a March 15 policy review underscores the RBI’s concern that a shortage of cash in the banking system will hurt the economy, forecast to expand at the slowest pace in three years in the fiscal period ending March 31. Asian nations including China and the Philippines have eased monetary policy to spur growth amid Europe’s debt crisis.
“The strong and surprise action by the RBI is aimed at ensuring that the rapid deterioration in growth momentum is arrested,” said Shubhada Rao, chief economist at Yes Bank Ltd. (YES) in Mumbai. “The CRR cut will help alleviate the stress in the banking system and guide the liquidity deficit to lower levels.”

Egypt Reports February Inflation Accelerated on Increases in Food Prices (Source: Bloomberg)
Egypt’s inflation rate accelerated in February on rising food prices, one of the causes of unrest that toppled President Hosni Mubarak in 2011. The annual inflation rate in urban parts of Egypt, the gauge the central bank monitors, increased to 9.2 percent from 8.6 percent in January, the official statistics agency said on its website today. Food and beverage costs, the biggest component of the consumer-price index, increased an annualized 12.6 percent compared with 11.2 percent in January. February’s higher inflation figure follows “a depreciated exchange rate as compared to the previous year,” said Nada Farid, a Cairo-based economist at investment bank Beltone Financial. “We believe the Central Bank of Egypt will keep policy rates unchanged” at its upcoming meeting, “to balance between slight inflationary pressures and still-weak economic prospects.”
Gross domestic product expanded 0.4 percent in the three months ended Dec. 31, compared with growth of 0.2 percent in the previous quarter and 5.6 percent a year earlier, according to a Ministry of Planning and International Cooperation report. The economy grew 1.8 percent in the fiscal year through June, the slowest pace in at least a decade.

Dubai Shares Advance Most in Two Years on Oil Price, U.S. Employment Gains (Source: Bloomberg)
Dubai’s shares surged the most in more than two years as oil rose and investors bet stronger-than- forecast U.S. jobs data will bolster global growth, helping the emirate’s benchmark index extend a rally. Arabtec Holding Co. (ARTC), the United Arab Emirates’ biggest construction company, surged the most since 2010. Dubai Financial Market PJSC (DFM) soared 9.7 percent. The DFM General Index (DFMGI) rallied 4.7 percent, the largest advance since December 2009, to 1,686.66, at the 2 p.m. close in the emirate. The Bloomberg GCC 200 (BGCC200) Index of Persian Gulf stocks added 1.1 percent. Dubai’s shares have rallied 25 percent so far this year after improved earnings and dividends boosted investor confidence. They posted their first weekly drop since January last week, tumbling 5.4 percent amid speculation the surge may have been overdone. A U.S. report showing the best six-month streak of job growth since 2006 helped lift the Standard & Poor’s 500 Index (SPX) 0.4 percent on March 9.
“With international markets performing well, local sentiment has picked up,” said Ziad Dabbas, a financial analyst at National Bank of Abu Dhabi PJSC, the U.A.E.’s second-biggest bank by assets. “After the strong correction last week, some believe this is an opportunity to go back in. We feel the market may ultimately continue to improve in the long term.”