Monday, November 26, 2012

20121126 1818 FCPO EOD Daily Chart Study.

FCPO closed : 2432, changed : +37 points, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histogram : turned upward, buyer seller battling.
Support : 2400, 2350, 2300, 2250, 2230 level.
Resistance : 2400, 2450, 2490, 2520, 2550 level.
Comment :
FCPO closed rebounded higher with lesser volume participation.  Soy oil price currently trading firmer after last Friday closed higher while crude oil price currently having downward correction.
FCPO price recovered today after soy oil price traded higher and news on Indonesia kept palm oil exports tax unchanged plus both cargo surveyor released lower but improved export figures.
FCPO daily chart reading revised to suggesting a correction range bound downside biased market development testing resistance again near middle Bollinger band level.
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.

20121126 1608 Global Markets & Commodities Related News.

STOCKS: Asian shares inched up on hopes that Greece can avoid a near-term bankruptcy, with the market focusing on a euro zone finance ministers meeting later in the day, but a regional Spanish vote favouring separatist parties capped gains.  Europe's main stock indexes looked set to open lower as investors take a breather following a sharp five-day rally, ahead of a meeting of euro zone finance ministers on Greece. U.S. stocks rose for a fifth day during a holiday-shortened, thinly traded session on Friday as investors picked up recently beaten-down shares of large technology companies. (Reuters)

FOREX-Euro touches 7-month peak vs yen, supported on Greek hopes
SINGAPORE/SYDNEY, Nov 26 (Reuters) - The euro hit a seven-month high against the yen and held near a one-month peak versus the dollar supported by hopes that Greece will finally secure new emergency loans to keep it afloat.    
"There is optimism around in regards to the euro area's ability to achieve a deal on Greece," said Emma Lawson, senior currency strategist at the National Australia Bank, adding further upside in euro/dollar was likely.

Euro zone, IMF to seek Greece deal, debt write-off main problem

Euro zone finance ministers and the International Monetary Fund will seek to unfreeze the second bailout package for Greece, but they first need to agree if some of the official loans to Athens might eventually be forgiven to cut Greek debt.  (Reuters)

U.S. looks best of 2013 economic runners
Forecasts for 2013 that are now landing thick and fast show Federal Reserve Chairman Ben Bernanke is not alone in believing it could be a very good year for America if politicians can avoid tumbling off the so-called fiscal cliff. (Reuters)

GRAINS: U.S. soybeans edged higher for the second consecutive session, as talk of Chinese demand supported the oilseed to a near one-week high. Corn rose slightly, lingering near a two-week high, while wheat firmed, buoyed by global tightness in key exporting countries. (Reuters)

Drought scorches Brazil's northeast sugar cane crop
One of the worst droughts in three decades will slash Brazil's northeastern sugar cane crop this season by as much as 30 percent in some areas, said leaders of the cane industry in the region, which is in the midst of crushing. (Reuters)

BP reorganises oil production unit
BP unveiled a reoganisation of its oil and gas production operations on Friday, reversing a change it enacted after the Gulf of Mexico oil spill. (Reuters)

OIL: Brent crude held at $111 a barrel as hopes Greece can avoid a near-term bankruptcy brightened the outlook for oil demand from Europe, while violent protests in Egypt reignited supply concerns. (Reuters)

Italy's Lucchini to halt steel furnace temporarily
Lucchini, Italy's second largest steel producer, will temporary shut down its Piombino blast furnace in December due to weak market conditions, the debt-burdened company said on Friday. (Reuters)

BASE METALS: London copper edged down after rising for two weeks in a row, although signs of economic recovery in top consumer China and hopes for Greece to avert an imminent bankruptcy kept a floor under prices. (Reuters)

PRECIOUS METALS: Gold shrugged off the influence of a firmer euro and turned lower as speculators booked profits after prices rallied to their highest in more than a month in the previous session on technical buying. (Reuters)

METALS-Copper steady after two weeks of gains; Greece supports
SINGAPORE, Nov 26 (Reuters) - London copper held steady after rising for two weeks in a row, as signs of economic recovery in top consumer China and hopes for Greece to avert an imminent bankruptcy kept a floor under prices.
"We think metals prices will continue rangebound for the rest of the year," said Beijing-based metals analyst Wan Ling of commodities research house CRU Group.

PRECIOUS-Gold comes off 1-month high despite firmer euro
SINGAPORE, Nov 26 (Reuters) - Gold shrugged off the influence of a firmer euro and turned lower o as speculators booked profits after prices rallied to their highest in more than a month in the previous session on technical buying.
"It's been a huge spike, so I believe people are cautious as they are still many unresolved issues ahead. There will be a budget meeting in the U.S. tonight to try and find a solution to avert the fiscal cliff. This is one of the issues," said Brian Lan, managing director of GoldSilver Central Pte Ltd.

Baltic index up as panamax rates rise amid tight vessel supply
Nov 23 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose for the 11th straight day on Friday, as rates for panamax vessels strengthened.  The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, rose 6 points or 0.55 percent to 1,090 points.

China to launch its own dry freight index
SHANGHAI/LONDON, Nov 23 (Reuters) - The Shanghai Shipping Exchange (SSE) will launch China's first dry bulk and oil import indices next week to track vessels carrying goods and energy to the world's largest commodities consumer, the exchange president told Reuters on Friday.
The new dry bulk index will launch on Nov. 28 based on strict price collection from charterers, brokers and ship owners and focus only on China, SSE President Zhang Ye said in an interview.

20121126 1514 Palm Oil Related News.

SGS CPO export down 1.9% to 1,256,492 tonnes for the period of 1~25 Nov 2012.

Indonesia Sets palm olein export tax at 3% and crude palm oil export tax at 9% remained unchanged from Nov 2012 - Trade Ministry

VEGOILS-Palm oil inches up on stocks, euro zone hopes
Mon Nov 26, 2012 12:37am EST
* Exports for Nov. 1-25 inches down 1.8 pct -ITS
    * SGS export data to be released later in the day
    * Palm oil to rise to 2,485 ringgit -technicals

 (Updates prices, adds detail)
    By Anuradha Raghu
    KUALA LUMPUR, Nov 26 (Reuters) - Malaysian palm oil futures
edged up on Monday on expectations stocks might grow at a slower
pace with the market also focusing on Greek financial aid deal
set to be signed later in the day that may cheer markets.
    Data from a cargo surveyor showed Malaysian exports declined
at a much slower pace, putting some pressure on stocks and
supporting palm oil prices that have fallen 24.2 percent so far
this year on roiling financial markets.
    "If exports maintain its two percent drop for the full
month, it means that although inventory levels are poised to go
higher, it may be growing at a slower rate than expected," said
Kenanga Investment Bank analyst Alan Lim.
    By the midday break, the benchmark February contract
 on the Bursa Malaysia Derivatives Exchange rose 0.5
percent to 2,406 ringgit ($787) per tonne.
    Total traded volumes stood at 12,460 lots of 25 tonnes each,
slightly lower than the usual 12,500 lots.
    Technicals showed that a new bullish target of 2,485 ringgit
per tonne has been established, aborting its more bearish 2,321
ringgit target previously, said Reuters market analyst Wang Tao.
    Cargo surveyor Intertek Testing Services said palm oil
exports in Nov. 1-25 fell 1.8 percent to 1,276,792 tonnes from a
month ago, showing slight improvement from a 3.3 percent drop in
the first twenty days of this month.
    Another cargo surveyor, Societe Generale de Surveillance,
will release export data for the same period later in the day.
    The market expects weaker palm oil prices in October and
November to stimulate demand from price-sensitive countries like
India and Pakistan, translating to higher exports in the weeks
to come.
    Financial markets across the world were generally optimistic
about a euro zone finance ministers meeting on Monday which is
pushing for international lenders to release emergency aid and
stem the region's debt crisis.
    Brent crude held above $111 a barrel on Monday. U.S. soyoil
for December delivery inched up 0.2 percent in early
Asian hours, resuming trade after Thanksgiving holidays.
    The most-active May 2013 soybean oil contract on
the Dalian Commodity Exchange rose 1.1 percent by the midday

20121126 1122 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares edge higher on hopes for Greek deal
TOKYO, Nov 26 (Reuters) - Asian shares rose on the hope Greece can avoid a near-term bankruptcy, with euro-zone finance ministers meeting later in the day, but a regional Spanish vote favouring separatist parties clouded Madrid's push for fiscal austerity.
"If there really is an agreement on Greece today, the euro could rise above $1.3 against the dollar and 107 against the yen," Masafumi Yamamoto, chief FX strategist at Barclays in Tokyo, said in a research note.

FOREX-Euro supported on Greek hopes; yen stuck in doldrums
SYDNEY, Nov 26 (Reuters) - The euro started the week near one-month highs against the dollar, having staged an impressive rally on hopes that Greece will finally secure more emergency loans to keep it afloat.
"There is optimism around in regards to the euro area's ability to achieve a deal on Greece," said Emma Lawson, senior currency strategist at the National Australia Bank, adding further upside in euro/dollar was likely.

OIL - Oil rises on Egypt violence, euro zone optimism
NEW YORK, Nov 23 (Reuters) - Oil rose in thin holiday trade on Friday as fresh protests in Egypt once again stoked supply concerns, with additional support coming from optimism about talks on releasing aid to Greece.
"It looks like there's some strength in the oil market today on the back of high hopes on a stronger (European Union)," said  Carl Larry, president of Oil Outlooks and Opinions LLC.

'Fiscal cliff' talks stalled for now but progress possible
WASHINGTON, Nov 25 (Reuters) - U.S. lawmakers have made little progress in the past 10 days toward a compromise to avoid the harsh tax increases and government spending cuts scheduled for Jan. 1, a senior Democratic senator said on Sunday.
The United States is on course to slash its budget deficit nearly in half next year. Closing the gap that quickly, which in Washington is referred to as going over a "fiscal cliff," could easily trigger a recession.

Pemex makes light crude discovery in southern Mexico
 MEXICO CITY, Nov 25 (Reuters) - Mexico on Sunday announced the discovery of light crude oil in an onshore well in the southern state of Tabasco, the country's third light crude find since August.
The oil, which lies at a depth of 6 km (3.7 miles) in the Navegante-1 well, has proven, probable, and possible reserves (3P) of up to 500 million barrels of crude oil equivalent (MMBoe), according to the state oil monopoly Pemex. Pemex, which began drilling in Navegante-1 in April 2011, said it plans to begin production on the new find next month.

BP to restructure oil production unit-sources
LONDON, Nov 23 (Reuters) - BP is planning to announce a reorganisation of its oil and gas production operations, three sources familiar with the matter said, the second significant restructuring of its main cash generator since the Gulf of Mexico oil spill.
The latest changes will undo some of the measures Chief Executive Bob Dudley imposed in 2010 and are partly intended to free him up from close oversight of day-to-day operations so he can help chart BP's recovery from the disaster which killed 11 men and spilled 5 million barrels of crude into the sea.

Enbridge, shippers at odds over "air barrel" relief
CALGARY, Alberta, Nov 23 (Reuters) - Enbridge Inc and its crude oil pipeline customers are battling over a plan by the company to try to cut the over-booking of capacity on the massive export network that has played a role in the deep discounting of Canadian crude prices.
The dispute is the latest symptom of an oil pipeline network running ever closer to capacity as production from the Canadian oil sands and North Dakota Bakken surges and expansion plans get bogged down by regulatory delays and environmental opposition.

Alberta, Quebec to study rerouting Canadian crude eastward
HALIFAX, Nova Scotia, Nov 23 (Reuters) - Alberta, Canada's oil-producing heartland, and Quebec's separatist government will study the benefits of shipping the western province's crude to refineries in Quebec, a shift that could help cut the industry's dependence on the U.S. market.
The development is a shift from previous comments by Quebec officials that had cast doubt on the energy industry's quickly evolving plans to get oil sands-derived crude to Eastern Canadian refineries, which now handle mostly imported oil that arrives at a much higher price.

Norway will not seek oil in Lofoten before 2013 polls -minister
 OSLO, Nov 23 (Reuters) - Norway's environmentally sensitive Lofoten archipelago will stay shut to oil exploration at least until elections next year, although a study shows drilling is unlikely to harm fisheries there, the oil minister said.
Oil companies, including Statoil have been calling on the government to open new areas for petroleum exploration as mature fields in the North Sea become depleted.

Desire says report confirms Falklands potential
LONDON, Nov 23 (Reuters) - British oil explorer Desire Petroleum said the findings of a third person report confirmed the potential of its controversial discoveries offshore the Falklands.
The chance of commercial development at its Sea Lion complex in the North Falkland basin was estimated to be 80 percent, the report by energy consultancy Senergy found, although it was a much lower 25 percent for the gas condensate discovery at its Liz complex.

Total picks four bidders for TIGF gas network-sources
LONDON/PARIS, Nov 23 (Reuters) - French oil company Total has chosen four bidders for its TIGF gas network and storage business in southwest France, worth an estimated 2.5 billion euros ($3.2 billion), three sources familiar with the matter said.
French insurer AXA's private-equity arm, EDF's nuclear fund, French state bank Caisse des Depots (CDC) and Spanish utility Enagas lead four consortia which will take part in a second round of the auction, the sources said.

20121126 1020 Local & Global Economy Related News.

Inflation held steady at 1.3% yoy in Oct for the second month, matching economists’ expectations. On a mom basis, the consumer price index (CPI) rose 0.2% (0.2% in Sep). From Jan to Oct, the CPI increased by 1.7%. (BT)

Malaysia is now prepared with efforts towards achieving  economic growth of more than 5% in 2013, after recording a GDP growth of 5.2% in 3Q12, said Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah. The country's economic growth projection for next year was 4.5-5.5%, although it was aware that the global economy is becoming more challenging. (Bernama)

The transformation in agriculture sector as proposed by the Malaysian government has shown positive achievements, said  PM Datuk Seri Najib Tun Razak. The positive achievement was because the transformation or the rise in efforts taken to increase agriculture production was through innovation, he said. To ensure that the agriculture sector continued to progress, Najib said the government has, for the first time, made a huge allocation which amounted to RM5.8bn in 2013 Budget. (Bernama)

The government is committed to speeding up the participation of local companies in the global supply chain, said Minister of Science, Technology and Innovation Datuk Seri Dr Maximus Ongkili. In the 2013 Budget, the Strategic Domestic Investment Fund with an allocation of RM1bn had been set aside under the Malaysian Investment Development Authority (Mida), he said. In line with this, the Supply Chain Safety Management System Certification Scheme (ISO 2800:2007) was launched last Friday to further raise the confidence of investors. (Bernama)

European Union  leaders failed to reach agreement on a new  seven-year budget for their troubled bloc, calling off talks in less than two days after most countries balked at far deeper spending cuts demanded by Britain and its allies. (Reuters)

Eurozone finance ministers are considering a possible "haircut" for Greece in 2015, to put Greece's debt on a more sustainable footing. By writing off half of their Greek debt holdings, eurozone governments and institutions could drive down Greece's debt to 70% of output in 2020, compared to 144%. (AFP)

China’s average urban salaries rose 12% yoy in th9M12 without adjusting for inflation, slowing from 14.4% for all of 2011 and 13.3% in 2010. (Bloomberg)

Indian officials pledged to cut the budget deficit to 5.3% of GDP in the fiscal year to 31 Mar 2013 (from 5.8% the previous year), and will be cut by 0.6% annually for the next five years. (Bloomberg)

South Korea’s consumer sentiment index  was at 99 in Nov from 98 in Oct. (Bloomberg)

Indonesia's foreign debt ratio to GDP in 3Q12 reached 27.8%, higher than 27.1% in 2Q12. Debt-to-exports ratio reached 108%, higher than the second quarter’s figure of 102.7%. Repayments and principal debt service ratio reached 34.7%, an increase from the second quarter’s 34.1%. (IFT)

The Thai Industries Sentiment Index for Oct was down from 94.1 in Sep to stand at 93.0, the lowest for 11 months. (Bangkok Post)

Thailand’s car exports value  hit THB47.12bn in Oct, a yoy increase of 93.46%. Car exports in 10M12 were also up 21% yoy to 840,149 units, with a total value of THB402.79bn, up 24.56% yoy. (Bangkok Post)

Singapore's inflation rate eased to 4% yoy in Oct from 4.7% the previous month due to smaller gains in transportation and housing costs. (CNA)

Vietnamese consumer prices gained an estimated 7.08% yoy in Nov, the sharpest increase since May, following a 7.0% rise in Oct. (AFP)

20121126 1020 Malaysia Corporate Related News.

Malaysia Airports (MAHB) has entered the running for Stansted airport, as the owners of London's third hub attempt to stoke up competition in the RM4.92bn bidding process. Although there were four existing bidders for Stansted in the first round, Heathrow has been seeking a "stalking horse" suitor to revive the auction process. The original four are Manchester Airport Group (MAG), Industry Funds Management, Macquarie and HRL Morrison. MAG had emerged as the favoured bidder. Stansted Airport is the fourth busiest airport in the UK, and is considered a hub for a number of major European low-cost carriers.It is also the core hub for Ryanair, the Irish low-cost carrier, which flies to over 100 destinations from the airport. The sale is  expected to be concluded by 1Q13. (Sunday Telegraph, BT)

The first Tunnel Boring Machine (TBM) for MRT Sungai-Buloh Kajang project is now ready for delivery to Malaysia. The TBM, expected to be put to work in May-13, has passed the Factory Acceptance Test (FAT), conducted by engineers from MRT Corp and MMC-Gamuda JV. The TBM which took nine months to be put together, will be dismantled and prepared for shipping to Malaysia, MRT Corp Strategic Communications and PR Director Amir Mahmood Razak said. The machine will undertake tunneling  works from the Cochrane, Kampung Pandan area to Pasar Rakyat in KL. It is one of ten such machines worth RM450m to be used for boring a 9.5km underground tunnel between Jalan Semantan and Taman Maluri. (BT)

SILK Holdings is confident of retaining its double-digit growth in total traffic volume on the Kajang-Silk Highway next year with the areas being served continuing to mature. "Last year, total traffic volume rose by 14.3%  to  51.8m vehicles and we are positive of maintaining the double-digit growth next year," executive chairman Datuk Mohd Azlan said. He said the 37km highway will also see positive spill-over effect from the  MRT project as this will make Kajang more attractive. SILK Holdings is also expected to undertake a lane expansion programme in order to cater to the increase in traffic flow, Mohd Azlan said. (BT)

Detailed alignments of MRT 2 and MRT 3, which will unveiled by end-2013, is expected to stir interest in the construction and property sectors, especially in areas like Kepong, Selayang and the Matrade Centre, which will fall within the coverage of the two new lines. According to SPAD, MRT 2 will be developed in at least two phases, partitioned into the sourth-western and north-eastern sectors. MRT 3 is expected to serve Selayang and Sg.  Buloh and will also be built in stages. (Edge Weekly)

Malaysian Resources Corp Bhd (MRCB) says the  Penang Sentral project in Butterworth, estimated to be worth over RM3bn, will begin in 2013 after more than four years of delay.  Penang Sentral, an integrated mixed commercial development was expected to start in 2008 but works got delayed due to land acquisition matters. MRCB was awaiting federal government allocation to fund the public utility project. It was then reported that Phase 1, comprising the integrated transportation hub with a retail component, worth an estimated RM400m, would start in Dec-2010.  MRCB's property division head of marketing Zamry Ibrahim said construction will begin next year and there would be some changes to the plan, like the incorporation of more green elements in the buildings.(BT)

The rising valuation of  MRCB is complicating a proposed asset injection exercise that would pave the way for the Gapurna group to emerge as a substantial shareholder in MRCB. Sources say that unless Gapurna group ends up with a meaningful stake of at least 20%, it would not be keen on pursuing the deal. Nusa Gapurna has 60 acres of prime land in several locations in KL. The valuation of the landbank owned by Gapurna is said to be between RM900m and RM1bn. The crown jewel is the 40-acre site in Petaling Jaya that is being developed into a prime commercial transport hub. A property valuer say that based at a conservative rate of RM450 psf, the tract is already worth RM784m. (Edge Weekly)

SP Setia, part of the consortium for the redevelopment of the London Battersea Power Station project, targets to sell all 800 units of apartments in phase one within six months. President and CEO Tan Sri Liew Kee Sin said GDV for the first phase of the project is about RM5bn. Liew said sales would begin in Jan with a worldwide launch and roadshow starting with Malaysia, before going to Singapore, Hong Kong, Brunei, Jakarta, Dubai, Istanbul and the UK. "The show village and office will be ready by Apr next year with official ground breaking ceremony to be held by Jul. The underground tube construction should also start by next year," he said. (Bernama, Malay Mail)

Malakoff Corp Bhd is on track for a listing next year with its IPO possibly raising US$1bn. Malakoff CEO Zainal Abidin Jalil said, "The IPO will not be as big as IHH Healthcare Bhd and Felda Global Ventures Holdings, but it will be significant." (Sun Biz)

RHB Capital Bhd, which aims to conclude the deal to acquire PT Bank Mestika Dharma by June 2013, expects to make an announcement on the transaction details by the end of this month, said its group managing director Kellee Kam. "We believe we are in a stage close enough to make an announcement relatively soon. Within this month we will be able to speak about the transaction in greater detail," he said. Kam said RHB Capital is still keen and focused in completing the acquisition of PT Bank Mestika of Indonesia and right now, is in consultation with both vendor and regulator there on the deal. He said it is still waiting for approvals from the regulators. "We are very cognizant of the new shareholder policies in Indonesia. For us to expand, we have to be conscious about the rules and regulations of domestic economy and financial system, which we want to go. We will abide the rules and regulation that has been put forward. We have restructured and adjust the transaction within the industry framework," he said. (Sun)

Malayan Banking Bhd (Maybank) will decide over the next six months whether it wants to locally incorporate its Singapore retail banking operations, a move that may enable it to double the number of outlets there. "If we do incorporate, then we can increase the branch network to double. But you have to weigh the pros and cons of such a move ... it's being discussed at the Maybank exco level," said Lee Hong Khim, Maybank's head of global wholesale banking (GWB) in Singapore. (BT)

Genting Hong Kong Ltd is confident on its growth prospects as its cruise business and its casino project in Manila are moving on the right track. The company, in which  Genting Malaysia Bhd has a 18.4% stake, is also optimistic that the US economy could improve. The company plans to add a new ship every year. It expects to have 22 ships by 2016. On its casino project in Manila, the company is now moving into its second and third phase of expansion as a result of satisfactory performance by Resorts Word Manila. (BT)

KPJ Healthcare has proposed to purchase the entire equity holding of Vejthani Public Co for RM60.53m. Vejthani owns and operates a multi-speciality hospital in Bangkok. The proposed acquisition will increase KPJ's gearing by 6%. The deal is expected to be completed in 2Q13. (Malaysian Reserve)

Malaysia Airlines (MAS) commenced the twice daily A380 Kuala Lumpur-London-Kuala Lumpur services with the inaugural daytime flight departing KLIA for the UK capital at 10.45 am. This was made possible after it received the third and fourth A380 aircraft on November 19 and last Friday respectively. (Bernama)

I-Berhad will launch the first phase of the residential incubator project at its flagship development  i-City next month. CEO Eu Hong Chew said the first phase with a gross development value (GDV) of RM317m would involve 956 units in two 33 storey towers. Located on a 0.81ha plot on the western part of i-City, the development would be built on i-City success as a MSC Cybercentre. "When i-City obtained its MSC Cybercentre status in 2008, there were only eight MSC Cybercentres in the Klang Valley, compared to the 19 centres currently. In order to differentiate ourselves, i-City is developing the residential incubators" Eu said. He added that the residential incubator is the latest start-up trend in the Silicon Valley.  (BT)

20121126 1011 Global Markets Related News. Weekly Market Update: Markets rebound on hopes that Europe bailouts and Fiscal Cliff can find resolution (Source:CME/
After several straight weeks of political concerns exerting downward pressure on equity markets, they snapped back smartly this week. European bourses had their best week of the year, shaking off a Moody's downgrade of France's AAA rating and the EU's failure to agree on a long term budget. Risk on sentiment was attributable to the hopes that leaders in Europe and the US could finally get their houses in order before the New Year. Negotiations on finalizing the revised Greek bailout package continued to grind ahead, with final details expected to be negotiated this weekend ahead of another Eurogroup conclave this coming Monday. This timetable would still allow Greece to receive the anticipated aid tranches in early December. Politicians in Washington were on a holiday break, so optimism from last week's bipartisan Congressional press conference still lingered, though tough negotiations are still ahead. Economic data helped sentiment too, starting with China HSBC Flash Manufacturing PMI on Wednesday posting its first growth reading in 13 months, possibly signaling the slowdown in Chinese growth has bottomed out. The German IFO Business Climate index showed its first rise in seven months, and US saw some more signs of strength in the housing market, with the NAHB Housing Market Index hitting a 6-year high and monthly Housing Starts coming in well above expectations. Trading in crude futures calmed this week as Israel and Hamas agreed to terms of a ceasefire on Wednesday, and so far the truce has held. Gold gained some ground as it tested its 50-day moving average on Friday, to end the week up 2%. Early indications from retailers are that Thanksgiving Day and Black Friday sales have gotten the US holiday shopping season off to a good start. Equity markets erased most of the losses seen in the last two weeks and had their best week since June: the S&P500 rose 3.6%, the Nasdaq added 4%, and the DJIA gained 3.3%, to close above 13,000 for the first time since November 6.
Moody's became the second credit-rating agency to strip France of its AAA rating on Monday evening. Moody's warned that a sustained loss of competitiveness and the failure to tackle structural problems prompted the decision to downgrade France. French Finance Minister Moscovici found a silver lining to the downgrade, claiming it would force leaders to agree to pursue reforms, however the development will have repercussions even though yields on French debt barely wavered in the aftermath of the move. To begin with, Moody's said the downgrade would impact the rating of the ESM/EFSF bailout facilities, and the EFSF was forced to delay the auction of three-year notes on Tuesday.
Hewlett-Packard shares collapsed to near 10-year lows after reporting accounting irregularities at its recently acquired Autonomy unit. On an adjusted basis, HP more or less met expectations in its Q4 results, however revenue fell nearly 7% y/y and after charges the firm racked up a huge quarterly loss, and Q1 EPS guidance was well below expectations. The firm took an $8.8B 'kitchen sink' charge in the quarter, blaming $5B of that on "serious accounting improprieties and outright misrepresentations" at Autonomy Corporation, which it acquired last fall. CEO Whitman said the board's due diligence had relied on financials audited by Deloitte, and said management had brought the accounting issue to the attention of US and UK regulators. A spokesman for the former Autonomy CEO shot back, saying the allegations were totally false and the due diligence was intensive.
Best Buy also had a terrible quarter, missing earnings targets by a very wide margin in its Q3 report. Overall sales were down on y/y basis and comps were equally bad. Executives continue to blame the poor overall economic environment, competition from online sites and customers holding back on purchases ahead of new product launches. Investors were clearly disappointed with Deer & Co Q4 results as well. Shares slid 4% after coming up short of consensus estimates on the bottom line and offering conservative guidance for 2013. was a noticeable bright spot among the week's earnings reports. Shares rose 8% after reporting Q3 earnings and sales exceeded expectations and the CEO said that the strong response to next generation cloud technologies will enable the company to surpass a $4B annual revenue run rate next year.
Energy markets went for a bit of a ride as traders watched headlines out of the Mideast closely. On Monday, the violence escalated as Israel bombed strategic targets in Gaza city and Hamas continued to lob rockets toward major population centers. As Israel called up tens of thousands of reservists in what was seen as a prelude to a ground incursion into Gaza, the rhetoric on both sides did little to quell the speculation of a larger conflict and oil prices rose sharply. By mid-week reports began to surface that the new Egyptian President had brokered a cease fire and as a result energy prices backed off, despite US stockpile data from both the API and EIA that indicated large draw downs across all three categories. For the week WTI and Brent each finished up more than 1.5%, but well off the Monday highs.
US Treasury markets spent much of the week on the defensive. Some speculated traders were unwinding positions ahead of thinner holiday shortened trade, as well as potentially reacting to some of the more positive comments made by Fed Chairman Bernanke. On Tuesday the Chairman suggested the financial crisis lowered the potential of US GDP growth below 2.5% and reiterated that the Fed has no means of offsetting the fiscal cliff, so Washington needs to find a solution. He also noted that a resolution to the fiscal cliff would have a positive impact on growth and the housing market has seen clear signs of improvement.
In Forex markets, the week began with a rise in risk appetite as sentiment that negotiations on a deal to avoid the fiscal cliff were productive which weighed upon the USD and JPY currencies. The EUR/USD started the week with a move over 1.2780 level. The currency was able to shake-off the French sovereign downgrade with growing optimism that Eurogroup would soon reach an acceptable agreement on Greece debt sustainability in order to release the next tranche payment before the country goes bankrupt in mid-December. The FX market was betting on a Greek solution with the Greek 10-year yield falling below the 16% level for its best post debt restructuring reading and the EUR/USD found the momentum to sustain a move above its 200-day moving average at 1.2804. The pair hit a 3-week high at 1.2915 after Friday's German IFO Survey registered its first month over month improvement in seven months.
The USD/JPY pair hit fresh 7-month highs while EUR/JPY cross tested above the 106 handle for 6-month highs. A number of factors were cited for the weaker JPY currency including a wider than expected Japan merchandise deficit, Japanese LDP opposition election platform and dealer chatter of M&A flows with rumor that Softbank had started buying USD for acquisition of Sprint with cited. The JPY was off its worst levels by Friday after LDP opposition leader Abe changed his FX intervention rhetoric that he was not thinking of currency intervention to weaken the JPY currency and wanted the BOJ to address strong yen through monetary policy.

Asia Stocks Head for Longest Winning Streak in Two Months (Bloomberg)
Asian stocks rose, with the benchmark regional gauge heading for its longest streak of gains in two months, after U.S. consumer spending during the Thanksgiving weekend jumped and South Korean consumer confidence climbed. Toyota Motor Corp., Asia’s largest carmaker, advanced 3 percent as the yen’s decline to a seven-month low against the dollar boosted the earnings outlook for Japanese exporters. Kangwon Land Inc. (035250) surged 8.3 percent in Seoul after the government approved plans for the casino and hotel operator to expand. Samsung Electronics Co. (005930) lost 1.3 percent, after closing at a record high in Seoul on Nov. 23, as Apple Inc. sought to add infringement claims over six more Samsung products to its multi-billion-dollar patent lawsuit against the company.
The MSCI Asia Pacific Index advanced 0.5 percent to 123.54 as of 10:15 a.m. in Tokyo, before China and Hong Kong markets opened. The measure is poised to gain for a fourth day, the longest rising streak since the second week of September. The Asian benchmark gained 13 percent from this year’s low on June 4 through Nov. 23 as central banks added stimulus to spur economic growth and data showed a slowdown in China may be ending. “Conditions have improved,” 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 U.S. consumer is in better shape. Equity valuations remain compelling on so many different measures.” Japan’s Nikkei 225 Stock Average (NKY) gained 1 percent, a third day of gains. South Korea’s Kospi advanced 0.1 percent and Australia’s S&P/ASX 200 Index rose 0.2 percent. Singapore’s Straits Times Index climbed 0.4 percent and Taiwen’s Taiex Index jumped 1 percent.

Japan Stocks Rise Third Day on Thanksgiving Spending, Weaker Yen (Bloomberg)
Nov. 26 (Bloomberg) -- Japanese stocks rose, with the benchmark equity gauge heading for a three-day gain, as an increase in U.S. consumer spending during the Thanksgiving weekend and the yen’s drop to a seven-month low against the dollar boosted the earnings outlook for exporters. Toyota Motor Corp. (7203), Asia’s biggest carmaker by market value that gets a quarter of its sales in North America, added 2.6 percent. Mitsubishi UFJ Financial Group Inc. (8306) paced gains among banks as minutes of the Bank of Japan’s policy meeting showed it will continue with powerful monetary easing. Nipro Corp. jumped 9.2 percent after the maker of medical products said it has developed an automatic incubator for mass production of induced pluripotent and embryonic stem cells.
The Nikkei 225 Stock Average (NKY) gained 0.9 percent to 9,446.62 as of 10:31 a.m. in Tokyo with about six stocks rising for each that fell. Trading volume was 48 percent above the 30-day average for the time of day after Japan’s market reopened after a three-day weekend. The broader Topix (TPX) Index advanced 1.2 percent to 785.54 with all but three of the 33 industry groups climbing. “The Nikkei is rising toward 9,500 yen after breaking above the range since June,” said Masaru Hamasaki, chief strategist at Toyota Asset Management Co., which oversees the equivalent of about 1.79 trillion yen ($21.7 billion). “The U.S. shopping season is starting on a positive note, but I’d like to see more data through at least the second week of December as you can’t grasp the whole trend yet.”

China’s Equity Futures Decline Before Industrial Profits Data (Bloomberg)
China’s stock-index futures declined, signaling losses for the benchmark index, before the release of industrial profits data tomorrow. Futures on the CSI 300 Index (SHSZ300) expiring in December, the most active contract, declined 0.2 percent to 2,193 as of 9:20 a.m. local time. Liquor maker JiuGuiJiu Co. (000799) may extend last week’s decline after its products were found to have excessive levels of plasticizer. Baoshan Iron & Steel Co. may gain among steelmakers after Xinhua News Agency said the industry may perform better this quarter. Air China Ltd. (601111) may advance after the controlling shareholder increased its stake. The Shanghai Composite Index (SHCOMP) climbed 0.6 percent to 2,027.38 on Nov. 23. The CSI 300 Index rose 0.7 percent to 2,192.68. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong gained 1.1 percent. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, added 2.3 percent in New York.
The Shanghai Composite advanced 0.6 percent last week, the first gain in three weeks. It dropped below the 2,000 level during intraday trading twice last week and rallied to close above that level amid speculation of government support. The gauge has slumped 7.8 percent this year and trades at 9.7 times estimated profit for 2012, compared with the 17.8 average multiple since Bloomberg began compiling the data in 2006.

U.S. Stocks Have Best Weekly Rally Since June on Budget (Bloomberg)
U.S. stocks had their biggest weekly rally since June after President Barack Obama expressed confidence on a budget agreement with Congress and data from China to Germany bolstered optimism about global growth. All 10 groups except for utilities in the Standard & Poor’s 500 Index rose during the Thanksgiving-shortened week. An index of homebuilders climbed 5.4 percent amid better-than-estimated housing data. Bank of America Corp. (BAC) jumped 8.6 percent after an analyst said the lender may commit as much as $10 billion to dividends and share repurchases in 2013. Inc. (CRM) surged 11 percent after revenue beat estimates. Apple Inc. (AAPL) gained 8.3 percent, ending a streak of eight weekly losses. The S&P 500 advanced 3.6 percent to 1,409.15 for the week, extending its 2012 gain to 12 percent. The Dow Jones Industrial Average rallied 421.37 points, or 3.4 percent, to 13,009.68. Both gauges had the best week since June 8.
“What you’re seeing out of Washington before the break is a very cooperative tone,” Bill Greiner, who oversees $14 billion as chief investment officer at Mariner Wealth Advisors in Kansas City, Missouri, said in a phone interview. “There is a gathering sense that the deceleration in economic growth in China seems to be bottoming right now. Both of those areas are adding to a little bit strength in the market.” The S&P 500 began the week with the biggest advance in two months after Obama met with senior Democrats and Republicans on Nov. 16 for talks to avoid a so-called fiscal cliff of $607 billion in automatic tax increases and spending cuts next year. The index continued to climb after Israel and the Palestinian militant group Hamas agreed to call a halt to more than a week of air strikes and missile attacks. Data showed the first expansion in China’s manufacturing industry in 13 months and an unexpected gain in German business confidence.

Recap Stock Index Market Report (CME)
The December S&P 500 registered its fifth consecutive higher close, lifted by ideas that Greece was closer to receiving aid and optimism over the US holiday shopping season. The market trended higher throughout a holiday-shortened session in light trading volume. One of the best performing sectors during the session was technology, helped by gains in Intel, Hewlett-Packard and Research In Motion. Material and resource-related shares were also higher, helped by weakness in the US dollar. The upside showing carried the December S&P 500 above 1400 and to the highest level since November 7th.

U.K. Stocks Rise For Fifth Day; Xstrata, Kingfisher Rise (Bloomberg)
U.K. stocks climbed for a fifth day, extending the benchmark FTSE 100 (UKX) Index’s biggest-weekly advance in almost a year, as business confidence rebounded in Europe’s two largest economies. Xstrata Plc rose to a two-month high as the company finished its first production line at its Koniambo nickel project. Kingfisher Plc (KGF) gained 1.3 percent before next week’s sales update. Thomas Cook Group Plc rallied 4.4 percent as Investec reiterated its buy recommendation for the shares. The FTSE 100 added 28.11 points, or 0.5 percent, to 5,819.14 at the close in London. The gauge has climbed 3.8 percent this week amid optimism U.S. policy makers will reach an agreement to avoid a budget deadlock and as a report signaled manufacturing expanded in China this month. The FTSE All-Share Index gained 0.5 percent today, while Ireland’s ISEQ Index increased 0.4 percent.
“Markets edged higher in afternoon trade, with encouraging German IFO survey and improving French business confidence data helping to lift spirits,” Ishaq Siddiqi, a market strategist at ETX Capital in London. The volume of shares changing hands in the gauge’s companies was 39 percent lower than the 30-day average, according to data compiled by Bloomberg, as the U.S. market reopened from yesterday’s Thanksgiving holiday. The German Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 101.4 from 100 in October, the first gain in eight months. The median economist forecast was for a drop to 99.5. In France, sentiment among factory executives rose to 88 in November from the lowest level in more than three years, according to the national statistics office Insee. That followed a drop to 85 in October and beat the median economist forecast for a reading of 87.

Emerging Stocks Gain for Fifth Day as Taiwan Shares Rally (Bloomberg)
Emerging-market stocks rose for a fifth day, its longest stretch of gains in two months, as Taiwan’s shares rallied and data showed improvement in Germany’s business climate. South Africa’s benchmark stock index climbed to a record. The MSCI Emerging Markets Index (MXEF) gained 1 percent to 995.94 in New York, the highest since Sept. 14. The gauge increased 2.7 percent since on the week, the first advance since the five days ended Nov. 2. The FTSE/JSE Africa All Share Index (JALSH) rose to the highest level on record for a second day. Voting shares of Centrais Eletricas Brasileiras SA (ELET6) jumped in Sao Paulo, rebounding from a 17-year low. Taiwan’s Taiex Index (TWSE) surged 3.1 percent, the most this year, after the Cabinet said it’s studying measures to bolster the stock market. The Ifo institute said the index for business climate in Germany, Europe’s biggest economy, rose to 101.4 this month, beating the 99.5 median estimate of 48 economists surveyed by Bloomberg.
The 21 countries with companies in the MSCI emerging stocks index send 30 percent of their exports on average to the European Union, data from the World Trade Organization show. “Overall market sentiment has been improving, with more indicators showing some recovery in the world’s main economies,” Monthol Junchaya, chief investment officer at Bangkok-based One Asset Management Ltd., which manages about $2.3 billion of assets, said by phone today.

Treasuries Stay Lower After 13% Gain in Holiday Sales (Bloomberg)
Treasuries stayed lower following last week’s steepest decline in two months after an industry report showed spending increased 13 percent during the four-day U.S. Thanksgiving weekend versus 2011. Benchmark 10-year yields were two basis points away from the highest level in two weeks after the National Retail Federation said spending rose to $59.1 billion from Nov. 22 through yesterday from $52.4 billion last year. The increase occurred even as ShopperTrak, which also monitors spending data, observed a 1.8 percent decline in sales on Black Friday, the start to the shopping season. “Sales are much better than last year,” 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 U.S. economy continues to recover. I don’t recommend people buy Treasuries. Equities and commodities are a better place to invest.”
Ten-year notes yielded 1.68 percent as of 9:46 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 1.625 percent security due in November 2022 changed hands at 99 15/32. The U.S. market was shut Nov. 22 for Thanksgiving holiday. The yield was as high as 1.7 percent on Nov. 23, a level not seen since Nov. 7. It will rise to 2 percent by year-end, Shimazu said. Treasuries fell last week on speculation President Barack Obama and lawmakers will reach an agreement to avert the so- called fiscal cliff of scheduled tax increases and spending cuts. Ten-year yields increased 11 basis points, or 0.11 percentage point, the most since the period ended Sept. 14. Euro-area finance ministers will try today for the third time this month to clear an aid payment to Greece and produce a plan to keep the country a solvent member of the currency bloc. Progress at the meeting may damp demand for the relative safety of Treasuries, Shimazu said.

Yen Weakens After BOJ Minutes Signaled Need for Stimulus (Bloomberg)
The yen weakened against all 16 major peers after minutes of last month’s Bank of Japan (8301) policy meeting showed members calling for powerful monetary easing. The Japanese currency fell to an almost seven-month low against the euro before Prime Minister Yoshihiko Noda and opposition leader Shinzo Abe hold a Nov. 29 debate prior to next month’s lower-house elections. Demand for the 17-nation euro was supported amid speculation finance ministers from the currency bloc will agree today to keep aid flowing to Greece. Gains in Asian stocks also damped the yen’s allure. “While Japan’s political situation is provoking yen weakness, the BOJ continues to lean toward monetary easing,” said Kengo Suzuki, currency strategist in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest bank by market value. “It’s possible that the BOJ will announce additional stimulus before year-end. The yen may weaken further.”
The yen touched 107.14 per euro, the lowest level since April 27, before trading at 107.05 as of 9:48 a.m. in Tokyo, 0.1 percent below the close in New York on Nov. 23. The Japanese currency lost 0.2 percent to 82.58 per dollar from the end of last week, when it completed a 1.3 percent five-day decline. It touched 82.84 on Nov. 22, the weakest since April 4. The euro was little changed at $1.2962 from $1.2976 on Nov. 23, when it reached $1.2991, the strongest since Oct. 31. The MSCI Asia Pacific Index (MXAP) of stocks rose 0.5 percent, following a 1.1 percent advance in the MSCI World Index (MXWO) Nov. 23.

Shoppers Lift Thanksgiving Weekend Spending 13% to $59.1 Billion (Bloomberg)
Shoppers spent 13 percent more during the four-day U.S. Thanksgiving weekend, heading to stores and jumping online to push Black Friday beyond a one-day extravaganza. Spending rose to $59.1 billion from Nov. 22 through today from $52.4 billion last year, the National Retail Federation said in a statement. The jump occurred even as Chicago-based researcher ShopperTrak observed a 1.8 percent decline in sales on Black Friday, the traditional start to the shopping season. Retailers have turned Black Friday into a week’s worth of deals and discounts, with ever-earlier openings and online offers. Thanksgiving Day, once reserved for family gatherings, saw more than 35 million shoppers buying in stores and online, up from 29 million last year, the NRF said. Even tomorrow’s so- called Cyber Monday is losing its distinction, with Best Buy Inc. and J.C. Penney Co. starting some web-based deals today.
“Retailers have now integrated the entire shopping experience,” Matt Shay, president and chief executive officer of the NRF, said on a conference call today. “Every day is Cyber Monday. Every day is Black Friday.” Customers spent $423 on average this weekend, up 6.3 percent from last year, the Washington-based NRF said. The 13 percent jump in total spending suggests some sales may have been pulled ahead from December and that retailers will have to keep up the promotions to avoid a lull. “Retailers are going to have to get creative, such as price discounts or special events, to keep the customer engaged,” Patricia Edwards, chief investment officer for Bellevue, Washington-based Trutina Financial, said today by telephone. Her firm owns Wal-Mart Stores Inc. (WMT) and Starbucks Corp. among more than $300 million in assets.

Spending Probably Cooled, Investment Fell: U.S. Economy Preview (Bloomberg)
Consumer spending probably cooled in October and business investment dropped, showing how superstorm Sandy and the looming fiscal cliff are hindering U.S. growth at the end of 2012, economists said before reports this week. Household purchases rose 0.1 percent last month, the smallest advance since June, after increasing 0.8 percent in September, according to the median estimate from 52 economists surveyed by Bloomberg before Nov. 30 figures from the Commerce Department. Orders for durable goods fell 0.8 percent in October, economists forecast another report to show. Sandy shuttered some retailers in the Northeast, temporarily countering the benefits of gains in consumer sentiment that are brightening the holiday-shopping outlook. At the same time, the prospect that the economy will stumble should lawmakers not be able to ward off tax increases and government spending cuts scheduled for 2013 may be prompting companies to put off replacing outdated equipment.
“There’s a mixed picture,” said George Mokrzan, director of economics for Huntington National Bank in Columbus, Ohio. “Even though the consumer has shown some greater strength, business equipment spending has weakened. That may be a function of all this uncertainty that is primarily because of the fiscal cliff.” An earlier read on spending from the Commerce Department on Nov. 14 showed retail sales fell in October for the first time in four months. While the Commerce Department said it was able to collect information from the storm-affected area, it said it couldn’t quantify Sandy’s impact.

U.S. Yields Rise First Time in 5 Weeks on Fiscal-Cliff Optimism (Bloomberg)
Treasuries fell, pushing 10-year note yields higher for the first in five weeks, on optimism President Barack Obama and lawmakers will reach an agreement to avert the so-called fiscal cliff, damping refuge demand. The benchmark yield touched a two-week high yesterday as finance ministers from the euro area prepare to hold a meeting on Nov. 26 to discuss unlocking bailout funds for Greece, after failing to reach an agreement earlier this week. Federal Reserve Chairman Ben S. Bernanke said earlier this week an agreement to reduce long-term U.S. deficits may remove an impediment to economic growth next year. The U.S. will sell $99 billion in notes next week. “The key market focus will be how the negotiations are proceeding” on the fiscal cliff, said Priya Misra, head of U.S. rates strategy at Bank of America Corp. in New York, one of the 21 primary dealers that trade with the Fed. “The last thing we heard from Congress was positive.”
The benchmark 10-year yield rose 11 basis points, or 0.11 percentage point on the week, to 1.69 percent in New York, according to Bloomberg Bond Trader prices. The price of the 1.625 percent security due in November 2022 lost 1 point, or $10 per $1,000 face amount, to 99 13/32. The yield rose for the first five-day period since Oct. 19 and touched 1.70 percent yesterday, the highest since Nov. 7.

China Wage Gains Hurt by Weaker Profit Damp Consumption (Bloomberg)
China’s wage gains have moderated on weaker corporate profits, capping consumer demand as the government seeks to sustain a rebound after a seven-quarter economic slowdown. Average urban salaries rose 12 percent in the first nine months from a year earlier without adjusting for inflation, slowing from 14.4 percent for all of 2011 and 13.3 percent in 2010, government data show. Restaurant operator Yum Brands! Inc. reports smaller pay increases, and labor ministry data show the same for minimum wages. Deeper declines in wage growth would undermine efforts by China’s new leadership under Xi Jinping to boost consumer spending and shift the world’s second-biggest economy away from dependence on investment and exports. Overcapacity in manufacturing is weighing on profits, with the latest reading due tomorrow when the statistics bureau releases industrial companies’ net income for this year through October.
“Given the poor profit picture, wage growth is bound to slow down in the coming quarters and this is set to reduce the robustness of consumption,” said Louis Kuijs, chief China economist at Royal Bank of Scotland Plc in Hong Kong, who formerly worked at the World Bank in Beijing. “The expected slowdown will impact the rebalancing in the sense that it will reduce the relative role of consumption in the short term.” Li Keqiang, the second-highest ranked official in the new Communist Party leadership and set to take over from Wen Jiabao as premier in March, said last week that household spending is key to boosting domestic demand.

Korean Consumer Confidence Rebounds From Nine-Month Low (Bloomberg)
South Korean consumer confidence rebounded from a nine-month low this month as the economy began to show signs of improvement. The sentiment index was at 99 from 98 in October, the Bank of Korea said in an e-mailed statement today. A reading below 100 indicates pessimists outnumber optimists. Unemployment fell to the lowest since 2008 last month as gains in exports and industrial output signaled growth may pick up from the weakest pace in three years in the third quarter. Risks for Asia’s fourth-largest economy include record household debt and strength in the won, which threatens to weigh on exporters’ sales. The Bank of Korea cut borrowing costs twice this year and the government boosted spending within its budget to support the economy. Today’s report showed that people expect inflation of 3.3 percent over the next year, within the range of between 2.5 percent and 3.5 percent that the central bank is targeting for the next three years.
The consumer confidence index is based on responses from 2,006 households in 56 cities, with the survey conducted by mail and telephone between Nov. 12 and Nov. 19.

S. Korea, Japan Finance Ministers Meet to Repair Ties (Bloomberg)
Japanese and South Korean finance ministers met to discuss boosting economic and financial ties as the two nations work to repair relations marred by a territorial dispute. “It was a very significant and meaningful financial discussion,” Koriki Jojima told reporters yesterday after talks with his South Korean counterpart Bahk Jae Wan in Gwacheon, south of Seoul. In a joint statement, the two reaffirmed the importance of resuming negotiations on a free trade agreement and resolved to work closely to strengthen collaboration on issues ranging from finance to the environment. The meeting, which was postponed from August, suggests Asia’s second- and fourth-largest economies are trying to improve relations after a territorial dispute damaged ties and led to the cancellation of an extension of a currency swap agreement. Japan is also involved in a row with China over the ownership of islands in the East China Sea.
“There are difficult issues,” Jojima said. “But on the other hand, especially on the economic front, Japan and Korea have a large influence on the regional economy and they should link up in the areas where that is possible.” Bahk said the talks were “aimed at deepening relations” and that “Jojima and I shared views on policy direction across tax, foreign exchange and fiscal soundness.” He declined to elaborate on the currency discussions.

India Pledges to Cut Deficit, Cap Debt to Avert Downgrade (Bloomberg)
Indian officials pledged to cut the widest budget deficit among the world’s largest emerging markets and curb public debt, as a report this week may show the economy grew at close to the slowest pace in three years. The government is “optimistic” it will rein in the shortfall for the year through March 31 to 5.3 percent of gross domestic product from the previous year’s 5.8 percent, and has no plan “at the moment” to increase its record borrowing program, Finance Minister Palaniappan Chidambaram said in Pune, India, on Nov. 24. The deficit will be cut 0.6 percent annually for the next five years, Chakravarthy Rangarajan, chief economic adviser to Prime Minister Manmohan Singh, said in Kolkata the same day.
Financial markets are pricing in an increasing likelihood that India’s credit rating will be cut to junk status, Credit Agricole CIB said last week. The threat of losing the nation’s investment-grade sovereign ranking prompted Singh to reduce fuel subsidies in mid-September to tackle the fiscal gap and to allow foreign investment in retailing and aviation. “I would like to, with all the conviction and command, reiterate that the government is fully committed to contain the fiscal deficit within 5.3 percent,” Economic Affairs Secretary Arvind Mayaram said at a conference in Mumbai on Nov. 24. “We have a clear program of disinvestment and we are confident of meeting our targets.” An auction of wireless spectrum this month helped raise 94 billion rupees ($1.7 billion), less than 25 percent of the target, straining state finances. The auction isn’t yet complete and the government is confident of meeting its goal of raising 400 billion rupees from the sale, said Chidambaram, the finance chief.

Vietnam Empty Office Towers Show Dreams Turned to Rubble (Bloomberg)
From afar, the gleaming metal and glass edifices of Hanoi’s EVN Tower illustrate Vietnam’s rapid economic development. Up close, the rubble-strewn entrance and missing windows tell another story: one of loose lending and property speculation that now hangs over the country’s banks. State-run monopoly Vietnam Electricity began construction of the 33- and 29- story dual-tower development in 2007, a year when 54 percent credit growth helped fuel the fastest economic expansion since 1996. Now, the economy has slowed, banks are struggling with an increase in bad debts, and unfinished property projects, empty offices and lower rents risk adding to the pile of non-performing loans.
“Banks were far too eager to lend and a lot of the projects that have been built haven’t been well-thought through,” said Stephen Wyatt, managing director for real estate broker Knight Frank Vietnam in Ho Chi Minh City. “A number of developments are on hold, purely because they have run out of funding. Banks are no longer willing to fund these massive developments.” Vietnam’s economy, which the communist government opened up in 1986, expanded at a 4.7 percent annual rate in the third quarter, after exceeding 7 percent from 2002 through to the first quarter of 2008. After a lending binge fueled the fastest inflation in Asia, policy makers raised interest rates in 2010 and 2011 and restricted lending. Among the casualties are many of the nation’s inefficient state-owned enterprises, which had diverted cash to property developments.
“When the developer is a state-owned enterprise and is using the money it should be using for say, power generation, airlines, shipping or banking, that’s where the oversupply has come,” said Marc Townsend, the Ho Chi Minh City-based managing director of CBRE Group Inc.’s Vietnam unit. “They all felt they could make easy money by being a property developer.”

Euro Ministers Take Third Swing at Clearing Greek Payment (Bloomberg)
Euro-area finance ministers try for the third time this month to clear an aid payment to Greece and forge a blueprint to keep the country a solvent member of the currency bloc. Finance chiefs from the 17-member single currency return to Brussels today, less than a week after an all-night meeting failed to yield agreement and days after a European Union summit broke up without a proposed seven-year budget. At stake at the euro meeting is the continuation of a three-year mission to return Greece to financial health. “It would be irresponsible not to reach an accord given all the efforts that have been made on all sides,” French Finance Minister Pierre Moscovici said late yesterday on BFM television. “I’m not going to guarantee that an accord will be reached, but I think the third time should be the charm.”
Efforts to resolve the European debt crisis have stumbled after the European Central Bank gave leaders more time with its September pledge to purchase sovereign debt. As officials put finishing touches on a bailout for Cyprus, divisions were on display in Spain. Voters in Catalonia took a step toward independence, risking the country’s fragmentation. Euro-area finance ministers held a conference call Nov. 24 to prepare for the Brussels meeting. A breakthrough hinges on coming up with 10 billion euros ($13 billion) to fill the financing gap that emerged when Greece this month got two more years to meet deficit-reduction targets. Measures on the table include reducing interest rates on rescue loans, arranging a debt buyback with bailout funds and applying central bank profits on Greek bond holdings to the effort.

Europe Turns Attention to Unlocking Greek Aid (Bloomberg)
European policy makers turned their attention to unlocking funds to keep Greece solvent after a summit failed to agree on a seven-year budget for the bloc. Euro-area finance ministers held a conference call today to prepare for their third meeting this month, on Nov. 26, on Greece’s rescue. As with the budget talks for the 27-nation European Union, euro finance chiefs have deadlocked on a plan to steer the country back to fiscal health. “There’s no time to waste” in finding a solution for Greece, German Chancellor Angela Merkel told reporters yesterday in Brussels. A plan “is being intensively worked on,” she said. An agreement, which would release an aid payout of at least 31 billion euros ($40 billion), may raise Greece’s debt target to 124 percent of gross domestic product in 2020 from a previous goal of 120 percent, a Greek official said Nov. 22. The cost of reaching the new target from a currently projected trajectory of 129 percent of GDP that year is about 10 billion euros, according to the official.
The main obstacle to clearing the loans for Greece is a plan to reduce the interest rates charged by euro-area creditors. A cut in interest rates would put them below the cost of funding for some of the 17 euro-area countries, the official told reporters in Brussels. The latest chapter in the Greek economic crisis that opened in 2009 was triggered by the ministers’ decision to extend by two years, to 2016, the deadline for Greece to cut its budget deficit to 2 percent of gross domestic product. The extra time drove its projected debt higher, stirring tensions with the International Monetary Fund. The IMF has provided about a third of 148.6 billion euros in loans funneled to Greece since 2010.

20121126 1011 Global Commodities Related News.

DTN Closing Grain Comments 11/23 12:54 Grains Close Holiday Week Higher (CME)
Led by a strong rally in the soy complex and sharp sell-off in the U.S. dollar index, grains were able to finish the week on a rally. Commodities in general were stronger, though cotton struggled throughout the day.

Corn Market Recap for 11/23/2012 (CME)
December Corn finished up 4 1/2 at 745 1/2, 3 1/2 off the high and 2 1/4 up from the low. March Corn closed up 4 1/2 at 749 3/4. This was 2 1/4 up from the low and 3 1/4 off the high.
December corn traded higher on the day on positive export data, less than favorable weather conditions in Argentina, and a sharply lower US Dollar. Risk assets saw a boost today on positive European and Chinese economic data. Net weekly export sales for corn, came in at 769,800 tonnes for the current marketing year and 188,800 for the next marketing year for a total of 958,600 tonnes. This was the second highest sales number for this crop year and Japan was a notable buyer. As of November 15th, cumulative corn sales stand at 41% of the USDA forecast for current marketing year vs. a 5 year average of 47%. Sales of 417,000 tonnes are needed each week to reach the USDA forecast. Additional support was linked to thoughts that the US export pace may pick up in 2013 amid tightening domestic supplies. Reports that recent rainfall in Argentina was heavier than expected may have also provided a boost to corn prices. January Rice finished up 0.205 at 15.035, equal to the high and equal to the low.

Wheat Market Recap Report (CME)
December Wheat finished up 2 3/4 at 848, 5 3/4 off the high and 2 3/4 up from the low. March Wheat closed up 2 1/4 at 862. This was 2 3/4 up from the low and 5 1/2 off the high.
December Chicago wheat traded slightly higher on the day in what was described as a low volume day due to the Thanksgiving holiday. Support was linked to positive export demand and dry weather conditions in the western plains. Other major world exporters continue to add sales while the US continues to struggle to find new business which could limit gains in the short term. Despite this, export sales were impressive this morning with sales reported at 635,400 tonnes for the current marketing year and 22,000 for the next marketing year for a total of 657,400. As of November 15th, cumulative wheat sales stand at 53% of the USDA forecast for current marketing year vs. a 5 year average of 66%. Sales of 498,000 metric tonnes are needed each week to reach the USDA forecast. Additional support was linked to news that Brazil may have bought German wheat which could imply that there are major issues with the quality and quantity of the wheat crop in Argentina. Little to no rain is expected in the western plains to finish out this month which could leave as much as a third of the wheat crop with poor establishment as it enters dormancy.
December Oats closed down 1 at 369. This was 4 1/2 up from the low and 5 1/2 off the high.

Wheat Gains for Second Day as Drought May Erode U.S. Supplies (Bloomberg)
Wheat rose for a second day in Paris on speculation global supplies will tighten because of dry weather in the U.S., the world’s largest exporter of the grain. Only 34 percent of U.S. winter wheat was rated good or excellent as of Nov. 18, the worst condition since tracking of data began in 1985, Department of Agriculture figures show. Prices climbed 39 percent this year in Paris trading after droughts in the U.S., Russia and eastern Europe. European Union export licenses for soft wheat in the marketing year begun July 2 are up 11 percent from a year earlier. “Matters are made worse for the hard, red winter wheat crop in that temperatures are warm, causing the wheat to mature earlier than it should and thus putting that crop at risk should normal cold winter temperatures return,” economist Dennis Gartman said of the U.S. today in his daily Gartman Letter.
Milling wheat for delivery in January added 0.3 percent to the day’s high of 271 euros ($350) a metric ton by 2:28 p.m. on NYSE Liffe in Paris. Prices are up 0.6 percent this week. Agricultural markets on the Chicago Board of Trade will open later today following yesterday’s Thanksgiving holiday. Argentina, which had above-normal rains in recent weeks, may produce 10.1 million tons of wheat, the Buenos Aires Cereals Exchange said yesterday. That compares with the USDA’s estimate for the country of 11.5 million tons. Corn for delivery in January gained 0.2 percent to 254 euros a ton in Paris. Rapeseed for delivery in February declined 0.2 percent to 470.75 euros a ton.

Recap Energy Market Report (CME)
January crude oil prices registered a higher high during the session, climbing back above the $88.00 level in the process. The market was under pressure during the morning hours following a ceasefire between Israel and Hamas, as well as uncertainty surrounding EU budget negotiations. A better than expected read on German Business sentiment, sell off in the US dollar and rally in global equity markets sparked the upside action in crude oil prices. Further support to risk sentiment came on ideas that Greece could be closer to receiving additional bailout funding.

Oil Trades Near One-Week High Before Europe Meeting on Greek Aid (Bloomberg)
Oil traded near the highest level in almost a week before European finance ministers discuss aid for Greece as they strive to tame a debt crisis that threatens to derail the economic recovery and curb fuel demand. Futures fluctuated in New York after rising 1 percent on Nov. 23 to cap the biggest weekly gain since October. Euro-area finance ministers are due to meet for the third time this month in Brussels to approve a Greek payment and forge a blueprint to keep the country a solvent member of the currency bloc. Oil advanced last week amid concern unrest in the Middle East from Israel to Egypt will spread and disrupt crude supplies. West Texas Intermediate crude for January delivery was at $88.02 a barrel, down 26 cents, in electronic trading on the New York Mercantile Exchange at 9:29 a.m. in Tokyo. Front-month futures rose 90 cents to $88.28 a barrel on Nov. 23, the highest settlement since Nov. 19. Prices are down 11 percent this year.
Brent for January settlement lost 6 cents to $111.32 a barrel on the ICE Futures Europe exchange. The European benchmark crude was at a premium of $23.30 to New York-traded WTI, up from $23.10 on Nov. 23. Israel yesterday eased restrictions on Palestinians in the Gaza Strip after last week’s cease-fire with Hamas survived claims of breaches by both sides. Hamas, which controls Gaza, said one Palestinian was killed and at least 19 injured after Israeli border guards opened fire. Israeli army spokeswoman Avital Leibovich said in a message on Twitter Nov. 23 that groups of Palestinians in the southern Gaza Strip had hurled rocks and tried to damage the security fence.
Protests have mounted in Egypt since President Mohamed Mursi on Nov. 22 granted himself new powers. The president will meet with the nation’s judicial council today, the state-run Middle East News Agency reported, citing presidential spokesman Yasser Ali. The nation’s judiciary said Nov. 24 that courts would suspend work until Mursi rescinds his decision.

Nickel Glut Recedes as Biggest Metals Loser Rallies: Commodities (Bloomberg)
Nickel, this year’s worst-performing metal, is rallying as analysts from Standard Bank Plc to BNP Paribas SA forecast a smaller-than-expected supply glut in 2013. Standard Bank reduced its estimate for the surplus by 17 percent on Oct. 15, citing project delays, and BNP Paribas said Nov. 12 it now expects output to match demand, after cutting its projection three times since April. Credit Suisse Group AG and Citigroup Inc. also lowered forecasts in the past two months. Nickel will average $19,000 a metric ton in the second quarter, 14 percent more than now, the median of 11 analyst estimates compiled by Bloomberg shows.
Futures fell 68 percent since reaching a record $51,800 in 2007 as higher prices spurred companies from Anglo American Plc to Vale SA to invest in new mines or expand existing ones. The surplus started in 2011 as slower growth weakened demand for stainless steel, which accounts for 65 percent of nickel consumption, and new supply emerged. Analysts are now paring supply forecasts as projects fall behind schedule. Prices rallied 5.5 percent in the past month. “The market balance is tighter than people had initially thought,” said Leon Westgate, an analyst at Standard Bank in London. “There are a number of operations and significant amount of capacity that may run into various issues. In terms of that producer wall of nickel, it may not be quite as large or impregnable as it looks on paper.”

Silver Market Recap Report (CME)
The silver market was also able to find its "second wind" midway through Friday's session, as prices reached their highest levels since mid-October. The sharp turnaround in macro-economic sentiment clearly helped to lift prices well above unchanged levels, with December silver more than $1.75 higher for the week at today's highs. The rapid pace of today's rally was also thought to have produced a large amount of technically-based short-covering, which in turn provided additional support for the silver market during Friday's trading.

Gold Futures Top $1,750, Silver Rises as Dollar Declines (Bloomberg)
Gold futures topped $1,750 an ounce and silver climbed to a six-week high as the dollar’s drop spurred demand for the metals as alternative investments. The greenback fell to a three-week low against a basket of major currencies as data showed German business confidence rose in November and speculation mounted that Europe’s policy makers will agree to keep aid flowing to Greece. Gold reached a five- week high. “The dollar weakness is supporting gold,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. Gold futures for December delivery rose 1.3 percent to $1,751.40 at 12:45 p.m. on the Comex in New York. That’s the biggest gain for a most-active contract since Nov. 6. Earlier, the metal touched $1,755, the highest since Oct. 17. Floor trading was closed yesterday for the U.S. Thanksgiving holiday.
Holdings in gold-backed exchange-traded products rose to a record 2,605.3 metric tons on Nov. 21, data compiled by Bloomberg show. The U.S. Mint sold 67,000 ounces of American Eagle gold coins this month, exceeding the 59,000 ounces for all of October, data on its website showed. Silver futures for March delivery gained 2.3 percent to $34.206 an ounce. Earlier, the price reached $34.25, the highest since Oct. 11. Platinum futures for January delivery advanced 2.1 percent to $1,617.10 an ounce on the New York Mercantile Exchange, while palladium futures for December delivery increased 2.5 percent to $667.60 an ounce.

Gold Market Recap Report (CME)
After posting modest gains during overnight trading, gold prices were given a significant boost this morning and were able to reach a new 5-week high by the close of trading. Positive economic data from China and the Euro zone was widely seen to have underpin the gold market since Wednesday's close, although the upcoming US fiscal cliff situations and continued uncertainty with peripheral EU debt were thought to have kept additional gold strength in check early in the session. However, indications of strong "Black Friday" shopping levels gave a "jump-start" to US equities as well as triggered deep losses in the Dollar, both of which provided gold and other physical commodities with sizable near-term support. Reports of violence outside of a South African mine created additional supply anxiety from that nation, which in turn was a likely source of additional support during today's trading.

20121126 1010 Soy Oil & Palm Oil Related News.

ITS CPO export down 1.8% to 1,276,792 tonnes for the period of 1~25 Nov 2012.

Soybean Complex Market Recap (CME)
January Soybeans finished unchanged at 1418 3/4, 8 1/4 off the high and 4 1/4 up from the low. March Soybeans closed unchanged at 1403. This was 4 up from the low and 8 1/4 off the high.
December Soymeal closed up 0.7 at 428.6. This was 2.2 up from the low and 6.1 off the high.
December Soybean Oil finished up 0.51 at 49.04, 0.11 off the high and 0.29 up from the low.
January soybeans traded sharply higher on the day on positive export data, a lower dollar, and fears that South American weather may disrupt supply pipelines. Positive economic data out of China and Europe pushed the dollar sharply lower which triggered rallies in metals and stocks today. This helped the grain and soybean market open in positive territory. Additional support was linked to positive export demand data for soybeans, meal, and oil last week. Net weekly export sales for soybeans came in at 543,600 tonnes for the current marketing year and none for the next marketing year. This was in line with market estimates and supportive to the trade throughout the day. As of November 15th, cumulative soybean sales stand at 74% of the USDA forecast for the current marketing year vs. a 5 year average of 59%. Sales of 231,000 tonnes are needed each week to reach the USDA forecast. Net meal sales totaled 197,900 tonnes which was also in line with market expectations and cumulative meal sales stand at 59% of the USDA forecast for current marketing year vs. a 5 year average of 41%. Sales of only 65,000 tonnes are needed each week to reach the USDA forecast. Net oil sales totaled 124,100 tonnes and the USDA reported that US exporters sold 20,000 tonnes of oil to and unknown destination for the 2012/13 crop year. As of November 15th, cumulative soybean oil sales stand at 83% of the USDA forecast for the current marketing year vs. a 5 year average of 30%. Sales of only 2,000 tonnes are needed each week to reach the USDA forecast.

EDIBLES: Malaysian palm oil futures fell for a fourth straight session and posted a third weekly loss in four, as investors remained concerned over slowing demand for the edible oil as prospects for global economic growth remained dim.(Reuters)