Thursday, August 16, 2012

20120816 1815 FCPO EOD Daily Chart Study.


FCPO closed : 2942, changed : +41 points, volume : higher.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : rising higher, buyer testing market.
Support : 2920, 2900, 2880, 2840 level.
Resistance : 2950, 2970, 3020, 3050 level.
Comment :
FCPO closed recorded gains with better volume transacted. Soy oil currently trading little lower after overnight closed recorded gain while crude oil price currently retreating little lower after overnight advance.
Yesterday improving exports data by 2 cargo surveyors, India trade body reported better than survey refined palm oil imports and news on cooler U.S. Midwest weather still not enough to restore grains harvest back to normal level factors resulted price to recover higher after recent falls.
Daily chart wise, FCPO price is likely to trade in pullback correction phase within a downside biased market development with MACD indicator having positive crossed up.
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.

20120816 1745 FKLI EOD Daily Chart Study.

FKLI closed : 1650.5 changed : +1 point, volume : lower.
Bollinger band reading : little upside biased.
MACD Histogram : recovering, buyer in little advantage.
Support : 1650, 1640, 1630, 1623, 1615 level.
Resistance : 1660, 1670, 1680, 1690 level.
Comment :
FKLI closed 1 point higher with quiet volume transacted on par with cash market that closed little lower. Overnight U.S. markets closed mixed and today Asia markets ended mixed while European markets currently trading little lower.
Global markets reacted differently after China Premier signal possible additional stimulus measure, droped in China foreign investment and improved month to month U.S. factories data.
Daily technical chart studt remained suggesting a 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.

20120816 1717 Regional Markets EOD Daily Chart Study.

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

20120816 1652 Global Markets & Commodities Related...


GLOBAL MARKETS: Asian shares inched higher but gains were limited as investors waited for more clues over the timing and extent of any further stimulus to tackle the euro zone's debt crisis and support global growth. European stock futures pointed to a higher open as expectations for further stimulus measures from central banks to aid global growth persisted after U.S. economic numbers came in mixed and China said its trade outlook had deteriorated. U.S. stocks spent another session in a tight range on Wednesday, with the S&P 500 ending a few points higher and extending a rally that seems to be happening in slow motion. (Reuters)

FOREX: The dollar surged to a one-month high against the yen, extending gains after this week's upbeat U.S. data gave a boost to Treasury yields and cooled expectations of monetary easing by the Federal Reserve. (Reuters)

FOREX-Dollar hits 1-month high vs yen, lifted by rising yields
SINGAPORE, Aug 16 (Reuters) - The dollar surged to a one-month high against the yen, extending gains after this week's upbeat U.S. data gave a boost to Treasury yields and cooled expectations of monetary easing by the Federal Reserve.
"We are seeing increasing signs of stabilisation in the U.S.," said Callum Henderson, global head of FX research for Standard Chartered Bank in Singapore.
"The U.S. improvement is in contrast to the persistent weakness elsewhere. So that's dollar positive because (interest) rate spreads move in favour of the dollar," he said, adding that the dollar may rise towards 80 yen in the short term.

Muted U.S. inflation supports more Fed easing(Reuters)
U.S. consumer prices were flat in July for a second straight month and the year-over-year increase was the smallest in more than 1-1/2 years, giving the Federal Reserve room to ease policy further to tackle high unemployment.

China's Wen says economy still under pressure(Reuters)
China's economy faces big headwinds though cooling inflation is giving the government more leeway to manoeuvre monetary policy, Premier Wen Jiabao was quoted by state media as saying on Wednesday.

China's soy imports to dwindle as price rally spooks buyers(Reuters)
China's unrelenting imports of soybean could hit a wall soon as oilseed processors in the world's top buyer cut purchases, with margins being eroded by a drought-driven rally in the United States and domestic price curbs urged by Beijing.

GRAINS: Chicago soybeans slid 0.8 percent, giving up some of the last session's strong gains on slowing demand from importers, stung by a rally in prices caused by the worst drought in the U.S. grain belt in more than half a century. (Reuters)

U.S. crude stocks fall sharply, oil products mixed-EIA(Reuters)
U.S. crude oil stockpiles fell more than expected last week despite a modest rise in crude imports, while inventories of refined products were mixed as plant utilization remained high, government data showed on Wednesday.

OIL: Brent crude held steady, staying near a three-month high above $116 on concerns about disruptions to supply from the Middle East and a steeper-than-expected drawdown in oil stocks in the world's top consumer, the United States. (Reuters)

Supply glut to keep China steel prices low - CISA(Reuters)
China's steel prices, hovering near record lows, are expected to remain weak in the next few months due to a supply glut that will offset an expected increase in demand, the China Iron & Steel Association (CISA) said on Thursday.

BHP warns of job cuts as coal markets slow
SYDNEY, Aug 16 (Reuters) - BHP Billiton said on Thursday jobs could go at its Australian coal mines as the company faces a deteriorating global market, the latest sign of global miners scaling back due to slowing industrial activity in China.
 BHP in a 50-50 partnership with Japan's Mitsubishi operates seven coal mines in Queensland's Bowen Basin yielding mostly metallurgical coal used in steel making. At peak output, the mines can supply up to a fifth of the world's traded coal.

Gold demand hits lowest in over 2 years in Q2 -WGC
LONDON, Aug 16 (Reuters) - Gold demand fell to its lowest level in more than two years in the second quarter, the World Gold Council said on Thursday, as a drop in buying in major consumers India and China outweighed a record quarter for central bank purchases.
Overall gold consumption fell 7 percent or nearly 76 tonnes to 990 tonnes in the three months to June, its lowest quarterly level since the first three months of 2010, the WGC said in its quarterly Gold Demand Trends report.

Alcoa to sell Texas plant assets, land
Aug 15 (Reuters) - Aluminum company Alcoa Inc said on Wednesday it will sell land and other assets at its Rockdale, Texas plant to the Lower Colorado River Authority, a non-profit public utility and conservation body.
Terms of the deal were not disclosed, but Alcoa said it will retain ownership of its smelter and aluminum powder operations in Rockdale.

Supply glut to keep China steel prices low - CISA
SHANGHAI, Aug 16 (Reuters) - China's steel prices, hovering near record lows, are expected to remain weak in the next few months due to a supply glut that will offset an expected increase in demand, the China Iron & Steel Association (CISA) said on Thursday.
CISA said low steel prices will also weigh down iron ore prices, which are currently trading around their lowest level in more than two and a half years.

Tight tin supplies could shield prices from gloomy economy
SINGAPORE, Aug 15 (Reuters) - Tin looks set to continue to outperform other base metals in coming months as tightening supplies help insulate the soldering material from the impact of a slowing Chinese economy, industry sources said on Monday.
China is the world's top producer and consumer of tin, used in electronics manufacture. Tin prices have fallen this year with other industrial commodities dependent on Chinese demand, but the dip has sparked a response from suppliers and consumers and tin has outperformed copper, the most liquid industrial metal, over the past three weeks.

BASE METALS: London copper climbed on hopes for more economic stimulus in the world's top two economies, the United States and China, which would support growth and boost global demand for metals. (Reuters)

PRECIOUS METALS: Gold hovered above $1,600 an ounce as investors continued to hope central banks would take further steps to boost the global economy, even as recent U.S. data suggested the Federal Reserve may not need to intervene for now. (Reuters)

METALS-LME copper rises on stimulus hopes
SHANGHAI, Aug 16 (Reuters) - London copper climbed on hopes for more economic stimulus in the world's top two economies, the United States and China, which would support growth and boost global demand for metals.
"New stimulus policies can give metal prices a short-term boost and some people are betting on that. But most investors prefer to stay on the sidelines which accounts for few fresh positions opened so far and small price movements," said a Shanghai-based trader.

PRECIOUS-Gold stays above $1,600, stimulus hopes persist
SINGAPORE, Aug 16 (Reuters) - Gold hovered above $1,600 an ounce as investors continued to hope central banks would take further steps to boost the global economy, even as recent U.S. data suggested the Federal Reserve may not need to intervene for now.
"(Further Fed quantitative easing has) become unlikely in the short term, as the string of negative economic surprises seem to have come to an end," Credit Suisse analysts wrote in a research note.
"What counts at the moment is the 'real' economy and while certainly far from booming, this does not appear weak enough for the Fed to act."

20120816 1106 Global Markets & Commodities Related.


GLOBAL MARKETS-Shares steady as more clues sought over stimulus
TOKYO, Aug 16 (Reuters) - Asian shares steadied on Thursday as investors took to the sidelines, waiting for more clues over the timing and extent of any further stimulus to tackle the euro zone's debt crisis and support global growth.
"Although economic data remain mixed, signs of stabilization continue to emerge," Barclays Capital analysts said in a note, adding that recent U.S. data has scaled back expectations for the Federal Reserve to embark on another round of bond buying at its meeting in September.

COMMODITIES-Most markets stronger on positive U.S. data
NEW YORK, Aug 15 (Reuters) - Most commodity markets ended stronger on Wednesday backed by some positive U.S. economic data and as investors hoped that the European Central Bank would provide economic stimulus to debt-burdened Italy and Spain.
"Sentiment is still pretty negative towards the growth outlook and markets now are waiting to see whether we do get some sort of policy response and if so, what form that takes and what the implications could be for metals demand," said Gayle Berry, analyst at Barclays Capital.

OIL-Brent ends above $116 to 3-month high on tight supply
NEW YORK, Aug 15 (Reuters) - Brent crude oil futures closed above $116 a barrel at the highest level in more than three months on Wednesday, as a sharp drawdown in U.S. crude stockpiles and expectations for lower North Sea oil output painted a tighter supply picture on both sides of the Atlantic.
"It's back to the Brent/WTI spread trade, with it stretching back above $22 intraday," said Richard Ilczyszyn, chief market strategist at iiTrader.com in Chicago.

U.S. crude stocks fall sharply, oil products mixed-EIA
NEW YORK, Aug 15 (Reuters) - U.S. crude oil stockpiles fell more than expected last week despite a modest rise in crude imports, while inventories of refined products were mixed as plant utilization remained high, government data showed on Wednesday.
Domestic stocks of crude, excluding oil held in the Strategic Petroleum Reserve, fell 3.7 million barrels to 366.16 million barrels in the week to Aug.

NATURAL GAS-Mild forecasts drive US natgas down 3 pct,support holds
NEW YORK, Aug 15 (Reuters) - U.S. natural gas futures ended lower on Wednesday, with prices pressured by milder U.S. weather forecasts that threaten to slow air conditioning demand and increase weekly inventory builds.
"The cooler weather forecast is playing into it (recent weakness), but I think today was just a little book squaring ahead of the storage report (on Thursday)," a Pennsylvania-based trader said.

20120816 1004 Malaysia Corporate Related News.

Axiata Group: Strong response to Celcom Axiata's Sukuk
Celcom Axiata Bhd has successful priced its Sukuk issuance of RM5bn in nominal value -- of which RM3bn received a final book of RM10bn via book building process and the remaining RM2bn was allocated to strategic investors. It said on Wednesday the RM3bn attracted strong investor demand comprising asset management companies, financial institutions, insurance companies, and corporate organisations. The remaining RM2bn was privately allocated to strategic investors in eight, nine and 10-year tranches. Celcom Axiata said the RM5bn Sukuk was the largest rated Sukuk Murabahah issuance based on a tawarruq arrangement in the Malaysian debt capital market to date. Celcom Axiata  chief executive officer Datuk Seri Shazalli Ramly said the demand for the Sukuk was overwhelming, which coupled with the highest credit rating achievable, indicated the capital market's confidence in Celcom and its long-term business sustainability. (StarBiz)

AMMB Holdings has no plan to acquire banks outside Malaysia as the group’s partnership
with its major shareholder, Australia and New Zealand Banking Group (ANZ), is sufficient for its reach abroad, said group MD Ashok Ramamurthy. Given the uncertainties of the global economic front, Ashok said AMMB targets a substantial slower compound annual growth rate (CAGR) of 9% to 12% between 2013 and 2015 compared with a CAGR of 22.1% between 2007 and 2012. (Financial Daily)

DRB-Hicom: May sell insurance unit
DRB-Hicom’s insurance arm, Uni.Asia Capital Sdn Bhd (UAC), might see the entry of another strategic stakeholder following DRB-Hicom’s intention to divest its stake, potentially further reshaping the country’s insurance industry. In filling with Bursa Malaysia, the company via CIMB Investment Bank Bhd announced that Gadek (M) Bhd, a wholly-owned subsidiary of DRB-Hicom, had received expressions of interest from certain parties to explore the possibility of acquiring an equity interest in Uni.Asia General Insurance Bhd  (UAG) and Uni.Asia Life Assurance Bhd (UAL). DRB-Hicom has received approvals from Bank Negara to commence negotiations with parties in relation to the possible disposal of equity interest in UAG and UAL. UAG and UAL are 68.1% and 100% respectively owned by UAC, which in turn is a 51% subsidiary of Gadek. The remaining 49% is held by United Overseas Bank (M) Bhd (UOB). (StarBiz)

Parkson Holdings: Parkson Retail Asia to open maiden store in Yangon by March
Parkson Retail Asia Ltd, a unit of Parkson Holdings will open its maiden department store in Yangon, Myanmar, by March 31 next year to tap the under-served middle to upper income segment of the retail market. Parkson, in a statement to Bursa Malaysia said that together with its wholly-owned unit Parkson Myanmar Co Pte Ltd, has signed a memorandum of agreement with Yoma Strategic Holdings Ltd and First Myanmar Investment Co Ltd (FMI) to establish a JV entity to operate department stores in Myanmar. The deal will see Parkson Myanmar holding the majority 70% in the JV company, 20% by Yoma and the remaining 10% by First Myanmar. The first Parkson department store, with an estimated size of 43,000 sq ft, will be located at the FMI Centre in the Pabedan township of Yangon. The area is home to two largest shopping areas in Myanmar. (Business Times)

Eversendai Corporation: In talks for MRT steel jobs
Eversendai Corporation is talking to the awardees of the Mass Rapid Transit (MRT) Sungai Buloh-Kajang Line to undertake some of the steel jobs dished out in the RM30bn rail project. Founder and Chairman Datuk A.K. Nathan said there were immense opportunities for the steel fabricator to tap into as most of the MRT stations and all the depots would be built in steel. Nathan said the MRT, Malayia's biggest infrastructure project, would complement Eversendai's target to increase contribution of the Malaysian business to the group's overall turnover. (Business Times)

George Kent: Gives RM50.88m bank guarantee to Prasarana
George Kent has furnished a bank guarantee of RM50.88m to Syarikat Prasarana Negara Bhd as the performance bond to undertake the Ampang Light Rail Transit (LRT) contract. In a statement on Wednesday, George Kent executive director Ir Dr Cheong Thiam Fook said the payment clearly debunked mischievous allegations, that the company lacked the financial muscle to undertake the 44-month national infrastructure project. (Business Times)

Yinson Holdings: All set for US$737m contract
Yinson Holdings on Wednesday received approval from its shareholders on a proposal to for JV with regard tom implementation of a US$737m (RM2.31bn) contract. The company had secured the contract in June this year from PetroVietnam Technical Services (PTSC). (Financial Daily)

Stemlife: Acquires Tonik Asia for RM43.5m
Stemlife is acquiring Tonik Asia Group Sdn Bhd for RM43.5m from Option Circle Sdn Bhd and HSC Healthcare Sdn Bhd. In a filing to Bursa Malaysia, it said the acquisition would partly be satisfied by  cash and with the issuance of 52,631,579 new StemLife shares at RM0.38 per share. The group also proposed a one-for two-bonus issue of 82.5m new Stemlife shares. (Business Times)

Handal Resources: Bags RM11m Carigali Hess job
Handal Resources has secured its fifth contract of the year from Carigali Hess Operating Company Sdn Bhd, worth RM11m. Handal's wholly-owned subsidiary, Handal Offshore Services Sdn Bhd, was awarded the Letter of Agreement to undertake integrated crane services for Carigali's offshore facilities for three years effective immediately. Since the beginning of the year, Handal Offshore has landed maintenance and refurbishments contracts with ExxonMobil Exploration and Production Malaysia Inc, Petrofac E&C Sdn Bhd, Talisman Malaysia Ltd and Petronas Carigali Sdn Bhd Peninsular Malaysia Operations, totalling almost RM350m. (Business Times)

Sentoria Group: To develop resort in Kuantan
Sentoria Group will develop a resort called Global Heritage South in Kuantan, Pahang, with a gross  development value of over RM300m. The development will include two and threestorey resort villas, a clubhouse and a boutique hotel. Its subsidiaries will sit on a 44.6ha. The project will span over three years. (Business Times)

Glove: Thailand, Indonesia, Malaysia agree moves to boost rubber
Thailand, Indonesia and Malaysia, representing about 70% of global natural-rubber supply, agreed steps to boost prices, said Yium Tavarolit, chief secretary of the International Rubber Consortium Ltd. The measures will be announced by ministers on Thursday, said Yium, who declined to give details. Global supply and demand for natural rubber is in balance, with no surplus, he said in an interview after a one-day meeting in Bangkok. State agencies from the 3 countries and an exporter representative from Thailand participated. (Bloomberg)

Multi-Purpose looks to divest non-gaming assets and pay back shareholders
Multi-Purpose has proposed to divest its non-gaming assets into MPHB Capital for RM905.3m, to be satisfied by cash and shares. The latter’s shares will be offered to investors at RM1 each. It will also pay shareholders an estimated RM0.485 per share from the proceeds of the offer for sale via a capital repayment exercise. After the exercise, the company will be a pure numbers forecast operator (NFO) and undertake a name change to Magnum. MPHB Capital will also assume RM77.6m of Multi-Purpose’s debt. (Financial Daily)

Media Chinese to float travel business
Media Chinese (MCIL) is proposing to float the shares of its travel and travel-related businesses, which had net assets of USD2m and FY12 PBT of USD2.5m, on the Growth Enterprise Market (GEM) in Hong Kong, with the company still remaining as a 75% shareholder. The size, structure, offer price and proceeds to be raised from the share offering will be finalised at a later stage. The proceeds will be utilised to expand MCIL’s travel business operations and other travel-related products. (Financial Daily)

Tabung Haji ups shareholding in TH Heavy Engineering by 25%
Lembaga Tabung Haji (LTH) has increased its shareholding in TH Heavy Engineering by almost 25% by buying shares in open trading to have a “comfortable level of control” of the company. In a filing yesterday, LTH had acquired 130.11m shares at RM0.40 a piece. With the acquisition, it now holds a 32% stake in the company. The reason the shareholding stops at 32% is to prevent a triggering of a mandatory general offer, MD and CEO Nor Badli Mohamad Alias said. (Malaysian Reserve)

1MDB’s RM2.3bn power plant purchase raises eyebrows
1MDB’s proposed RM2.3bn purchase of Genting’s 17-year-old power asset is deemed to be enough to construct a new power plant, several industry executives and consultants said. However, a source familiar with the company defended the proposed sale price due to the “high upside potential” of the acquisition. The rule of thumb for the costing of a new power plant is calculated at USD1m per MW. Hence, a 720MW facility would cost in the region of RM2.2bn, close to what 1MDB is paying for the 17-year-old power asset. (Malaysian Reserve)


Autos: Asean the sixth biggest auto market by 2018. ASEAN is set to become the sixth biggest automotive market globally by 2018, research firm Frost & Sullivan said. By then, vehicle sales in the region will almost double to nearly 4.7m units from 2.4m last year. Frost & Sullivan research manager for Asia Pacific automotive practice Vijayendra Rao said as a region, it had become more significant in the last few years due to the implementation of Asean Free Trade Agreement in 2010 and healthy rivalry among member countries to attract foreign investments. (Source: Business Times)

20120816 1003 Local & Global Economy Related News....


Malaysia: GDP grew 5.4% in 2Q while July’s inflation was up 1.4%
Malaysia's economy grew at an annual pace of 5.4% in 2Q12 as sturdy domestic demand and strong government spending helped offset weaknesses in exports due to faltering global demand. Meanwhile, the CPI for July was 1.4% higher than a year earlier. The central bank kept its official GDP target for 2012 at between 4% and 5%, but said growth is likely to be at the upper end of the range. (Reuters)

Economy: Malaysia's 2Q 2012 balance of payments records lower surplus of RM9.6bn
Malaysia's current account balance for 2Q 2012 showed a lower surplus of RM9.6bn, down from RM18.1bn attained a quarter ago, the Statistics Department said. It said performance for the quarter reviewed was weighed down by lower surplus recorded in goods account, which declined by RM6.4bn to RM29.4bn, and an increase of income account, which was RM3.1bn higher to RM11.7bn in. Y-o-Y the surplus on current account was reduced by RM13.4bn from RM23bn a year ago. (Bernama)

China: Can meet growth target on positive signs, Wen says
Chinese Premier Wen Jiabao said easing inflation allows more room to adjust monetary policy as positive signs are emerging in the economy, expressing confidence after July’s data showed a further slowdown in growth.
“We have the conditions and capabilities, and will be sure to fulfill this year’s economic and social development targets,” Wen said. (Bloomberg)

China: Soured loans rise for 3Q 2012 as economy slows
Chinese banks’ bad loans increased for a third straight quarter, the longest streak of deterioration in 8 years, highlighting pressures on asset quality and profit growth as the economy weakens.  Non-performing loans rose by 18.2bn yuan  (US$2.86bn) in the three months ended June 30 to 456.4bn yuan, the China Banking Regulatory Commission said in a statement on its website on Wednesday. Bad loans surged at all types of banking institutions, including the largest state-owned lenders, rural  banks and foreign banks, the regulator said. (Bloomberg)

China: Reluctance on reserve cut signals inflation concern
China’s slower-than-forecast cuts in banks’ reserve requirements show authorities are reluctant to shake their concern inflation will quicken, 3 months after Premier Wen Jiabao shifted priorities to boosting growth. China has left the reserve ratio for the biggest banks at 20% since mid-May while lowering interest rates in June and July, bucking forecasts from HSBC Holdings Plc and Societe Generale SA that the government would build on  3 ratio reductions since Nov 30. Industrial-production and loan data for July that missed estimates last week fuelled further speculation the People’s Bank of China would cut the ratio as soon as Aug 10. (Bloomberg)

UK: Unemployment unexpectedly falls on Olympics boost
UK jobless claims unexpectedly fell in July and a wider measure of unemployment dropped to its lowest in a year as the Olympic Games created jobs, showing the labor market’s resilience in the face of deepening recession. Jobless-benefit claims fell 5,900 to 1.59m, the Office for National Statistics said on Wednesday in London. The median forecast of 29 economists in a Bloomberg News Survey was for a gain of 6,000. The jobless total measured by International Labor Organization methods fell to 8% in the second quarter from 8.1% in the three months through May. (Bloomberg)

UK: BOE drops reference to rate cut as it considers policy options
Bank of England policy makers dropped a reference to interest-rate cuts this month as they voted to keep their bond-purchase target unchanged and said they will assess the need for other stimulus measures. The Monetary Policy Committee voted 9-0 to hold the target at 375bn pounds (US$587bn), according to the minutes of the Aug. 1-2 meeting, published in London on Wednesday. It also voted 9-0 to keep the benchmark interest rate at a record-low 0.5%. (Bloomberg)

Spain: Said to accelerate EU bank bailout after collateral limits
Spain is about to receive an emergency disbursement from the 100bn-euro (US$123bn) bailout of its financial system because of restrictions the ECB imposed on bank borrowing, according to a person familiar with the matter. The ECB last month imposed limits on how much it will lend banks against government-guaranteed bonds. The rule change meant Spain had to ditch a plan for nationalized lender Bankia group to get a loan from the Frankfurtbased central bank, said the person, who asked not to be named because the matter is private. (Bloomberg)

US: Factory output climbs as prices remain tame
Manufacturers are turning out more cars and computers, homebuilders are gaining confidence and prices are little changed, showing the US economy is expanding with inflation contained. Production at factories, mines and utilities increased 0.6% in July following a 0.1% gain the prior month, Federal Reserve data showed today in Washington. The cost of living over the past 12 months rose at the slowest pace in almost two years and sentiment among residential construction companies climbed to a 5-year high, according to other data. (Bloomberg)

US: Homebuilder confidence increases to 5-year high
Confidence among US homebuilders climbed in August to the highest level in more than five years, affirming the improvement in residential construction. The National Association of Home Builders/Wells Fargo builder confidence index rose to 37, higher than projected and the best showing since February 2007, according to figures from the Washington-based group released on Wednesday. The median forecast in a Bloomberg survey of economists called for no change from July’s 35. Readings below 50 mean more respondents said conditions were poor. (Bloomberg)

US: July consumer prices unchanged pricing power wanes
The cost of living in the US was little changed in July for a second month, showing companies lack pricing power. The unexpected reading in the consumer-price index capped a 1.4% gain over the past 12 months, the smallest year-to- year increase since November 2010, the Labor Department reported today in Washington. The median forecast of 85 economists surveyed by Bloomberg News called for an increase of 0.2%. The core index, which excludes volatile food and fuel costs, rose less than forecast. (Bloomberg)

US: International demand for assets falls from previous month
International demand for US financial assets fell in June from the previous month’s inflows, as investors saw Europe’s leaders moving toward a resolution of their financial crisis. Net buying of long-term equities, notes and bonds totalled US$9.3bn during the month, a drop from net purchases of US$55.9bn in May, the Treasury Department said on Wednesday in Washington. Economists surveyed by Bloomberg News projected net buying of US$40bn of long-term assets, according to the median estimate. (Bloomberg)

20120816 0956 Global Markets Related News.


Asia FX  By Cornelius Luca - Wed 15 Aug 2012 16:06:40 CT (Source:CME/www.lucafxta.com)
The appetite for risk was limited on Wednesday amid economic malaise and status quo. The US economic data was sluggish and Eurozone peripherals' debt crisis remains firmly lodged in. Of course, the slowdown in China and Japan doesn't help. The European and commodity currencies ended little changed after the European currencies made little progress on Tuesday. The yen and Aussie dollar remain under pressure after falling this week. The US stock markets ended mixed. Gold, oil and silver closed up. The short-term outlook for most of the European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short only the yen.  Good luck!

Overnight
US: The Consumer Price Index remained flat for a second month in July, while the core CPI edged up 0.1%.
US: The NY Empire State Manufacturing Index fell to -5.85 in August from 7.39 in July.
US: Net Long-Term TIC flows fell to $9.3 billion in June from $55.9 billion in May. Total Net TIC flows for June sank to $16.7 billion from $121.3 billion.
US: Industrial production rose 0.6% in July from a downwardly revised +0.1% in June. Capacity utilization ticked up to 79.3% from 78.9%.
US: The NAHB Housing Market Index rose to 37 in August from 35 in July.

Recap Stock Index Market Report (Source:CME)
The September S&P 500 grinded higher throughout the US trading session but remained in close proximity to the 1400.00 level. The September S&P 500 sold off toward its early morning low in the wake of this morning's New York Manufacturing activity that contracted for the first time October 2011. Corporate earnings this morning were mixed, with disappointing results from Deere & Co that lowered their full year outlook. Meanwhile, shares of Target were up around 2.0% after their earnings beat and the company raised their full year forecast. Equity markets recouped early losses following better than expected Industrial Production data, as well as home builder sentiment that surged to a new five year high. Shares of Cisco Systems traded more than 1.0% higher in anticipation of their latest earnings report expected after the close. The market will also get the latest tech-sector earnings from Applied Materials and NetApp.

Asian Stocks Advance as Wen Signals More China Stimulus (Source:Bloomberg)
Asian stocks rose as Chinese Premier Wen Jiabao said easing inflation is allowing room to adjust monetary policy and positive signs are emerging in the world’s second-largest economy. Fanuc Corp. (6954), a maker of industrial robots that gets almost half its sales from Asia outside Japan, gained 2.9 percent in Tokyo. Goodman Fielder Ltd., an Australian baker, fell 1.8 percent after saying it hasn’t received a takeover proposal from Wilmar International Ltd. Lenovo Group Ltd. (992), a Chinese personal- computer maker, may be active today in Hong Kong after its first-quarter profit increased. The MSCI Asia Pacific Index rose 0.3 percent to 120.21 as of 9:51 a.m. in Tokyo. twice as many stocks advanced as declined before the open of markets in Hong Kong and China. “Monetary easing is taking effect in China,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co., which oversees about $70 billion. “Wen’s remarks are pushing it, and that’s a positive catalyst for the markets.
The Premier seldom makes such direct remarks, but he might want to emphasize that government wants to support the economy by monetary policies.” The MSCI Asia Pacific Index (MXAP) fell 7 percent from this year’s high on Feb. 29 through yesterday amid concern Europe’s sovereign-debt crisis will worsen and China’s economy is slowing. The regional benchmark index traded at 12.4 times estimated earnings compared with 13.6 times for the S&P 500 Index and a multiple of 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Nikkei 225 Heading for Five-Week High on China Stimulus(Source:Bloomberg)
Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average heading for a six-week high, as Chinese Premier Wen Jiabao said slowing inflation is allowing more room to adjust monetary policy in the world’s second-largest economy. Fanuc Corp. (6954), a manufacturer of robotics used in Chinese factories, climbed 2.7 percent. Dai-Ichi Life Insurance Co. rose 5 percent, leading the sector higher after Moody’s Investors Service said its investment in Janus Capital Group Inc. is positive. Inpex Corp., Japan’s top oil explorer by market value, gained 2 percent after crude traded near a three-month high. “Monetary easing is taking effect in China,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co., which oversees about $70 billion. “The premier seldom makes such direct remarks, but he might want to emphasize that government wants to support the economy by monetary policies.”
The Nikkei 225 gained 0.9 percent to 9,002.53 as of 9:46 a.m. in Tokyo, rising to its highest since July 6. Volume on the gauge was 2 percent below the 30-day average even with many investors taking the week off for O-bon holidays. The broader Topix (TPX) Index rose 0.8 percent to 753.42, with more than twice as many shares advancing as declined. Stocks gained on the Chinese premier’s remarks on possible easing. There’s “growing room for monetary policy operation,” Wen said yesterday during an inspection tour of the eastern province of Zhejiang, according to state media. “We have the conditions and capabilities, and will be sure to fulfill this year’s economic and social development targets.” He added that downward pressure on the economy remained “relatively large.”

European Stocks Little Changed; Mining Shares Lead Drop(Source:Bloomberg)
European (SXXP) stocks were little changed, after the Stoxx Europe 600 reached its highest level in almost five months yesterday, as a worse-than-expected manufacturing report for the New York area revived hopes the Federal Reserve will act to stimulate the economy. A gauge of European mining companies slumped, with Rio Tinto Plc dropping 3.4 percent. Eurasian Natural Resources Corp., a Kazakh metal producer, slid the most in 11 months. Standard Chartered Plc (STAN) gained 4.1 percent after the company settled a New York money laundering probe for $340 million. The Stoxx 600 lost 0.1 percent to 270.35 at the close of trading. European stocks rallied for the last 10 weeks amid better-than-expected company earnings and speculation policy makers from will do more to stimulate the economy. The Stoxx 600 climbed yesterday as a report showed German growth slowed less than forecast.
“The surprisingly weak Empire State index is disappointing and shows that the mood in the U.S. industry remains tense,” Ulrich Wortberg, an analyst at Helaba Landesbank Hessen- Thueringen, wrote in an e-mail. “With these numbers, the QE3 topic could get a little bit more life again,” he said, referring to a potential third program of stimulus from the U.S. Federal Reserve. The volume of shares changing hands in companies listed on the Stoxx 600 was 53 percent lower than the average of the last 30 days, according to data compiled by Bloomberg. Markets in Italy, Luxembourg, Austria and Greece were closed today.

Most U.S. Stocks Rise as Investors Weigh Economic Data(Source:Bloomberg)
Most U.S. stocks rose, after a two- day decline in the Standard & Poor’s 500 Index, as investors weighed manufacturing data for clues on whether the Federal Reserve will move to stimulate the economy. Abercrombie & Fitch (ANF) Co. and JDS Uniphase Corp. (JDSU) rallied at least 8.2 percent after earnings topped analysts’ estimates. Deere (DE) & Co. dropped 6.3 percent as profit trailed analysts’ estimates and the largest maker of farm equipment cut its full- year forecast. Staples Inc. (SPLS) tumbled 15 percent after reducing its projections amid slower growth. More than two stocks advanced for each declining on U.S. exchanges at 4 p.m. New York time. The S&P 500 rose 0.1 percent to 1,405.53, after falling as much as 0.2 percent. The Dow Jones Industrial Average slipped 7.36 points, or 0.1 percent, to 13,164.78. Volume for exchange-listed stocks in the U.S. was 4.8 billion shares, 26 percent below the three-month average.
“You’re getting back and forth data that sometimes confirm the potential for QE3, like today, and yesterday brings it into question,” said Andrew Slimmon, Chicago-based managing director of global investment solutions at Morgan Stanley Smith Barney, referring to another round of Fed stimulus known as quantitative easing. His firm has $1.7 trillion in client assets. “There is going to be no other expected major news between now and when the Fed meets on Aug. 31. There will be a lot of conjecture back and forth about what they are going to do.” Industrial production in the U.S. increased in July, Fed data showed today, propelled by a pickup in motor vehicle output and a rebound in utility use during the hottest month on record. A separate report showed manufacturing in the New York area unexpectedly contracted in August for the first time since October.

Dollar Touches Month-High Before U.S. Housing Data(Source:Bloomberg)
The dollar climbed to a one-month high against the yen before U.S. housing data that may reduce prospects for monetary stimulus by the Federal Reserve which tends to debase the greenback. The dollar gained against most major counterparts ahead of reports forecast to show new home construction remained near an almost four-year high and the number of building permits rose. New Zealand’s currency held gains after Auckland-based Fonterra Cooperative Group Ltd. said milk-powder prices rose. “The reason the U.S. dollar has been strengthening is that the data hasn’t been too bad,” said Joseph Capurso, a strategist in Sydney at Commonwealth Bank of Australia (CBA), the nation’s biggest lender. “The market has started to take out a little bit of pricing for QE3 in the near term,” he said, referring to a third round of Fed asset purchases known as quantitative easing, or QE.
The dollar earlier touched 79.11 yen, the strongest since July 18, before trading at 79.09 as of 9:15 a.m. in Tokyo. It was little changed at $1.2295 per euro. The 17-nation currency rose 0.2 percent to 97.24 yen. The so-called kiwi bought 80.72 U.S. cents after gaining 0.2 percent to 80.71 yesterday, the biggest advance since Aug. 3. The annual pace for U.S. housing starts was probably at 756,000 in July, according to the median estimate of economists surveyed by Bloomberg News before today’s Commerce Department report. That compares with a 760,000 rate in the previous month, the fastest since October 2008. Building permits rose to 769,000 last month from 760,000 in June, a separate poll showed.

Recap Interest Rate Market Report (source:CME)
September 30-Year Bonds traded sharply lower throughout the session, falling to its lowest level since May 17th. Treasury markets came under pressure during the early Asian trade as they reacted to yesterday's favorable US retail sales figures. This pushed September 30-Year Bonds below last week's low of 147-10 and appeared to trigger a round of stop-loss selling. Prices managed to recover heading into the first tier of US economic data, which highlighted benign consumer inflation and weaker than expected manufacturing activity in New York. However, gains were shallow and prices reversed into new low on the session following the second wave of US economic readings. The latest round of upbeat economic data appears to have reduced the prospect of more Fed quantitative easing at their September meeting. Some traders also pointed to a very active flow of corporate issuance as another force pressuring Treasury prices lower. In an interview later in the session, Dallas Fed President Fisher reiterated his stance that providing more monetary stimulus would not lower unemployment levels.

Treasuries Fall for Fourth Day Before Housing Starts Data(Source:Bloomberg)
Treasuries fell for a fourth day before a report economists forecast will show new-home construction in the U.S. was close to the most since 2008 as the housing market stabilizes. Ten-year yields increased two basis points, or 0.02 percentage point, to 1.84 percent as of 9:50 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in August 2022 slid 6/32, or $1.88 per $1,000 face amount, to 98 2/32. Builders broke ground on homes at an annual rate of 756,000 houses in July, according to the median estimate of economists surveyed by Bloomberg News. June’s 760,000 pace was the highest since October 2008. International Demand for U.S. Assets Declined in June
International demand for U.S. financial assets fell in June from the previous month’s inflows, as investors saw Europe’s leaders moving toward a resolution of their financial crisis. Net buying of long-term equities, notes and bonds totaled $9.3 billion during the month, a drop from net purchases of $55.9 billion in May, the Treasury Department said today in Washington. Economists surveyed by Bloomberg News projected net buying of $40 billion of long-term assets, according to the median estimate. Including short-term securities such as stock swaps, foreigners bought a net $16.7 billion in June, compared with net purchases of $121.3 billion the previous month. Net foreign purchases of U.S. Treasuries fell to $32.4 billion in June from $45.9 billion the previous month.
“The U.S. was not the safe haven it was earlier in the year for global funds as questions over the sustainability of the U.S. recovery cropped up,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said in an e-mail after the report was released. “Credit concerns seemed to be paramount as the selling of corporate bonds has been sizeable.”

FOREX-Dollar hits 1-month high against yen on solid data
LONDON, Aug 15 (Reuters) - The dollar rose to a one-month high against the yen after upbeat U.S. retail sales data the previous day dampened talk of monetary stimulus from the Federal Reserve.
"People are finding it hard to get inspired by the newsflow. Knowing that the euro zone debt situation is not OK makes them
wary of buying the euro," said Niels Christensen, currency strategist at Nordea.

Factory Output in U.S. Climbs as Prices Remain Tame: Economy(Source:Bloomberg)
Manufacturers are turning out more cars and computers, homebuilders are gaining confidence and prices are little changed, showing the U.S. economy is expanding with inflation contained. Production at factories, mines and utilities increased 0.6 percent in July following a 0.1 percent gain the prior month, Federal Reserve data showed today in Washington. The cost of living over the past 12 months rose at the slowest pace in almost two years and sentiment among residential construction companies climbed to a five-year high, according to other data. The reports ease concern the debt crisis that has dragged Europe to the brink of a recession and slowing demand in Asia will bring an end to the U.S. recovery that began in June 2009. At the same time, a lack of pricing power makes it possible for Fed policy makers to take whatever additional steps are needed to ensure the expansion is sustained.
“Manufacturing is still moving in the right direction,” said Michael Carey, chief economist for North America at Credit Agricole CIB in New York. “Domestic demand has been holding up, and there are some areas that continue to do well, such as autos,” said Carey, who accurately predicted the gain in output. “Inflation is well under control and not something the Fed is worried about.” Most stocks rose as investors weighed what influence the data will have on Fed policy makers when they meet next month. The Standard & Poor’s 500 Index increased 0.1 percent to 1,405.53 at the 4 p.m. close in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 1.82 percent from 1.74 percent late yesterday.

Manufacturing in New York Area Unexpectedly Shrank in August(Source:Bloomberg)
Manufacturing in the New York area unexpectedly contracted in August for the first time in 10 months, indicating U.S. factories are burdened by the global economic slowdown. The Federal Reserve Bank of New York’s general economic index fell to minus 5.9 this month from 7.4 in July. The median estimate in a Bloomberg survey of economists was 7.0. Readings less than zero signal contraction in the so-called Empire State Index, which covers New York, northern New Jersey and southern Connecticut. A slowdown in demand from consumers in the first half of the year, limited capital spending and a build-up in inventories gives factories little reason to boost production. Orders for the region’s manufacturers fell to the lowest level in almost a year, showing the industry that spurred the recovery from recession is facing a bigger hurdle from a weaker global economy.
“The outlook is not particularly favorable,” Millan Mulraine, a senior U.S. strategist at TD Securities Inc. in New York, said before the report. “Slowing global growth momentum will certainly eat into the global demand for U.S. exports and manufacturing in particular.” Stock-index futures held losses after the figures, with the contract on the Standard & Poor’s 500 Index falling 0.2 percent to 1,398.4 at 8:32 a.m. in New York. Estimates in the Bloomberg survey of 56 economists ranged from minus 2 to 10. The Empire State gauge of new orders dropped to minus 5.5 in August from minus 2.7 the prior month, while the shipments measure fell to 4.1 from 10.3.

Homebuilder Confidence in U.S. Increases to Five-Year High(Source:Bloomberg)
Confidence among U.S. homebuilders climbed in August to the highest level in more than five years, affirming the improvement in residential construction. The National Association of Home Builders/Wells Fargo builder confidence index rose to 37, higher than projected and the best showing since February 2007, according to figures from the Washington-based group released today. The median forecast in a Bloomberg survey of economists called for no change from July’s 35. Readings below 50 mean more respondents said conditions were poor. Builders such as PulteGroup Inc. (PHM) are benefiting as less- expensive properties and record-low mortgage rates entice buyers. At the same time, faster hiring and fewer foreclosures are needed to bring about bigger gains for the industry that precipitated the worst recession in the post-World War II era.
“The outlook appears to be brightening,” Barry Rutenberg, chairman of the NAHB and a builder from Gainesville, Florida, said in a statement. At the same time, “there is still much room for improvement.” Other reports today showed production at factories, mines and utilities climbed more than forecast in July, and consumer prices were unexpectedly little changed.

July Consumer Prices Unchanged as U.S. Pricing Power Wanes(Source:Bloomberg)
The cost of living in the U.S. was little changed in July for a second month, showing companies lack pricing power. The unexpected reading in the consumer-price index capped a 1.4 percent gain over the past 12 months, the smallest year-to- year increase since November 2010, the Labor Department reported today in Washington. The median forecast of 85 economists surveyed by Bloomberg News called for an increase of 0.2 percent. The core index, which excludes volatile food and fuel costs, rose less than forecast. Companies may find it difficult to charge more while joblessness hovers above 8 percent. Tempered inflation makes it possible for Federal Reserve policy makers to take additional steps if needed to revive the economic expansion when they meet next month. “The fact that the economy was so weak in the first half of the year means there’s probably less pricing power,” said Omair Sharif, U.S. economist at RBS Securities Inc. in Stamford, Connecticut.
“It’s going to be tough to push prices through to the cons umer who’s already very weak and shown an appetite for discount shopping,” said Sharif, who correctly forecast the increase in core prices. “If you’re the Fed, inflation is the least of your concerns right now,” he said. Manufacturing in the New York area unexpectedly contracted in August for the first time since October, indicating factories are cutting back amid the global economic slowdown, another report today showed.

China Can Meet Growth Target on Positive Signs, Wen Says(Source:Bloomberg)
Chinese Premier Wen Jiabao said easing inflation allows more room to adjust monetary policy and positive signs are emerging in the economy, expressing confidence after July data showed a further slowdown in growth. “We have the conditions and capabilities, and will be sure to fulfill this year’s economic and social development targets,” Wen said during a two-day inspection tour to the eastern province of Zhejiang, the official Xinhua News Agency reported yesterday. He said downward pressure on the economy remained “relatively large,” according to state radio, and state television reported him as saying there’s “growing room for monetary policy operation.” The comments may bolster speculation China will cut banks’ reserve requirements or benchmark interest rates again after inflation slowed to a 30-month low in July, export growth collapsed and new yuan loans trailed estimates. Zhejiang, an export base, is among the hardest-hit regions by the economic slowdown.
“Policy makers have made clear in recent weeks that supporting economic growth is their central concern,” Qinwei Wang, an economist at Capital Economics Ltd. in London, said in an e-mail. “We continue to think that more policy support will be announced soon, including a further cut to the required reserve ratio, and that more infrastructure projects proposed by local governments will be given the go-ahead.” Wang is a former employee People’s Bank of China, according to his profile on Capital Economics’ website.

S. Korea Unemployment Falls to 7-Month Low on Service Jobs(Source:Bloomberg)
South Korea’s unemployment rate unexpectedly fell to a seven-month low on increasing numbers of self-employed workers and service-sector jobs even as Europe’s debt crisis dragged down exports. The jobless rate was at 3.1 percent in July, compared with 3.2 percent in June, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of 14 economists was for a rate of 3.3 percent. The outlook for the labor market is clouded by signs that Asia’s fourth-largest economy is losing steam. A decline in exports in July was the steepest since 2009 and the central bank said Aug. 9 that domestic demand is also weakening. “Jobs are increasing in the service sector and the self- employed are lifting the total number of workers, but Europe’s fiscal crisis is taking a toll on company hiring,” said Sun Yoo, an economist Woori Investment & Securities Co. in Seoul. “The quality of the job market is deteriorating with more people taking non-salaried work.”
The won weakened 0.3 percent to 1,133.00 per dollar at the 9:00 a.m. open in Seoul and the benchmark Kospi stock index was little changed. The number of employed people increased by 470,000 to 25.1 million in July, with the self-employed and public services providing 318,000 of those new jobs. The seasonally unadjusted jobless rate was also at 3.1 percent in July, compared with 3.2 percent in June, today’s report showed.

Malaysia Growth Withstands Global Risks as Najib Boosts Spending(Source:Bloomberg)
Malaysia’s economic expansion unexpectedly accelerated as construction and consumption climbed, easing pressure on the central bank to join its Asian counterparts in cutting interest rates to shore up growth. Gross domestic product rose 5.4 percent in the three months through June from a year earlier, after expanding a revised 4.9 percent in the previous quarter, Bank Negara Malaysia said in a statement in Kuala Lumpur yesterday. The median of 23 estimates in a Bloomberg News survey was for a 4.6 percent expansion. Prime Minister Najib Razak’s increased spending ahead of a general election that must be called by early 2013 has bolstered Southeast Asia’s third-largest economy, allowing the central bank to keep rates unchanged for more than a year. Growth in 2012 may be at the upper end of the 4 percent-to-5 percent forecast range even as risks from Europe and the U.S. remain, Bank Negara said.
“Malaysia is in a sweet spot at the moment,” said Lim Su Sian, an economist at HSBC Holdings Plc in Singapore. “While it’s inevitable we will see the global weakness start to filter through and investment might lose some of its momentum, there’s a lot of underlying support from the government and economic transformation programs. This strong number cements our view there won’t be a rate change this year.” The ringgit has risen about 1.6 percent this quarter, the biggest gainer among Asia’s 11 most-traded currencies. The benchmark FTSE Bursa Malaysia KLCI Index closed 0.1 percent higher yesterday.

Brazil Will Sell Licenses for $66 Billion of Roads and Rails(Source:Bloomberg)
Brazil’s government will sell licenses to build and operate roads and railways requiring as much as 133 billion reais ($66 billion) in investments over 30 years to help boost growth in the world’s sixth-largest economy. The government will sell licenses for private companies to operate 7,500 kilometers (4,660 miles) of roads and 10,000 kilometers of railways, Transport Minister Paulo Sergio Passos said during a ceremony in Brasilia today. “Brazil is offering an extraordinary investment opportunity in an environment of economic and institutional stability,” President Dilma Rousseff said at the event. Inadequate road and rail infrastructure has limited Brazil’s growth potential as the country prepares to host the 2014 World Cup soccer tournament and the 2016 Olympic Games. Rousseff said the new projects will help solve infrastructure challenges that stem from a decade without investment.
Brazil’s economy will grow 1.8 percent this year, according to the latest central bank survey, down from 2.7 percent last year and marking the second-slowest pace since 2003. The flagging economy caused tax revenue in June to fall from a year earlier for the first time since November 2010.

U.K. Unemployment Unexpectedly Falls on Olympics Boost: Economy(Source:Bloomberg)
U.K. jobless claims unexpectedly fell in July and a wider measure of unemployment dropped to its lowest in a year as the Olympic Games created jobs, showing the labor market’s resilience in the face of deepening recession. Jobless-benefit claims fell 5,900 to 1.59 million, the Office for National Statistics said today in London. The median forecast of 29 economists in a Bloomberg News Survey was for a gain of 6,000. The jobless total measured by International Labor Organization methods fell to 8 percent in the second quarter from 8.1 percent in the three months through May. The willingness of companies to keep hiring workers when the economy is shrinking has provided a boost for Prime Minister David Cameron and perplexed economists. Some say the improvement is unsustainable and unemployment may rise in coming months.
“It might be difficult to sustain these strong trends,” said Nida Ali, an economist at Ernst & Young’s ITEM Club in London. “Activity in the second half of 2012 is expected to remain sluggish, implying that the private sector will find it increasingly difficult to create jobs.” Britain’s economy shrank 0.7 percent in the three months through June, the third straight quarter of contraction. The Bank of England sees the economy contracting about 0.2 percent this year, according to figures published today. Separately, minutes of the Bank of England’s Aug. 1-2 meeting showed policy makers voted unanimously to keep their bond-purchase target unchanged this month. They said they will assess the need for other measures in light of the impact of their new credit-boosting program.

20120816 0955 Global Commodities Related News.


DTN Closing Grain Comments 08/15 14:52 : Soybeans Lead Grains Higher (Source:CME)
Strong buying interest from both sides of the market sparked a sharp rally in soybeans. Corn staged an impressive rally of its own, closing back above $8.00. Chicago wheat lagged well behind due to a lack of interest from either side of the market.

Wheat Market Recap Report(Source:CME)
December Wheat finished up 8 at 866 1/4, 3 3/4 off the high and 7 3/4 up from the low. March Wheat closed up 8 1/2 at 876. This was 6 1/2 up from the low and 2 1/4 off the high. September Chicago wheat traded slightly higher midday after falling nearly $1 dollar off the highs made last Friday. Wheat saw support from a higher corn market and on concern that a developing El Nino pattern could have a dramatic impact on Australian wheat crops in the next couple of months. Kansas City and Minneapolis wheat traded higher with Chicago. Wheat markets continue to see nearby pressure from weak nearby cash markets and sluggish export demand, however lower production and exports in the Black Sea could be supportive long term. The Russian Agriculture Ministry reports that Russian grain yields have fallen 28.6% below last year's levels with 47% of the harvest complete. The USDA recently cut Russia's wheat production estimate to 43 million tonnes vs. 49 in the July report. Argentina will see timely rainfall over the next two weeks which should promote good soil moisture to start their winter wheat crop year. The US Dollar traded higher today which offered slight resistance to gains. December Oats closed up 7 3/4 at 376 1/4. This was 11 1/4 up from the low and 3 1/2 off the high.

Pro Farmer: After the Bell Wheat Recap (Source:CME)
Wheat futures enjoyed gains for most of the session but pared gains into the close. Nearby Chicago wheat futures closed around 7 to 8 cents higher; nearby Kansas City wheat saw gains of roughly 3 to 4 cents; and nearby Minneapolis wheat ended around a dime higher. There was little fresh news for the wheat market today, leaving it to again follow corn.

Corn Market Recap for 8/15/2012(Source:CME)
December Corn finished up 15 at 804, 2 off the high and 17 up from the low. March Corn closed up 13 at 804 1/4. This was 14 3/4 up from the low and 2 1/4 off the high. December corn traded sharply higher into the close after the release of a positive ethanol report and a sharply higher soybean market. Cash corn in the Gulf of Mexico fell to a 2 year low this week but stabilized today as physical traders began moving corn north on the Mississippi River to ethanol facilities. Export demand remains light with South American and Ukraine supplies quoted at cheaper levels. Ethanol production for the week ending August 10 averaged 819,000 barrels per day. This is up 0.24% vs. last week and down 8.90% vs. last year. Nearby ethanol futures continue to trade a sharp discount to gasoline which supports ethanol use in blends going forward. Corn used in last week's production is estimated at 87.2 million bushels vs. 87.03 the week prior. This is the 3rd straight week that corn usage has increased. Corn use needs to average 105.7 million bushels per week to meet this crop year's USDA estimate of 5 billion bushels. Ethanol Stocks were 18.447 million barrels vs. 18.651 the week prior. This is the 8th week of the past 11 that ethanol stocks are dropping so implied demand for ethanol is stronger than the weekly production numbers.

Pro Farmer: After the Bell Corn Recap (Source:CME)
Corn futures favored a stronger tone through the day, with nearbys posting double-digit gains and high-range closes. Far-deferred futures were mixed. Corn was largely supported by spillover from the soybean pit and nearby corn contracts strengthened into the close amid concerns about tight supplies. Additional support today came from indications of a smaller Chinese crop due to significant army worm infestations.

Lower Temperatures and Rain Won’t Be Enough to Ease U.S. Drought(Source:Bloomberg)
Lower temperatures and rain forecast for parts of the Midwest won’t be enough to reverse the drought that has pushed crop prices up for months. In July, drought covered 57.2 percent of the contiguous 48 U.S. states, the worst since December 1956 when 57.6 percent of the country was dry, according to the latest Palmer Drought Index. The Palmer records, which date to 1895, are used to make comparisons to drought years before 2000. “The primary corn and soybean agriculture belt has been especially hard-hit by drought the last four months,” the Palmer index showed. “By the end of July 2012, about 86 percent of the primary corn and soybean belt was experiencing moderate to extreme drought, surpassing all previous droughts except those in 1988 and the 1930s.”
A large part of the Midwest will be drier than normal through the end of the month even with the rain and lower temperatures, said Joel Widenor, co-founder of Commodity Weather Group LLC in Bethesda, Maryland. He said time may be running out for soybean yields. “Once you get past the end of the 10-day forecast the soybean crop will be too far along in most areas to benefit from rain as far as yield potential goes,” Widenor said.

Soybeans, Corn Rise on Shrinking U.S. Harvests; Wheat Gains(Source:Bloomberg)
Soybeans and corn rose for the first time this week on speculation that the U.S. government may have underestimated crop damage from the hottest July since 1936. Wheat gained. Rain during the next week will be light, and the drought stress will expand to about 45 percent of the Midwest from 35 percent today, the Commodity Weather Group LLC said in a report. The U.S. Department of Agriculture on Aug. 10 said domestic corn output will drop 13 percent to a six-year low of 10.78 billion bushels this year while the soybean harvest slips to 2.692 billion bushels, the lowest since 2007. “Early harvest results are disappointing, and if they are indicative of the rest of the Midwest, then the risk is for crops to get smaller than the USDA is forecasting,” Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. “Traders are focused on higher prices to slow global demand for shrinking U.S. crops, especially for soybeans.”
Soybean futures for November delivery gained 2.2 percent to $16.325 a bushel at 10:01 a.m. on the Chicago Board of Trade, after falling 2.8 percent in the first two days of this week. The price touched a record $16.915 on July 23. Corn futures for December delivery rose 1.1 percent to $7.98 a bushel in Chicago, the first gain in three sessions. The most-active contract touched a record $8.49 on Aug. 10. Wheat futures for December delivery advanced 0.8 percent to $8.655 a bushel on the CBOT, after yesterday touching $8.5725, the lowest since Aug. 2. The price fell 7.4 percent the past three sessions, the biggest such slide since June 2011.

Soybeans Rise on Signs Demand Remains Robust After Record High(Source:Bloomberg)
Soybeans rose in Chicago for the first time this week on signs demand has yet to slow even after the worst U.S. drought in a half century lifted prices to a record last month. Corn and wheat gained. U.S. processors crushed 137.4 million bushels of soybeans in July, up 2.4 percent from June, the National Oilseed Processors Association said yesterday. The amount of soybeans inspected for export surged 22 percent in the week ended Aug. 9, government data show. The oilseed is up 34 percent this year as dry weather left U.S. crops in the worst shape since 1988, after drought slashed supplies in South America last season. “We maintain a bullish outlook for soybeans,” Australia & New Zealand Banking Group Ltd. analysts including Paul Deane wrote today in an e-mailed report. “The market needs to ration a record amount of supply before the next South American crop.”
Soybeans for November delivery rose 0.8 percent to $16.105 a bushel on the Chicago Board of Trade by 12:54 p.m. London time. Prices fell 2.8 percent in the previous two days and are down 4.8 percent since reaching a record $16.915 on July 23. Areas of central Iowa and Illinois have chances of rain tomorrow before conditions turn drier, National Weather Service data show. Much of those states, the biggest U.S. corn and soybean growers, had less than half the normal amount of rain in the past 60 days.

China's soy imports to dwindle as price rally spooks buyers (Reuters)
China's unrelenting imports of soybean could hit a wall soon as oilseed processors in the world's top buyer cut purchases, with margins being eroded by a drought-driven rally in the United States and domestic price curbs urged by Beijing.

China 2012 corn output estimate revised lower to 197 mln T-CNGOIC (Reuters)
Corn output in China, the world's second largest corn consumer, is estimated to rise 2.19 percent in 2012 compared to a year ago to 197 million tonnes, think tank China National Grain and Oils Information Center said in a monthly report issued on Wednesday.

Rice Harvest in India Set to Drop as Drought Curbs Sowing(Source:Bloomberg)
Rice production in India, the world’s second-biggest grower, is poised to slump from a record as the worst monsoon since 2009 reduces planting, potentially lowering exports and boosting global prices. The monsoon-sown harvest may be between 5 million metric tons and 7 million tons below a record 91.5 million tons a year earlier, said P.K. Joshi, director for the South Asia region at the Washington-based International Food Policy Research Institute. Production of food grains, including corn and lentils, may slide as much as 12 percent from 129.9 million tons a year earlier, he said. Rice has rallied 7.4 percent in Chicago since the end of May on prospects for a lower Indian crop and export curbs, adding to global food costs that the United Nations estimates jumped 6.2 percent in July. Corn and soybeans have soared to records as the worst U.S. drought in half a century killed crops. Global rice production this year will be smaller than previously forecast, according to the UN’s Food & Agriculture Organization.
“A lot of importing countries looking toward India for more competitive prices are likely to shift to Thailand or Vietnam,” Abah Ofon, an analyst at Standard Chartered Plc, said by phone from Singapore. “If we see a drop in India’s rice output, it is not going to have a significant impact on global inventories. There may be slight moderation in exports.”

Top buyers snap up wheat fearing ongoing price hike (Reuters)
Leading wheat importers Egypt and Algeria seized a modest correction in grains prices this week to resume buying in what traders said reflected market fears that high prices are here to stay due to a devastating U.S. drought and an expected Russian export ban.

GRAINS: U.S. wheat edged up, after suffering its biggest three-day decline since July last year in a selloff triggered by Russia's exports to Egypt in two tenders this week, which eased concerns over supplies from the Black Sea region. Corn and soybeans rose, underpinned by tightening global supplies following the U.S. grain belt's worst drought in more than five decades. (Reuters)

SOFTS: Raw sugar futures were slightly higher, pausing after 11 consecutive lower closes as crop prospects in top growers improved, while arabica coffee and ICE cocoa were steady. (Reuters)

Ivory Coast investigates cocoa bugs after Brazil ban (Reuters)
Ivory Coast is investigating how two shipments of cocoa beans exported last month became infested by insects causing the receiving country, Brazil, to suspend imports from the world's top grower, an official with the country's marketing board said.

Indonesia to issue 250,000 T of raw sugar import permits (Reuters)
Indonesia, Southeast Asia's largest sugar consumer, is to issue import permits for 250,000 tonnes of raw sugar, a trade ministry official said on Tuesday, to help plug a domestic shortage of the sweetener for industrial use.

Coffee Extends Slump on Supplies; Cocoa, Sugar, Cotton Advance(Source:Bloomberg)
Arabica-coffee futures fell, heading for the longest slump in six months, on persistent signs that supplies will remain ample. Cocoa, sugar, cotton and orange juice advanced. Stockpiles of coffee at warehouses monitored by ICE Futures U.S. rose 0.1 percent yesterday, taking this month’s climb to 4 percent and the inventories to the highest level since October 2010, exchange data showed. Dry weather in Brazil, the world’s largest producer, has allowed the harvest to accelerate in the main growing areas according to Cooperativa Regional de Cafeicultores em Guaxupe Ltda, the biggest coffee cooperative. “The rising stocks are a psychological bearish factor,” Joe Scaduto, the president of JPS Commodities LLC, a broker in New York, said in a telephone interview. “Brazil’s weather is also good for the crop.”
Arabica-coffee futures for December delivery dropped 2.4 percent to $1.62205 a pound at 11:08 a.m. on ICE in New York, after reaching $1.618, the lowest for a most-active contract since June 28. A close at that level will mark the seventh straight loss, the longest decline since Feb. 16. Cocoa futures for December delivery increased 0.4 percent to $2,450 a metric ton on ICE. Also in New York, raw-sugar futures advanced 0.3 percent to 20.39 cents a pound, heading for the first gain in 12 sessions. Cotton futures for December delivery climbed 0.2 percent to 72.25 cents a pound. Orange-juice futures for November delivery rose 1.2 percent to $1.0575 a pound, headed for the first gain since Aug. 8.

Thailand, Indonesia, Malaysia Agree Moves to Boost Rubber(Source:Bloomberg)
Thailand, Indonesia and Malaysia, representing about 70 percent of global natural-rubber supply, agreed steps to boost prices, said Yium Tavarolit, chief secretary of the International Rubber Consortium Ltd. The measures will be announced by ministers tomorrow, said Yium, who declined to give details. Global supply and demand for natural rubber is in balance, with no surplus, he said in an interview after a one-day meeting in Bangkok. State agencies from the three countries and an exporter representative from Thailand participated. Rubber plunged 43 percent in the past year and reached the lowest in almost three years as growth slowed in China, the top consumer, and Europe. Demand in China may drop 5 percent this year as declining truck sales cut tire use, Hangzhou Zhongce Rubber Co., the biggest tiremaker, said last month. The three producers cut exports by 690,000 metric tons from January to July 2009 to combat a 56 percent decline in prices a year earlier. Rubber surged 103 percent in 2009.
The steps “will have a positive outcome, moving prices higher,” said Yium. China’s imports are still growing, he said. The International Rubber Consortium is an arm of the International Tripartite Rubber Council, which represents growers and exporters from the three countries. January-delivery rubber gained 0.9 percent to close at 209.5 yen a kilogram ($2,654 a metric ton) on the Tokyo Commodity Exchange after settling yesterday at the lowest level for the most-active contract since October 2009.

OIL-Brent holds around $114 on supply risk, QE hopes
LONDON, Aug 15 (Reuters) - Brent crude oil futures held steady around $114, near a three-month high, supported by supply disruption concerns and hopes of central bank intervention to bolster the ailing global economy.
"The market is still waiting for any indication that there will be an announcement on quantitative easing by (Federal Reserve Chairman) Ben Bernanke, and we'll be in a holding pattern," Gareth Lewis-Davies at BNP Paribas said.

Oil Gains as Supplies Decline More Than Expected(Source:Bloomberg)
Oil traded near a three-month high after U.S. stockpiles dropped to the lowest in four months amid rising demand in the world’s biggest crude consumer. Futures were little changed after advancing 1 percent yesterday. Inventories dropped 3.7 million barrels and total oil use reached the highest level in nine months last week, the Department of Energy said in a report. Middle East tension grew as Saudi Arabia, the United Arab Emirates and Qatar called on their citizens to leave Lebanon because of a kidnapping threat. “When you look at the inventory data you expect something and when it comes in above that, you have a major reaction,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity-markets newsletter in Sydney, who predicted that prices will still stay below $95.20 until there is broader global economic growth. Oil for September delivery was up 12 cents at $94.45 a barrel in electronic trading on the New York Mercantile Exchange at 9:32 a.m. in Tokyo.
Yesterday’s settlement was the highest since May 14. Prices have rallied 11 percent since June and are down 4.4 percent this year. Brent crude for September settlement, which expires today, rose was unchanged at $116.25 after climbing 2 percent yesterday on the London-based ICE Futures Europe exchange. The more actively traded October future was 28 cents higher at $114.59. Brent’s premium to WTI narrowed 12 cents to $21.80 a barrel after reaching a nine-month high.

Gold Rises as Consumer-Price Outlook Boosts Bets on Fed Stimulus(Source:Bloomberg)
Gold advanced after a U.S. report showing stagnant consumer prices bolstered prospects that the Federal Reserve will take further steps to spur growth, reviving inflation and demand for the metal as a hedge. Consumer prices were unchanged in July and are up 1.4 percent over the past 12 months, the smallest year-to-year increase since November 2010, the Labor Department reported today. Gold has dropped 6.1 percent since the end of February as the Fed failed to announce any new easing measures besides extending its program in June of replacing short-term bonds with longer-term debt by $267 billion through the end of 2012. “The CPI numbers have removed one roadblock in the path of some announcement on the easing front,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. Gold futures for December delivery advanced 0.3 percent to settle at $1,606.60 an ounce at 1:39 p.m. on the Comex in New York. Prices have risen 2.5 percent this year.
Bullion gained 0.8 percent last week amid speculation that China, the U.S. and Europe may take more steps to boost economic growth, reviving demand for gold as an inflation hedge. The metal surged 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing.

20120816 0954 Soy Oil & Palm Oil Related News.


Pro Farmer: After the Bell Soybean Recap(Source:CME)
Soybean futures were supported throughout the day by tightening supplies. Nearby soybean futures ended 30-plus cents higher. Gulf basis levels have surged recently to suggest supplies are tightening and demand remains strong. And while the crop in some areas has benefited from recent rains, there is still concern about the ability of the crop to properly fill pods as rains haven't been widespread and drier conditions are expected next week.

Soybean Complex Market Recap (Source:CME)
November Soybeans finished up 36 1/2 at 1634 1/2, 1 1/2 off the high and 37 1/4 up from the low. January Soybeans closed up 32 3/4 at 1625 1/2. This was 32 3/4 up from the low and 1 3/4 off the high. December Soymeal closed up 14.4 at 493.8. This was 14.5 up from the low and 0.6 off the high. December Soybean Oil finished up 0.28 at 53.71, 0.16 off the high and 0.43 up from the low. November soybeans settled near the highs of the day following two straight days of losses. Cash soybean levels along the Mississippi River spiked higher today as traders attempt to buy nearby supplies to fulfill export sales. Domestic crush margins remain positive as demand for soybean meal accelerates. The weather forecast for the rest of August provides a slightly bearish outlook for soybeans with cooler temperatures and better rainfall. However, a closely followed commodity weather analyst suggests that 35% of the US Midwest will remain stressed this week. The favorable outlook for soybean yields is being offset by surging domestic and international demand for soybeans and soybean meal. Analysts believe this trend could last well into 2013 causing US supply to tighten further given the lower US production forecast. Soybeans also saw support on reports that Brazil could trend drier this week and a drier than normal pattern could return in their peak growing season later this year.

EDIBLE OIL: Malaysian crude palm oil futures gained slightly as last-minute buying on rising exports for the first half of August erased losses posted earlier in the session. (Reuters)