Wednesday, June 20, 2012

20120620 1736 FKLI EOD Daily Chart Study.

FKLI closed : 1607.5 changed : +10 points, volume : lower.
Bollinger band reading : upside biased with possible pullback correction.
MACD Histogram : rising higher, buyer in control.
Support : 1600, 1590, 1580, 1570 level.
Resistance : 1610, 1620, 1630, 1640 level.
Comment :
FKLI closed firmer with slower volume changed hand doing 3 points premium compare to cash market that also climb higher. Overnight U.S. markets closed higher and today Asia markets ended mostly higher while European markets currently having mixed development.
News on G-20 leaders meeting on support economic growth and help overcome Europe's debt crisis, speculation on China and U.S. stimulus measures send most regional market higher while investors awaits U.S. Federal Reserve monetary policy meeting tonight.
FKLI daily chart reading remained recommending an upside biased market development with possibly pullback correction after breaking recorded new year high of 1608.5.
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.

20120620 1713 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : upside biased with possible pullback correction.
Hang Seng chart reading : upside biased with possible pullback correction.
KLCI chart reading :  upside biased with possible pullback correction.

20120620 1624 Global Market & Commodities Related News.

Asian shares rose as investors bet that Europe's worsening debt crisis and faltering global growth will prompt major central banks to launch a new round of monetary stimulus. European shares looked set to open lower but losses could be limited on optimism U.S. central bank could launch a new round of monetary stimulus. U.S. stocks rose on Tuesday on hopes that the Federal Reserve will agree to extend stimulus measures as the economy struggles to recover and the euro zone's debt crisis gets worse.

The euro eased versus the dollar, but clung to much of the previous day's gains, with investors focusing on whether the U.S. Federal Reserve will adopt further monetary stimulus to support the economy's recovery.

FOREX-Euro slips, losses limited before Fed decision
SINGAPORE, June 20 (Reuters) - The euro eased versus the dollar, but clung to much of the previous day's gains, with investors focusing on whether the U.S. Federal Reserve will adopt further monetary stimulus to support the economy's recovery.
The euro also gained some support from signs that Greek parties may be close to forming a coalition government, and as Spanish government bonds gained a bit of respite on Tuesday after a recent sell-off.

U.S. corn slid as traders locked in profits after the contract jumped 10 percent in the previous two sessions on concerns that hot, dry weather in the Midwest will reduce new-crop yields.

SovEcon cuts outlook for Russia 2012/13 harvest
A top Russian grain analyst lowered his 2012/13 grain harvest forecast by 4.5 percent and his wheat harvest forecast by 5.7 percent from previous estimates and said the outlook could be reduced further due to falling yields.

Argentina agrees export of 6 mln tonnes new-crop wheat
Argentina's government authorized on Tuesday the export of 6 million tonnes of 2012/13 wheat as farmers advance with early plantings, officials said.

US farmers scrap new-crop deals as corn shrivels
Some farmers in the eastern U.S. Corn Belt have been buying back contracts of corn sold to their local elevators for post-harvest delivery as a deepening drought raised concern that there may be no grain to deliver.

Rain clogs Brazil's commodities ports with ships
Rain in southern Brazil is extending ship lineups at the country's largest agricultural commodities ports Santos and Paranagua, where more than 250 vessels are waiting to unload or load fertilizers, grains, sugar and other cargoes, the authorities said on Tuesday.

Brent crude was steady under $96 a barrel, but prices stayed close to 17-month lows hit the previous session as worries over Spain's deep borrowing costs lingered ahead of the outcome of the U.S. Federal Reserve's policy meeting.

POLL-U.S. crude stocks seen down on higher runs, lower imports
U.S. crude oil stockpiles likely fell last week for the third straight week due to increased refinery utilization and lower imports, an expanded Reuters poll of analysts showed on Tuesday.

Iran, world powers fail to settle nuclear dispute
World powers and Iran failed to secure a breakthrough at talks on Tehran's nuclear programme on Tuesday and set no date for more political negotiations, despite the threat of a new Middle East conflict if diplomacy collapses.

RUSAL: Aluminium 2013 price rise depends on China
MOSCOW, June 19 (Reuters) - Russia's RUSAL , the world's biggest aluminium producer, is prepared to cut output and costs this year to support prices, which could recover in 2013 if China also reduces production, a senior executive told Reuters.
"The market price is at a level where about 30 percent of producers are unprofitable. This means that people are forced to significantly reduce capital expenditures, which leads to stagnation of the industry," Oleg Mukhamedshin, RUSAL's   head of equity and corporate development, said in an interview.

Tinto approves $3.7 bln Australia iron ore expansion
SYDNEY, June 20 (Reuters) - Rio Tinto   will spend $3.7 billion to boost its Australian output of iron ore, its most profitable business, shrugging off forecasts of waning demand and a looming global supply glut as Chinese manufacturing slows.
The spending to increase iron ore production by 25 percent by 2016 is the lion's share of $4.86 billion in capital outlays approved by Rio's board and announced on Wednesday.

U.S. Steel warns imports threatening pipe market
NEW YORK, June 19 (Reuters) - A surge in imports of steel products into the United States so far this year could threaten the market for steel pipes for the oil and gas industry, one of the strongest sectors in the U.S. market, U.S. Steel Corp  Chief Executive John Surma said on Tuesday.
Imports of steel pipe into the United States jumped sharply in the first four months of the year from 2011, Surma said, a sign that foreign companies could be breaching global trade rules.

Brazil steel demand growth slowing -Gerdau
NEW YORK, June 19 (Reuters) - Brazilian steel makers face slower demand growth than expected as they struggle with higher costs and growing imports, Gerdau SA Chief Executive Andre Gerdau Johannpeter said on Tuesday, as he called on the government to step in to help the industry.
"Brazil steel consumption should grow by around 4 percent this year. It is not as much as we expected, but it is still some growth while the crisis in Europe is a real concern for the industry," he told Reuters in an interview on the sidelines of AMM's Steel Success Strategies conference.

Chinese copper demand to stay robust-Aurubis
Chinese copper demand is expected to continue to expand in the second half of 2012 as the country's moves to stimulate its economy are likely to raise consumption of the metal, Germany's Aurubis , Europe's biggest copper producer, said on Tuesday.

China daily crude steel output rises to 2 mln T-CISA
China's steel mills produced an average of 2 million tonnes of crude steel a day over the June 1-10 period, edging back to the record levels reached in early May, as large mills ramped up output, data from the China Iron and Steel Association (CISA) showed on Wednesday.

 Iron Ore-Spot on track to stretch gains to 9th day
SINGAPORE, June 20 (Reuters) - Spot iron ore prices mostly edged higher on Wednesday, putting the benchmark rate on course for a ninth consecutive day of gains - its longest rally in seven months - as traders took cargoes betting Chinese buyers would follow suit.
China's daily crude steel output neared record highs in early June, based on the latest industry estimate, suggesting producers may continue to replenish iron ore stockpiles, although some traders say prices may soon peak.

Brazil steel demand growth slowing -Gerdau
Brazilian steel makers face slower demand growth than expected as they struggle with higher costs and growing imports, Gerdau SA Chief Executive Andre Gerdau Johannpeter said on Tuesday, as he called on the government to step in to help the industry.

Peru mining chamber sees lower 2012 output
Peruvian mineral production will likely edge down for the fourth straight year in 2012 as reserves are depleted, demand slows abroad and social conflicts threaten to delay fresh projects, analysts say.

Argentine currency rules hit mine exports-industry
Mining companies in Argentina have sharply reduced exports because they are unable to meet a new government rule forcing them to cash in the proceeds within 30 days, the head of an industry group said on Tuesday.

London copper slipped on worries over Spain's debt problems and as some investors cashed in on gains made the previous day, but talk of further stimulus by the U.S. Federal Reserve that could lift demand for industrial metals lent support.

Gold rose, driven by hopes the U.S. Federal Reserve may do more to stimulate the world's top economy, a move which would boost bullion's appeal as a hedge against inflation.

METALS-London copper slips on Spain worries; Fed hopes limit fall
SHANGHAI, June 20 (Reuters) - London copper slipped on worries over Spain's debt problems and as some investors cashed in on gains made the previous day, but talk of further stimulus by the U.S. Federal Reserve that could lift demand for industrial metals lent support.
The U.S. Federal Reserve concludes a two-day policy meeting later, with expectations high that the central bank will extend its bond-buying programme dubbed "Operation Twist" to shore up the economy.

PRECIOUS-Cash gold rises on Fed stimulus hopes
SINGAPORE, June 20 (Reuters) - Gold rose on growing hopes the U.S. Federal Reserve may do more to stimulate the world's top economy, a move which would boost bullion's appeal as a hedge against inflation.
A trail of disappointing data indicating sluggish U.S. economic growth has raised speculation the Fed's bond-buying scheme dubbed "Operation Twist" may last beyond its June deadline - a less extreme step than outright purchases of new securities, widely known as quantitative easing.

Baltic index up, capesize rates turn higher
June 19 (Reuters) - The Baltic Exchange's main sea freight index tracking rates for ships carrying dry commodities rose on Tuesday as higher activity propped up freight rates in the overall dry bulk segment.
The overall index that reflects the daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels rose 16 points, or 1.71 percent, to 954 points, its highest since the end of May.

20120620 1135 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares rise as investors bet Fed will 'Twist' again
SINGAPORE, June 20 (Reuters) - Asian shares rose and the euro clung to most of the previous session's gains as investors bet that Europe's worsening debt crisis and faltering global growth will prompt major central banks to launch a new round of monetary stimulus.
"The market is waiting for the outcome of the Fed meeting, and many expect some kind of easing steps," said Yutaka Miura, senior technical analyst at Mizuho Securities in Tokyo. "If they're disappointed, U.S. stocks would fall, so that risk will likely keep the market here from pushing the upside too far."

COMMODITIES-Markets rally as Greece fears ebb, Fed hopes rise
NEW YORK, June 19 (Reuters) - Commodities staged their biggest rally since February, jumping more than 1 percent as the euro rose on optimism about progress in Greece after weekend elections, and on hopes for more U.S. monetary stimulus from the Federal Reserve.
"It's a big move across the board. Everyone's just buying," said Shawn Hackett, president at Hackett Financial Advisors in Florida, a firm focusing on agricultural markets analysis.

Oil-Brent crude dips as Iran, West plan July talks
NEW YORK, June 19 (Reuters) - Brent crude edged lower on relief that negotiations to defuse the dispute over Iran's nuclear program led to plans for technical talks in July, while hopes for more monetary stimulus from the Federal Reserve helped lift U.S. crude.
"It is significant that Iran agreed to meet after the European Union embargo (on Iranian oil) begins. There was definitely a growing sense that they were at their breaking point, ready to walk out," said John Kilduff, partner at Again Capital LLC in New York.

Japan May energy imports surge again after Fukushima
TOKYO, June 20 (Reuters) - Japan's coal, crude oil and liquefied natural gas (LNG) imports rose sharply in May from a year earlier as all of the country's nuclear plants were idled following the disaster at Fukushima, government data showed on Wednesday.
Japan's imports of LNG were 7.06 million tonnes last month, up 16.8 percent from a year earlier, preliminary data from the Ministry of Finance showed. They rose 2.2 percent from April.

Japan May crude oil import volume up 7.1 pct
TOKYO, June 20 (Reuters) - The volume of Japan's customs-cleared crude oil imports rose 7.1 percent in May from the same month a year earlier, the Ministry of Finance said on Wednesday.
Japan, the world's third-biggest oil consumer, imported 16.6 million kilolitres (3.37 million barrels per day) of crude oil last month, the preliminary data showed.  That compared with April imports of 19.157 million kl.

NATURAL GAS-Profit-taking drives US natgas futures to lower close
NEW YORK, June 19 (Reuters) - U.S. natural gas futures ended lower  as milder regional weather forecasts for later this week and next week prompted some investors to take profits after the front contract hit a four-week high overnight.
"There was buying momentum yesterday on the heat and on last week's storage report, but we sold off today on profit-taking," said Tom Saal, senior vice president at INTL Hencorp Futures.

EURO COAL-Prices rise by marginal 20c/T
LONDON, June 19 (Reuters) - Prompt physical coal prices rose by around 20 U.S. cents a tonne , a marginal move higher with stronger oil but no fresh trades were reported.
"The bids and offers have been close but there's little appetite to trade," one European trader said.

20120620 0939 Malaysia Corporate Related News.

Tune Talk launched an automatic top-up service for its subscribers in collaboration with global online payment company, Paypal. CEO, Jason Lo, said, "Subscribers need only to sign up for a PayPal account and link their credit or debt card. They can then set standing instructions for the top-up value ranging from RM10 to RM100 as they would in a regular online banking transaction." (Bernama)

Tune Talk plans to have 1m active subscribers and expand to 10 countries by year-end. CEO Jason Lo said the company wants to expand into Asean, eyeing countries like the Philippines, Laos and Vietnam. Currently, Tune Talk has presence in Indonesia, Cambodia, Sri Lanka and Bangladesh with about 700,000 active subscribers. "We adopt a high-volume approach. We want people to start utilising our products. So we really believe that when we capitalise on AirAsia's footprint throughout the region, slowly and surely we will see an increase in Tune Talk's relevance with regard to roaming," he said. (BT)

Malaysian Airlines (MAS) is now focusing on the plan to replace aircraft, as its priority, to enhance revenue as well as reduce operational costs, said Prime Minister Datuk Seri Najib Razak. As a strategic move towards regaining customer confidence, MAS will introduce long-haul services in utilising the Airbus A380 as a "new brand" for the airline from July 1, he added. He said MAS will join the one-world alliance at the end of this year to enhance its brand among other airline customers as well as improve the load factor with additional traffic. (Financial Daily)

Vale has placed orders for more than US$600m of port-handling equipment at China’s Dalian Huarui Heavy Industry as the construction of the miner’s transhipment centre in Malaysia enters its later stages. The equipment will be installed in Teluk Rubiah, Malaysia, where Vale is building a bulk transhipment centre that could handle up to 90m tonnes of iron ore a year. Vale’s US$1.3bn complex includes a blending centre, a pelletising plant and a port terminal, making Malaysia one of its most important marketing centres in Asia. Construction began last year and is due to be completed in late 2013 or 2014. (Lloyd’s List)

Ivory Properties Group Bhd is in talks with several parties to jointly develop certain parcels of land at its RM10bn Bayan Mutiara development. Its CEO Murly Manokharan said yesterday that Ivory hopes to seal at least one deal in three months. "We are looking for investors to jointly develop portions involving the commercial aspect of the proposed Penang World City project, such as the medical facilities and offices which are in the masterplan," he told reporters after the company's AGM. Murly said interested parties included firms from Singapore, Japan and Kuala Lumpur, but he did not name them."The Bayan Mutiara land is not for sale," he stressed, responding to a query if the company was planning to sell some of the land to individual investors. In March, Ivory shareholders gave their nod for the company to buy and develop a 41ha site in Bayan Mutiara on Penang island from the Penang Development Corp (PDC) and Chief Minister of Penang (Incorporated). The 41.5ha land, comprising 27.3ha of existing land and 14.2ha of land to be reclaimed - was sold for RM1.07bn or RM240psf and will be paid Last Nov, Ivory announced that it was entering into a 49:51 joint venture with Dijaya Corp Bhd to develop Bayan Mutiara. (BT)

Ivory Properties Group expects to see a huge jump in its revenue next year amid several projects to be launched in the second half of this year and early 2013. Its CEO Murly Manokharan, said next year would be exciting for Ivory with the Bayan Mutiara development kicking in and also its position as a turnkey builder for the project. (StarBiz)

Aeon Credit Service is aiming for double-digit growth in credit card issuance for the financial year ending Feb 20, 2013. Managing Director Yasuhiro Kasai said the company planned to launch a platinum credit card before year-end for high-end customers, apart from the present classic and golden cards. Yasuhiro said although personal financing is the biggest revenue contributor to AEON currently, used-car financing possessed a huge potential to be the company's future growth driver. He said the company also planned to open four more branch and service centres this year to expand its exposure. The centres will be located in Banting, Bangi, Gombak and Subang in Selangor. (BT)

Pacific & Orient Bhd’s unit Pacific & Orient Insurance Co Bhd has received approval from the Securities Commission to issue RM150m bonds. It had also obtained approval from Bank Negara Malaysia. (BT)

Genting, Lim units raise Echo Entertainment stakes to 7.7%
Companies linked to Genting and its chairman Tan Sri Lim Kok Thay increased their holdings in Echo Entertainment Group Ltd to 7.7% after a Hong Kong unit bought a stake in the operator of Sydney’s only casino. Genting Hong Kong Ltd bought 2.8% of Echo for AUD82.6m (RM264.4m), the company said on Monday. Genting Singapore plc last week revealed it also bought a stake, which Echo said was 4.9%. (Malaysian Reserve)

FGVH: Venture talks with Louis Dreyfus ongoing
Felda Global Ventures Holdings (FGVH)’s talks on a strategic venture partnership with Louis Dreyfus Commodities Asia (LDC) are ongoing, said FGVH group president Datuk Sabri Ahmad. The partnership is a win-win for both FGVH and LDC, in which both parties will be able to tap each other’s strengths – FGVH in its upstream and midstream activities and LDC in the downstream capabilities. (Malaysian Reserve)

KPS in deal to invest RM24m to push 2 mobile prepaid brands
Kumpulan Perangsang Selangor (KPS) plans to invest RM24m in the mobile virtual network operator (MVNO) business to expand into the voice and data telecommunication industry, its MD and CEO Suhaimi Kamaralzaman said. The investment in two phases will see its presence in two mobile prepaid brands – FRiENDi and Virgin Mobile. (M0alaysian Reserve)

AZRB bidding for several ‘big’ projects
Ahmad Zaki Resources (AZRB) is bidding for a number of new government- and private-driven projects, including the tower projects in the upmarket Kuala Lumpur International Financial District. Its MD Datuk Wan Zakariah Muda however declined to disclose the volume that the company has tendered for, only hinting the amount is “big”. (Malaysian Reserve) Please see accompanying report

Eversendai plans to acquire firms
Eversendai Corp, a specialist structural steel and power plant contractor, is buying several companies related to its core business to help achieve its RM2bn revenue target by 2016. The group, which has RM1.9bn worth of ongoing contracts in hand, is also bidding for more jobs in Southeast Asia, the Middle East and India. Group MD Datuk AK Nathan said the companies, both local and foreign, are involved in oil and gas and manufacturing will complement Eversendai’s own. (BT)

RHB Capital, OSK Holdings: Kam to head RHB-OSK IB, OSK founder Ong to be chairman
Kelle Kam, group MD of RHB Capital is tipped to head the merged investment bank unit of RHB and OSK Investment Bank while the latter’s founder, Tan Sri Ong Leong Huat will be its chairman. A source familiar with the developments said both RHB and OSK were looking for talents from the outside to head the merged entity but they were not able to find a suitable candidate outside. (Financial Daily)

Glomac: To boost sales to more than RM500m
Glomac’s sales for FY2012 is expected to be more than RM500m buoyed by strong demand in its 3 major townships. This will be the catalyst for the company to record positive growth for the year under review. The company will announce its financial results early next week. Glomac has registered about RM400m sales in FY2011. Group MD and CEO Datuk FD Iskandar said that the sales for its township development in Sungai Buloh, Rawang and Sri Saujana in Johor did very well. He said that these 3 townships contributed total sales of about RM270m as of April. He said that as of 31 Jan 2012, the company has already recorded sales of about RM343m and he is confident the company will cross the RM600m mark for 2012. (StarBiz)

Mulpha International: Eyes share buyback exercise or assets disposal
Mulpha International, which is trading at a large discount to its net tangible assets (NTA), is looking at narrowing this gap, according to executive chairman Lee Seng-Huang. He said that the board (of directors) is  exploring ways to close the gap.  As at March 31, Mulpha International's NTA stood at RM1.32 while its share price was 41 sen at the close Tuesday. Lee said the group would close the huge gap between its share price and NTA either through a share buyback programme or assets disposal that was above NTA. (StarBiz)

Oil & Gas: Fire at Sabah Oil and Gas Terminal
Petronas Carigali Sdn Bhd, a unit of Petonas said a fire had occurred at the site office of Se Jong M&E (M) Sdn Bhd, which undertakes the mechanical and piping works at the Sabah Oil and Gas Terminal (SOGT) in Kimanis near Kota Kinabalu. Petronas Carigali said the late morning fire was extinguished within an hour and there was no injury reported. It said Se Jong is a sub-contractor of the Samsung-Naim JV, which is the engineering, procurement, contractor and commissioning contractor for the SOGT. (Financial Daily)

20120620 0939 Global Economy Related News.

Malaysia : The government has no plans to increase the mandatory retirement age for civil servants to 66 years, the same mandatory retirement age for judges. Minister in the Prime Minister's Department Datuk Seri Mohamed Nazri Abdul Aziz said the government would instead appoint retired officers on contract basis. "In this way, the government can ensure that only retired officers with high performance will be appointed to meet service needs," he said. (Bernama)

Several emerging-market countries detailed their plans to boost the IMF's coffers by more than US$90bn, to push the total new commitments to about US$456bn: China is pledging US$43bn, while India, Russia, Brazil and Mexico told G-20 officials they would commit around US$10bn each. Turkey committed US$5bn, and a handful of others offered about US$1bn. (WSJ)

China’s commerce minister Chen Deming said his nation’s economy is heading for a rebound this month following government measures to support growth. He added that the target of 10% growth in trade this year is “still possible” if the European debt crisis can be contained in 2H12. (Bloomberg)

China offered US$43bn to the IMF’s crisis-fighting reserves, rounding off a global push to nearly double the Fund's war chest to US$456bn to help protect countries from fallout from the euro zone debt crisis. (Reuters)

UK: Inflation slows to weakest since November 2009 on fuel

UK inflation slowed to the weakest in 2 1/2 years in May, led by food and fuel prices, which may ease resistance among Bank of England policy makers to increase monetary stimulus. Consumer prices rose a 2.8% from a year earlier, compared with a 3% increase in April, the Office for National Statistics said. That’s the weakest since November 2009. Economists had forecast a gain of 3%, the median of 29 estimates in a Bloomberg News survey showed. From April, prices fell 0.1%, the first drop in that period since records began in 1996. (Bloomberg)

EU: Euro-Zone construction output falls
Construction output in the 17 nations that use the euro dropped 2.7% from March, and 5.0% from April 2011, the European Union's official statistics agency Eurostat said. Eurostat also lowered its estimate for the growth of construction output in March, to 11.4% from 12.4%. The decline in construction during April was widespread across the currency area, with building work down 6.0% in Germany, 2.3% in Spain and 4.4% in Italy. Among the euro zone's larger economies, only France posted a significant increase, of 2.3%. (Dow Jones Newswires)

EU: Euro rises against Dollar as EU seeks acceptable Greek path
The euro rallied to almost the highest level in a month against the dollar after a European Union official said a politically acceptable path will be sought for renegotiating Greece’s bailout conditions. The US currency fell against most of its major counterparts as the Federal Reserve starts a two-day meeting where 12 primary dealers expect some form of added stimulus from the central bank, while nine expect no action. The pound weakened versus the euro after UK inflation slowed in May to the least in 2 1/2 years. Mexico’s peso and Canada’s dollar rose after a report showed a measure of future construction in the US climbed to the highest since September 2008. (Bloomberg)

US: Housing starts in US fell in May to 708,000 annual rate
Builders in the US broke ground on fewer homes than forecast in May as a slump in the construction of apartments swamped a pick-up in single-family houses. Starts dropped 4.8% to a 708,000 annual pace from a revised 744,000 rate in the prior month that was the highest since October 2008, the Commerce Department reported. The median forecast of 77 economists surveyed by Bloomberg News called for a 722,000 pace. (Bloomberg)

The US pressed the EU and the IMF to renegotiate their bailout plan with Greece to give the new government more time to meet its obligations. (AFP)

US President Barack Obama felt "encouraged" by Europe's plans to move out of its economic crisis after talks on Monday with German Chancellor Angela Merkel, the White House said. (AFP)

US ICSC-Goldman Store Sales index rose 0.0% wow in the week ended 16 Jun (-0.7% in the prior week), whilst on a yoy basis, the measure gained 3.6% (2.9% in the earlier week). (Bloomberg)

US stocks rally to one-month high
US stocks advanced, sending the Standard & Poor’s 500 Index to the highest level in more than a month, as investors speculated the Federal Reserve will announce more measures to stimulate the world’s largest economy. The S&P 500 rose 1% to 1,357.98, gaining for a fourth day. The Dow Jones Industrial Average added 95.51 pts, or 0.8%, to 12,837.33. Trading volume for exchange-listed stocks in the US was about 6.8bn shares, or almost in line with the three-month average. (Bloomberg)

20120620 0938 Global Market Related News.

Asian Stocks Advance Amid Fed, China Stimulus Speculation (Source: Bloomberg)
Asian stocks gained, with the regional benchmark index heading for its highest close in a month, as investors speculated central banks from the U.S. to China may announce more stimulus measures to boost growth in the world’s largest economies. Sony Corp. (6758), Japan’s biggest consumer electronics maker, jumped 3.8 percent in Tokyo. Renesas Electronics Corp., the world’s largest maker of microcontrollers used in cars, added 1.3 percent after saying its partnership with Taiwan Semiconductor Manufacturing Co. Lynas Corp. gained 3 percent in Sydney, extending its advance for a third day, as a Malaysian parliamentary committee said the miner should be given permissiion for a rare-earths refinery. The MSCI Asia Pacific Index (MXAP) climbed 0.7 percent to 116.53 as of 9:44 a.m. in Tokyo, with almost seven shares rising for each that fell. More than $5 trillion has been erased from global equities since March amid concern growth is slowing in the U.S. and China, and as Europe’s debt crisis intensified.
“There will be more measures taken by central banks to stimulate the economy,” said Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Banking, where she helps oversee about $207 billion. “China also has more flexibility to ease monetary and fiscal policy.”

Asia Stocks Rise, Dollar Weakens Before Fed Decision; Corn Falls (Source: Bloomberg)
Asian stocks rose and the dollar held losses amid speculation the Federal Reserve will consider further stimulus measures when it concludes its meeting today. Corn snapped two days of gains. The MSCI Asia Pacific (MXAP) Index rose 0.6 percent at 9:37 a.m. in Tokyo as Japan’s Nikkei 225 Stock Average gained 0.8 percent. Standard & Poor’s 500 Index futures dropped 0.2 percent. The dollar remained lower against most of its major peers after losses yesterday. Corn futures fell 0.5 percent. Signs of faltering growth mean the Fed will announce new steps to boost the economy as soon as this week’s meeting, according to 12 of the 21 primary dealers who trade with the central bank, which is scheduled to release its statement on interest rates and the economy in Washington today. Group of 20 leaders were focusing their response on Europe’s financial crisis at a summit in Mexico as Greece’s creditors appeared set to ease bailout terms.
“We’re expecting something stimulatory,” Kurt Magnus, executive director of currency sales in Sydney at Nomura Holdings Inc., Japan’s biggest brokerage, said about the U.S. central bank meeting. “Any stimulus from the Fed is bearish for the U.S. dollar.” The dollar rose 0.2 percent to $1.2680 per euro after sliding 0.9 percent yesterday. The greenback on June 18 touched $1.2748, the weakest since May 22. The New Zealand dollar fell 0.4 percent, and the South Korean won gained 0.3 percent. Corn declined to $5.60 a bushel after rising for two days on concern that hot, dry weather will curb yields in U.S. growing areas. Gold for immediate delivery rose 0.1 percent to $1,620.25 an ounce.

Japan Stocks Rise on Optimism Fed, China to Add Stimulus (Source: Bloomberg)
Japanese stocks rose, with the Topix Index heading for its highest in more than a month, as investors speculated central banks in the U.S. and China may announce more stimulus to boost growth in the world’s largest economies. Sony Corp., a consumer electronics company that gets almost a fifth of its revenue in the U.S., gained 3.1 percent. Mitsubishi Corp. (8058), Japan’s top commodities trader by revenue, climbed 1.4 percent after prices of oil and metals increased. Daio Paper Corp. led the sector higher on a Nikkei newspaper report that Hokuetsu Kishu Paper Co. will buy a 20 percent stake. The Topix advanced 1.2 percent to 743.21 as of 9:23 a.m. in Tokyo, set for the highest close since May 17. All 33 industry groups in the index climbed. The Nikkei 225 Stock Average (NKY) rose 0.7 percent to 8,712.82, with volume 9.7 percent lower than the 30-day average.
“There will be more measures taken by central banks to stimulate the economy,” said Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Banking, where she helps oversee about $207 billion. “China also has more flexibility to ease monetary and fiscal policy.” Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The gauge advanced 1 percent yesterday and closed at its highest level in more than a month as analysts at JPMorgan Chase & Co., Jefferies & Co. and Goldman Sachs Group Inc. speculated the Federal Reserve will move to spur growth.

U.S. Stocks Advance to One-Month High as Fed Meets (Source: Bloomberg)
U.S. stocks advanced, sending the Standard & Poor’s 500 Index to the highest level in more than a month, as investors speculated the Federal Reserve will announce more measures to stimulate the world’s largest economy. Bank of America Corp. (BAC) climbed 4.5 percent as the Federal Housing Finance Agency said it plans to help banks avoid being forced to buy back mortgages amid concern lenders are tightening standards even for the most creditworthy buyers. FedEx Corp. (FDX), operator of the largest cargo airline, jumped 2.8 percent after pledging “significant cost reductions.” Microsoft Corp. (MSFT) increased 2.9 percent after unveiling a tablet computer. The S&P 500 rose 1 percent to 1,357.98 at 4 p.m. New York time, gaining for a fourth day. The Dow Jones Industrial Average added 95.51 points, or 0.8 percent, to 12,837.33. Trading volume for exchange-listed stocks in the U.S. was about 6.8 billion shares, or almost in line with the three-month average.
“It’s possible that the Federal Reserve will do something else,” said David Kelly, who helps oversee about $394 billion as chief market strategist at JPMorgan Funds in New York. “It’s possible that they will do some further extension of Operation Twist. They seem overly sensitive to the possibility that the market will react badly to them not taking action.”

European Stocks Climb for Third Day; Home Retail Rallies (Source: Bloomberg)
European stocks gained for a third day as Greece moved closer to forming a government and a Spanish debt sale met targets, outweighing a bigger-than-forecast decline in German investor confidence. Home Retail Group Plc (HOME) surged 24 percent as sales at the Argos chain beat estimates. Whitbread Plc (WTB) jumped 6.4 percent as first-quarter revenue increased. SAP AG (SAP) rose 2.1 percent after U.S. peer Oracle Corp. reported fourth-quarter profit that beat estimates. Danone (BN) tumbled 6 percent after the world’s biggest yogurt maker cut its profitability forecast. The Stoxx Europe 600 Index (SXXP) added 1.6 percent to 248.27 at the close in London, the highest since May 11. The benchmark gauge has still dropped 8.9 percent from its peak on March 16 amid concern that the euro area’s debt crisis has triggered a slowdown in global economic growth.
“The markets have stabilized now, and are waiting for more discussion about the future of the euro zone, especially the question of Spanish debt,” said Yves Maillot, director of investments at Robeco Gestions SA in Paris. “The Greek election result has been played last week, and now the markets expect a new government, hoping for something better.” Greek politicians are close to forming a governing coalition and will seek relief from austerity measures imposed as a condition for bailout loans, probable coalition partners said

Mexico Trading Halt Adds to Series of Glitches on Bourse (Source: Bloomberg)
Mexican stocks ceased to trade for more than 20 minutes because of what an official called “communication issues,” the latest in a series of glitches to halt activity on Latin America’s second-largest equity exchange. Shares stopped moving at 2:11 p.m. local time and remained inactive until 2:34 p.m., according to data compiled by Bloomberg. The benchmark IPC index of 35 Mexican companies ended the day up 1.6 percent, after paring gains from an intraday advance of as much as 1.8 percent. The problem was “solved fast, but the process of rebooting all the connections takes a little time,” Jorge Alegria, the Mexico City-based head of markets and information at the exchange, said in an e-mailed response to questions. He attributed the stoppage to “communication issues.” Today’s stoppage marked the latest in a string of technology shortcomings, both at the bourse and at a now defunct brokerage, that have brought Mexican stock trading to a standstill at least three times since April 13.
That day, late- day transactions by Bulltick Capital Markets set off a circuit- breaker mechanism that pulled the plug on trading. On May 31, a surge of orders overwhelmed the exchange’s operating system and forced it to pause trading.

Dollar Trades Near Month Low Versus Euro on Fed Prospects (Source: Bloomberg)
The dollar was 0.5 percent from the lowest level in almost one month against the euro on prospects the Federal Reserve will consider further monetary stimulus when it concludes its two-day meeting today. The greenback remained lower against most of its 16 major peers as 12 out of 21 primary dealers who trade with the Fed expect some form of added stimulus. The 17-nation euro held gains against the yen after Greece’s Pasok party leader Evangelos Venizelos said a new government could be ready today amid speculation European leaders are renegotiating the country’s bailout conditions. “Any stimulus from the Fed is bearish for the U.S. dollar,” said Kurt Magnus, executive director of currency sales in Sydney at Nomura Holdings Inc., Japan’s biggest brokerage. “We’re expecting something stimulatory, whether or not it’s in the form of an extension of Twist, or a little bit of QE,” he said of the program to sell short-maturity debt to buy longer- term bonds and asset purchases known as quantitative easing.
The dollar was unchanged at $1.2685 per euro as of 8:28 a.m. in Tokyo from yesterday, when it slid 0.9 percent. The greenback on June 18 touched $1.2748, the weakest since May 22. The U.S. currency added 0.1 percent to 79.05 yen. The euro added 0.1 percent to 100.28 yen from yesterday, when it rose 0.7 percent.

Aussie Trades Near 6-Week High on Fed Easing Speculation (Source: Bloomberg)
Australia’s dollar was 0.2 percent from its highest level in six weeks on speculation Federal Open Market Committee members will signal additional measures to support U.S. growth at the conclusion of a meeting today. The so-called Aussie remained higher after a two-day advance versus the yen as pro-bailout parties in Greece continue talks to form a three-way government, keeping alive prospects the nation will avoid an exit from the euro bloc. New Zealand’s currency, nicknamed the kiwi, fell after data today showed the nation’s current-account deficit widened in the first quarter. “The market has built in strong expectations for some sort of policy action from the FOMC,” said Andrew Salter, a strategist at Australia & New Zealand Banking Group Ltd. (ANZ) in Sydney. “If we get some sort of flag by the Federal Reserve to additional purchases, then that would be a positive for the Aussie.”
The Australian dollar was at $1.0179 as of 9:17 a.m. in Sydney from yesterday, when it climbed to $1.0201, the strongest level since May 8. It was little changed at 80.45 yen after rising 0.4 percent to 80.44 yen yesterday. The kiwi lost 0.3 percent to 79.57 U.S. cents. It fell 0.2 percent to 62.88 yen

Asian Millionaires Outnumber Those in North America, Report Says (Source: Bloomberg)
Asia-Pacific millionaires outnumbered those in North America for the first time last year as the world’s wealthy saw a decline in their fortunes, according to a report by Capgemini SA (CAP) and RBC Wealth Management. The number of individuals in Asia-Pacific with at least $1 million in investable assets jumped 1.6 percent to 3.37 million, helped by an increase in rich people in China, Japan, Thailand, Malaysia and Indonesia, according to the World Wealth Report released today. So-called high-net-worth individuals in North America dropped 1.1 percent to 3.35 million. “While throughout the world the euro-zone crisis has affected markets in general and investors’ level of uncertainty, within the Asia-Pacific region we have seen strength in their domestic economies underlying their performance from an economic standpoint,” Gay Mitchell, deputy chairman for RBC Wealth Management, said in an interview in Toronto. “As such it’s yielded an increase in population for high net-worth individuals.”
The population of millionaires worldwide was little changed at 11 million, according to the report. Their wealth dropped 1.7 percent to $42 trillion of assets last year, the first decline since 2008, as the euro region’s sovereign debt crisis and lack of economic growth in the U.S. roiled investors.

Fed Born of Morgan’s Bailout Scrutinized After Dimon’s Loss (Source: Bloomberg)
After John Pierpont Morgan stepped in to quell the panic of 1907, U.S. lawmakers created the Federal Reserve in 1913 as a lender of last resort to defend against future financial crises. Almost a century later, the disclosure of a $2 billion trading loss by the man who now heads the Morgan banking empire, Jamie Dimon, has prompted calls to end an arrangement that Vermont Senator Bernie Sanders calls “a clear example of the fox guarding the hen house.” The bill signed by President Woodrow Wilson created a decentralized institution with a Washington-based Federal Reserve Board and 12 regional banks. Each has its own president and board that includes representatives from the banking industry. Dimon, chief executive officer of JPMorgan Chase & Co. (JPM), has served since 2007 as a director of the Federal Reserve Bank of New York, the entity that oversees Wall Street banks including Dimon’s, the largest U.S. lender.
“The optics in a situation like this are not good,” said Alfred Broaddus, former president of the Richmond Fed. “Maybe it is fair now to take a look at this structure and see whether it still makes sense.”

Fiscal-Cliff Concerns Hurting Economy as Companies Hold Back (Source: Bloomberg)
Companies are starting to delay hiring and spending out of concern that Congress won’t reach a compromise in time to avoid automatic tax increases and budget cuts that would pull billions of dollars of purchasing power out of the economy. Faced with a so-called fiscal cliff of more than $600 billion in higher taxes and reductions in defense and other government programs in 2013, U.S. companies are pulling back, though the deadline for congressional action is more than six months away. The best strategy for companies to follow when confronted with such uncertainty ahead of Dec. 31 is to “stay lean and keep your inventories taut,” Sandy Cutler, chief executive officer of industrial equipment-maker Eaton Corp. (ETN) in Cleveland, told a conference May 31.
Economists are predicting this trend will pick up through the year. “A lot of people see the fiscal cliff as a 2013 story, but you don’t board up the windows when the hurricane is there, you board up the windows in anticipation,” said Michael Hanson, senior U.S. economist at Bank of America Corp. in New York.

Housing Starts in U.S. Fall 4.8% in May on Apartments (Source: Bloomberg)
Builders broke ground on more single-family houses for a third consecutive month in May and rising construction permits pointed to further gains, showing the residential real-estate market is weathering the U.S. economic slowdown. Work began on 516,000 one-family houses at an annual rate last month, up 3.2 percent from April and the most this year, the Commerce Department reported today in Washington. A slump in construction of apartments, which is often volatile, led to an unexpected drop in total housing starts. Building permits, a proxy for future construction, climbed to the highest level since September 2008, showing the combination of lower prices and record-low mortgage rates is underpinning demand and encouraging new projects. Toll Brothers (TOL) Inc. is among homebuilders benefiting from an improving housing market on rising demand for move-up homes.
“We saw a very strong number in new permits, indicating builders are seeing improving demand,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit. The report “was a lot better than the headline number would suggest.” Total starts dropped 4.8 percent to a 708,000 annual pace in May from a revised 744,000 rate in the prior month that was the highest since October 2008, today’s report showed. The median forecast of 77 economists surveyed by Bloomberg News called for a 722,000 rate. Estimates ranged from 685,000 to 750,000.

Paulson Says Harm to U.S. From Europe Crisis is Minimal (Source: Bloomberg)
Former Treasury Secretary Henry Paulson said the U.S. will emerge relatively unharmed from the debt crisis in Europe as efforts by Greece, Spain and other nations to stabilize their economies persist for the long-term. “Although Europe is a drag, the U.S. will continue to muddle along with growth that really isn’t enough to make a dent in employment,” Paulson, who was Treasury secretary from July 2006 through January 2009, said at a biotechnology industry conference in Boston today. Europe will eventually stabilize and avoid a “catastrophic outcome,” he said. U.S. President Barack Obama and German Chancellor Angela Merkel are among world leaders meeting in Mexico this week to attempt to fix the European debt crisis that’s threatening to plunge the global economy back into recession. They gathered after Spain’s borrowing costs soared to a euro-era record and elections in Greece failed to damp the threat of contagion.
“It’s hard for people over here to understand how committed the Europeans are to the monetary union,” Paulson told executives during the Biotechnology Industry Organization conference. “The monetary union isn’t sustainable unless you forge something that is more like a political union. That’s much more different. You’ve got 17 different countries over there.”

Job Openings in U.S. Decrease by Most in Almost Four Years (Source: Bloomberg)
Job openings in the U.S. decreased in April by the most in almost four years, the latest sign that the labor market is cooling. The number of open positions dropped by 325,000, the biggest decline since September 2008, to 3.42 million from 3.74 million the prior month, the Labor Department said today in Washington. Hiring slowed from the prior month and firings climbed. The decrease in openings coincides with the slowdown in hiring seen in April and May, signaling employers are pulling back as the economy cools. The number of jobs available is down from an average 4.46 million in the two years before the recession began, showing the labor market continues to struggle. “The most worrisome development is this big drop in hiring,” said Harm Bandholz, chief U.S. economist at UniCredit Group in New York. “If you have the outlook that things are getting little bit better, you eventually have to hire more people. But the fact that this is not happening -- that’s worrisome.”
Stocks climbed as the Federal Reserve began a two-day meeting to decide whether more monetary stimulus is needed to boost the economy. The Standard & Poor’s 500 Index rose 1 percent to 1,358.11 at 10:54 a.m. in New York.

China Steps Said to Grow Bond Market, Add Issuer Scrutiny (Source: Bloomberg)
China is allowing more companies to trade bonds and increasing scrutiny over issuers as the government seeks to ensure that the expansion of its nascent debt market isn’t derailed by defaults. The top economic planning agency ordered local governments to examine the ability of companies to repay bonds maturing in 2012 and 2013, two people with direct knowledge of the matter said yesterday, asking not to be identified as they weren’t authorized to speak to media. China Securities Regulatory Commission began allowing mutual funds to invest in private placements by smaller companies, according to an agency document obtained by Bloomberg News.
Chinese companies sold more debt in the first five months of the year than in all of 2010 as the government encouraged companies to boost fundraising through sales of equity and bonds in a campaign to wean them off loans from state-owned banks and make their finances more transparent. The growth is spurring concern given that China has never had a domestic bond default, according to Moody’s Investors Service. “It’s kind of a dilemma because for a bond market you must face default sooner or later,” said Ivan Chung, an analyst at Moody’s in Hong Kong. Chinese officials “worry that one default may cause a confidence crisis and people will lose faith in the bond market,” he said.

Subbarao Says India’s Inflation Rate Is Above Tolerance Level (Source: Bloomberg)
Indian inflation exceeds acceptable levels and restraining it may require sacrificing economic growth, central bank Governor Duvvuri Subbarao said. “Headline inflation has come down, core inflation has come down to below 5 percent, but WPI inflation is still above our tolerance level at 7.5 percent,” Subbarao said in a speech in Mumbai yesterday, referring to India’s benchmark wholesale-price index. “Consumer-price inflation is running above 10 percent. That is quite disturbing.” The Reserve Bank of India unexpectedly left interest rates unchanged on June 18 as price pressures narrow scope to bolster the weakest growth in almost a decade. Curbing the nation’s fiscal deficit and the success of the monsoon are among the keys to controlling inflation, Subbarao said. “India is flirting with stagflation and needs a dose of supply-side reforms to improve medium-term growth potential,” said Prasanna Ananthasubramanian, Mumbai-based chief economist at ICICI Securities Primary Dealership Ltd.
“However, the political realities are such that the chances of structural reforms and fiscal consolidation are uncertain.” Price increases have been stoked in part by costlier imports following a near 20 percent slump in the rupee against the dollar in the past year. The currency tumbled as growth deteriorated and Europe’s debt crisis sapped demand for emerging-market assets.

Crisis Survivor Indonesia Sees Banking Strength: Southeast Asia (Source: Bloomberg)
Indonesia will strengthen banking supervision to ensure that lenders stay insulated from fallout from Europe’s crisis, the incoming head of the country’s new financial regulator said. Commercial banks have about 154 trillion rupiah ($16.4 billion) of exposure to Europe, through channels including trade finance and money markets, a fraction of their more than 3,000 trillion rupiah in assets, Muliaman Hadad, a central bank deputy governor, said in an interview yesterday. Lending growth in Southeast Asia’s biggest economy was an annual 28 percent pace in May, underscoring domestic strength, he said. “While we’re facing a crisis risk from Europe, the performance of our banking industry is shining,” Hadad said in his office at Bank Indonesia in Jakarta. “The industry, as the main engine for the economy, is still growing amid the turmoil in Europe.”
Hadad was a senior analyst at the central bank when the Asian financial crisis forced Indonesia, Thailand and South Korea to tap International Monetary Fund bailouts totaling about $100 billion as their currencies plummeted. As deputy governor, he has overseen lenders in an economy where foreign-exchange reserves have more than quadrupled since 2008, and growth has exceeded 6 percent since 2010 as investment surged.

Greek Leaders Poised to Agree on Three-Way Governing Coalition (Source: Bloomberg)
Haggling among Greek political leaders is set to continue for a third day as they bid to form a coalition that will seek relief from austerity measures tied to emergency loans. Socialist Pasok leader Evangelos Venizelos said a new government could be ready today. Antonis Samaras’ New Democracy party, which won June 17 elections, is hammering out a three-way government committed to staying in the euro. He would partner with Venizelos’s Socialist Pasok, which finished third, and Democratic Left. They would hold 179 seats in the 300-member parliament. Talks resume at 1 p.m. in Athens. “The most critical matter isn’t the form the government takes but the national negotiating team which will seek the best possible revision of the loan accord,” Venizelos told reporters at the party headquarters as they wrapped up a second day of talks. “We must do what we can to fight the recession and unemployment and bring growth and jobs. This is what determines the framework in which the government and the country will move.”
European officials have held out the prospect of flexibility after the election that amounted to a referendum on remaining in the 17-nation currency union. Venizelos, the former finance minister who negotiated a second 130 billion-euro ($165 billion) rescue package earlier this year, spoke as representatives of the three parties met on a joint policy program.

Austerity Doesn’t Pay as Debt Markets Ignore Rating Cuts (Source: Bloomberg)
Britain is forcing Stephen Jobling and his stroke patients to defend the nation’s AAA credit rating. Staffing at the National Health Service hospital ward where Jobling works was reduced by about half in the U.K.’s deepest drive since World War II to shrink its deficit. The goal was to avoid losing the top credit score, which might risk higher interest expenses, according to the government of Conservative Prime Minister David Cameron. “If they could see these people suffering while we have two members of nursing staff running round trying to wash, dress and feed 20 patients, they would think twice,” says Jobling, 27, a nurse at Lincoln County Hospital in eastern England. “You should be looking after your people. You shouldn’t be bothering about some credit agency from somewhere else.”
The bond market says he’s right. After Moody’s Investors Service issued a “negative” outlook for U.K. debt on Feb. 13, yields on government securities relative to benchmark U.S. Treasury debt fell over the next month, instead of rising.

U.K. Inflation Slows to Weakest Since November 2009 on Fuel (Source: Bloomberg)
U.K. inflation slowed to the weakest in 2 1/2 years in May, led by food and fuel prices, which may ease resistance among Bank of England policy makers to increase monetary stimulus. Consumer prices rose a 2.8 percent from a year earlier, compared with a 3 percent increase in April, the Office for National Statistics said today in London. That’s the weakest since November 2009. Economists had forecast a gain of 3 percent, the median of 29 estimates in a Bloomberg News survey showed. From April, prices fell 0.1 percent, the first drop in that period since records began in 1996. While inflation has held above the central bank’s 2 percent target since December 2009, price pressures are easing as oil and food costs drop and Europe’s debt turmoil continues to weigh on Britain. The Bank of England responded last week by introducing measures to stoke bank lending, and Governor Mervyn King said the case for restarting stimulus is “growing.”
“Inflation is likely to fall a lot further on energy prices, and there’s a lot of slack in the economy,” said Joost Beaumont, an economist at ABN Amro Bank NV in Amsterdam. “The central bank will increase asset purchases in July. They think the euro crisis will linger for longer and they want to be ahead of the curve.”

German June Investor Confidence Fell More Than Expected (Source: Bloomberg)
German investor confidence fell the most in 14 years in June as Europe’s sovereign debt crisis weighed on the economic outlook. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, plunged to minus 16.9 from 10.8 in May. That’s the steepest decline since October 1998. Economists forecast a drop to 2.3, according to the median of 38 estimates in a Bloomberg News survey. Germany’s economy, which grew 0.5 percent in the first quarter, is losing momentum as austerity measures across Europe curb demand for its goods and damp confidence. Exports, factory orders and industrial production all fell in April and business sentiment waned in May. The benchmark DAX share index has dropped 12 percent in the last three months. Today’s report “clearly shows a general sense of panic amongst investors,” said Annalisa Piazza, a fixed-income strategist at Newedge Strategy in London.
It points to “risks of a deeper-than-expected recession” in the euro area, she said.

Saddling Spain With Bank Burden Repeats Irish Error: Euro Credit (Source: Bloomberg)
Spain’s surging borrowing costs suggest the nation is hurtling toward a full sovereign bailout as the same aid policies that doomed Ireland to pariah status on the capital markets are repeated in southern Europe. Spain’s 10-year bond yields jumped 76 basis points since the government agreed June 9 to seek 100 billion euros ($126 billion) from the European Union to recapitalize its banks, reaching 7.09 percent today after yesterday’s euro-era record of 7.29 percent. Germany is reluctant to sanction disbursements directly to the region’s banks. Channelling payments via governments, however, increases their debt burdens, undermining their creditworthiness and stoking investor concern about ranking behind official creditors for repayment.
“Germany still refuses to recognize its mistakes,” said Ray Kinsella, a lecturer in banking and finance at University College Dublin. “It is wrong that the burden of adjustment should be borne by these peripheral countries, which are in effect acting as the insurers,” of German and French banks which benefited most from euro-region trade, he said.

20120620 0937 Soy Oil & Palm Oil Related News.

ITS CPO export up 15% to 991,917 tonnes for the period of 1~20 Jun 2012.
SGS CPO export up 15.1% to 996,662 tonnes for the period of 1~20 Jun 2012.

Soybean Complex Market Recap (Source: CME)
August Soybeans finished up 48 3/4 at 1419, 18 1/2 off the high and 44 1/4 up from the low. November Soybeans closed up 42 at 1381 1/4. This was 38 1/4 up from the low and 13 3/4 off the high. August Soymeal closed up 11.7 at 421.4. This was 11.2 up from the low and 7.6 off the high. August Soybean Oil finished up 1.58 at 50.51, 0.32 off the high and 1.44 up from the low. Soybeans continued their move higher today in explosive fashion. The November contract traded 45 1/2 cents higher towards the end of today's trading session. The warm and dry forecast for the central and western portions of the Midwest could result in yield reduction in an already tight old crop supply situation. The July contract gained on November soybeans after the USDA announced private exporters sold 140,000 tonnes of old crop beans to an unknown destination. A continuation of the rally will depend on positive outside market developments and continued bullish weather factors

Pro Farmer: After the Bell Soybean Recap (Source: CME)
Soybean futures finished off their highs with still-impressive gains of 43 1/4 to 51 cents through the January contract, with old-crop futures leading gains. Soyoil and soymeal finished sharply higher thanks to spillover support. Futures trimmed gains in after-hours trade. Soybean traders focused on taking advantage of a weaker dollar by building weather premium.

VEGOILS-Palm edges up on U.S. dry weather outlook
SINGAPORE, June 19 (Reuters) - Malaysian palm oil futures gained on expectations of higher demand as dry U.S. weather could damage the soybean crop further, tightening global edible oil supply.
"Prices should remain positive with the Greeks behind us. Dry weather in the U.S. Midwest also supports a bullish stance," said a trader with a local commodities brokerage in Malaysia.

Argentine soy harvest seen at 40.5 mln T -Rosario
BUENOS AIRES, June 18 (Reuters) - Argentina's biggest grains exchange trimmed its forecast for 2011/12 soy output on Monday to 40.5 million tonnes, down from May's estimate of 40.9 million tonnes as harvesting enters the home stretch.
Farmers in the world's top supplier of soyoil and soymeal have brought in 98 percent of this season's drought-afflicted crop, Rosario grains exchange said in a report. Poor yields and some key growing areas prompted the downward revision.

20120620 0937 Global Commodities Related News.

DTN Closing Grain Comments 06/19 14:11 : Weather Rally Continues(Source: CME)
The fire lit under traders at the beginning of the week tied to concerns over U.S. corn and bean production remained strong Tuesday with contracts across the board posting sharp gains. Support came from both commercial and noncommercial traders in the new-crop markets, indicating underlying fundamentals are growing more bullish longer-term.

Pro Farmer: After the Bell Wheat Recap (Source: CME)
Chicago wheat settled mostly 19 1/4 to 21 cents higher while Kansas City wheat finished mostly 17 1/2 to 19 3/4 cents higher, although far-deferred futures at both exchanges posted slightly lesser gains. July Minneapolis wheat posted slight losses, while most other contracts were 11 to 12 cents higher. Futures got plenty of spillover support from strong gains in the corn market and sharp losses in the U.S. dollar index today.

Wheat Market Recap Report (Source: CME)
September Wheat finished up 20 1/4 at 668 3/4, 2 1/4 off the high and 22 1/4 up from the low. December Wheat closed up 20 1/4 at 692 3/4. This was 21 3/4 up from the low and 2 1/2 off the high. July wheat continued its advance today with the July contract trading 19 1/4 higher. European wheat futures extended gains on potentially warm and dry conditions in parts of Russia, which lent support to US markets. The US Dollar traded lower today and stocks rallied. Wheat benefited from a mixture of positive outside markets and spillover support from corn and beans. The market pushed to the highest level since May 31st. September Oats closed up 7 3/4 at 306 3/4. This was 6 1/4 up from the low and 3 3/4 off the high.

Corn Market Recap for 6/19/2012(Source: CME)
September Corn finished up 26 at 563, 5 off the high and 22 1/2 up from the low. December Corn closed up 26 at 560. This was 23 3/4 up from the low and 4 off the high. The corn market continued its rally today with the new crop, December contract trading 27 3/4 higher towards the end of the session. The hot and dry weather forecast for nearly half of the Corn Belt could mean deterioration of yield potential. The US Dollar fell today and stock indices traded higher, helping December corn advance to new, monthly highs. Continued warm and dry weather mixed with positive outside markets could provide further support to the corn market. The market pushed to the highest level since March 21st. September Rice finished up 0.455 at 14.75, equal to the high and equal to the low.

Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures closed 13 cents higher in the front-month July contract, with the rest of the market mostly in the upper 20s to 30 1/2 cents higher. Futures slightly trimmed gains in after-hours trade. A combination of weather concerns and dollar weakness bolstered corn futures today. Yesterday's crop condition report showed more deterioration in the corn crop than expected and the near-term forecast is void of any widespread rains to recharge soils.

U.S. corn firms on weather damage, hits one-wk high
SYDNEY, June 19 (Reuters) - U.S. corn rose to a one-week high as the U.S. Department of Agriculture said new-crop quality had been damaged by recent hot, dry weather, prompting concerns that stocks will not be replenished as projected.
"The weather is driving prices today," Lynette Tan, investment analyst at Phillip Futures said. "There has been some weather damage to corn and going into the summer season we will see increasingly dry weather, and this will likely drive up prices."

Australia wheat stocks fall 16 pct as exports climb
SYDNEY, June 19 (Reuters) - Australian wheat stocks at the end of May fell 16 percent from a month earlier to 15.93 million tonnes, the largest monthly draw-down in at least three years, the Australian Bureau of Statistics said on Tuesday,  
The largest draw-down of wheat in bulk storage came from the east coast, dropping 2 million tonnes on the year, while South Australia saw a fall of 1.5 million tonnes.

Canada wins appeal over wheat board monopoly
OTTAWA, June 18 (Reuters) - Canada's Conservative government on Monday won its appeal of a lower court declaration that said it had broken the law in the way it ended the Canadian Wheat Board's grain marketing monopoly, Agriculture Minister Gerry Ritz stated.
The wheat board monopoly is scheduled to end on Aug. 1. Backers of the wheat board are still pursuing a separate court case to try to get the law suspended.

US corn, soybeans keep wilting in hot, dry weather
CHICAGO, June 18 (Reuters) - Hot and dry weather has hurt U.S. corn and soybean crops more than analysts expected, the U.S. Department of Agriculture (USDA) said in its latest weekly report on Mo nday.
The USDA crop progress report said 63 percent of the U.S. corn crop last week was in good-to-excellent condition -- below last week's USDA rating of 66 percent and also below an average of analysts' estimates for 64 percent.

Algeria halts durum, barley imports until year-end
ALGIERS, June 18 (Reuters) - Algeria has halted imports of durum wheat and barley until the end of December this year because of a promising domestic harvest and stock-building, the head of the state grain agency said on Monday.
"We took the decision (to halt imports) in April," Nouredine Kahel, head of the OAIC state grain agency, told reporters on the sidelines of a grain conference.

Monsoon rains pick up, cover almost half of India
NEW DELHI, June 18 (Reuters) - India's annual monsoon rains have covered almost half of the country, showing signs of a pick-up after falling short in the first 15 days of the season, weather officials said on Monday.
The rebound eases concerns about the planting of summer-sown crops such as rice, corn, cane, cotton and soybean in a country that is a leading producer and consumer.

Ivory Coast Cocoa Growers Risk Attacks in Return to Farms (Source: Bloomberg)
Cocoa farmers in western Ivory Coast who fled recent attacks on their villages are beginning to return to the plantations, fearing their beans may be stolen or damaged, according to growers in the area. “I’m afraid of the attacks but I had no choice but to come back to take care of my farm,” said Salam Zongo, a farmer with a four-hectare (9.9-acre) plantation in Saho, a village attacked on June 8. Seven United Nations peacekeepers, one Ivorian soldier and at least 10 civilians were killed in the ambushes. The fighting near Ivory Coast’s border with Liberia is extending a decade of conflict in the world’s top cocoa producer, which started with a mutinous uprising of soldiers in 2002 that left the country divided between a rebel-held north and a government-controlled south. At least 3,000 people were killed in five months of violence that followed a disputed election in November 2010.
The armed group behind this month’s attacks has a base on the Liberian side of the Cavally River that serves as a border between the two countries, according to Losseni Fofana, the army commander in charge of security in western Ivory Coast. The group comprises Ivorian militia members and Liberian mercenaries, he said this week, following a June 17 clash between Ivorian soldiers and Liberian gunmen.

ICE coffee, sugar dip, Spain worries weigh
LONDON, June 19 (Reuters) - Arabica coffee and raw sugar futures on ICE eased, as concerns over Spain eclipsed investors' relief following Greece's vote for pro-bailout parties.
"A bearish target at $1.4630 per lb remains unchanged for New York July coffee , as indicated by its wave pattern and a Fibonacci projection analysis, according to Reuters market analyst Wang Tao."

Vietnam Coffee-Thin domestic supply limits new deals
HANOI, June 19 (Reuters) - Trading on Vietnam's coffee markets slowed this week as exporters failed to secure beans from domestic markets while farmers held back sales as rising prices have not met their expectations, traders said on Tuesday.
Due to difficulties in buying Vietnamese beans in recent weeks, some foreign buyers have shifted their purchase to rival robusta producer Indonesia, where the harvest has been peaking.

El Salvador sees 2012/13 coffee harvest up 14 pct
SAN SALVADOR, June 18 (Reuters) - El Salvador's coffee harvest next season will increase 14 percent over the current season, reaching 1.44 million 60-kg bags, the country's coffee institute, Procafe, said on Monday.
The institute said higher production for the 2012/13 season would be due to next season's higher biennial cycle, favorable working conditions on farms, and rainfall that has contributed to the healthy flowering of coffee trees.

Rain to return to Brazil's sugarcane belt
SAO PAULO, June 18 (Reuters) - A week of rainy weather is headed for Brazil's main cane belt, which will interrupt crushing in the world's largest producer of sugar, local forecaster Somar said on Monday.
Although the moisture will favor young cane that will mature late this year or early next year, the moisture will drag down the level of recoverable sugars, known as ATR, in the crop that is now being harvested.

I.Coast cocoa arrivals seen down, eyes on 2012/13
ABIDJAN/DALOA, June 18 (Reuters) - Cocoa arrivals at ports in Ivory Coast are slightly lagging last year's levels, exporters estimated on Monday, with the quality of beans and prospects of a slow start to next year's crop also hanging over the sector in the world's top grower.
Heavy rains in key growing areas has led to moist beans and the spread of black pod disease, exporters said.

OIL-Brent off 17 month low, euro concerns linger
LONDON, June 19 (Reuters) - Brent crude fell to a near 17 month low below $95 a barrel , hit by the latest twist in the euro zone crisis, but steadied because Spain managed to sell debt, even though its costs soared to their highest since 1997.
"Stop loss liquidation of some long positions was triggered when Brent broke $95.00, compounded by pervading gloominess towards the eurozone," said Mark Thomas, head of Energy Europe at brokerage Marex Spectron.
Spain's short-term borrowing costs soared as investors worried the country, the euro zone's fourth largest economy, will soon be forced to ask for international aid.

Iran to add 1.1 bln litre oil prods storage by 2013
DUBAI, June 19 (Reuters) - Iran plans to increase its oil products storage capacity by 1.1 billion litres (6.9 million barrels) by next March, oil ministry news service Shana said .
Speaking at the opening of a new oil storage facility in Ahwaz in southern Iran, the managing director of the National Iranian Oil Products Distribution Company (NIOPDC) told Shana that new facilities would boost storage for oil products from around 50 days' consumption to 80 days.

Big powers seek progress on day two of Iran talks
MOSCOW, June 19 (Reuters) - Russia said it expected a "reasonable outcome"  from talks between world powers and Iran on Tehran's nuclear programme, after a first day of "intense and tough" talks failed to make headway towards ending a decade-long dispute.  
If the talks in Moscow collapse, financial markets could grow increasingly nervous over the threats of higher oil prices and new conflict in the Middle East.

Indonesia seeks sweet crude for Aug delivery, limits suppliers
SINGAPORE, June 19 (Reuters) - Indonesia is seeking sweet crude for delivery in early August, but has limited its suppliers to national oil companies after a recent presidential decree, trade sources said .
Last month, President Susilo Bambang Yudhoyono ordered state-owned oil firm Pertamina to buy crude and oil products directly from primary sources.

UN sees natural gas a key to forests, helping poor
RIO DE JANEIRO, June 18 (Reuters) - Natural gas, including non-traditional shale gas, should play a major role in cutting greenhouse gases, protecting forests and improving the health and living standards of the world's poor, the co-head of a U.N. sustainable energy program said on Monday.
Without it, the U.N.'s Sustainable Energy for All Initiative will have difficulty meeting goals of ensuring universal energy access, doubling the world's share of renewable energy and doubling the rate of improvement in energy efficiency by 2030, Kandeh Yumkella, co-head of the initiative, told Reuters.

Oil Trades Near Two-Day High on Stimulus Speculation, Iran Talks (Source: Bloomberg)
Oil traded near the highest close in two days amid speculation the Federal Reserve may do more to boost the U.S. economy and after talks with Iran on the Persian Gulf nation’s nuclear program ended without an agreement. Futures were little changed in New York after climbing 0.9 percent yesterday. The Fed is scheduled to release its statement on interest rates and the economy at 12:30 p.m. in Washington after a two-day meeting. Iran and world powers failed to reach a breakthrough after two days of talks in Moscow aimed at alleviating the threat of military strikes on OPEC’s second- biggest oil producer. U.S. crude supplies fell while gasoline stockpiles rose, American Petroleum Institute data showed. Oil for July delivery, which expires today, dropped 5 cents to $83.98 a barrel in electronic trading on the New York Mercantile Exchange at 9:35 a.m. Sydney time. It rose 0.9 percent yesterday to $84.03, the highest close since June 15. The more-actively traded August contract gained 1 cent to $84.36.
Front-month  prices are down 15 percent this year. Brent oil for August settlement decreased 29 cents, or 0.3 percent, to $95.76 a barrel on the London-based ICE Futures Europe exchange yesterday. The front-month price for the European benchmark contract closed at a premium to West Texas Intermediate of $11.41. U.S. crude inventories fell 550,000 barrels last week, according to the API data. An Energy Department report today may show they dropped 1.3 million barrels, according to the median estimate of 11 analysts in a Bloomberg News survey. Gasoline supplies rose 1.1 million compared with a projected gain in the government report of 1 million barrels.

IPad Boom Strains Lithium Supplies After Prices Triple (Source: Bloomberg)
Investors from JPMorgan Chase & Co. to BlackRock Inc. are trying to make money from the exploding popularity of iPads and increasing sales of hybrid cars by investing in producers of lithium for batteries. Prices for the conductive metal, the lightest in the periodic table, have tripled since 2000 in a market now worth $1 billion a year as uses expand in vehicles, ceramics, electronics and lubricants. Apple Inc. (AAPL) and Toyota Motor Corp. (7203), maker of the Prius electric-gasoline car, have few alternatives as they pursue higher performance and mobility, leading Dahlman Rose & Co. analysts to forecast lithium demand will double by 2020. Talison Lithium Ltd. (TLH), whose shares have gained 26 percent in the last month, together with Soc. Quimica & Minera de Chile SA, Rockwood Holdings Inc. and FMC Corp. (FMC), produce almost 95 percent of world supply.
Rio Tinto Group (RIO), the third-biggest mining company, may join the largest suppliers if it goes ahead with a mine in Serbia it says is capable of producing 20 percent of global output of the metal. “There are some companies now that we think are attractive to get a hold of lithium exposure,” Evy Hambro, who manages about $13 billion in mining stocks for BlackRock in London, said in an interview. “We’ve got a small exposure today and we’re looking for some more,” he said without naming any companies.

Mittal Doesn’t See Return to Pre-Crisis Usage ‘Anytime Soon’ (Source: Bloomberg)
ArcelorMittal (MT) Chairman and Chief Executive Officer Lakshmi Mittal said steel demand won’t recover “soon” to levels seen before the financial crisis. ArcelorMittal, the world’s largest steelmaker, is adjusting output to meet customer requirements, he said today in an interview. Mittal, 62, declined to comment on possible closures. “I don’t believe we’ll return to pre-crisis level of demand anytime soon,” he said in New York after speaking at the Steel Success Strategies conference. ArcelorMittal has slumped 43 percent in the past year after steel prices declined and demand dropped in Europe amid the region’s debt crisis. The Luxembourg-based company has shuttered or idled plants in the country and in Belgium, Spain, France in the past nine months. European steel-plant shutdowns are inevitable as the region’s demand in a “normal market” is as much as 160 million metric tons while it has a production capacity of 210 million tons, industry lobby group Eurofer said last week.