Malaysian palm exports to suffer after Indonesia cuts taxes
KUALA LUMPUR, Sept 14 (Reuters) - Malaysia's palm oil exports for the rest of 2011 will be flat at best with a negative outlook for next year as refiners are at a price disadvantage after No.1 producer Indonesia slashed refined palm olein export taxes, a top industry official said. Palm Oil Refiners Association of Malaysia (PORAM) Chief Executive Mohammad Jaaffar Ahmad said Indonesia's tax change from Sept. 15 will cut production costs for Indonesian refiners, who could enjoy a price advantage of $72-$129 a tonne. While No.2 producer Malaysia does not tax its processed palm oil exports, its costs have risen due to tight crude palm oil supplies that it usually supplements with imports from Indonesia. With Indonesia more than halving its refined palm oil export taxes and keeping crude palm oil taxes virtually unchanged, more of the edible oil gets channeled to its plants, limiting supply for Malaysia and raising feedstock costs.
"The new Indonesian duty differential is a final wake up call for Malaysia to re-look at our export policy," Mohammad told Reuters in an interview on Tuesday. "We do not have the luxury of time to wait before we lose all our market share that we have built over the years," he added.
Moody's downgrades Credit Agricole, SocGen ratings by one notch
(Reuters) - Moody's Investors Service on Wednesday downgraded credit ratings on Credit Agricole SA (CASA) and Societe Generale SA by one notch, citing their exposure to the Greek economy. Moody's cut SocGen's debt and deposit ratings by one notch to Aa3 from Aa2. The outlook on the long-term debt ratings was negative. Moody's anticipated that the impact of its review on the Bank Financial Strength Rating (BFSR) would be limited to a one-notch downgrade. For Credit Agricole, Moody's downgraded its BFSR by one notch to C from C+, and cut its long-term debt and deposit ratings by one notch to Aa2 from Aa1.
Obama Approval Plummets on Doubts Over Jobs Plan (Bloomberg)
A majority of Americans don’t believe President Barack Obama’s $447 billion jobs plan will help lower the unemployment rate, skepticism he must overcome as he presses Congress for action and positions himself for re- election. The downbeat assessment of the American Jobs Act reflects a growing and broad sense of dissatisfaction with the president. Americans disapprove of his handling of the economy by 62 percent to 33 percent, a Bloomberg National Poll conducted Sept. 9-12 shows. The disapproval number represents a nine point increase from six months ago. The president’s job approval rating also stands at the lowest of his presidency -- 45 percent. That rating is driven down in part by a majority of independents, 53 percent, who disapprove of his performance.
Retail Sales in U.S. Probably Rose at Slower Pace as Employment Stagnated (Bloomberg)
Retail sales in the U.S. probably rose in August at the slowest pace in three months as a lack of jobs restrained shoppers, economists said before a report today. The 0.2 percent rise would follow a 0.5 percent increase in July, according to the median forecast of 83 economists surveyed by Bloomberg News. A separate report may show inflation at the wholesale level cooled last month. Chains like J.C. Penney Co. and Target Corp. (TGT) are among those saying a stagnant labor market that’s battered confidence is hurting sales. The dim outlook for household spending, which accounts for about 70 percent of the economy, means it will be harder for the two-year old economic recovery to gain speed.
“Consumers are not spending all that much,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “People are nervous about the economic recovery and they’re stretched for money.”
Fed set to give economy therapy, not shock treatment
(Reuters) - The Federal Reserve, facing rising global financial strains and recession fears, is poised to increase downward pressure on longer-term interest rates next week in a bid to accelerate a sputtering U.S. recovery. With one eye on escalating debt turmoil in Europe and another on a stubbornly high 9.1 percent U.S. unemployment rate, the Fed, whose policy panel meets next Tuesday and Wednesday, looks set to begin shifting the composition of its balance sheet to weight it more heavily with longer-term securities. Having taken short-term interest rates to near zero and bloated its balance sheet with bond purchases that topped $2 trillion, analysts say the U.S. central bank is looking for smaller-bore ways to increase its support, such as shifting its holdings away from shorter-term debt.
Geithner Takes Tougher Tone on Europe (Bloomberg)
Treasury Secretary Timothy F. Geithner will urge European governments to step up their crisis- fighting efforts amid Obama administration concerns that the region’s woes may hurt the U.S. economy. Geithner will press European Union finance ministers when he meets with them this week, a euro-area official said. The official spoke on condition of anonymity because preparations for the meeting, which takes place in Wroclaw, Poland, on Sept. 16 and 17, are confidential. It will be the first time Geithner has attended a session of Europe’s Economic and Financial Affairs Council, known as Ecofin. “The U.S. has always been discretely preoccupied and discretely present, and now it’s starting to be intensely preoccupied and intensely present,” said Nicolas Veron, a senior fellow at Bruegel, a Brussels-based economics research group.
China Must Avoid Loans to ‘Troubled’ Nations: Yu (Bloomberg)
China shouldn’t buy bonds issued by individual euro-area countries because their leaders and the European Central Bank are in disarray, said Yu Yongding, a former adviser to China’s central bank. “China has to wait until it can see a clearer road map by euro countries for solving sovereign-debt problems,” Yu, who is based in Beijing, said in e-mailed comments today. The nation is not a lender of last resort for “troubled countries,” he added. Brazilian Finance Minister Guido Mantega said yesterday that officials from Russia, India, China and South Africa will discuss next week ways to help Europe overcome its debt crisis. Italy is struggling to avoid a collapse in investor confidence and German Chancellor Angela Merkel has warned that an “uncontrolled insolvency of Greece” would roil markets.
China, U.S. raise alarm over euro debt crisis
(Reuters) - China and the United States urged Europe's leaders to prevent the euro area debt mess from spreading, underlining the international alarm over a crisis now threatening Italy, the zone's third-biggest economy. President Barack Obama urged "more effective coordinated fiscal policy" by the euro area states. Chinese Premier Wen Jiabao said Beijing was willing to help its biggest trading partner, but added that Europe must stop the crisis from growing. Investors are increasingly skeptical the debt debacle in the 17-nation currency area can be resolved. Credit markets are factoring in a 90 percent chance Greece will default on its debts and they demanded the highest risk premium on Italian five-year bonds at auction on Tuesday since the country joined the euro in 1999.
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