Monday, November 19, 2012

20121119 1803 FCPO EOD Daily Chart Study.

FCPO closed : 2459, changed : +30 points, volume : higher.
Bollinger band reading : pullback correction little downside biased.
MACD Histogram : rising higher, buyer testing market.
Support : 2450, 2400, 2350, 2300, 2250 level.
Resistance : 2490, 2520, 2550, 2570 level.
Comment :
FCPO closed firmer with increased volume transacted. Soy oil price currently trading higher by more than 1% after last Friday closed lower while crude oil price soaring higher.
Price advanced higher on China oilseed stockpiling program news while cargo surveyor shows small decline in export figure.
Daily chart reading suggesting a pullback correction little downside biased market development with MACD indicator having positive crossed up and potential double bottom chart pattern formation.
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.

20121119 1746 FKLI EOD Daily Chart Study.

FKLI closed : 1616.5 changed : -3.5 points, volume : higher.
Bollinger band reading : downside biased with possible pullback correction.
MACD Histogram : recovering, seller taking partial profit.
Support :  1615, 1600, 1595, 1590 level.
Resistance : 1623, 1627, 1635, 1640 level.
Comment :
FKLI closed recorded loss again with slightly better volume exchanged  doing 6.5 points discount compare to cash market that closed lower. Last Friday U.S markets closed higher and today Asia markets performance better while European markets currently trading in positive territory.
Most regional markets advance higher as U.S. President Obama expressed confident will reach budget agreement with the U.S. congress. Back home KLCI continue to closed weaker as most top 30 counters traded lower.
FKLI daily chart reading revised to suggesting a downside biased market development with possible pullback correction.
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.

20121119 1719 Global Markets & Commodities Related News.

STOCKS: European stock index futures pointed to a sharply higher open, with stocks poised to mirror gains on Wall Street and in Asia on hopes of a deal in Washington to avoid a damaging "fiscal cliff". (Reuters)

FOREX-Yen hits 7-mth low as likely next government calls for easing
SINGAPORE, Nov 19 (Reuters) - The yen hit a seven-month low against the dollar hurt by expectations that a new Japanese government will push the Bank of Japan into taking aggressive monetary stimulus measures to boost economic growth.
"We've travelled too far, too fast over the last week or so," said Gareth Berry, a strategist for UBS in Singapore.

Looking hard for reasons to give thanks (Reuters)
With every year that passes, fewer and fewer people lead a life that is poor, nasty, brutish and short. So it is only right to step back, as America does this Thursday, to appreciate the bounties bestowed by economic progress.

US lawmakers say they're confident they can avoid 'fiscal cliff' (Reuters)
Leading U.S. lawmakers expressed confidence on Sunday that they could reach a deal to avert the "fiscal cliff" even as they laid down markers on taxes and spending that may make any agreement more difficult.

China to halt regular state soy sales from this week -CNGOIC (Reuters)
China, the world's top soy buyer, will temporarily halt regular state soy sales from this week as Beijing starts a stockpiling programme for the oilseed, an official think tank said on Monday, to improve margins for soy plants and spur imports.

GRAINS: U.S. soybeans rose 1 percent, buoyed by expectations of renewed buying after prices slid to their lowest in five months in the previous session as the world's top buyer China cancelled purchases. Corn rose for a second straight session while wheat ticked higher, snapping a six-session losing streak as sentiment across global financial markets turned positive on hopes that U.S. politicians would find common ground to prevent the economy from being weakened by the "fiscal cliff": a combination of spending cuts and higher taxes. (Reuters)

OIL: Brent crude rose to almost $110 a barrel as escalating violence between Israel and the Palestinians fuelled concerns about supplies from the Middle East. (Reuters)

Oil platform blaze off Louisiana leaves workers missing (Reuters)
An oil platform in the Gulf of Mexico off the Louisiana coast exploded on Friday, leaving two people missing and badly injuring several others, recalling the horror of the 2010 Deepwater Horizon disaster.

LME aluminium stocks set to break record on structural surplus (Reuters)
Aluminium stocks on the London Metal Exchange are poised to hit another all-time record above five million tonnes as soon as next week in a market swamped by a structural surplus.

BASE METALS: London copper rallied almost 1 percent, with traders expecting fresh shoots of economic revival to be revealed in China this week, while hopes that U.S. lawmakers would avert a looming fiscal crisis also stoked appetite for risk. (Reuters)

PRECIOUS METALS: Gold gained after dropping by a percent last week as the dollar came off the previous session's highs, while continued U.S. discussions to avert an upcoming "fiscal cliff" also lent support. (Reuters)

METALS-Copper up nearly 1 pct on hopes for U.S. fiscal fix
SINGAPORE, Nov 19 (Reuters) - London copper rallied almost 1 percent with traders expecting fresh shoots of economic revival to be revealed in China this week, while hopes that U.S. lawmakers would avert a looming fiscal crisis also stoked appetite for risk.
"The trough seems to be behind us on China. If you take historical information like fixed asset investment ... it seems we are on a higher footing," said Dominic Schnider, head of commodity research at UBS Wealth Management.

PRECIOUS-Gold firms on soft dollar; US fiscal talks eyed
SINGAPORE, Nov 19 (Reuters) - Gold gained after  dropping by 1 percent last week as the dollar came off the  previous session's highs, while rising tension in the Middle  East and continued U.S. discussions to resolve fiscal  difficulties lent support.
"The dollar is losing momentum for a further rally after  Friday's positive news on the fiscal talks, which will support  gold," said Li Ning, an analyst at Shanghai CIFCO Futures.

20121119 1553 Palm Oil Related News.

SGS CPO export down 1.2% to 759,452 tonnes for the period of 1~15 Nov 2012.

VEGOILS-Palm oil rises to 2-week high, export data eyed
Mon Nov 19, 2012 1:05am EST
* Palm oil tracking gains in soybeans, soybean oil
    * China to halt regular state soy sales from this week
    * Traders eye Nov. 1-15 export data from SGS later in day
    * Palm oil to rise to 2,588 ringgit -technicals

 (Updates prices, adds detail)
    By Chew Yee Kiat
    SINGAPORE, Nov 19 (Reuters) - Malaysian palm oil futures
rose to their highest in two weeks on Monday, tracking climbs in
soybeans and rival soybean oil, although caution ahead of export
data later in the day kept gains in check.    
    China, the world's top soy buyer, will temporarily halt
regular state soy sales from this week as Beijing starts a
stockpiling programme for the oilseed, an official think tank
said on Monday.
    The move came after heavy crush losses and weak demand that
prompted Chinese buyers to cancel purchases of some 600,000
tonnes of U.S. soybeans over the past weeks.
    Dalian soybean oil prices rose as analysts said some
crushers could use a possible shortage of supply as an excuse to
start hiking their soy product prices, a move that could benefit
competing palm oil.  
    "Palm oil is just tracking soybean oil's move, and
technicals are looking bullish as well," said a dealer with a
foreign commodities brokerage in Malaysia.
    By the midday break, the benchmark February contract
 on the Bursa Malaysia Derivatives Exchange had advanced
1.4 percent to 2,462 ringgit ($804) per tonne. Prices earlier
touched 2,479 ringgit, the highest since Nov. 5.
    Total traded volumes stood at 16,431 lots of 25 tonnes each,
higher than the usual 12,500 lots.  
    Technicals showed palm oil could rise to 2,588 ringgit per
tonne as it has broken above resistance at 2,447 ringgit, said
Reuters market analyst Wang Tao.
    Exports of Malaysian palm oil products for Nov. 1-15 fell
0.1 percent to 769,087 tonnes from 769,534 tonnes a month ago,
cargo surveyor Intertek Testing Services said on Friday.

    Traders will be looking out for export data for the same
period from another cargo surveyor, Societe Generale de
Surveillance, later in the day.
    U.S. soybeans rose 1 percent on Monday, buoyed by
expectations of renewed buying after prices slid to their lowest
in five months in the previous session as the world's top buyer
China cancelled purchases.
    The gains in soybeans supported U.S. soyoil for December
delivery, which climbed 0.9 percent in early Asian trade,
while the most active May 2013 soybean oil contract on
the Dalian Commodity Exchange was up 0.2 percent.  
    In related markets, Brent crude edged up to above $109 a
barrel on Monday as escalating tensions between Israelis and
Palestinians fuelled concerns about supply from the Middle East.

20121119 1116 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares rise on positive US tone, yen slips
TOKYO, Nov 19 (Reuters) - Asian shares rose, boosted by a positive tone in U.S. equities last week, while the yen fell to a near seven-month low against the dollar on expectations a new government after next month's election in Japan may deliver more stimulus.
"The market bullish sentiment will continue today," said Takashi Hiroki, chief strategist at Monex Inc, adding that sentiment had changed as trading volume hit an eight-month high on Friday and any short-term profit-taking would likely to be limited.

FOREX-Yen steadier after hammering, still fragile
SYDNEY, Nov 19 (Reuters) - The yen was hovering near a seven-month low versus the dollar at the start of the week, as expectations of more stimulus by Japanese authorities after next month's election made holding the already low-yielding currency even less appealing.
"We think dovish rhetoric from the opposition LDP regarding monetary policy is likely to weigh on the currency into the election date," Yuki Sakasai, analyst at Barclays Capital, wrote in a note.

OIL - Oil rises on Middle East conflict, Gulf of Mexico fire
NEW YORK, Nov 16 (Reuters) - Oil rose on Friday as a fire on a Gulf of Mexico platform and the escalating conflict between Israel and Palestinians stoked supply concerns.
"Traders who had been long Brent/short WTI (U.S. crude) on the Middle East fears reversed that when the platform fire news broke," said Phil Flynn, analyst at Price Futures Group in Chicago.

Light crude surplus spins world oil trade compass
LONDON, Nov 16 (Reuters) - The world is increasingly saturated with hitherto scarce high-quality light crude with Europe's market to join the United States in a surplus, traders say, predicting a scramble to export to Asia and a global shortage of once abundant heavy oil.
The shale oil boom has pushed U.S. production to the highest in more than 15 years and sharply cut its appetite for oil from Nigeria or Algeria as most of its domestically produced barrels are similarly light and low-sulphur, or sweet.

BP agrees to record criminal penalties for US oil spill
NEW ORLEANS/WASHINGTON, Nov 15 (Reuters) - BP Plc  will pay $4.5 billion in penalties and plead guilty to criminal misconduct in the Deepwater Horizon disaster, which caused the worst U.S. offshore oil spill ever.
U.S. Attorney General Eric Holder called the deal a "critical step forward" but was adamant that it did not end the criminal investigation of the 2010 spill.

Canada says needs foreign investment, still discussing policy
NEW YORK, Nov 16 (Reuters) - Canada needs foreign capital to develop its oil sands and is in the "middle" of discussions on how to approach foreign takeover bids such as that by China's CNOOC  for oil and gas producer Nexen , Finance Minister Jim Flaherty said on Friday.
"It's clear that the amount of investment required to develop the oil sands and other resources in Canada exceeds the amount of capital within Canada, so it's inevitable that there will be substantial direct foreign investment in Canada. The question then is what form does that take," Flaherty told reporters after giving a speech in New York.

Oil platform blaze off Louisiana leaves workers missing
HOUSTON/NEW YORK, Nov 16 (Reuters) - An oil platform in the Gulf of Mexico off the Louisiana coast exploded on Friday, leaving two people missing and badly injuring several others, recalling the horror of the 2010 Deepwater Horizon disaster.
The fire ignited when workers were welding a pipe on the deck of the shallow-water platform operated by Houston-based Black Elk Energy. Eleven workers were injured, including four who suffered severe burns.

Senators turn up pressure on Obama to approve Keystone pipeline
WASHINGTON, Nov 16 (Reuters) - A bipartisan group of senators on Friday urged President Barack Obama to quickly issue a permit for the northern leg of the Keystone XL pipeline, a project environmental groups have vowed to keep fighting.
The senators - nine Democrats and nine Republicans - asked Obama to approve the pipeline because it will create jobs and reduce the need for oil from the Middle East. They were led by Max Baucus, a Montana Democrat and powerful chair of the Senate Finance Committee, and John Hoeven, a North Dakota Republican. Both senators represent the booming Bakken oil region.

Iraq would favour CNPC, Lukoil bids for Exxon oil stake
BAGHDAD, Nov 16 (Reuters) - Iraq would favour bids by Russia's Lukoil  and China's CNPC if they decided to buy Exxon Mobil's  stake in the super-giant West Qurna-1 oilfield, a senior oil ministry official said on Friday.    
A sale of the stake to either company would significantly strengthen the position of Russia or China in exploiting Iraq's oil reserves, the world's fourth biggest.

Europe oil refining margins to return to reality in 2013
LONDON, Nov 16 (Reuters) - European oil refiners can expect margins to come back down to earth in 2013 as global capacity returns, after a rollercoaster this year that saw them soar in the second and third quarters on low oil products stocks and plant closures.
The persistent strength of European refining margins since the middle of the year has surprised traders and refiners, who had grown used to very tough conditions.

US Oct oil demand fell 2.3 pct from year ago-API
WASHINGTON, Nov 16 (Reuters) - U.S. oil demand continued to decline in October, with demand falling to its lowest level for the month since 1995, industry group American Petroleum Institute said on Friday.
Petroleum demand dropped 2.3 percent from a year earlier to 18.412 million barrels per day.

20121119 1116 Local & Global Economy Related News.

Malaysia: GDP grew by 5.2% in 3Q, driven by domestic demand
Malaysia’s GDP expanded by 5.2% in the 3Q of this year, as compared to 5.8% a year ago and 5.6% in the 2Q of 2012. The 3Q growth figure this year exceeds consensus’s estimate of 4.7%. During the quarter under review, domestic demand expanded by 11.4%. (Financial Daily)

China: Home prices gain in half the cities tracked as market steadies
China’s new home prices rose in October in more cities than the previous month, indicating the government will refrain from relaxing curbs on the property market. Prices climbed in 35 of the 70 cities the government tracks, compared with 31 in September, according to data from the statistics bureau. Prices fell in 17 cities. Investors are gauging the government’s policy direction on real estate, rolled out over two years to rein in surging home prices that raised concerns about affordability, after the Communist Party unveiled the new generation of leaders last week. (Bloomberg)

Spain: 10-Year bonds decline as Euro-area slips into recession
Spanish bonds fell, pushing 10-year yields to the highest level in six weeks, as a euro-area report showed the region’s economy contracted in the 3Q, pushing it into recession. Spain’s 10-year yield climbed for a fourth consecutive week, the longest run of increases since June, as the nation’s government refrained from asking for aid from the European Central Bank’s Outright Monetary Transactions program. (Bloomberg)

US: Record-low mortgage rates may lift housing
The lowest mortgage rates on record probably helped keep sales of previously-owned US homes close to a two-year high in October, and underpinned construction of new residences, economists said. Purchases of existing dwellings held at a 4.75m annual rate last month, according to the median forecast in a Bloomberg survey. (Bloomberg)

US: Sandy cuts US output while overseas demand cools
Industrial production unexpectedly fell in October as superstorm Sandy disrupted output of goods from food to chemicals, adding to the woes of companies contending with cooling global demand. Production at factories, mines and utilities dropped 0.4% after a revised 0.2% increase in September that was smaller than previously estimated, Federal Reserve data showed. Economists projected a 0.2% gain, according to the median forecast in a Bloomberg survey. (Bloomberg)

US: Foreign demand for US assets sinks on Europe easing, QE3
International purchases of US financial assets plunged 96% in September as confidence grew that Europe was beginning to solve its debt crisis and investors sold Treasuries following the Federal Reserve’s quantitative easing announcement. Net buying of long-term equities, notes and bonds totalled USD3.3bn during the month, down from net purchases of USD90.3bn in August, the Treasury Department said. Economists surveyed by Bloomberg projected net buying of USD50bn of long-term assets, according to the median estimate. (Bloomberg)

20121119 1115 Malaysia Corporate Related News.

Unisem back on radar screen
Unisem 2.0, which was launched in end-2011 by Unisem (M), was relevant for the supplier of components to technology-related sectors in its efforts to revamp its business. The company has embarked on initiatives to take on new challenges and discard the "old" ways of doing things. Unisem returned to the black in its third quarter and has since been on the radar screens of some investors. (StarBiz)

GDP growth at 5.2% in Q3
Malaysia's gross domestic product (GDP) for the third quarter ended 30 Sep expanded 5.2% y-o-y, supported by domestic demand and investment activities. Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said at a briefing to announce the GDP data that growth in the quarter was supported by domestic demand, especially in the favourable performance of private and public sector consumption and investment activities. (StarBizWeek)

More high-impact projects unveiled
A total of RM26.1bn in investments will be flowing in for 20 projects under seven National Key Economic Areas (NKEAs) as well as three economic corridors. This will create 64,282 jobs and contribute RM10.1bn of gross national income (GNI) by 2020. Prime Minister Datuk Seri Najib Tun Razak said at a progress update of the Economic Transformation Programme that the country was on track to hit the 2020 development targets. (StarBizWeek)

Obama calls for more Myanmar reform on Asian tour
President Barack Obama flexed US power in Asia yesterday on a regional tour that will make history when he lands in Myanmar, calling on its leaders to step up their startling political reform drive. Obama today will become the first sitting US president to visit formerly-isolated Myanmar. He will praise President Thein Sein for ending a dark era of junta rule, but also prod him to go much further towards genuine democracy. (Financial Daily)

Pantech on track for solid earnings
Strong demand from industrial oil and gas sectors will spell a solid showing for Pantech Group Holdings in its current financial year. There is still strong demand for the company's products despite the current global economic uncertainties, said Pantech executive director Adrian Tan. Coupled with continued capital expenditure in the oil and gas sector, Pantech expects to post credible top and bottom lines in its fiscal year ending 28 Feb 2013, he said. (BT)

Maxis believes in untapped potential of SME segment
Maxis believes there is good growth potential in offering end-to-end business solutions to the small and medium enterprises (SME) market as the segment is still fairly untapped. Head of business services, Fitri Abdullah believes that competition among businesses is increasing everyday and they need to be an adopter of technologies or IT solutions to compete better in the market space. (BT)

Petronas in modified bid for Progress
Petroliam Nasional (Petronas) is said to have submitted a fresh and modified bid for the CND5.2bn (RM15.9bn) takeover of Calgary-based Progress Energy Resources that was blocked by the Canadian government, well ahead of the Tuesday deadline to respond to queries from authorities. A Petronas official told The Malaysian Reserve that the company has no comment yet on the deal, but Reuters reports said Petronas' chief negotiator has just returned to Kuala Lumpur after submitting the revised bid. (Malaysian Reserve)

Perisai appoints manager for its jack-up rig
Perisai Petroleum Teknologi has appointed KCA Deutag as the drilling operations and maintenance contractor on its newbuild Pacific class jack-up drilling. The rig is expected to be delivered by Jul 2014 to Perisai's wholly-owned unit, Perisai Drilling. The deal to maintain and operate the rig was signed with Global Tender Barges Drilling, a company within the KCA Deutag group, Perisai said in a filing last Friday. (Malaysian Reserve)

Xinquan's net profit up 7.7% in 1Q
Xinquan International Sports Holdings net profit increased 7.7% to RM36.8m in its first-quarter ended 30 Sep 2012, from the RM34.2m recorded in the same period last year. In an exchange filing yesterday, the outdoor casual wear company said the increase was mainly due to the increased brand value and positioning of the Gertop brand of products. (Malaysian Reserve)

20121119 1043 Global Markets Related News.

Global Economy Outlook for 2013 Dims as Debt Woes Persist (CME)
By The Economist Intelligence Unit - Fri 16 Nov 2012 13:23:38 CT
Euro Zone Seen in Recession Second Straight Year
Global economic growth in 2013 will be weaker than previously forecast, with Europe heading for recession for the second consecutive year, amid political tensions and lingering effects of the 2008-09 financial crisis, the Economist Intelligence Unit said. Worldwide, Gross Domestic Product is projected to expand 2.3% next year, down from 2.5% in a previous estimate and only a slight improvement from the 2.2% growth expected this year, Economist Intelligence Unit analysts said in a new report. "Such a subdued rate of growth is exceptionally disappointing at this stage of an economic recovery, and underlines the fact that the world has not recovered fully from the 2008-09 financial crisis," the Economist Intelligence Unit said.
The group also forecast the euro zone economy will contract by 0.2%, after previously saying the region would grow 0.4%. Overall, trading conditions "remain difficult in many countries," and while China and the U.S. offer some bright spots, "the global economy still has serious problems - most notably the debt crisis in the euro zone… Austerity looks set to bite harder than we previously forecast."

Asia Stocks Rise for 2nd Day as Obama Pledges Budget Deal (Bloomberg)
Asian stocks gained, with the MSCI Asia Pacific Index (MXAP) heading for its second day of advance, after President Barack Obama expressed confidence that he and Congress would reach a budget agreement. Toyota Motor Corp., the world’s biggest carmaker, climbed 2.1 percent in Tokyo. Japan Tobacco Inc. jumped 6.6 percent as the government plans to postpone the sale of its stake in the cigarette maker. Billabong International Ltd. surged 11 percent in Sydney after the surf-wear maker said it’s considering a takeover. The MSCI Asia Pacific Index rose 0.8 percent to 120.82 as of 10:06 a.m. in Tokyo, with four shares gaining for each that fell. The regional benchmark index is extending its rally for a second day as Obama, who is visiting Asia this week, initiated talks with Republicans and Democrats to avoid the combination of $607 billion in automatic tax increases and spending cuts. Failure to avert the so-called fiscal cliff would threaten to throw the country into a recession next year.
“There were some early signs of some conciliatory language in the U.S. late Friday night that was encouraging,” said George Boubouras, Melbourne-based head of investment strategy at UBS AG’s Australian wealth management unit. The Swiss bank has about $1.5 trillion under management. “The market retracement this month is an opportunity to buy the dip as investors navigate through the political negotiation.” Japan’s Nikkei 225 Stock Average increased 1.4 percent, heading for its biggest four-day rally since March 2011. The Bank of Japan holds a meeting today amid speculation the country’s opposition party that advocates more aggressive monetary policy easing will take power in December’s election.

China’s Stock-Index Futures Rise After Home Prices Advance (Bloomberg)
China’s stock-index futures rose, signaling gains for the benchmark index, as Premier Wen Jiabao said the economy is stabilizing and the nation’s new home prices climbed in October in more cities than the previous month. Futures on the CSI 300 Index (SHSZ300) expiring in December, the most-active contract, added 0.2 percent to 2,179.80 as of 9:17 a.m. local time. China Vanke Co. may lead property stocks higher after a report showed home prices climbed in 35 of the 70 cities the government tracks, compared with 31 in September. Citic Securities Co. may lead an advance for brokerages after the Shanghai Securities News reported the government may allow them to diversify their invesments and relax capital requirements. The Shanghai Composite Index (SHCOMP) slid 0.8 percent to 2,014.73 on Nov. 16, while the CSI 300 Index declined 0.8 percent to 2,177.24. The MSCI Asia Pacific Index advanced 0.7 percent today after U.S. President Barack Obama expressed confidence that he and Congress would reach a budget agreement. The Shanghai Composite slid 2.6 percent last week as the Communist Party held a meeting to appoint new leaders. Xi Jinping was named general secretary, putting him in line to become president. China’s stocks pared losses in the last 30 minutes of trading on Nov. 16 after the government said it will cut the stock dividend tax by half for individuals who hold shares for at least one year as part of efforts to encourage long-term investment and reduce speculative trading. The index trades at 9.6 times estimated profit for 2012, compared with the 17.8 average multiple since Bloomberg began compiling the weekly data in 2006. It has fallen 8.4 percent this year. Trading volumes were 26 percent lower than the 30-day average on Nov. 16, according to data compiled by Bloomberg. Thirty-day volatility was at 12.8, compared with this year’s average of 17.1.

Japan Stocks Advance on Stimulus Hopes, U.S. Budget Talks (Bloomberg)
Japanese stocks rose, with the Topix Index heading for the biggest three-day gain since March 2011, as the yen fell amid speculation elections next month will hand power to an opposition party pushing for more stimulus and as U.S. budget negotiations appear to make progress. Canon Inc. (7751), the world’s biggest camera maker, gained 3.7 percent. Funai Electric Co., a television maker that relies on North America for half its sales, gained 2.1 percent after U.S. House Speaker John Boehner said talks with President Barack Obama were “constructive. ” Japan Tobacco Inc. jumped 4.7 percent as the government plans to postpone sale of its stake in the company.
The Topix rose 1.6 percent to 763.33 as of 9:24 a.m. in Tokyo, with more than seven shares advancing for each that fell. The index is set for a three-day gain of 5.6 percent, after the ruling party decided to dissolve parliament. The Nikkei 225 Stock Average (NKY) gained 1.4 percent to 9,153.33 today on volume about 60 percent above the 30-day intraday average. “Unless the Liberal Democratic Party loses the upperhand, the yen will continue to weaken,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc. Expectation the U.S. will reach an agreement on the so-called fiscal cliff “is fueling confidence among investors.” The Japanese currency fell to the lowest level in almost seven months before the Bank of Japan holds a meeting today amid speculation the opposition party will win next month’s elections.

Recap Stock Index Market Report (CME)
The December S&P 500 experienced a choppy to lower trade during the morning hours, pressured by weak US economic data, uncertainty surrounding the fiscal cliff and option expiration. US economic data this morning on October Industrial Production came in significantly weaker than expected, and that seemed to put added pressure on the market. The December S&P 500 registered a new low for the decline, falling to the lowest level since July 26th. Some traders noted that there were about five intra day swings in the index of nearly 10 points before turning higher later in the session. Midday support for the S&P 500 came from well-received comments from Congressional leaders and their willingness to work together on the fiscal cliff. The December S&P 500 finished the week down 20 points.

European Stocks Post Biggest Weekly Slump in Five Months (Bloomberg)
European stocks posted their biggest weekly drop since June amid concern President Barack Obama and Congress will fail to agree on a new budget, triggering $607 billion of automatic tax increases and spending cuts. EON AG slumped 16 percent after Germany’s biggest utility lowered its earnings forecast. Vodafone Group Plc slid 5.9 percent as the world’s second-largest mobile-phone company took a 5.9 billion-pound ($9.4 billion) writedown on its operations in Spain and Italy. SBM Offshore NV plunged 19 percent after saying it won’t meet its sales forecast for 2012. The Stoxx Europe 600 Index dropped 2.7 percent to 262.86 this past week, erasing its advance since the European Central Bank authorized an unlimited bond-buying program in September. The gauge has lost 4.3 percent since Obama won a second term on Nov. 6 amid concern that the president and Republican lawmakers will fail to avert a package of deficit-cutting measures.
“The way to play the fiscal cliff is to be very cautious in the short term,” Stewart Richardson, chief investment officer at RMG Wealth Management LLP said on Bloomberg Television in London this week. “The day after the election we saw another bad down day in equities and that gave us a technical signal that markets were vulnerable to the downside. We have seen that movement follow through this week.” Stocks have tumbled around the world on concern that the so-called fiscal cliff will push the world’s largest economy into a recession at the beginning of next year.

Emerging Stocks Drop in Week as Earnings Sink Eletrobras (Bloomberg)
Emerging-market stocks fell, extending the benchmark’s biggest weekly decline since May, as escalating Middle East tensions and concern over the U.S. economy cut demand for riskier assets. The MSCI Emerging Markets Index (MXEF) slid for a seventh day, losing 0.5 percent to 969.82 at the close of trading in New York, the lowest level since Sept. 7. The index declined 2.1 percent this week. Brazilian utility Centrais Eletricas Brasileiras SA (ELET6) had the biggest drop on the gauge, slumping to the lowest close since 2003 after quarterly earnings trailed estimates. Samsung Electronics Co. (005930) tumbled 1.8 percent, leading a retreat in emerging-market technology stocks.
The index pared losses after John Boehner, speaker of the U.S. House of Representatives, said talks with President Barack Obama over the so-called fiscal cliff were “constructive.” Industrial production in the nation unexpectedly fell 0.4 percent in October, data today showed. Palestinian missiles landed in areas around Jerusalem and Tel Aviv, while Israel stepped up its bombing on Gaza, buoying oil prices on speculation supply will be interrupted. “The risk-off mood continues to prevail,” Benoit Anne, head of emerging-market strategy at Societe Generale SA in London, said by e-mail. “I don’t think we are going to see a turnaround in the near term.” The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, gained 0.3 percent, paring its weekly loss to 1.4 percent. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, dropped 2.8 percent.

Trading Volume Remains Tepid as Economic and Regulatory Fears Grow (CME)
By Markets Media - Fri 16 Nov 2012 16:01:07 CT
Strong macroeconomic headwinds continue to buffet the trading environment. With the U.S. 'fiscal cliff' fast approaching, eurozone sovereign debt fears still at the forefront of investors' minds and new regulations set to stifle activity still further, there appear little reasons to be bullish. Trading volume on exchanges continues to be muted-for instance, U.S. equity volumes are on course to decline for a fourth consecutive year-and, following on from the typical summer slowdown, a low interest rate environment and general uncertainty around the pace of a global economic recovery continue to mean that volumes may remain tepid for some time yet. In Europe, the epicenter of the current macroeconomic crisis, many market participants there are struggling to see where the upturn is going to come from.
"There are many reasons for the current low trading volume, all centered around uncertainty in the environment," Kee-Meng Tan, managing director and head of agency broker Knight Capital's trading group in Europe, told Markets Media.
"There are very few catalysts for change due to the overhanging European sovereign debt issue. We have seen many U.S. funds reduce their exposure in Europe drastically. The uncertainty is also presenting few drivers for investment in the region.
"Uncertainty around regulation is keeping many people from making firm plans and investment in business until things become clearer. New regulations could conceivably make it much more expensive to do business in Europe.  And a broader European Union financial transaction tax is certainly not going to help the situation."
Market participants are hoping that the current low volume environment is not due to a long-term structural shift in the market and that there will, at some point, be a sustained pick-up.
"You can see from the latest quarterly reports from the big exchanges around the globe, nobody will have a record year in 2012, unfortunately," Michael Krogmann, executive vice-president of Deutsche Börse, operator of the Frankfurt Stock Exchange, told Markets Media.
"Volumes are down not only in Europe, but across the globe. It is in all markets, cash as well as derivatives."
However, despite all the doom and gloom some market participants have reasons to be optimistic for the future.
For one, the initial public offering market appears to be showing signs of life. German mobile operator Telefonica recently made its IPO debut on the Frankfurt bourse, becoming Europe's largest new listing in more than a year.
"We've seen first very positive signals as the IPO market is back," said Krogmann. "The last IPO saw Telefonica Germany raise €1.5 billion. This was a big success for our market and there are signs of recovery in the cash market."
Krogmann added: "For the cash markets, it is a cyclical business. From my perspective, volumes will definitely come back in due course."

Yen Bears See Vindication in New BOJ Under Abe Watch: Currencies (Bloomberg)
For long-suffering bears on the yen, redemption is looking more likely if options are any guide. After appreciating more than 60 percent between July 2007 and June of this year, the yen has tumbled almost 10 percent against a basket of developed-market currencies, including a drop of 2.2 percent last week, data compiled by Bloomberg show. Option traders are paying record premiums to protect against further depreciation as Prime Minister Yoshihiko Noda calls for elections next month. The yen slid to the lowest in almost seven months today. Polls signal the main opposition Liberal Democratic Party will win elections on Dec. 16, led by Shinzo Abe who last week called for the Bank of Japan (8301) to pursue unlimited bond purchases and zero-to-negative interest rates. BOJ Governor Masaaki Shirakawa is due to step down in April after a five-year term.
“This is a major shift and the key event is the replacement of Shirakawa,” said Jens Nordvig, a managing director of currency research in New York at Nomura Holdings Inc. “It really is a change that would move the BOJ away from being the least expansive in terms of balance sheet use to potentially being ahead of the other central banks.” At the same time, trade surpluses that have served as a main pillar of support for the yen are starting to erode. Japan’s imports exceeded exports by 3.22 trillion yen ($40 billion) in the six months ended Sept. 30, the biggest trade deficit for a fiscal half-year period, according to Ministry of Finance data going back to 1979.

Treasuries Fall as Obama Sees Fiscal Cliff Resolution (Bloomberg)
Treasuries fell, headed for the steepest loss in almost two weeks, after President Barack Obama expressed confidence the U.S. will avoid the automatic spending cuts and tax increases scheduled to occur at year-end. Nomura Holdings Inc., one of the 21 primary dealers that underwrite the U.S. debt, is trimming its position as officials make progress on the so-called fiscal cliff. Treasuries also fell before an industry report that economists said will show sales of previously owned U.S. homes were near the most in two years in October. “There’s a high probability that the fiscal cliff will be resolved,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s third-largest publicly traded bank by assets. “The economy is improving gradually. Investors should put their money in equities.”
Ten-year yields increased one basis point, or 0.01 percentage point, to 1.59 percent as of 10:05 a.m. in Tokyo, Bloomberg Bond Trader data show. The 1.625 percent security due in November 2022 declined 1/8, or $1.25 per $1,000 face amount, to 100 9/32. The rate is less than the 10-year average of 3.68 percent. The last time yields rose as much was Nov. 6. “I am confident we can get our fiscal situation dealt with,” Obama said yesterday at a news conference in Bangkok, where he started a three-nation Asian trip. Before Obama left, he began on a round of deficit-reduction talks with top Republicans and Democrats to avoid the combination of $607 billion in automatic tax increases and spending cuts that threatens to throw the country into a recession.

Treasuries Rally Is Longest Since July on Fiscal Cliff (Bloomberg)
Treasuries had the longest rally in almost four months as President Barack Obama and lawmakers started tax-and-spending talks to avoid the so-called fiscal cliff, stoking demand for refuge. The yield on the 10-year note touched a 10-week low yesterday as House Speaker John Boehner offered a “framework,” including increased revenue, as part of a debt-reduction package. Some Federal Reserve officials said the central bank may need to buy more U.S. debt next year to bolster the economy, according to policy-meeting minutes, while volatility in Treasuries dropped to a five-year low. The U.S. will sell $13 billion in 10-year inflation-indexed securities on Nov. 21.
“If the powers that be in Congress are able to come up with a plan to get a resolution to the fiscal cliff, something of substance, then the market would view that as relatively good news,” said Jason Rogan, director of U.S. government trading at Guggenheim Partners LLC in New York. “The market is waiting to see the specifics and to hear a plan, as opposed to just positive rhetoric, which is certainly a first step.” The benchmark 10-year yield fell three basis points, or 0.03 percentage point on the week, to 1.58 percent in New York, according to Bloomberg Bond Trader prices. The price of the 1.625 percent security due in November 2022 gained 1/4, or $2.50 per $1,000 face amount, to 100 13/32. The yield touched the least since Sept. 5. The market was closed Nov. 12 for Veterans’ Day. The four-week drop in 10-year yields was the longest stretch of declines since the period ended July 20. It traded in a range of eight basis points this week, the narrowest on a weekly basis since April.

Obama Says He’s Confident of Reaching Fiscal Cliff Deal (Bloomberg)
President Barack Obama expressed confidence that he and Congress would reach an agreement that will avoid the automatic spending cuts and tax increases that are scheduled to occur at the end of the year. “I am confident we can get our fiscal situation dealt with,” Obama said at a news conference in Bangkok, where he began a three-nation trip that will include the first visit by a sitting U.S. president to Myanmar. Before Obama left for Asia, he began on a new round of deficit-reduction talks with top Republicans and Democrats in a bid to avoid the combination of $607 billion in automatic tax increases and spending cuts that threatens to throw the country into a recession next year. He arrived in Asia today on his first foreign trip since re-election, underscoring the region’s importance to U.S. growth. The Nov. 17-20 trip is built around a summit in Phnom Penh, Cambodia, where Obama will meet with leaders from China, Japan, Russia, India and other Asia-Pacific countries.
Speaking in a region where some nations are still moving toward allowing greater political and economic freedom, Obama said the squabbling in Washington is an outgrowth of one of the key strengths of the democratic system because it ensures that all sides are heard. “Democracy is a little messier than alternative systems of government but that’s because democracy allows everybody to have a voice,” he said at a joint news conference with Thailand’s Prime Minister Yingluck Shinawatra. “And that system of government lasts. And it’s legitimate. And when agreements are finally struck, you know that nobody is being left out of the conversation and that’s the reason for our stability.”

Record-Low Mortgage Rates May Lift Housing: U.S. Economy Preview (Bloomberg)
The lowest mortgage rates on record probably helped keep sales of previously owned U.S. homes close to a two-year high in October, and underpinned construction of new residences, economists said before two reports this week. Purchases of existing dwellings held at a 4.75 million annual rate last month, according to the median forecast in a Bloomberg survey before tomorrow’s report from the National Association of Realtors. Housing starts eased in October to an 840,000 pace from a four-year high of 872,000 units in September, Commerce Department figures may show Nov. 20. Demand for residential real estate is also being propelled by more affordable properties, progress in the labor market and improving consumer sentiment. The data underscore what Federal Reserve Chairman Ben S. Bernanke called “signs of improvement” in the market, which is helping fuel the expansion as manufacturing cools.
“Housing has definitely become a bright spot in the economy, while all the international-facing sectors are doing much worse,” said Yelena Shulyatyeva, U.S. economist at BNP Paribas in New York. The economy should sustain a “modest recovery” through year-end, she said. Existing-home sales have improved after reaching a 3.39 million annual rate in July 2010, the lowest since comparable records began in 1999. In the buildup to the subprime lending collapse and recession, purchases reached a peak of 7.25 million in September 2005.

China Home Prices Gain in Half Cities Tracked as Market Steadies (Bloomberg)
China’s new home prices rose in October in more cities than the previous month, indicating the government will refrain from relaxing curbs on the property market. Prices climbed in 35 of the 70 cities the government tracks, compared with 31 in September, according to data from the statistics bureau yesterday. Prices fell in 17 cities. Investors are gauging the government’s policy direction on real estate, rolled out over two years to rein in surging home prices that raised concerns about affordability, after the Communist Party unveiled the new generation of leaders last week. The measures have had a “relatively good” effect and the government will “steadfastly” enforce property controls, Housing Minister Jiang Weixin said at a press conference in Beijing last week.
“The government has sent out signals that they will not loosen property policies because they don’t want to see a big price rebound,” said Shen Jian-guang, a Hong Kong-based economist at Mizuho Securities Asia Ltd. “At the National People’s Congress next March, it probably could claim victory for controlling property prices.” Delegates and officials gather every March for the annual meeting of the National People’s Congress, the highest governmental body. The northwestern city of Urumqi led gains in October, with a 0.5 percent increase from September, according to the data. Among major cities, the southern business hubs of Guangzhou and Shenzhen recorded gains of 0.4 percent each. Beijing prices rose 0.2 percent, while those in Shanghai and 17 other cities were unchanged.

China’s Next Step on Yuan Is Convertibility, Zhou Says (Bloomberg)
China’s central bank governor said convertibility will be the next step in the overhaul of the exchange-rate system as calls grow for the nation’s new leadership to deepen changes in the economy to sustain growth. “For the central bank, I think the next movement related to the yuan is going to be reform of convertibility,” Zhou Xiaochuan said at a conference in Beijing on Nov. 17. “We are going to realize it, we are moving in this direction, we need to go further, we will have some deregulation.” Zhou’s comments underscore pledges by the ruling Communist Party, which last week completed the most important phase of a once-a-decade power transition, to promote freer movement of capital in and out of the country for investment purposes and to make the exchange rate more market based. The reforms may be part of a broader sweep of changes the nation’s new leadership, headed by Xi Jinping, will be pressured to roll out in the world’s second-biggest economy over the next decade.
“Expectations are high” for change as government intervention, ranging from excessive regulation to rigid price controls, has become “unbearable” over the last couple of years, said Li Jiange, head of the country’s biggest investment bank and a vice chairman at the government-run company that holds stakes in state-owned lenders. Li, who spoke at a conference in Beijing on Nov. 17, is chairman of China International Capital Corp., and a vice chairman of Central Huijin Investment Co., a unit of the nation’s sovereign wealth fund.

China’s Xi May Unveil Plan for Change Late 2013, CICC Head Says (Bloomberg)
China’s new leadership, headed by Xi Jinping, will probably unveil new market-oriented changes in late 2013, according to Li Jiange, head of the country’s biggest investment bank. Li, chairman of China International Capital Corp. and a vice chairman of state-owned Central Huijin Investment Co., which holds stakes in the nation’s biggest lenders, said the focus will probably be on reducing government intervention in the economy and breaking up state monopolies. Li spoke at Caixin Media’s annual conference in Beijing yesterday. China last week completed the most important phase of a once-a-decade power transition with Xi taking over as head of the ruling Communist Party and Li Keqiang, set to become premier in March, made No. 2 in the party hierarchy. They inherit an economy burdened by slower growth, an aging population, widening income disparity and environmental degradation that’s fueling social unrest.
“Expectations are high” for the new leadership to make changes as government intervention, ranging from excessive regulation to rigid price controls, has become “unbearable” over the last couple of years, said Li, who previously worked for the Development Research Center, an organization that advises the State Council, China’s cabinet.

Southeast Asia Will Be Less Export Dependent by 2017, OECD Says (Bloomberg)
Southeast Asia’s growth will remain resilient over the next five years as stronger investment and private consumption reduce dependence on exports for expansion, the Organization for Economic Cooperation and Development said. Europe’s sovereign debt crisis and a slowdown in advanced economies have had a “limited” impact on Southeast Asian nations with most of the effect experienced through trade, the Paris-based OECD said in a report released in Phnom Penh today. The region, along with China, may face risks stemming from volatility of capital inflows in the medium term, it said. The prospects for developing Asian nations contrast with the fiscal and demographic challenges faced by more advanced economies, as higher public spending and younger populations support domestic demand and lure investment even as global expansion weakens.
Increased government expenditure on social safety nets and health will encourage household spending and reduce the need for precautionary savings in emerging Asia, according to the report. “A combination of cyclical factors, government policies, and longer-term shifts in economic structure that have supported consumption growth over the past several years are likely to continue to underpin its growth over the medium term in Southeast Asia, China and India,” the OECD said in its 2013 outlook for the region. Governments in Southeast Asia have loosened fiscal policies to spur growth. Philippine President Benigno Aquino is increasing spending to a record and seeking more than $16 billion of investments in roads and airports, while Malaysian Prime Minister Najib Razak is also boosting outlays.

Miles Says Bank of England Can Do More If U.K. Slump Persists (Bloomberg)
Bank of England policy maker David Miles said there is more the central bank can do to boost growth if the recessionary conditions gripping the U.K. economy persist. “We may need more stimulus,” he said in an interview with Sky News television yesterday. “That will depend on how the headwinds holding back growth play out.” The bank’s Funding for Lending Scheme “will have some positive impact as we go into next year, but if it turns out that not enough has been done, that the economy’s going to stay in a recessionary state and that’s going to drive inflation down, there is more we can do. We have not run out of ammunition,” he said. Bank of England Governor Mervyn King gave a gloomy assessment of the economy last week, saying gross domestic product may shrink in the current quarter and that the road to recovery will be “long and winding.” He held out the prospect of further asset purchases after the Monetary Policy Committee voted this month to halt the program at 375 billion pounds ($596 billion.)
Miles said yesterday that pressure on wages had allowed officials to keep monetary policy at this “very expansionary setting” and cautioned against tightening conditions too soon.” “It would be a mistake to try and get back to more normal monetary policy too quickly when the recovery that we’ve seen has been pretty anemic,” he said. He dismissed any prospect of a return to “more normal” growth rates in the near term. “It may not be three, six months but if you look beyond that, a year, 18 months, two years, I would expect we’ll get back to more normal rates of growth.”

European Finance Chiefs Seek to Close Greek Gap Amid IMF Spat (Bloomberg)
European finance ministers aim to stitch together Greece’s next aid payment this week as a sputtering euro-area economy and a spat with the International Monetary Fund cloud efforts to resolve the debt crisis. The finance chiefs are due to meet in Brussels tomorrow for the second time in a week after they agreed seven days ago to keep Greece’s bailout aid flowing. In addition to a disagreement between the European Union and IMF over softening Greece’s debt target, the ministers will attempt to re-engineer the current bailout without asking taxpayers to put up more money. The talks are “likely to be tense as all players set out their positions,” Thomas Costerg, an economist at Standard Chartered in London, said in an e-mail. “Greece’s debt can is likely to be kicked further down the road, but we could see some constructive statements.”
The meeting of the ministers from the 17-member euro area underscores continuing skirmishes among EU officials confronting rising unemployment and a slowing economy as they struggle with the three-year-old debt crisis. The finance chiefs’ talks will precede a Nov. 22-23 EU summit to resolve the bloc’s budget, a project threatened by a dispute with the U.K. With tens of thousands of Europeans staging protests last week against austerity measures and unemployment, shifting dynamics in other European countries could foreshadow renewed conflict -- an early election in Italy, a regional vote in Spain and an approaching bailout package for Cyprus.

Spain Deepens EU Budget Deadlock as Rajoy Spars With Van Rompuy (Bloomberg)
Spanish Prime Minister Mariano Rajoy rejected a proposal for the European Union budget made by its president Herman Van Rompuy, while European Commission President Jose Manuel Barroso requested “solidarity” from members. “The EU president’s current proposal is not acceptable for Spain,” Rajoy told reporters today following a two-day summit of Ibero-American leaders in Cadiz, southern Spain. While the European Commission’s initial proposal was “a good starting point”, Spain rejects a second proposal made by Van Rompuy due to plans for cohesion funds and a “radical” reduction in the budget for the common agricultural policy, Rajoy said. Spanish opposition deepens a deadlock between European governments over the bloc’s budget for 2014 to 2020 before a Nov. 22-23 summit of EU leaders. With unemployment at 26 percent after a five-year economic slump, Spain’s struggle to restore growth is at the heart of a debate about how to balance reordering public finances and stimulating growth.
“The most important and substantial point is that the Spanish government doesn’t like this proposal, so we have informed the institutions and we hope a more reasonable one can be made that can be agreed on by all,” Rajoy said. Barroso, with whom Rajoy said he had discussed budget issues, earlier today rebuked governments that are resisting efforts to lessen the impact of what he termed a “social emergency” in some European Union countries. “It seems unimaginable to me that at this socially difficult moment in Europe, some governments keep proposing cutting some of our proposals in the next budget,” Barroso told reporters. Van Rompuy yesterday said in Vienna that a deal on the budget “requires political will, compromises and concessions by all.” EU leaders need to show in talks about bloc’s 2014-2020 budget next week that they “can make difficult decisions in difficult times,” he said.

Lagarde to Defend IMF Credibility in Euro-Area Talks on Greece (Bloomberg)
International Monetary Fund Managing Director Christine Lagarde said she’ll defend the IMF’s credibility in talks on Greece this week, signalling a potential clash with euro finance chiefs over Greek debt sustainability. Lagarde cut short a visit to Southeast Asia yesterday to return to Europe for a meeting with euro-region finance ministers in Brussels on Nov. 20. With the two sides deadlocked over the timeline for reducing Greek debt levels, Lagarde said she was approaching the talks feeling “patient and resilient.” Speaking in an interview in the Philippine capital Manila before leaving for Europe, Lagarde said she’ll seek to “operate independently” while sticking to the fund’s rules, suggesting no retreat from her position in the negotiations. Maintaining the “solidity of our advice” on Greece will be just as important as ensuring the country’s program works, she said.
Lagarde took issue last week with European governments’ decision to push back a debt reduction target by two years to 2022 against the fund’s recommendations, raising questions over whether the IMF would keep financing Greece. Agreement on how to reduce Greece’s debt to sustainable levels is key to disbursing the next tranche of aid under the bailout that euro nations co- finance with the IMF. “We never leave the table,” Lagarde said in the interview when asked about dropping support. She declined to answer a question on whether the IMF has room for maneuver in the negotiations.

Pound Weakens on Speculation Bank of England Will Resume Easing (Bloomberg)
The pound fell against the euro and the dollar this week as the Bank of England said U.K. growth will remain “subdued,” leaving the door open for further stimulus to boost the economy. The U.K. currency snapped a three-week advance versus the euro as a report showed Britain’s retail sales fell more last month than economists forecast, adding to signs the economy is struggling to recover. Sterling has still strengthened almost 4 percent against the 17-nation currency this year as the euro- area debt crisis spurred demand for safer assets. U.K. government bonds were little changed this week. “Weak economic numbers and comments from the Bank of England presented a downside risk for sterling in the near term,” said John Hardy, head of foreign-exchange strategy at Saxo Bank A/S in London. “Our view remains, however, that as long as the euro debt crisis is unresolved, sterling will benefit from a safe-haven status.”
The pound declined 0.3 percent this week to 80.15 per euro at 5 p.m. in London yesterday, after strengthening 1.7 percent during the previous three weeks. The U.K. currency fell 0.2 percent this week to $1.5866. It fell to $1.5829 on Nov. 15, the weakest level since Sept. 5. The central bank lowered its forecasts for the U.K. economy in its quarterly inflation report released Nov. 14, and said there was a heightened risk of “persistent low growth.”

20121119 1042 Global Commodities Related News.

Hedge Funds Cut Bets in Longest Retreat Since 2008: Commodities (Bloomberg)
Hedge funds cut bullish commodity bets for a sixth straight week, the longest slump since the depths of the global recession four years ago, on mounting concern that economies are slowing. Money managers lowered combined net-long positions across 18 U.S. futures and options by 17 percent to 772,512 contracts in the week ended Nov. 13, Commodity Futures Trading Commission data show. Holdings have tumbled 38 percent since Oct. 2 in the longest retreat since August 2008. Investors turned bearish on copper for the first time since August.
Commodities are headed for the first annual loss since 2008 as weaker growth and more supply will mean surpluses in sugar, aluminum and zinc, according to Morgan Stanley. U.S. industrial production unexpectedly declined in October, while applications for jobless benefits rose to the highest since April 2011, separate reports showed last week. The 17-nation euro-area’s economy tumbled back into recession last quarter for the second time in four years, official figures showed Nov. 15. “I am not bullish on commodities,” said Martin Murenbeeld, the chief economist at Toronto-based DundeeWealth Inc., which manages about C$100 billion ($97 billion) of assets. “I don’t think we are going to see improvement in the world economy for some time as there are too many problems.”

DTN Closing Grain Comments 11/16 14:28 (CME)
Soybean Market Losses Continue
The soybean chart fell to new depths Friday, dragging the wheat market down with it, but some friendly news for corn-based ethanol allowed that market to post some gains at the end of the session.

Wheat Market Recap Report (CME)
December Wheat finished down 7 1/2 at 838, 12 off the high and 8 1/2 up from the low. March Wheat closed down 7 1/2 at 853 3/4. This was 8 3/4 up from the low and 11 3/4 off the high.
December Chicago wheat closed 7 1/2 cents lower on the session but down 48 1/2 cents for the week. The market traded moderately lower on the day into the mid-session as weakness in soybeans, a strong US dollar and the slow pace of exports helped to pressure. Weekly export sales came in about as expected at 314,600 metric tonnes which was higher than last week but still well short of a pace of 548,700 tonnes needed each week to reach the USDA projection for the year. Cumulative wheat sales stand at 48.7% of the USDA forecast for 2012/2013 (current) marketing year versus a 5 year average of 64.7%. While wheat sales were sluggish, the market found underlying support from ideas that US wheat is now competitive to other world suppliers and that future tender results might include more US wheat. Corn weakness early today helped to pressure but to higher on the day for corn support the solid gains off of the early lows. With a dry forecast for the central and southern plains and record low crop ratings already, July KC wheat managed to bounce near 12 cents off of the lows to close just slightly lower on the day. December Oats closed unchanged at 364 1/2. This was 4 up from the low and 3/4 off the high.

Corn Market Recap for 11/16/2012 (CME)
December Corn finished up 5 3/4 at 727, 2 3/4 off the high and 16 up from the low. March Corn closed up 6 at 731. This was 16 1/2 up from the low and 2 3/4 off the high.
December corn closed 5 3/4 cents higher on the session but the strong recovery from the lows still left the market down 11 3/4 cents for the week. The market traded as much as 10 1/4 cents lower on the day early in the session led by soybean weakness but support held near Tuesday's lows and the market managed to find fairly active short-covering to support the strong gains off of the lows. News from the EPA that they decided to hold the current ethanol mandate in place may have provided some psychological support. Traders did not expect a change in the mandate but the news appears to have sparked some short-covering; especially after the market failed to make a downside break-out. In addition, the EPA indicated that the waiver would only reduce corn prices by about 1%. Weekly export sales for corn came in at 103,900 metric tonnes for the current marketing year and 208,200 for the next marketing year for a total of 312,100. As of November 8th, cumulative corn sales stand at just 38.2% of the USDA forecast for 2012/2013 (current) marketing year versus a 5 year average of 45.6%. Sales of 425,000 metric tonnes are needed each week to reach the USDA forecast. January Rice finished down 0.02 at 14.845, 0.045 off the high and 0.045 up from the low.

Recap Energy Market Report (CME)
January crude oil trended higher throughout the US trading hours and registered a new seven day high in the process. Some traders noted that crude oil attracted support from escalating tensions between Israel and Gaza. Meanwhile, a weaker outside market tone, a sell off in equity markets and gains in the US dollar served to keep gains in check. Some traders also pointed to uncertainty surrounding the US fiscal cliff meeting in Washington as another force limiting gains during the session. Late morning support in January crude oil appeared to come from a positive turnaround in outside markets and an IAEA report indicating Iran's efforts to expand their uranium enrichment program.

Oil Advances a Second Day on Israel Conflict, U.S. Budget Talks (Bloomberg)
Oil advanced for a second day in New York after Israel said it may expand an assault on the Gaza Strip and U.S. House Speaker John Boehner signaled budget talks with President Barack Obama were constructive. Futures climbed as much as 0.9 percent after Israeli Prime Minister Benjamin Netanyahu said yesterday that the army is prepared to “significantly widen the operation,” raising concern Middle East unrest will disrupt oil supplies. Obama and congressional leaders met Nov. 16 to discuss how to avert the fiscal cliff, a combination of spending cuts and tax increases that threaten to throw the world’s biggest crude user into a recession next year. “The market is concerned about an escalation to the conflict in Israel,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “Nervousness about the Middle East is forcing the hand of a few short positions,” or wagers on falling prices, he said.
Crude for January delivery rose as much as 76 cents to $87.68 a barrel in electronic trading on the New York Mercantile Exchange and was at $87.60 at 11:46 a.m. Sydney time. The contract increased $1.05 to $86.92 on Nov. 16 to cap a second weekly gain. Front-month prices are down 11 percent this year. Brent for January settlement gained 62 cents, or 0.6 percent, to $109.57 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $21.97 to West Texas Intermediate.

Silver Market Recap Report (CME)
Silver prices ended up failing substantially lower during Friday's trading session and reached a new weekly low before making a sizable recovery by the close of trading. For the week, December silver finished with a loss of 0.299. Some traders felt that sluggish global equity markets and a fairly strong Dollar kept silver prices on the defensive through the later part of this week's trading. Other traders felt that December silver was able to avoid any sizable downside move late in the week due to there being no fresh risk flare-ups to eroded global risk sentiment going into the weekend.

Gold Market Recap Report (CME)
Gold was able to put together a modest recovery rally from early lows and was ultimately able to reach positive territory by the close of Friday's trading. For the week, however, December gold finished with a loss of 16.20. Many traders felt that Euro zone debt anxiety and the upcoming US fiscal cliff continued to erode macro-economic sentiment throughout the day, and ultimately will keep gold prices somewhat on the defensive going into the weekend. A lukewarm reading on US Industrial Production was also seen as a key negative factor for the gold market during today's trading. In addition, reports that China's gold output during the first 9 months of this year was 11% above the same period in 2011 may have weighed on December gold as well.

Gold Advances as ETP Holdings Expand to Record, Dollar Declines (Bloomberg)
Gold gained for the first time in three days, climbing alongside other commodities as the dollar weakened and investors boosted holdings in exchange-traded products to a record. Spot gold advanced as much as 0.4 percent to $1,721.30 an ounce and traded at $1,720.70 at 9:10 a.m. in Singapore. The metal slumped 1 percent last week as the dollar strengthened for a fourth week against a six-currency basket in the best run since June. Holdings in ETPs backed by bullion rose to 2,603.692 metric tons on Nov. 16, data compiled by Bloomberg show. President Barack Obama expressed confidence that he and Congress would reach a budget agreement needed to avert the so- called fiscal cliff, a combination of spending cuts and tax increases scheduled to take effect in January. This weighed on the dollar and helped send oil and copper higher today.
“Investment demand has been resilient despite lackluster price performance and that’s been helping to keep gold above $1,700,” said Sun Yonggang, macroeconomic strategist at Everbright Futures Co., a unit of one of China’s largest state- owned investment companies. “In the short term, developments in the U.S. and Europe will continue to determine direction of the dollar and thus gold.” Gold has rallied 10 percent this year as central banks including the Federal Reserve took steps to shield their economies hurt by Europe’s crisis. The Bank of Japan holds a meeting today amid speculation of further easing. The U.S. Mint has sold 56,000 ounces of gold coins in November, according to data on the Mint’s website. At that pace, total sales this month would be 106,909 ounces, up 161 percent from a year earlier.

20121119 1042 Soy Oil & Palm Oil Related News.

ITS CPO export down 0.1% to 769,087 tonnes for the period of 1~15 Nov 2012.

Soybeans Drop on Slower Chinese Demand; Corn Gains; Wheat Falls (Bloomberg)
Soybeans fell to the lowest in almost five months on reports that China canceled previous purchases as improved planting progress in South America boosted potential for record crops. Corn rose and wheat declined. China, the world’s biggest soybean consumer, canceled 10 cargoes totaling 600,000 metric tons, Commerzbank AG said today in an e-mailed report, citing the country’s National Grain and Oils Information Center. Rain followed by dry, warm weather will aid planting and early crop development the next two weeks in parts of Brazil as dry weather eases flooding in Argentina for sowing, World Weather Inc. said in a report. “Reports of China canceling soybean imports put the market on the defensive,” Chad Henderson, the president of Prime Agricultural Commodities Inc. in Brookfield, Wisconsin, said in a telephone interview. “Right now, there are fewer worries about the potential for record crops in South America.”
Soybean futures for January delivery dropped 1.3 percent to close at $13.8325 a bushel at 2 p.m. on the Chicago Board of Trade, after touching $13.7225, the lowest since June 22. Prices, which reached a record $17.89 in September, fell 4.7 percent this week. Corn futures for March delivery jumped 0.8 percent to $7.31 a bushel on the CBOT. Still, the grain slid 1.5 percent this week, the first drop in three weeks. Wheat futures for March delivery retreated 0.9 percent to $8.5375 a bushel in Chicago. It was the sixth straight decline, the longest slump since September 2011. The U.S. was the leading shipper of all three commodities last year. Corn is the biggest crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show. Wheat is the fourth-largest at $14.4 billion, behind hay.

Soybean Complex Market Recap (CME)
January Soybeans finished down 35 3/4 at 1383 1/4, 44 1/2 off the high and -17 3/4 up from the low. March Soybeans closed down 16 at 1368. This was 12 up from the low and 22 1/4 off the high. December Soymeal closed down 5.9 at 424.6. This was 3.7 up from the low and 7.7 off the high. December Soybean Oil finished down 0.41 at 47.05, 0.65 off the high and 0.44 up from the low.
January soybeans closed 18 3/4 cents lower on the day and down 68 cents for the week. The market was down as much as 29 3/4 cents into the pit opening with futures moving down to the lowest level since June 22nd which was about the time that the mid-west turned dry. Weakness in outside market forces, news from China that crushers had cancelled 600,000 tonnes of soybean purchases for December and January delivery and a non-threatening weather outlook for South America into early next week were seen as bearish forces. Impressive demand news has not been enough in recent weeks to slow the active fund selling and the market stayed under pressure even with better than expected weekly sales news. Sales for soybeans came in well above expectations at 559,700 metric tonnes for the current marketing year and 25,500 for the next marketing year for a total of 585,200. As of November 8th, cumulative soybean sales stand at 77.0% of the USDA forecast for 2012/2013 (current) marketing year versus a 5 year average of 56.7%. Sales of 187,000 metric tonnes are needed each week to reach the USDA forecast. Net meal sales came in at 234,600 metric tonnes for the current marketing year and none for the next marketing year for a total of 234,600 which also exceeded expectations. Cumulative meal sales stand at 59.2% of the USDA forecast for 2012/2013 (current) marketing year versus a 5 year average of 38.7%. Sales of 59,000 metric tonnes are needed each week to reach the USDA forecast. Oil sales came in at 21,000 metric tonnes. Sales of 4,600 tonnes are needed each week to reach the USDA forecast. The market saw solid gains off of the early lows as corn prices pushed higher on the day, wheat recovered from the lows and the stock market managed to push higher on the day. December meal closed moderately lower on the day as well and managed to push to the lowest level since July 3rd while December oil closed moderately lower after first challenging Monday's 26 month low.

EDIBLES: Malaysian palm oil futures slipped despite posting a weekly gain of close to 5 percent, as traders booked profits from a large increase in the previous session, and slowing exports squeezed prices. (Reuters)

Golden-Agri issues 1.5 bln rgt Islamic bond in Malaysia
Nov 19 (Reuters) - Singapore-listed Golden Agri-Resources Ltd, the world's second largest palm oil plantation company, has issued its first Islamic bond, or sukuk, in Malaysia worth 1.5 billion ringgit ($488 million).
"The company considers Malaysia the ideal location for the issue given the country's well-established and advanced sukuk market, which is abundant with liquidity, coupled with its familiarity with the palm oil industry," Golden Agri said in a statement to the Singapore stock exchange on Monday.
The Islamic medium-term notes, part of a 5 billion ringgit program established earlier this month, will have a tenor of five years and mature in Nov 2017. The notes were priced at 4.35 percent.
Golden Agri said proceeds would go towards general corporate purposes, while the issuance would boost financial flexibility by readying the company for future growth.
Golden Agri, which has yet to achieve its internal target for hectarage expansion this year, may use some of the funds raised to buy new land, a company director told Reuters on Nov. 9 (Full Story:nL3E8M83DW).
Shares in Golden Agri added 1.7 percent to S$0.61 as of 0124 GMT. ($1 = 3.0715 Malaysian ringgits) (Reporting By Al-Zaquan Amer Hamzah; Editing by Richard Pullin)

VEGOILS-Palm oil edges down as slowing exports weigh
Fri Nov 16, 2012 5:27am EST
* Malaysia's Nov. 1-15 exports down 0.1 pct on month -ITS
    * Prices post weekly gain, snap two weeks of losses
    * Palm oil faces resistance at 2,447 ringgit -technicals

 (Updates prices)
    By Chew Yee Kiat
    SINGAPORE, Nov 16 (Reuters) - Malaysian palm oil futures
slipped on Friday, despite posting a weekly gain of close to 5
percent, as traders booked profits from a large increase in the
previous session, and slowing exports squeezed prices.
    Futures posted on Wednesday their sharpest daily gain since
October 2010, moving off a near 3-year low struck on Monday.
Malaysian financial markets were closed on Tuesday and Thursday
for the Hindu festival of Diwali and the Islamic New Year.
    "The market came down a bit as there was some
profit-taking," a trader with a foreign commodities brokerage in
Malaysia said, adding that prices seemed to be trading in a
broad range of 2,300 to 2,500 ringgit. "Exports were also down
and that could be another reason."
    The benchmark February contract on the Bursa
Malaysia Derivatives Exchange fell 1.3 percent to close at 2,429
ringgit ($791) per tonne. For the week, prices posted a gain of
4.9 percent, snapping two straight weeks of losses.
    Total traded volumes stood at 31,623 lots of 25 tonnes each,
higher than the usual 25,000 lots.  
    Palm oil faces a resistance at 2,447 ringgit per tonne, a
break above which will lead to a further gain to 2,588 ringgit,
Reuters market analyst Wang Tao said.
    Exports of Malaysian palm oil products for Nov. 1 to 15 fell
0.1 percent to 769,087 tonnes from 769,534 tonnes for the Oct.
1-15 period, cargo surveyor Intertek Testing Services said on
    That came as a disappointment after exports rose as much as
22 percent for the Nov. 1-10 period from a month ago, although
some traders traced the slowdown to a slew of holidays this
    Slowing exports may put pressure on Malaysia's record
stocks, which hit 2.51 million tonnes in October, missing
expectations for 2.67 million.
    Market players are also closely monitoring a French proposal
of a fourfold tax increase on palm oil in food, which stirred
opposition from foodmakers and industry groups in top producers
Indonesia and Malaysia.    
    Brent futures hovered around $108 a barrel on Friday, as
uncertainties surrounding the global economic outlook weighed on
prices, and a showdown between Israel and the Palestinians
stoked worries about supply.  
    In other vegetable oil markets, U.S. soyoil for December
delivery fell 1 percent in late Asian trade. The most
active May 2013 soybean oil contract on the Dalian
Commodity Exchange closed down 1.6 percent.