20110812 1108 Global Market Related News.

Asian Stocks Gain as U.S. Jobless Claims Data Ease Economic Growth Concern (Source: Bloomberg)
Asian stocks rose, paring the benchmark index’s third weekly decline, as lower U.S. jobless claims eased concerns the global economy is faltering. Canon Inc. (7751), the world’s biggest camera maker that gets more than 80 percent of its revenue overseas, jumped 5.3 percent in Tokyo. LG Electronics Inc. (066570), which gets more than a quarter of sales in North America, gained 2.2 percent in Seoul. James Hardie Industries SE (JHX), the biggest seller of home siding in the U.S., rose 2.4 percent in Sydney. BHP Billiton Ltd. (BHP), the world’s largest mining company, advanced 1.6 percent after crude and metal prices increased. The MSCI Asia Pacific Index gained 0.5 percent to 122.72 as of 9:40 a.m. in Tokyo, paring its decline this week to 2.7 percent. Stocks also advanced as France, Spain, Italy and Belgium moved to impose bans on short-selling in order to stabilize markets.

Central Bankers Worldwide Race to Save Growth in 72 Hours of Policymaking (Source: Bloomberg)
Central bankers are racing to shield their economies from fiscal tightening and lopsided currency swings that threaten a new global recession. In the 72 hours after a Group of Seven conference call on Aug. 7, the Federal Reserve pledged to keep interest rates near zero through at least mid-2013, the European Central Bank intervened in bond markets and the Bank of England indicated it’s ready to add more stimulus if needed. Japan signaled renewed concern about the yen and Switzerland yesterday stepped up its fight to curb an “overvalued” franc. “Central bankers have so far been the tower of strength,” said Stefan Schneider, chief international economist at Deutsche Bank AG in Frankfurt. “Lawmakers have done everything to destroy belief in their ability to solve the problems they’re facing.”

GLOBAL MARKETS-Stocks stabilise after battering; euro rises
LONDON, Aug 11 (Reuters) - World stocks edged up on Thursday from this week's 11-month low as higher U.S. stock futures calmed frayed investor nerves after a steep sell-off triggered by concerns about the U.S. economic slowdown and the euro zone banking system.
"Investors are hugely worried about the spread of the debt contagion and the economic status of the U.S. Each sell-off is effectively a cry for help to politicians and central banks to reach a solution to the debt crisis," Jimmy Yates, head of equities at CMC Markets, said.

First-Time Jobless Claims in U.S. Unexpectedly Decrease to Four-Month Low (Source: Bloomberg)
Claims for U.S. unemployment benefits unexpectedly dropped last week to a four-month low, signaling the job market is being hampered by a lack of hiring rather than more firings. The number of applications for unemployment insurance payments fell 7,000 in the week ended Aug. 6 to 395,000, the fewest since early April, the Labor Department said today in Washington. Other reports showed the trade gap widened in June to the highest level since October 2008 and consumer confidence dropped last week. Stocks rebounded after benchmark indexes yesterday sank to the lowest level in 11 months as the decrease in worker dismissals relieved investor concern the recovery was stumbling. Companies like Cisco Systems Inc. (CSCO) are among those seeing little sign of recession even as their customers say they will keep a lid on payrolls.

Mortgage Rates for 30-Year U.S. Loans Decline to Nine-Month Low (Source: Bloomberg)
Mortgage rates for 30-year loans in the U.S. declined to a nine-month low as concern grew that the nation’s economy is slowing. The average rate for a 30-year fixed loan dropped to 4.32 percent in the week ended today from 4.39 percent, according to Freddie Mac. The average 15-year fixed-loan rate fell to 3.5 percent, the lowest on record, from 3.54 percent, the McLean, Virginia-based mortgage-finance company said in a statement. Borrowing costs are declining as the U.S. economic recovery shows signs of faltering. Federal Reserve policy makers pledged Aug. 9 to keep interest rates at record lows through mid-2013 to bolster an economy that was growing “considerably slower” than they previously projected. The yield on the 10-year Treasury note, a guide for consumer loans including mortgage rates, hit an all-time low after the Fed’s announcement.

Trade Deficit of U.S. Unexpectedly Widens to $53.1 Billion on Export Slump (Source: Bloomberg)
The U.S. trade deficit unexpectedly increased in June to the highest level since October 2008 as a slump in exports exceeded a decline in shipments from overseas. The gap widened 4.4 percent to $53.1 billion from $50.8 billion in the prior month, Commerce Department figures showed today in Washington. The deficit exceeded all estimates in a Bloomberg News survey of economists in which the median was $48 billion. Exports declined the most since January 2009. U.S. shipments of capital equipment and industrial supplies fell in June, which may reflect the start of a cooling in the global economy. Some companies like Caterpillar Inc. (CAT) remain optimistic that demand for American-made goods will be sustained, helped in part by a weaker dollar.

U.S. Consumer Confidence Declines to Lowest Since May in Bloomberg Index (Source: Bloomberg)
Consumer confidence dropped last week to the lowest level since mid-May as American high earners, homeowners and those working full time turned more pessimistic. The Bloomberg Consumer Comfort Index was minus 49.1 in the period to Aug. 7, down from minus 47.6 the prior week and the second-lowest level in a year. The measure was less than five points away from the record low of minus 54 reached in November 2008, during the depths of the last recession. The biggest one-week plunge in stocks since 2008 followed by the downgrade of the country’s top credit rating may even be unnerving those who are fully employed and earning more than $100,000 a year. Rising concern among such households, which have the wherewithal to spend, poses a risk to a recovery that Federal Reserve policy makers said this week was already advancing “considerably slower” than projected.

U.S. Stocks Rally as Profits, Drop in Jobless Claims Offset Europe Woes (Source: Bloomberg)
U.S. stocks rallied, reversing yesterday’s drop for the Standard & Poor’s 500 Index, as a decline in jobless claims and better-than-estimated corporate earnings tempered concern Europe’s debt crisis is worsening. All 10 groups in the S&P 500 advanced at least 2.5 percent, with gains being led by financial, energy and raw-material companies. Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) rallied more than 6.7 percent, after plunging at least 5.5 percent yesterday. Cisco Systems Inc. (CSCO), the world’s largest maker of networking equipment, soared 16 percent, the most since May 2002, as profit and sales beat analysts’ estimates. The S&P 500 surged 4.6 percent to 1,172.64 at 4 p.m. in New York. The gauge had plunged as much as 18 percent from its 2011 high and yesterday traded at 12.3 times reported earnings, the lowest valuation since March 2009, according to data compiled by Bloomberg. The Dow Jones Industrial Average jumped 423.37 points, or 4 percent, to 11,143.31 today.

US STOCKS-Futures higher, Cisco gains in premarket
NEW YORK, Aug 11 (Reuters) - Equity index futures rose on Thursday after a sharp drop for stocks in the previous session as Wall Street headed for another session of volatility.
The increases came a day after worries about the French banking sector and a possible France credit downgrade sent the S&P 500 tumbling 4 percent and the Dow dropping 4.6 percent after fluctuating in a range of more than 400 points for a fifth straight day.

Treasuries Rise, Head for Weekly Gain, Before Consumer Confidence Report (Source: Bloomberg)
Treasuries rose, heading for a third weekly gain, before a private report that economists said will show U.S. consumer confidence dropped to levels not seen since the last recession. “The U.S. economy is weaker than expected,” said Kazuaki Oh’e, a debt salesman in Tokyo at CIBC World Markets Japan Inc., a unit of Canada’s fifth-largest lender. “There are still problems in Europe’s debt markets. Money is going into the least risky securities, and that means Treasuries.” Ten-year yields declined two basis points to 2.32 percent as of 9:56 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2.125 percent note maturing in August 2021 rose 5/32, or $1.56 per $1,000 face amount, to 98 1/4.

High-Frequency Firms Tripled Trading as S&P 500 Plunged 13%, Wedbush Says (Source: Bloomberg)
The stock market’s fastest electronic firms boosted trading threefold during the rout that erased $2.2 trillion from U.S. equity values, stepping up strategies that profit from volatility, according to one of their biggest brokers. The increase from Aug. 1 to Aug. 10 over their 2011 average surpassed the 80 percent rise in U.S. equity volume, showing that high-frequency traders made up more of the market during the plunge, Gary Wedbush, executive vice president and head of capital markets at Wedbush Securities, said in a telephone interview. Wedbush is the largest broker supplying bids and offers on the Nasdaq Stock Market, according to exchange data.
“We’re seeing a tremendous amount of high-frequency trading,” said Wedbush, whose company is one of the biggest execution and clearing brokers catering to high-speed firms. “Their business is a trading business, and volatility creates far more opportunities. Some of their algorithms and automated systems are trading two, three or five times as many shares as they would have in a more normalized volatility environment.”

Surging Yuan May Herald Stimulus for Global Recovery (Source: Bloomberg)
The yuan’s strongest gain in more than three years may herald a new stimulus for a flagging global recovery as Chinese importers get more firepower to buy up goods from slowing economies in the U.S. and Europe. The currency has increased 0.72 percent this week, more than any weekly increase since December 2007, breaking through 6.4 per dollar for the first time in 17 years. The central bank set the trading band 0.27 percent higher yesterday, the biggest increase since November.
Chinese officials are allowing the currency to appreciate as slowing growth and gyrations in global currencies and stock markets threaten to spark a new recession. Besides countering inflation and accelerating China’s shift to domestic-driven growth, a stronger yuan may also signal a willingness to help shore up slumping confidence in the global economy.

Japan June machinery orders jump, Q3 slowdown seen
TOKYO, Aug 11 (Reuters) - Japan's core machinery orders jumped more than expected in June, confirming a brisk pick-up from a slump caused by the March 11 earthquake, but manufacturers expect orders to slacken this quarter as the strong yen and cooling global economy bite.
The data, a leading indicator of capital expenditure, backs the Bank of Japan's forecast for the world's third-largest economy to resume a moderate recovery by autumn, even though a slowing U.S. economy and Europe's debt problems cloud the outlook.

Japanese Stocks Swing Between Gains, Losses as Investor Confidence Wanes (Source: Bloomberg)
Japanese stocks swung between gains and losses, with the benchmark Nikkei 225 (NKY) Stock Average headed for its third weekly loss, as concern Europe’s debt crisis is worsening overshadowed a report that fewer Americans filed jobless claims. Inpex Corp., Japan’s biggest energy explorer, rose 2.8 percent after crude oil prices gained. Canon Inc. (7751), the world’s biggest camera maker by market value, climbed 5.2 percent after announcing a share buyback. Toyota Motor Corp., the world’s biggest carmaker, slipped 0.6 percent after early rising as much as 1.3 percent. “Investors are losing confidence,” Naoki Fujiwara, who helps oversee $6 billion at Shinkin Asset Management Co. in Tokyo. “The recovery is looking weak and investors are concerned about the earnings outlook.”

South Korean Won Rebounds After U.S. Jobless Data Ease Concern on Recovery (Source: Bloomberg)
South Korea’s won rose, paring a weekly loss, as jobless claims in the U.S. dropped unexpectedly to the lowest level since April, easing concern that the world’s biggest economy is headed for a recession. Unemployment-benefit claims fell by 7,000 in the week ended Aug. 6 to 395,000, the Labor Department said yesterday. The median estimate of economists surveyed by Bloomberg was for an increase to 405,000. The MSCI Asia-Pacific Index of regional shares rose after the Standard & Poor’s 500 Index rallied 4.6 percent. “Stock-market movements in Europe and the U.S will have a positive effect on market sentiment,” said Han Sung Min, a foreign-exchange dealer at Busan Bank in Seoul. “Still, gains in the won may be limited as the market remains volatile.”

India’s Food Inflation Accelerates to Three-Month High (Source: Bloomberg)
India’s food inflation accelerated to a three-month high, maintaining pressure on the central bank to increase interest rates amid the risk of a global downturn. An index measuring wholesale prices of agricultural products including rice, wheat and lentils rose 9.9 percent in the week ended July 30 from a year earlier, the commerce ministry said in an e-mailed statement today. That’s the most since the week ended April 23. Reserve Bank of India Governor Duvvuri Subbarao, whose term this week was extended by two years, has to weigh the risks to economic growth as he tightens monetary policy to counter inflation. Stocks across Asia fell today on concern Europe will fail to contain its debt crisis, undermining the world economy.

EU Heads for Eurobond Clash Over Fiscal Union (Source: Bloomberg)
European ratification of a reinforced crisis-management fund will act as a prelude to an even more divisive debate: whether to put more money into the pool and use it to borrow on behalf of all 17 euro states. The question of “eurobonds” or “fiscal union” -- toxic language in northern countries like Germany -- will force itself onto the agenda once the retooled rescue fund is in place as soon as next month. The trigger will be a European Commission feasibility study of jointly sold eurobonds, seen by a growing number of economists as the only way of guaranteeing to the markets that countries such as Italy won’t go bust. Unprecedented bailouts by governments and the European Central Bank have so far failed to stamp out the crisis that is menacing the region’s core members.

Portugal Attempts to Seduce Asset Buyers at ‘Worst of Times’: Euro Credit (Source: Bloomberg)
Portugal may have to brave the most turbulent stock markets in three years as it seeks buyers for state-owned assets to meet the terms of its bailout package. Prime Minister Pedro Passos Coelho in the third quarter is seeking to sell holdings in power company EDP-Energias de Portugal SA and grid operator REN-Redes Energeticas Nacionais SA, which have a combined value of 2.17 billion euros. Under its 78 billion-euro ($112 billion) European Union-led rescue, Portugal agreed to speed asset sales through 2013. The EU and the International Monetary Fund are due to conclude their first review of Portugal’s program this week. Europe’s debt crisis and a faltering U.S. recovery and credit-rating cut are fueling market turmoil. Benchmark stock indexes saw their biggest slump since Dec. 2008 before the Federal Reserve said on Aug. 8 that it’s prepared to bolster the economy, sparking the biggest surge in the Standard & Poor’s 500 Index since March 2009.

Euro Extends Weekly Drop Before Industrial Production, Greece GDP Reports (Source: Bloomberg)
The euro extended a weekly drop against the dollar before a report forecast to show an expansion in industrial production in the region stalled in June. The 17-nation currency was set for its biggest weekly drop in month against the yen as traders bet the European Central Bank will cut its key interest rate and before Greece reports gross domestic product figures today. The Australian and New Zealand currencies weakened before data that may show confidence among U.S. consumers dropped to the lowest level in more than two years, damping demand for higher-yielding assets. “The market is now factoring in rate cuts from the ECB and the data will potentially start to be a factor as well, as you have seen some slowing,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “You continue to look at some of the weak data points out there and it suggests euro is going to come lower.”

FOREX-Dollar spikes vs yen but no intervention seen
LONDON, Aug 11 (Reuters) - The yen fell against the dollar on Thursday, after coming within a whisker of its all-time high following a record high fix in the Chinese yuan, although traders said there was no sign of Japanese authorities intervening in the currency markets.
"Without intervention the yen will appreciate further. Gravity will pull dollar/yen down as long as U.S. Treasury yields are so low, and China is a huge trading partner of Japan so yuan strength helps the Japanese currency."

FOREX-Euro falters on French bank woes, more losses seen
NEW YORK, Aug 11 (Reuters) - The euro declined against most major currencies on Wednesday and its outlook remained bleak on persistent global economic uncertainty and worries about euro zone banks with large exposure to peripheral debt.
"The outlook for the euro is not too good with the Dow Jones Industrials closing the way it has," said Alex Sinton, senior Dealer at ANZ Institutional in Auckland, New Zealand.