Asian shares lower, euro capped ahead of Europe summit
TOKYO, Oct 20 (Reuters) - Riskier assets across the board from stocks, metals and commodity currencies fell as investors grew wary about taking risks ahead of a key European leaders' summit on Sunday.
"The investors were eager to play with broader sentiment turning ... even though the EU isn't completely out of the woods," said a banker close to the deal.
France and Germany Split on Crisis Solution (Bloomberg)
A French-German split over Europe’s rescue strategy emerged as finance ministers prepare to meet in Brussels tomorrow under pressure to craft a solution to the region’s debt crisis. With a summit scheduled two days later, a disagreement over the European Central Bank’s role threatens to stymie progress on the banking and economic questions needed to deliver the comprehensive strategy demanded by global policy makers. Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of euro-area finance ministers, indicated an impromptu meeting of European leaders in Frankfurt last night failed to resolve differences. “We are still meeting,” he said as he departed.
French President Nicolas Sarkozy, whose wife was reportedly giving birth to his first daughter, jetted into Frankfurt to meet with officials as they attended an event to honor outgoing ECB President Jean-Claude Trichet. Sarkozy, German Chancellor Angela Merkel and International Monetary Fund Managing Director Christine Lagarde left the event at the Frankfurt Opera House without commenting.
Sales of Existing U.S. Homes Probably Fell as Lack of Jobs Hurt Confidence (Bloomberg)
Sales of existing U.S. homes probably fell in September, extending a pattern of gains and losses that shows the industry is being buffeted by a lack of jobs and confidence, economists said before a report today. Purchases declined 2.5 percent to a 4.91 million annual rate, according to the median of 77 economists surveyed by Bloomberg News. Jobless claims data from the Labor Department may show scant improvement in the pace of dismissals. Growing pessimism about the economy, unemployment above 9 percent and limited access to credit are keeping some Americans from taking advantage of near record-low mortgage rates. Foreclosures that are adding to the supply of homes for sale and driving down prices remain a hurdle for an industry that’s made little progress more than two years after the recession ended.
“Weakness in housing isn’t going to change in the short or medium term,” said Jennifer Lee, an economist at BMO Capital Markets in Toronto. “Talk of recession or slowdown, an uncertain job market and volatile financial markets are holding back activity.”
European Stocks Drop as Leaders Split (Bloomberg)
European stocks declined for the third time in four days as splits emerged among the region’s leaders on a plan to end the debt crisis. Asian shares fell and U.S. index futures were little changed. Actelion Ltd. (ATLN) sank the most since May as Europe’s largest biotechnology company said it expects drug sales to decrease next year. Schneider Electric SA (SU), the world’s biggest maker of low- and medium-voltage equipment, slid 7.5 percent after trimming its 2011 profit target. The benchmark Stoxx Europe 600 Index slid 1.1 percent to 234.2 at 8:57 a.m. in London. The measure has still rallied 9 percent from this year’s low on Sept. 22 amid speculation policy makers will find a resolution to Europe’s fiscal woes. The MSCI Asia Pacific Index tumbled 1.8 percent today and Standard & Poor’s 500 Index futures dropped less than 0.1 percent.
European Stocks Unattractive Until Crisis Solved, BlackRock Says (Bloomberg)
European policy makers must deliver on plans to resolve the debt crisis before the region’s equities become attractive investments, according to BlackRock Inc. (BLK), the world’s biggest money manager. “What we need to see is a resolution to the sovereign debt crisis in Europe and some details on how politicians plan to launch the bank rescue plan before we can judge if the market offers a meaningful buying opportunity,” Zehrid Osmani, the Edinburgh-based co-manager of BlackRock’s BGF European Fund, which has about $3 billion under management, said in a phone interview. “We do see pockets of value, but valuation alone is not going to stabilize the market.” The benchmark Stoxx Europe 600 Index has advanced for the past three weeks amid optimism euro-area policy makers will contain the region’s debt crisis. The gauge is trading at 10.1 times the estimated earnings of its companies, compared with the two-year low of 9.1 reached on Sept. 23, according to data compiled by Bloomberg.
U.S. underlying inflation pressures ease
WASHINGTON, Oct 19 (Reuters) - U.S. consumer prices outside food and energy rose at their slowest pace in six months in September, a sign broad inflation pressures remained contained.
The core Consumer Price Index edged up just 0.1 percent, a Labor Department report showed on Wednesday, as the cost of apparel and used vehicles fell, new car prices held steady and rental-related costs rose only modestly.
FOREX-Euro flat on doubts over EU delivering crisis plan
NEW YORK, Oct 19 (Reuters) - The euro was little changed against the dollar and yen due to nagging doubts that European leaders will take aggressive steps at a summit this weekend to resolve the region's debt crisis.
Officials dismissed a report in Britain's Guardian newspaper on Tuesday that France and Germany had agreed to a deal enlarging the European Financial Stability Facility (EFSF), while French President Nicolas Sarkozy said talks to boost the bailout fund have stalled. But investors still clung to the newspaper report as a reason to pare back bets against the euro.
Soy slides to 1-week low; corn, wheat extends losses
SINGAPORE, Oct 20 (Reuters) - U.S. soybean futures lost more ground, falling for a fourth straight day, while corn and wheat slid amid a selloff in the commodity markets triggered by mounting worries over the euro zone debt crisis.
"Euro zone crisis does remain a key concern for the financial markets and there are murmurs that the Chinese economy could be facing some headwind," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia in Sydney.
US solar panel makers seek duties against China
WASHINGTON, Oct 19 (Reuters) - American solar panel makers asked the U.S. government on Wednesday to impose stiff duties on
Chinese-made solar energy products that they said unfairly undercut prices and destroy thousands of American jobs.
The spat over solar panels, which comes even as the Obama administration faces criticism over its financial backing for bankrupt U.S. solar panel maker Solyndra, marks the latest irritant in relations between the world's two top economies.
US eastern coal ramps up exports: Kimmerle
--Chris Kimmerle is a Reuters market analyst. The views expressed are his own--
NEW YORK, Oct 19 (Reuters) - Rising exports of U.S. coal have helped Eastern coal producers enjoy a good year so far, even though shale gas has been displacing coal in the domestic power market.
On a year-to-date basis, US coal production is running 0.3 percent below last year's volume with Western production off 2.3 percent while Appalachian Basin output is up 1.2 percent and interior production up 3.8 percent.
Brent crude steady at $108, after Wednesday's 2.5 pct plunge
SINGAPORE, Oct 20 (Reuters) - Brent crude held steady at $108, after plunging 2.5 percent in the previous session on worries a failure to come up with a plan to prevent the euro zone's debt crisis from worsening may hurt oil demand growth.
"Investors don't want to take positions until there is a clear sign of a resolution of the debt crisis," said Tetsu Emori, a fund manager at Astmax Co Ltd in Tokyo. "Fundamentally there are factors to support prices, but the economic uncertainty is weighing on sentiment."
PetroChina says faces $7.8 bln in refining losses
BEIJING, Oct 20 (Reuters) - PetroChina , China's second-biggest refiner, said it will suffer refining losses of more than 50 billion yuan ($7.84 billion) this year if fuel prices remain at their current level for the rest of the year.
China's refiners have struggled as a result of a government pricing system which does not allow them to fully pass on their costs to consumers.
Aluminium financing deals could unravel -analysts
LONDON, Oct 19 (Reuters) - Financing deals that have tied up most aluminium inventories in warehouses could unravel as the global economic crisis deepens and banks look to unlock funds, said William Adams, an analyst at Basemetals.com, on Wednesday.
"There is a potential for further problems on the banking side of things, whether it's another banking crisis or a liquidity crisis," Adams said at a Sucden Financial press briefing.
Indonesia says UAE to invest in aluminium smelters
JAKARTA, Oct 19 (Reuters) - The United Arab Emirates (UAE) may make possibly the largest-ever investments in Indonesia's industrial sector by pumping $9.5 billion into aluminium smelter projects in Kalimantan, Indonesia's ambassador to the UAE said on Wednesday.
However, the United Arab Emirates' Ras al-Khaimah emirate, one of the investors mentioned, has refuted suggestions by the Indonesian official that it is to invest billions of dollars in an aluminium smelter in Southeast Asia's largest economy.
African Minerals to ship iron ore from end-October
LONDON, Oct 19 (Reuters) - African Minerals Ltd will start exporting iron ore cargoes to China and Europe from its Tonkolili mine in Sierra Leone at the end of this month, the London-listed metals explorer and developer said on Wednesday.
The company commenced mining iron ore in Sierra Leone in December 2010 and has since stockpiled material. Iron ore exports will start this month, and African Minerals expects to export about 1.2 million tonnes of iron ore during the current fourth quarter.
Iron Ore’s Worst Rout in 15 Months Seen Deepening as China’s Growth Slows
Iron ore’s biggest decline in 15 months may worsen as the economy slows in China, the largest importer, the European debt crisis persists and BHP Billiton Ltd. (BHP) and Rio Tinto Group increase production, analysts said. Ore for immediate delivery may drop to $140 a metric ton by year-end, according to Macquarie Group Ltd. analyst Bonnie Liu in Shanghai. That’s down 5.2 percent from $147.70 yesterday, data from The Steel Index Ltd. show. The price may fall to the mid to low $140s, said Australia & New Zealand Banking Group Ltd. China, the world’s biggest steelmaker, grew at the slowest pace since 2009 in the third quarter on weaker export demand and monetary tightening as steel prices dropped to a 10-month low and port ore inventories held near a record. Cheaper ore -- also sold through quarterly contracts -- may limit profit growth at Vale SA (VALE5), Rio Tinto and BHP Billiton, the largest producers.
Japan Sept crude steel output down 3.8 pct yr/yr
TOKYO, Oct 19 (Reuters) - Japan's crude steel output fell 3.8 percent in September from a year ago, after recording its first rise in six months the previous month, as the yen's strength hurt exports at the country's top two steelmakers, an industry body said on Wednesday.
September output, which is not seasonally adjusted, came to 8.88 million tonnes, the Japan Iron and Steel Federation said.
Shanghai copper drops by 6-pct limit on economic worries
SHANGHAI, Oct 20 (Reuters) - Shanghai copper hit its 6-percent limit drop while in London prices fell for a fourth straight session on mounting fears that an economic slowdown in the euro zone and United States would erode demand for industrial metals.
"Concerns over macroeconomic continue to override those of fundamentals for copper investors, with the euro zone crisis being the chief worry," said Eric Liu, a trader at CITIC Newedge in Shanghai.
Japan Sept copper cable shipments down 1.6 pct yr/yr
TOKYO, Oct 20 (Reuters) - Japanese copper wire and cable shipments fell 1.6 percent from a year earlier to an estimated 59,500 tonnes in September, an industry body said on Thursday.
Japanese appetite for copper, often seen as a gauge of economic activity and already weak in the wake of the global financial crisis, took a fresh beating after the March earthquake prompted user industries to reduce domestic production.
Japan Sept copper cable shipments down 1.6 pct yr/yr
TOKYO, Oct 20 (Reuters) - Japanese copper wire and cable shipments fell 1.6 percent from a year earlier to an estimated 59,500 tonnes in September, an industry body said on Thursday.
Japanese appetite for copper, often seen as a gauge of economic activity and already weak in the wake of the global financial crisis, took a fresh beating after the March earthquake prompted user industries to reduce domestic production.
METALS-Shanghai copper drops by 6-pct limit on economic worries
SHANGHAI, Oct 20 (Reuters) - Shanghai copper hit its 6-percent limit drop while in London prices fell for a fourth straight session on mounting fears that an economic slowdown in the euro zone and United States would erode demand for industrial metals.
Market optimism from earlier this week crumbled after French President Nicolas Sarkozy said on Wednesday that Paris and Berlin were at odds over how to increase the firepower of the region's bailout fund.
PRECIOUS-Gold tumbles as euro zone debt worries mount
SINGAPORE, Oct 20 (Reuters) - Gold prices fell about 2 percent, on course for a fourth consecutive session of losses, as investors were spooked by worries whether Europe will achieve a cure for its debt crisis.
Other precious metals also sold heavily, with platinum leading the decline with its biggest daily fall in more than three weeks.
Gold drops 1 pct as euro zone debt worries mount
SINGAPORE, Oct 20 (Reuters) - Gold prices fell 1 percent, on course for a fourth consecutive session of losses, as worries about whether Europe will achieve a cure for its debt crisis spooked investors.
"Every commodity is falling as market participants turn pessimistic over what is happening in Europe," said Hou Xinqiang, an analyst at Jinrui Futures in China.
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