Asia shares, euro fall on debt worries, FOMC eyed
TOKYO, Nov 2 (Reuters) - Asian shares fell and the euro hovered near three-week lows against the dollar, as investors shed riskier assets after Greece's abrupt call for a referendum rekindled fears about the viability of a European debt deal reached just last week.
"Investors don't want to take risks, halting both inflows to and outflows from funds," said Xiao Minjie, chief economist at FuNNeX Asset Management in Tokyo. "Every deal is temporary and there is nothing definite, meaning there is no sense for a market to bottom out.
Asia Stocks Fall for a Third Day as Greek Vote Plan Upsets Bailout Package (Bloomberg)
Asian stocks fell, with the regional benchmark index heading for its biggest three-day slide in a month, as concern heightened that Europe’s bailout of Greece will unravel and a report showed U.S. manufacturing slowed. Macquarie Group Ltd., the Australian investment bank that gets 16 percent of revenue from Europe, dropped 2.8 percent on speculation a default by Greece will threaten bank earnings. Li & Fung Ltd. (494), a supplier of clothes and toys to retailers that counts the U.S. as its largest market, declined 1.5 in Hong Kong. Nomura Holdings Inc. (8604) sank 4.1 percent after Japan’s largest brokerage posted its first quarterly loss in more than two years. The MSCI Asia Pacific Index slipped 0.9 percent to 118.02 as of 3:57 p.m. in Tokyo, extending its three-day decline to 5.3 percent, the most since Oct. 4. The measure pared losses as Chinese infrastructure companies rallied on speculation the government may adopt measures to stimulate the economy.
Japanese Stocks Fall Most in 7 Weeks as Greek Vote Threatens Europe Rescue (Bloomberg)
Nov. 2 (Bloomberg) -- Japanese stocks fell for a third day, with the benchmark Nikkei 225 (NKY) Stock Average dropping the most in seven weeks, amid concern a Greek referendum will derail Europe’s rescue plan. Mitsubishi UFJ Financial Group Inc. (8306) led declines among Japanese lenders after European banks plunged yesterday. Nomura Holdings Inc. (8604) slumped 4.1 percent after the brokerage posted its first quarterly loss in more than two years. Mitsui O.S.K. Lines Ltd. plunged 5.8 percent after shipping rates fell for a fifth day and commodity prices slid. The Nikkei 225 dropped 2.2 percent to 8,640.42 at the 3 p.m. close of trading in Tokyo, the steepest drop since Sept. 12. The gauge has lost 4.5 percent in the last three trading days, erasing most of the gains made last week after Europe appeared to make a breakthrough on a deal to contain the debt crisis. The broader Topix index fell 2.1 percent to 738.58 today. Japan’s markets are closed tomorrow for a public holiday.
FOREX-Euro near 3-week low as Greece rattles investors
TOKYO, Nov 2 (Reuters) - The euro wallowed near a three-week low against the dollar on Wednesday, having suffered its worst two-day beating since May after Greece's shock call for a referendum sparked jitters about the euro zone debt deal and sent riskier assets tumbling.
As traders covered their shorts following the slide, the euro was steady at $1.3695 , leaving a seven-week peak of $1.4248 set last Thursday but a distant memory. That kept the dollar index near a three-week high of 77.400, close to Tuesday's peak of 77.676.
Fed Officials May Prepare Ground for Further Bond Purchases, Survey Shows (Bloomberg)
Federal Reserve officials are probably engineering a third round of large-scale asset purchases, while they are unlikely to announce a decision today, according to economists in a Bloomberg News survey. Sixty-nine percent of those surveyed say Chairman Ben S. Bernanke will embark on a third round of quantitative easing, or QE3, with a plurality of 36 percent predicting the move in the first quarter of next year, according to the poll of 42 economists from Oct. 26-31. “We are becoming increasingly persuaded that QE3 is coming, this time focused on purchases of mortgage-backed securities,” said Dana Saporta, U.S. economist at Credit Suisse in New York. “The best guess is at this meeting they’ll try to build some consensus around the idea and lay the groundwork for eventual purchases.”
Japan Faces $510 Billion Loss From Intervening to Curb Yen, JPMorgan Says (Bloomberg)
Japan’s government faces almost 40 trillion yen ($512 billion) in losses from intervening in the foreign-exchange markets to stem the yen’s advance, according to estimates by JPMorgan Chase & Co. Valuation losses on Japan’s foreign-exchange reserves minus yen liabilities totaled 35.3 trillion yen at the end of 2010, according to Finance Ministry data. The losses may swell further as the yen is projected to climb to 72 versus the dollar by September 2012, said Tohru Sasaki, head of Japan rates and foreign-exchange research at JPMorgan Chase in Tokyo. “It’s difficult to change the trend of the currency market” with intervention, said Sasaki, who used to work in the foreign-exchange division of the Bank of Japan, at a forum in Tokyo yesterday. “Even if the action can stem the currency’s gains temporarily, the yen will eventually appreciate.”
COLUMN-Oilfield jobs boom in U.S. despite recession: John Kemp
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, Nov 1 (Reuters) - Jobs related to oil and gas drilling account for more than one in eight of all net new nonfarm jobs in the United States since 2003, and almost one in five in the private sector, according to an analysis of data from the Bureau of Labor Statistics (BLS).
Oil and gas drilling is one of the fastest growing sectors of employment, as near-record prices spur a massive expansion in activity and employment.
China reshuffle could accelerate capital market reforms
SHANGHAI, Nov 1 (Reuters) - China's reshuffle of key financial regulators a year earlier than normal shows the country is trying to avoid policy paralysis that has plagued its leadership restructuring decisions in the past. The new watchdogs may now press on with much-needed reforms, especially to its stock markets.
With markets stagnant at home and a debt crises overseas, China cannot afford to have its reform calendar come to a standstill, as has often happened in the past in the months leading up to broader leadership reshuffles decided at the Communist Party's five-yearly congresses.
Commodity trading chill lifts, MF Global angst remains
CHICAGO/NEW YORK, Nov 1 (Reuters) - Commodity trading slowly returned to normal on Tuesday as MF Global resumed selling off client positions, although new revelations about missing money sent chills through the markets.
The higher trading volume across all the major U.S. futures markets after Monday's near paralysis belied the deeper angst and frustration among many traders whose collateral funds were still frozen and who now feared that the stricken broker may have failed to separate customer accounts from its own money.
CFTC faces "big problem" with MF Global funds-source
WASHINGTON, Nov 1 (Reuters) - The U.S. Commodity Futures Trading Commission is facing an unprecedented problem as it tries to account for bankrupt MF Global's funds, a source familiar with the CFTC told Reuters.
"We do have a big problem with a hole in the segregation, and that is a serious first-of-a-kind problem that we've ever seen here," the source said. "We're trying to figure out what MF Global did with it and where is it."
COLUMN-Countdown to corn's last hurrah: Gavin Maguire
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, Nov 1 (Reuters) - The corn market has clearly lacked direction for much of the past month as December futures prices treaded water within a tight trading band on either side of the $6.50-a-bushel level.
A lack of fresh fundamental developments coupled with general worries over EU debt contagion accounted for the low-key tone of grains market action of late, but the upcoming U.S. Department of Agriculture crop report could well provide the spark required to lift this market from its recent funk and potentially spur corn's final rally of 2011.
US corn, wheat fall on Greek debt woes; soy rebounds
SINGAPORE, Nov 2 (Reuters) - U.S. corn and wheat futures ticked lower, giving up previous session's gains as investors shunned riskier assets following renewed concerns over Greece's debt crisis and a slowdown in China's manufacturing.
"We have such a heavy macro-market influence, but agricultural commodities seem to be supported, particularly corn around these levels," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.
Indonesia cocoa exports fall for 8th month in Oct
JAKARTA, Nov 2 (Reuters) - Indonesia's cocoa bean exports from the main growing island of Sulawesi slumped 80 percent in October from a year ago, declining for an eighth consecutive month, industry data showed on Wednesday.
Indonesia, the world's third-largest cocoa producer after the Ivory Coast and Ghana, has suffered a bad harvest this year as wet weather damaged the main crop and triggered an outbreak of a deadly fungal disease.
Mexico's 2011 corn harvest to fall on bad weather
MEXICO CITY, Nov 1 (Reuters) - Mexico will produce less corn than expected this year after the crop was battered first by hard frosts in parts of the country and then by drought, the agriculture ministry said on Tuesday.
Mariano Ruiz, Mexico's deputy Agriculture Minister, said the harvest would fall to 20 million tonnes this year, less than the 23 million tonnes originally forecast. Next year the crop should recover, he said.
ADM hurt by high corn costs; ag services shine
Nov 1 (Reuters) - U.S. agribusiness Archer Daniels Midland Co boosted trading revenue last quarter, navigating choppy markets better than its rivals, but saw its profit slump on soaring corn prices and poor oilseed processing margins.
While volatile markets tripped up competitors Cargill and Bunge in the global grains trade, ADM reported its grain merchandising and handling profits more than doubled as exports from the drought-hit Black Sea region resumed after a year-long hiatus.
Brazil 2011/12 CS sugar output cut again - Unica
SAO PAULO, Nov 1 (Reuters) - Brazil's main cane-milling association cut its forecast for the current crop again on Tuesday and said next season would show "timid growth" as aging plants and bad weather exact tolls on output.
Sugar production from the main center-south cane region is now forecast at 30.8 million tonnes, down from 31.57 million tonnes projected in August, industry association Unica said in its latest forecast of the 2011/12 crop.
Brazil coffee crop muddles through erratic weather
BRASILIA, Nov 1 (Reuters) - Trees in Brazil's Minas Gerais coffee belt have shed some fruit due to their weakened state following months of dry weather but the crop looks secure for now, the country's biggest cooperative said on Tuesday.
The world's top coffee grower is in a delicate early phase of the 2011/12 season, with tiny coffee beans forming following a wave of flowering, but an extended dry season earlier this year caused leaf loss causing trees to abort some fruit for lack of energy now.
Brent crude falls on Greek debt worries, weak data
SINGAPORE, Nov 2 (Reuters) - Brent crude fell for a fourth day, the longest losing streak since September, on worries that renewed euro zone debt woes and weak economic data from China and the United States could hurt the global recovery and reduce oil demand.
"Greece's referendum plan has introduced a new level of uncertainty over the EU debt crisis," said Nader Naeimi, a strategist at AMP Capital Investors Ltd in Sydney.
India's NALCO issues 9,000 T aluminium ingots export tender
BHUBANESWAR, Nov 1 (Reuters) - India's state-run National Aluminium Co (NALCO) on Tuesday issued a tender to export 9,000 tonnes of aluminium ingots, a senior company official said.
The last date for submission of bids is Nov 9. The metal would be shipped in six batches of 1,500 tonnes each from November to April, Ansuman Das, commercial director at NALCO told Reuters.
Most non-Chinese rare earth projects doomed-consultant
LONDON, Nov 1 (Reuters) - The vast majority of non-Chinese rare earth metal (REM) ventures will fail due to a lack of expertise and high ore processing costs, says Jack Lifton, founder of the industry consultancy Technology Metals Research.
Firms were quick to launch new mines and restart mothballed operations as soon as China, which controls about 95 percent of the REM market, started slashing its export quota in 2009.
METALS-London copper rebounds after losses, Fed meeting eyed
SHANGHAI, Nov 2 (Reuters) - London copper edged back up on Wednesday after two days of losses, with investors cautious ahead of the U.S. Federal Reserve meeting later in the day.
Three-month copper on the London Metal Exchange rose 1.2 percent to $7,819.50 a tonne by 0427 GMT, after losing 3.3 percent in the previous session.
London copper rebounds after losses, Fed meeting eyed
SHANGHAI, Nov 2 (Reuters) - London copper edged back up after two days of losses, with investors cautious ahead of the U.S. Federal Reserve meeting later in the day.
"Base metal prices are in a consolidation stage at the moment and volatility is to be expected. In view of where prices have been, I don't think that today's movements are too significant, despite a divergence in the price directions on LME and ShFE," said Minmetals Futures analyst Zhang Ao.
PRECIOUS-Gold firms as Greek debt fear returns
SINGAPORE, Nov 2 (Reuters) - Gold prices firmed on Tuesday, riding on renewed safe-haven demand as fears about Greece's debt crisis returned after its government shocked the markets with a call for a referendum on a European Union aid deal.
Greece's cabinet decided early on Wednesday to back Prime Minister George Papandreou's proposal for a referendum on the EU deal, a government spokesman said.
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