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Tuesday, October 18, 2011
20111018 1812 FCPO EOD Daily Chart Study.
FCPO closed : 2835, changed : -41 points, volume : lower.
Bollinger band reading : side way range bound downside biased.
MACD Histrogram : turned lower, buyer lock in profit and reducing exposure.
Support : 2800, 2770, 2750, 2720 level.
Resistance : 2850, 2900, 2920, 2950 level.
Comment :
FCPO closed recorded loss again with lower volume traded while overnight soy oil closed recorded loss and currently trading weaker testing lower support level while crude oil price also head south recording loss.
Worry on slowing down China economy data (9.1% GDP, lowest quarter in 2 years) and resumed concern over dragging Europe debt crisis issue may affect lower demand resulted broad commodities prices to trade lower.
Daily chart formed a down doji bar candle positioned below middle Bollinger band after market opened gap down, soar higher tested above resistance level followed by second session downward movement tested near support level and recovered slightly to closed off the low of the day.
Chart study still suggesting a side way range bound downside biased market development testing support and resistance 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.
20111018 1741 FKLI EOD Daily Chart Study.
FKLI closed : 1430, changed : -40 points, volume : higher.
Bollinger band reading : pullback correction little upside biased.
MACD Histrogram : turned lower, buyer lock in profit and reduce exposure.
Support : 1425, 1420, 1400, 1395 level.
Resistance : 1440, 1445, 1458, 1470 level.
Comment :
FKLI closed recorded massive losses with increasing volume changed hand doing almost 10 points discount compare to cash market that also closed substantially lower. Overnight U.S. markets ended 247 points lower and today Asia markets traded severely lower while European markets opened and currently trading weaker.
Global markets reacted negatively to news on Germany leader announced that a quick end to the European crisis that investors are hoping for at a meeting of European leaders on Oct. 23 was unlikely, news on slowing down China GDP recorded at 9.1% the slowest in 2 years and U.K. inflation quicken more than expected.
Daily chart formed a wide range down bar candle closed in between upper and middle Bollinger band level after market opened lower and slide downwards all the way towards the end to closed near the low of the day.
Technical study suggesting that market is doing pullback correction within a upside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.
Bollinger band reading : pullback correction little upside biased.
MACD Histrogram : turned lower, buyer lock in profit and reduce exposure.
Support : 1425, 1420, 1400, 1395 level.
Resistance : 1440, 1445, 1458, 1470 level.
Comment :
FKLI closed recorded massive losses with increasing volume changed hand doing almost 10 points discount compare to cash market that also closed substantially lower. Overnight U.S. markets ended 247 points lower and today Asia markets traded severely lower while European markets opened and currently trading weaker.
Global markets reacted negatively to news on Germany leader announced that a quick end to the European crisis that investors are hoping for at a meeting of European leaders on Oct. 23 was unlikely, news on slowing down China GDP recorded at 9.1% the slowest in 2 years and U.K. inflation quicken more than expected.
Daily chart formed a wide range down bar candle closed in between upper and middle Bollinger band level after market opened lower and slide downwards all the way towards the end to closed near the low of the day.
Technical study suggesting that market is doing pullback correction within a upside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.
20111018 1703 Regional Markets EOD Daily Chart Study.
DJIA chart reading : side way range bound little upside biased.
Hang Seng chart reading : side way range bound little downside biased.
KLCI chart reading : pullback correction upside biased.
20111018 1611 Global Market & Commodities Related News.
U.K. Inflation Quickens More Than Forecast (Bloomberg)
U.K. inflation accelerated to match a record high in September, a surge Bank of England policy makers set aside as they shifted their focus to combating the threat of another recession. Consumer prices rose 5.2 percent from a year earlier, compared with 4.5 percent in August, the Office for National Statistics said in London today. That matched the record high reached in September 2008, which was the highest since comparable records began in 1997. The median estimate of 35 economists in a Bloomberg News survey was 4.9 percent. Bank of England Governor Mervyn King has said consumer-price growth will probably peak in September and slow “sharply” in 2012.
The Bank of England restarted asset purchases on Oct. 6 to protect Britain’s recovery from risks related to the euro-area debt crisis, and some officials have since signaled they may add to the emergency stimulus if needed. King will deliver a speech in Liverpool later today and minutes of the decision showing how policy makers voted this month will be published tomorrow.
Moody's warns France on possible negative outlook (Reuters)
Moody's warned on Monday it may slap a negative outlook on France's Aaa credit rating in the next three months if the costs for helping to bail out banks and other euro zone members stretch its budget too much. The warning comes as European Union leaders are discussing measures to protect the region's financial system from an expected Greek debt default. Those measures should include injection of capital into banks with exposure to Greek debt. France and Germany are the two strongest economies among the 17 euro zone members, and they are spearheading a plan to be presented at an EU summit on Sunday to help resolve the region's debt crisis. France's progress on crucial fiscal and economic reforms as well as potential adverse developments in financial markets or the economy will also be taken into account under the review, Moody's said.
A negative outlook would be a sign that Moody's could downgrade its rating on France in the next couple of years. Moody's had placed the United States's Aaa rating on negative outlook in August. "The deterioration in debt metrics and the potential for further contingent liabilities to emerge are exerting pressure on the stable outlook of the government's Aaa debt rating," Moody's said in a statement.
China’s Stocks Drop Most this Month After Economy Slows More than Expected (Bloomberg)
China’s stocks fell, sending the benchmark index to its biggest loss in almost a month, after the economy grew at the slowest pace in two years and Germany damped expectations for a fast resolution to Europe’s debt crisis. PetroChina Co. and Jiangxi Copper Co., the nation’s largest oil and copper producers, led declines by commodity producers after gross domestic product expanded less than analysts’ estimates. China Vanke Co., the biggest developer, slid 2 percent after home prices gained in fewer than half of 70 cities as sales eased. Sinohydro Group Ltd., the nation’s largest builder of hydroelectric dams, jumped 17 percent in China’s biggest initial public offering this year. “The economic growth number wasn’t too bad but the European crisis is still a hangover for the stock market,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “A lack of cash also caps gains in stocks.”
Hong Kong Stocks Retreat Most in a Month as China Growth Misses Estimates (Bloomberg)
Hong Kong’s Hang Seng Index (HSI) tumbled toward its biggest drop in four weeks after China reported the slowest economic growth since 2009 and Germany doused expectations of a quick fix to Europe’s debt crisis. Aluminum Corp. of China Ltd. fell 7.7 percent after commodities prices slid on concern global growth will slow. China Overseas Land & Investment Ltd. (688), a builder controlled by the nation’s construction ministry, dropped 9.5 percent, leading developers lower after lenders in cities across the country raised mortgage rates. Industrial & Commercial Bank of China (601398) Ltd., the world’s largest lender by market value, retreated 7 percent after mainland economic growth slowed.
The Hang Seng Index dropped 4.8 percent to 17,972.79 as of 3:36 p.m. local time, headed for its biggest decline since Sept. 22. All but two stocks fell on the 46-member gauge, which accelerated its drop as European shares sank. The Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong plunged 5.8 percent to 9,280.92.
European Stocks Fall on Debt Crisis, China (Bloomberg)
European stocks fell for a second day amid growing concern the region’s leaders are struggling to contain the debt crisis and as China’s economy grew at the slowest pace in two years. Asian shares and U.S. futures slid. The benchmark Stoxx Europe 600 Index lost 1.4 percent to 232.99 as of 8:11 a.m. in London. The gauge retreated 1 percent yesterday as a German government spokesman said that euro-area leaders will not provide a complete fix to the debt crisis at their next meeting. The gauge has slumped 20 percent since this year’s high on Feb. 17 amid concern Europe’s sovereign debt crisis will dampen economic growth. “The renewed prospect of failure is going to keep the euro zone story very much in focus,” said Cameron Peacock, a market analyst at IG Markets in Melbourne. “Even the occasional shock on the corporate agenda is unlikely to shift attention away from sovereign debt.”
The MSCI Asia Pacific Index retreated 2.5 percent today, while Standard & Poor’s 500 Index futures declined 0.1 percent before companies from Johnson & Johnson to Bank of America Corp. and Goldman Sachs Group Inc. report earnings.
German comments, China slowdown drag stocks lower
TOKYO, Oct 18 (Reuters) - Asian stocks and commodities fell after Germany's finance minister cautioned against hopes for a quick fix to Europe's debt problem, and news that China's economic growth slowed a tad in the third quarter added to concerns.
"The pace of moderation has so far been measured, and today's numbers reinforce our view that a soft landing is in sight," said Connie Tse, Economist at Forecast in Singapore.
Worries Persist for IBM (The Wall Street Journal)
Tech Bellwether's Profit Up 7%, but Contracts Disappoint
International Business Machines Corp.'s quarterly profit and sales rose amid growth in emerging markets, but the technology giant failed to dispel investors' concerns about the health of technology spending. IBM has been hampered by concerns over weak technology spending, particularly by governments. IBM, one of the first big tech companies to post quarter results, is seen as a barometer for investment in technology by governments and corporations. While IBM has benefited from a push toward higher-margin businesses, such as data-analysis services, worries have emerged that the weak global economy is having a negative impact on tech spending, particularly by governments.
Those worries were exacerbated Monday by a disappointing number of signed service contracts, an indication of future business, and a sequential decline in the company's backlog, which measures the current value of work under contract. IBM on Monday reported new service contracts worth $12.3 billion, up 12% from the previous year, but below $14.3 billion in the second quarter. Meanwhile, IBM's services backlog slipped to $137 billion from $144 billion in the second quarter.
FOREX-Euro off 1-mth high as crisis plan optimism ebbs
SINGAPORE, Oct 18 (Reuters) - The euro rose on Tuesday but remained below the previous day's one-month high, having taken a hit after Germany tempered hopes that European leaders would soon come up with a quick, comprehensive solution to the euro zone's debt crisis.
The euro regained some ground after a 1 percent drop the previous day, with market positioning and some technical signals suggesting that its recent short-covering rally may be running out of steam.
Soybeans, corn fall as harvest weighs
KUALA LUMPUR, Oct 18 (Reuters) - U.S. soybeans and corn fell, weighed down by a pickup in harvest and a gloomy economic outlook that raised concerns demand will slow.
U.S. soy futures for November delivery on the Chicago Board of Trade declined for a second straight day, dropping 0.4 percent to $12.47-3/4 a bushel by 0056 GMT after hitting a two-week high on Friday.
Weather points to record Paraguay soy crop-industry
ASUNCION, Oct 17 (Reuters) - Paraguay could produce a record soy crop of between 8.5 million and 9 million tonnes this season due to forecasts for more rains than expected over the next few months, an industry official said on Monday.
Farmers in the world's No. 4 soybean exporter had feared that dry weather related to the La Nina weather anomaly could limit 2011/12 soy production.
Mexico coffee exports rise in 10/11, Nicaragua down
MEXICO CITY, Oct 17 (Reuters) - Mexico exported 2.7 million 60-kg bags of coffee in the 2010/11 harvest, which drew to a close last month, 6 percent higher than the previous season; nearby Nicaragua saw exports fall in the same period.
Nicaragua exported 1.5 million bags of coffee in the October-September coffee growing year, down 9.5 percent from the 2009/10 harvest, the national export board said on Monday.
Rains hamper Brazil's cane harvest but should ease
SAO PAULO, Oct 17 (Reuters) - Persistent rains over the past few days have hindered cane harvesting in Brazil's main center-south cane producing region, but the weather should turn dry again soon, meteorologists Somar said on Monday.
More than 20 mills out of about 350 in the region have finished crushing for the 2011/12 season, about twice as many as a year ago, as the center-south posts its first drop in output in 11 years.
Drenched Brazil soy fields to dry out - Somar
SAO PAULO, Oct 17 (Reuters) - A wave of rains drenched Brazil's soy belt over the past several days, which will favor planting as skies clear this week, local forecasters Somar said on Monday.
After a slow start to rains over Brazil's main center-west soy producing states, showers pushed into the region over the past week with greater consistency, bringing ample moisture to some regions.
Vietnam raises 2011 rubber exports forecast
HO CHI MINH CITY, Oct 17 (Reuters) - Vietnam, the world's fourth largest natural rubber exporter, has raised its rubber export forecast for this year to 780,000-800,000 tonnes from a prior projection of 770,000 tonnes due to higher output, an industry official said on Monday.
"The output is rising as the planting area has been expanded," General Secretary Tran Thi Thuy Hoa of the Vietnam Rubber Association said.
Brent slips below $110 as China growth slows
SINGAPORE, Oct 18 (Reuters) - Brent crude futures fell below $110, after China's economy grew a shade below expectations in the third quarter, failing to dispel fears of slowing growth in the world's second largest oil consumer.
"I wouldn't call it a downside surprise, the numbers still indicate a soft landing, but not enough to lift commodity prices in the current environment," said Ric Spooner, chief market analyst with CMC Markets in Sydney.
Libya oil fields face guerrilla war threat
LONDON, Oct 17 (Reuters) - Pro-Gaddafi fighters may resort to hit-and-run guerilla attacks against Libyan politicians, foreign workers and oil installations in the remote southwestern Fezzan district if they are driven from their last bastions, risk consultants say.
A full-scale insurgency like the one that erupted in Iraq following the ouster of Saddam Hussein by U.S.-led forces is unlikely, but a determined guerrilla campaign could make life difficult for Libya's new rulers and foreign oil companies considering a return.
Copper falls after German comments, China GDP weighs
SHANGHAI, Oct 18 (Reuters) - Copper extended losses after German comments that the European Union summit would not produce a miracle cure for the euro zone's debt crisis, while China's economic growth data that came in a shade lower than expected also weighed on sentiment.
"I doubt that the price downturn today was due to pessimism over China's GDP. I will put it more to the German minister's comments last night. Copper is highly sensitive to negative news in the global economy and today's fall reflects this," said CIFCO Futures analyst Zhou Jie.
Freeport Indonesia mine halts copper output
JAKARTA, Oct 17 (Reuters) - Freeport-McMoRan Copper & Gold halted production at its Grasberg mine in Indonesia on Monday because of security fears and worker blockades, in the worst supply disruption since a strike began a month ago.
Freeport said the main pipe carrying copper concentrate to its port from Grasberg, the world's second-biggest copper mine, was cut earlier on Monday, helping copper prices to rise.
Azerbaijan to restart aluminium, alumina output
BAKU, Oct 17 (Reuters) - Azerbaijan has launched a new aluminium plant with an annual capacity of 50,000 tonnes and plans to restart production of alumina later this year at another plant, an official from the company, which manages both plants, said on Monday.
An old Soviet-era aluminium plant in the town of Sumgait was closed down in February 2009 due to the global financial crisis, dragged down by debt obligations it could not meet.
Aluminium stocks double at Rotterdam
LONDON, Oct 17 (Reuters) - Stocks of aluminium have almost doubled at the port of Rotterdam in the last three to six months, Jouke Schaap, director of breakbulk at the port, said on Monday.
"We have got 2.0-2.5 million tonnes of stocks of aluminium lying around the port right now, and that's never a good sign," he told Reuters on the sidelines of a Metal Bulletin steel conference, adding that compared with levels of around 1 million to 1.5 million tonnes usually.
Major market developments in September
LONDON, Oct 17 (Reuters) - Aluminium prices were pounded in September by growing concerns for global demand prospects and, while the market has steadied above those lows, some analysts expect it to fall back to levels where producers will start to curb output.
"I think metals prices generally will move up in the next week or so, but after that they'll fall again," said Fastmarkets analyst Will Adams, unconvinced that efforts to deal with the euro zone debt crisis will succeed.
China Sept steel output up 16.5 pct y/y - stats bureau
BEIJING, Oct 18 (Reuters) - China produced a total of 56.7 million tonnes of crude steel in September, up 16.5 percent against the same month of 2010, but down 3.5 percent compared with August, figures from the country's statistics bureau showed on Tuesday.
On a daily basis, output stood at 1.89 million tonnes, down slightly from 1.895 million tonnes in the previous month, according to Reuters calculations.
Chile 2011-2018 mining investment, output up-Sonami
SANTIAGO, Oct 17 (Reuters) - Chilean mining production is seen jumping between 2010 and 2018 as the world's top copper exporter boosts its output of the red metal, gold and iron, an industry group said on Monday.
Copper output is seen increasing from 5.4 million tonnes in 2010 to 8.0 million tonnes in 2018, as new projects and mine revamps help boost production hit by lower ore grades, labor strife and weather disruptions.
Major market developments in September
LONDON, Oct 17 (Reuters) - Nickel prices recorded heavy losses in September, but have since steadied helped by optimism that the euro zone's debt crisis will be dealt with successfully, but further weakness could prompt higher cost producers to act.
"I expect nickel to fall below $18,000 again and if prices stay there for any length of time then it would get some support from NPI production being cut," said Will Adams of Fastmarkets.
World Steel Dynamics downgrades output forecast
LONDON, Oct 17 (Reuters) - Forecaster and consultant World Steel Dynamics has revised its steel production forecast for 2011 and 2012 downwards, as the gloomier economic outlook is reducing manufacturers' optimism, its managing parters said on Monday.
WDS cut its global steel production forecast for the last quarter to 369 million tonnes, down 4.5 percent from its previous forecast at the beginning of the summer, and only 3.7 percent above the figure for the fourth quarter of 2010, Peter Marcus and Karlis Kirsis told a Metal Bulletin steel conference.
Major market developments in September
LONDON, Oct 17 (Reuters) - Zinc prices fell sharply in September and while the ensuing rebound has been muted by the prospect of at least another year of over-supply, the downside for the market may be limited.
Giles Lloyd of consultancy CRU Group said there would be some support from cuts in high-cost mine production in China.
Major market developments in September
LONDON, Oct 17 (Reuters) - Lead prices fell sharply in September as fears for global economic prospects grew, but they have since steadied above those lows, and the onset of the replacement battery season may lend the metal some level of immunity to wider developments.
Lead-acid batteries used in cars and other vehicles are much more prone to failing in extreme weather such as harsh winters, making the metal at least partially recession-proof.
METALS-Copper falls after German comments, China GDP weighs
SHANGHAI, Oct 18 (Reuters) - Copper extended losses on Tuesday after German comments that the European Union summit would not produce a miracle cure for the euro zone's debt crisis, while China's economic growth data that came in a shade lower than expected also weighed on sentiment.
Strikes at two Freeport-McMoran Copper & Gold mines, including one of the world's largest copper mines in Indonesia, are expected to lend some support to prices.
PRECIOUS-Gold steady after Germany warns about debt deal
SINGAPORE, Oct 18 (Reuters) - Gold prices held steady on Tuesday, with investors looking out for more clues from the euro zone on whether the bloc will come up with a concrete plan to solve the debt crisis, after Germany cautioned against any definitive solution.
Germany said on Monday that a summit of EU leaders next Sunday would not produce a miracle cure for the euro zone's sovereign debt crisis, a warning that pushed down markets after a rise in the past week on expectations of a breakthrough.
Gold steady after Germany warns about debt deal
SINGAPORE, Oct 18 (Reuters) - Gold prices held steady, with investors looking out for more clues from the euro zone on whether the bloc will come up with a concrete plan to solve the debt crisis, after Germany cautioned against any definitive solution.
"It will not be the end of problems there," said Mark Pervan, Global Head of Commodity Research of ANZ. "There will be residue risk in the market, and the market would have to long gold."
U.K. inflation accelerated to match a record high in September, a surge Bank of England policy makers set aside as they shifted their focus to combating the threat of another recession. Consumer prices rose 5.2 percent from a year earlier, compared with 4.5 percent in August, the Office for National Statistics said in London today. That matched the record high reached in September 2008, which was the highest since comparable records began in 1997. The median estimate of 35 economists in a Bloomberg News survey was 4.9 percent. Bank of England Governor Mervyn King has said consumer-price growth will probably peak in September and slow “sharply” in 2012.
The Bank of England restarted asset purchases on Oct. 6 to protect Britain’s recovery from risks related to the euro-area debt crisis, and some officials have since signaled they may add to the emergency stimulus if needed. King will deliver a speech in Liverpool later today and minutes of the decision showing how policy makers voted this month will be published tomorrow.
Moody's warns France on possible negative outlook (Reuters)
Moody's warned on Monday it may slap a negative outlook on France's Aaa credit rating in the next three months if the costs for helping to bail out banks and other euro zone members stretch its budget too much. The warning comes as European Union leaders are discussing measures to protect the region's financial system from an expected Greek debt default. Those measures should include injection of capital into banks with exposure to Greek debt. France and Germany are the two strongest economies among the 17 euro zone members, and they are spearheading a plan to be presented at an EU summit on Sunday to help resolve the region's debt crisis. France's progress on crucial fiscal and economic reforms as well as potential adverse developments in financial markets or the economy will also be taken into account under the review, Moody's said.
A negative outlook would be a sign that Moody's could downgrade its rating on France in the next couple of years. Moody's had placed the United States's Aaa rating on negative outlook in August. "The deterioration in debt metrics and the potential for further contingent liabilities to emerge are exerting pressure on the stable outlook of the government's Aaa debt rating," Moody's said in a statement.
China’s Stocks Drop Most this Month After Economy Slows More than Expected (Bloomberg)
China’s stocks fell, sending the benchmark index to its biggest loss in almost a month, after the economy grew at the slowest pace in two years and Germany damped expectations for a fast resolution to Europe’s debt crisis. PetroChina Co. and Jiangxi Copper Co., the nation’s largest oil and copper producers, led declines by commodity producers after gross domestic product expanded less than analysts’ estimates. China Vanke Co., the biggest developer, slid 2 percent after home prices gained in fewer than half of 70 cities as sales eased. Sinohydro Group Ltd., the nation’s largest builder of hydroelectric dams, jumped 17 percent in China’s biggest initial public offering this year. “The economic growth number wasn’t too bad but the European crisis is still a hangover for the stock market,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “A lack of cash also caps gains in stocks.”
Hong Kong Stocks Retreat Most in a Month as China Growth Misses Estimates (Bloomberg)
Hong Kong’s Hang Seng Index (HSI) tumbled toward its biggest drop in four weeks after China reported the slowest economic growth since 2009 and Germany doused expectations of a quick fix to Europe’s debt crisis. Aluminum Corp. of China Ltd. fell 7.7 percent after commodities prices slid on concern global growth will slow. China Overseas Land & Investment Ltd. (688), a builder controlled by the nation’s construction ministry, dropped 9.5 percent, leading developers lower after lenders in cities across the country raised mortgage rates. Industrial & Commercial Bank of China (601398) Ltd., the world’s largest lender by market value, retreated 7 percent after mainland economic growth slowed.
The Hang Seng Index dropped 4.8 percent to 17,972.79 as of 3:36 p.m. local time, headed for its biggest decline since Sept. 22. All but two stocks fell on the 46-member gauge, which accelerated its drop as European shares sank. The Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong plunged 5.8 percent to 9,280.92.
European Stocks Fall on Debt Crisis, China (Bloomberg)
European stocks fell for a second day amid growing concern the region’s leaders are struggling to contain the debt crisis and as China’s economy grew at the slowest pace in two years. Asian shares and U.S. futures slid. The benchmark Stoxx Europe 600 Index lost 1.4 percent to 232.99 as of 8:11 a.m. in London. The gauge retreated 1 percent yesterday as a German government spokesman said that euro-area leaders will not provide a complete fix to the debt crisis at their next meeting. The gauge has slumped 20 percent since this year’s high on Feb. 17 amid concern Europe’s sovereign debt crisis will dampen economic growth. “The renewed prospect of failure is going to keep the euro zone story very much in focus,” said Cameron Peacock, a market analyst at IG Markets in Melbourne. “Even the occasional shock on the corporate agenda is unlikely to shift attention away from sovereign debt.”
The MSCI Asia Pacific Index retreated 2.5 percent today, while Standard & Poor’s 500 Index futures declined 0.1 percent before companies from Johnson & Johnson to Bank of America Corp. and Goldman Sachs Group Inc. report earnings.
German comments, China slowdown drag stocks lower
TOKYO, Oct 18 (Reuters) - Asian stocks and commodities fell after Germany's finance minister cautioned against hopes for a quick fix to Europe's debt problem, and news that China's economic growth slowed a tad in the third quarter added to concerns.
"The pace of moderation has so far been measured, and today's numbers reinforce our view that a soft landing is in sight," said Connie Tse, Economist at Forecast in Singapore.
Worries Persist for IBM (The Wall Street Journal)
Tech Bellwether's Profit Up 7%, but Contracts Disappoint
International Business Machines Corp.'s quarterly profit and sales rose amid growth in emerging markets, but the technology giant failed to dispel investors' concerns about the health of technology spending. IBM has been hampered by concerns over weak technology spending, particularly by governments. IBM, one of the first big tech companies to post quarter results, is seen as a barometer for investment in technology by governments and corporations. While IBM has benefited from a push toward higher-margin businesses, such as data-analysis services, worries have emerged that the weak global economy is having a negative impact on tech spending, particularly by governments.
Those worries were exacerbated Monday by a disappointing number of signed service contracts, an indication of future business, and a sequential decline in the company's backlog, which measures the current value of work under contract. IBM on Monday reported new service contracts worth $12.3 billion, up 12% from the previous year, but below $14.3 billion in the second quarter. Meanwhile, IBM's services backlog slipped to $137 billion from $144 billion in the second quarter.
FOREX-Euro off 1-mth high as crisis plan optimism ebbs
SINGAPORE, Oct 18 (Reuters) - The euro rose on Tuesday but remained below the previous day's one-month high, having taken a hit after Germany tempered hopes that European leaders would soon come up with a quick, comprehensive solution to the euro zone's debt crisis.
The euro regained some ground after a 1 percent drop the previous day, with market positioning and some technical signals suggesting that its recent short-covering rally may be running out of steam.
Soybeans, corn fall as harvest weighs
KUALA LUMPUR, Oct 18 (Reuters) - U.S. soybeans and corn fell, weighed down by a pickup in harvest and a gloomy economic outlook that raised concerns demand will slow.
U.S. soy futures for November delivery on the Chicago Board of Trade declined for a second straight day, dropping 0.4 percent to $12.47-3/4 a bushel by 0056 GMT after hitting a two-week high on Friday.
Weather points to record Paraguay soy crop-industry
ASUNCION, Oct 17 (Reuters) - Paraguay could produce a record soy crop of between 8.5 million and 9 million tonnes this season due to forecasts for more rains than expected over the next few months, an industry official said on Monday.
Farmers in the world's No. 4 soybean exporter had feared that dry weather related to the La Nina weather anomaly could limit 2011/12 soy production.
Mexico coffee exports rise in 10/11, Nicaragua down
MEXICO CITY, Oct 17 (Reuters) - Mexico exported 2.7 million 60-kg bags of coffee in the 2010/11 harvest, which drew to a close last month, 6 percent higher than the previous season; nearby Nicaragua saw exports fall in the same period.
Nicaragua exported 1.5 million bags of coffee in the October-September coffee growing year, down 9.5 percent from the 2009/10 harvest, the national export board said on Monday.
Rains hamper Brazil's cane harvest but should ease
SAO PAULO, Oct 17 (Reuters) - Persistent rains over the past few days have hindered cane harvesting in Brazil's main center-south cane producing region, but the weather should turn dry again soon, meteorologists Somar said on Monday.
More than 20 mills out of about 350 in the region have finished crushing for the 2011/12 season, about twice as many as a year ago, as the center-south posts its first drop in output in 11 years.
Drenched Brazil soy fields to dry out - Somar
SAO PAULO, Oct 17 (Reuters) - A wave of rains drenched Brazil's soy belt over the past several days, which will favor planting as skies clear this week, local forecasters Somar said on Monday.
After a slow start to rains over Brazil's main center-west soy producing states, showers pushed into the region over the past week with greater consistency, bringing ample moisture to some regions.
Vietnam raises 2011 rubber exports forecast
HO CHI MINH CITY, Oct 17 (Reuters) - Vietnam, the world's fourth largest natural rubber exporter, has raised its rubber export forecast for this year to 780,000-800,000 tonnes from a prior projection of 770,000 tonnes due to higher output, an industry official said on Monday.
"The output is rising as the planting area has been expanded," General Secretary Tran Thi Thuy Hoa of the Vietnam Rubber Association said.
Brent slips below $110 as China growth slows
SINGAPORE, Oct 18 (Reuters) - Brent crude futures fell below $110, after China's economy grew a shade below expectations in the third quarter, failing to dispel fears of slowing growth in the world's second largest oil consumer.
"I wouldn't call it a downside surprise, the numbers still indicate a soft landing, but not enough to lift commodity prices in the current environment," said Ric Spooner, chief market analyst with CMC Markets in Sydney.
Libya oil fields face guerrilla war threat
LONDON, Oct 17 (Reuters) - Pro-Gaddafi fighters may resort to hit-and-run guerilla attacks against Libyan politicians, foreign workers and oil installations in the remote southwestern Fezzan district if they are driven from their last bastions, risk consultants say.
A full-scale insurgency like the one that erupted in Iraq following the ouster of Saddam Hussein by U.S.-led forces is unlikely, but a determined guerrilla campaign could make life difficult for Libya's new rulers and foreign oil companies considering a return.
Copper falls after German comments, China GDP weighs
SHANGHAI, Oct 18 (Reuters) - Copper extended losses after German comments that the European Union summit would not produce a miracle cure for the euro zone's debt crisis, while China's economic growth data that came in a shade lower than expected also weighed on sentiment.
"I doubt that the price downturn today was due to pessimism over China's GDP. I will put it more to the German minister's comments last night. Copper is highly sensitive to negative news in the global economy and today's fall reflects this," said CIFCO Futures analyst Zhou Jie.
Freeport Indonesia mine halts copper output
JAKARTA, Oct 17 (Reuters) - Freeport-McMoRan Copper & Gold halted production at its Grasberg mine in Indonesia on Monday because of security fears and worker blockades, in the worst supply disruption since a strike began a month ago.
Freeport said the main pipe carrying copper concentrate to its port from Grasberg, the world's second-biggest copper mine, was cut earlier on Monday, helping copper prices to rise.
Azerbaijan to restart aluminium, alumina output
BAKU, Oct 17 (Reuters) - Azerbaijan has launched a new aluminium plant with an annual capacity of 50,000 tonnes and plans to restart production of alumina later this year at another plant, an official from the company, which manages both plants, said on Monday.
An old Soviet-era aluminium plant in the town of Sumgait was closed down in February 2009 due to the global financial crisis, dragged down by debt obligations it could not meet.
Aluminium stocks double at Rotterdam
LONDON, Oct 17 (Reuters) - Stocks of aluminium have almost doubled at the port of Rotterdam in the last three to six months, Jouke Schaap, director of breakbulk at the port, said on Monday.
"We have got 2.0-2.5 million tonnes of stocks of aluminium lying around the port right now, and that's never a good sign," he told Reuters on the sidelines of a Metal Bulletin steel conference, adding that compared with levels of around 1 million to 1.5 million tonnes usually.
Major market developments in September
LONDON, Oct 17 (Reuters) - Aluminium prices were pounded in September by growing concerns for global demand prospects and, while the market has steadied above those lows, some analysts expect it to fall back to levels where producers will start to curb output.
"I think metals prices generally will move up in the next week or so, but after that they'll fall again," said Fastmarkets analyst Will Adams, unconvinced that efforts to deal with the euro zone debt crisis will succeed.
China Sept steel output up 16.5 pct y/y - stats bureau
BEIJING, Oct 18 (Reuters) - China produced a total of 56.7 million tonnes of crude steel in September, up 16.5 percent against the same month of 2010, but down 3.5 percent compared with August, figures from the country's statistics bureau showed on Tuesday.
On a daily basis, output stood at 1.89 million tonnes, down slightly from 1.895 million tonnes in the previous month, according to Reuters calculations.
Chile 2011-2018 mining investment, output up-Sonami
SANTIAGO, Oct 17 (Reuters) - Chilean mining production is seen jumping between 2010 and 2018 as the world's top copper exporter boosts its output of the red metal, gold and iron, an industry group said on Monday.
Copper output is seen increasing from 5.4 million tonnes in 2010 to 8.0 million tonnes in 2018, as new projects and mine revamps help boost production hit by lower ore grades, labor strife and weather disruptions.
Major market developments in September
LONDON, Oct 17 (Reuters) - Nickel prices recorded heavy losses in September, but have since steadied helped by optimism that the euro zone's debt crisis will be dealt with successfully, but further weakness could prompt higher cost producers to act.
"I expect nickel to fall below $18,000 again and if prices stay there for any length of time then it would get some support from NPI production being cut," said Will Adams of Fastmarkets.
World Steel Dynamics downgrades output forecast
LONDON, Oct 17 (Reuters) - Forecaster and consultant World Steel Dynamics has revised its steel production forecast for 2011 and 2012 downwards, as the gloomier economic outlook is reducing manufacturers' optimism, its managing parters said on Monday.
WDS cut its global steel production forecast for the last quarter to 369 million tonnes, down 4.5 percent from its previous forecast at the beginning of the summer, and only 3.7 percent above the figure for the fourth quarter of 2010, Peter Marcus and Karlis Kirsis told a Metal Bulletin steel conference.
Major market developments in September
LONDON, Oct 17 (Reuters) - Zinc prices fell sharply in September and while the ensuing rebound has been muted by the prospect of at least another year of over-supply, the downside for the market may be limited.
Giles Lloyd of consultancy CRU Group said there would be some support from cuts in high-cost mine production in China.
Major market developments in September
LONDON, Oct 17 (Reuters) - Lead prices fell sharply in September as fears for global economic prospects grew, but they have since steadied above those lows, and the onset of the replacement battery season may lend the metal some level of immunity to wider developments.
Lead-acid batteries used in cars and other vehicles are much more prone to failing in extreme weather such as harsh winters, making the metal at least partially recession-proof.
METALS-Copper falls after German comments, China GDP weighs
SHANGHAI, Oct 18 (Reuters) - Copper extended losses on Tuesday after German comments that the European Union summit would not produce a miracle cure for the euro zone's debt crisis, while China's economic growth data that came in a shade lower than expected also weighed on sentiment.
Strikes at two Freeport-McMoran Copper & Gold mines, including one of the world's largest copper mines in Indonesia, are expected to lend some support to prices.
PRECIOUS-Gold steady after Germany warns about debt deal
SINGAPORE, Oct 18 (Reuters) - Gold prices held steady on Tuesday, with investors looking out for more clues from the euro zone on whether the bloc will come up with a concrete plan to solve the debt crisis, after Germany cautioned against any definitive solution.
Germany said on Monday that a summit of EU leaders next Sunday would not produce a miracle cure for the euro zone's sovereign debt crisis, a warning that pushed down markets after a rise in the past week on expectations of a breakthrough.
Gold steady after Germany warns about debt deal
SINGAPORE, Oct 18 (Reuters) - Gold prices held steady, with investors looking out for more clues from the euro zone on whether the bloc will come up with a concrete plan to solve the debt crisis, after Germany cautioned against any definitive solution.
"It will not be the end of problems there," said Mark Pervan, Global Head of Commodity Research of ANZ. "There will be residue risk in the market, and the market would have to long gold."
20111018 1129 Global Market & Commodities Related News.
Asian Stocks Drop Most in Two Weeks as Germany Dashes Europe-Debt Optimism (Bloomberg)
Asian stocks fell, driving the region’s benchmark index toward its biggest drop in two weeks, as Germany damped expectations for a fast resolution to Europe’s debt crisis, souring the outlook for Asian exporters and banks. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, slipped 3.4 percent in Sydney after commodity prices slumped. Sony Corp., which gets about 70 percent of its revenue overseas, dropped 1.7 percent in Tokyo. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, lost 1.8 percent after U.S. banks Citigroup Inc. and Wells Fargo & Co. said quarterly revenue dropped.
“The implied lack of urgency by European policy makers will create additional uncertainty regarding a robust, all- encompassing solution to Europe’s growing list of problems,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Increased uncertainty will feed through to investor nervousness and is likely to see risk reduced by investors as they move to lock in gains from the past couple of weeks.”
China Economy Grows at Slowest Pace in 2 Years (Bloomberg)
China’s economy grew 9.1 percent in the third quarter from a year earlier, the slowest pace since 2009, on monetary tightening and weaker export demand. The gain was less than the median estimate of 9.3 percent in a Bloomberg News survey of 22 economists and follows a 9.5 percent gain in the previous three months. The statistics bureau released the data in Beijing today. Premier Wen Jiabao may need to weigh more measures to support growth after the State Council this month announced aid for small businesses. Asian stocks slid today, adding to global declines after German Chancellor Angela Merkel’s office knocked down what it called “dreams” that an Oct. 23 summit will be the last word in taming the euro region’s debt crisis. “While a shift to a looser monetary policy isn’t warranted yet, some sector-specific easing is needed to ease the financing difficulties facing smaller businesses,” Tim Condon, Singapore- based head of Asian research at ING Groep NV (INGA), said before the report.
Asian policy makers face a “delicate balancing act” with inflation remaining elevated while Europe’s sovereign-debt crisis threatens growth, the International Monetary Fund said last week.
Oil falls as Germany dampens hope for debt plan
NEW YORK, Oct 17 (Reuters) - Brent crude prices fell nearly 2 percent in light trading volume on Monday after Germany's finance minister said an upcoming European Union summit would not produce a definitive resolution to the euro zone debt crisis.
"Germany's comments pulled oil back and the euro fell, strengthening the dollar," said Phil Flynn, analyst at PFGBest Research in Chicago.
COMMODITIES-Warnings against euro debt plan hit oil, metals
NEW YORK, Oct 17 (Reuters) - Nearly all commodity markets, from oil to industrial metals and even coffee, closed lower on Monday after Germany's finance minister warned against expecting a "definitive solution" to Europe's massive debt problems from the coming weekend summit.
"It's a dose of reality. The market got ahead of itself," said Alan Ruskin, global head of G10 FX strategy at Deutsche Bank in New York, speaking of the euro.
GLOBAL MARKETS-Stocks, euro fall on German finmin comments
NEW YORK, Oct 17 (Reuters) - U.S. and European stocks fell on Monday and the euro slipped, after Germany dashed hopes that the euro zone debt crisis would be resolved at next Sunday's summit of European leaders.
"I am absolutely sure that we will get a pretty robust package in 10 days' time," said Milligan, speaking in New York. "But I think we will not get as much detail as we would like to see. ... It's going to take some months before a number of the issues are sorted out."
Natural gas ends down despite chilly forecast
NEW YORK, Oct 17 (Reuters) - U.S. natural gas futures ended lower on Monday in fairly modest trade, as pressure from growing supplies and technical selling after last week's strong gains offset support from colder forecasts for the next two weeks.
"We pulled back a little after last week's rally, but we could be prone to more rally attempts ahead of winter. There is some cooler weather coming," a Chicago-based analyst said.
Euro Coal-Prices drift lower, track fall in oil
LONDON, Oct 17 (Reuters) - Prompt physical coal prices weakened on Monday as slower business and a weaker oil market took their toll.
"It has been sold down today together with the wider energy complex," a European coal trader said. "There's not been much interest."
Asian stocks fell, driving the region’s benchmark index toward its biggest drop in two weeks, as Germany damped expectations for a fast resolution to Europe’s debt crisis, souring the outlook for Asian exporters and banks. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, slipped 3.4 percent in Sydney after commodity prices slumped. Sony Corp., which gets about 70 percent of its revenue overseas, dropped 1.7 percent in Tokyo. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, lost 1.8 percent after U.S. banks Citigroup Inc. and Wells Fargo & Co. said quarterly revenue dropped.
“The implied lack of urgency by European policy makers will create additional uncertainty regarding a robust, all- encompassing solution to Europe’s growing list of problems,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Increased uncertainty will feed through to investor nervousness and is likely to see risk reduced by investors as they move to lock in gains from the past couple of weeks.”
China Economy Grows at Slowest Pace in 2 Years (Bloomberg)
China’s economy grew 9.1 percent in the third quarter from a year earlier, the slowest pace since 2009, on monetary tightening and weaker export demand. The gain was less than the median estimate of 9.3 percent in a Bloomberg News survey of 22 economists and follows a 9.5 percent gain in the previous three months. The statistics bureau released the data in Beijing today. Premier Wen Jiabao may need to weigh more measures to support growth after the State Council this month announced aid for small businesses. Asian stocks slid today, adding to global declines after German Chancellor Angela Merkel’s office knocked down what it called “dreams” that an Oct. 23 summit will be the last word in taming the euro region’s debt crisis. “While a shift to a looser monetary policy isn’t warranted yet, some sector-specific easing is needed to ease the financing difficulties facing smaller businesses,” Tim Condon, Singapore- based head of Asian research at ING Groep NV (INGA), said before the report.
Asian policy makers face a “delicate balancing act” with inflation remaining elevated while Europe’s sovereign-debt crisis threatens growth, the International Monetary Fund said last week.
Oil falls as Germany dampens hope for debt plan
NEW YORK, Oct 17 (Reuters) - Brent crude prices fell nearly 2 percent in light trading volume on Monday after Germany's finance minister said an upcoming European Union summit would not produce a definitive resolution to the euro zone debt crisis.
"Germany's comments pulled oil back and the euro fell, strengthening the dollar," said Phil Flynn, analyst at PFGBest Research in Chicago.
COMMODITIES-Warnings against euro debt plan hit oil, metals
NEW YORK, Oct 17 (Reuters) - Nearly all commodity markets, from oil to industrial metals and even coffee, closed lower on Monday after Germany's finance minister warned against expecting a "definitive solution" to Europe's massive debt problems from the coming weekend summit.
"It's a dose of reality. The market got ahead of itself," said Alan Ruskin, global head of G10 FX strategy at Deutsche Bank in New York, speaking of the euro.
GLOBAL MARKETS-Stocks, euro fall on German finmin comments
NEW YORK, Oct 17 (Reuters) - U.S. and European stocks fell on Monday and the euro slipped, after Germany dashed hopes that the euro zone debt crisis would be resolved at next Sunday's summit of European leaders.
"I am absolutely sure that we will get a pretty robust package in 10 days' time," said Milligan, speaking in New York. "But I think we will not get as much detail as we would like to see. ... It's going to take some months before a number of the issues are sorted out."
Natural gas ends down despite chilly forecast
NEW YORK, Oct 17 (Reuters) - U.S. natural gas futures ended lower on Monday in fairly modest trade, as pressure from growing supplies and technical selling after last week's strong gains offset support from colder forecasts for the next two weeks.
"We pulled back a little after last week's rally, but we could be prone to more rally attempts ahead of winter. There is some cooler weather coming," a Chicago-based analyst said.
Euro Coal-Prices drift lower, track fall in oil
LONDON, Oct 17 (Reuters) - Prompt physical coal prices weakened on Monday as slower business and a weaker oil market took their toll.
"It has been sold down today together with the wider energy complex," a European coal trader said. "There's not been much interest."
20111018 1042 Local & Global Economic Related News.
Malaysia doesn't need a "Plan B" to stimulate the economy even if the global economic climate worsens, said Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop. The current plan that has been outlined by the government, including the GTP, ETP and political transformation were done in such a way that they were adjustable even in the worst case scenario, he noted. The ETP can be adjusted accordingly to cushion any potential external headwinds due to the economic uncertainties in Europe and the US. Even with the challenging global economic situation, the 5% growth targeted by the nation was achievable as the economy has been managed quite well, he added. (Bernama)
Malaysia attracted RM35.8bn in investments, foreign and domestic, in 585 approved manufacturing projects in the first eight months of this year. Deputy Minister of International Trade and Industry, Datuk Mukhriz Mahathir Mohamad, said of the total, RM19.4bn (54.2%) was foreign direct investments (FDIs) and RM16.4bn (45.8%) domestic direct investments (DDIs). The five key sectors which attracted the FDIs were electronics and electrical products, basic metal products, chemicals and chemical products, non-metallic mineral products and food manufacturing. The sectors which attracted DDIs were transport equipment, petrolium products, including petrochemicals, basic metal products, fabricated metallic products and electronic and electrical products. (Bernama)
Thailand: Thai floods adding to European risks may pause rates in boost to Yingluck
Thailand may pause tomorrow after seven interest-rate increases as the worst floods in five decades and weakening global growth threaten to curb output and weaken demand for exports. The Bank of Thailand will keep its benchmark one-day bond repurchase rate at 3.5%, according to 16 of 17 economists surveyed by Bloomberg News ahead of a decision due at 2:30 p.m. in Bangkok tomorrow. One predicted a 25-basis point cut. The country has raised borrowing costs more than any other major Asian economy after India, where there have been 10 rate increases since the beginning of July 2010. Floods that have killed more than 300 people, shutting factories and wiping out crops, may convince the nation‟s central bank to heed calls from Prime Minister Yingluck Shinawatra‟s government to put growth ahead of efforts to cool inflation. (Bloomberg)
EU: Germany shoots down ‘dreams’ of swift fix
Germany said European Union leaders won‟t provide the complete fix to the euro-area debt crisis that global policy makers are pushing for at a summit on 23 Oct. German Chancellor Angela Merkel has made it clear that “dreams that are taking hold again now that with this package everything will be solved and everything will be over on Monday won‟t be able to be fulfilled,” Steffen Seibert, Merkel‟s chief spokesman, said at a briefing in Berlin yesterday. The search for an end to the crisis “surely extends well into next year.” Group of 20 finance ministers and central bankers concluded weekend talks in Paris endorsing parts of Europe‟s emerging plan to avoid a Greek default, bolster banks and curb contagion. Providing a week to act, they set the 23 Oct meeting of European leaders in Brussels as the deadline. (Bloomberg)
US: Central banks sell most US bonds since 2007
International central banks are selling the most Treasuries since the credit crisis began just as institutional investors load up on U.S. government bonds. The Federal Reserve said its holdings of U.S. government debt on behalf of central bankers and institutional investors outside America has plunged USD76.5bn in the last seven weeks, the most since August 2007. At the same time, bond mutual funds are adding Treasuries, banks have increased their holdings 45% in the past five years and the Fed has added USD656bn to its balance sheet this year. Rather than a referendum on the US‟ USD1.3trn budget deficit and rising debt burden, sales by foreign policy makers may have more to do with supporting their currencies after the Brazilian real weakened 11% and Taiwan‟s dollar lost 4.4% against the US dollar since June. (Bloomberg)
US: Manufacturing in New York Fed region shrinks more than economists forecast
Manufacturing in the New York region contracted in October at a faster pace than forecast, reflecting a lack of confidence in the US recovery that failed to be confirmed by measures of orders and sales. The Federal Reserve Bank of New York‟s general economic index rose to minus 8.5 from minus 8.8 in September. Economists projected an improvement to minus 4, based on the median of 53 forecasts in a Bloomberg News survey. Readings less than zero signal companies in the so-called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut, are cutting back. The central bank‟s measures of bookings and shipments climbed to the highest levels in five months, indicating the industry at the heart of the economic recovery may be regaining momentum. (Bloomberg)
US: Industrial production in US increases 0.2% on demand for cars, computers
Industrial production in the US advanced in September on growing demand for automobiles and computers after stalling the prior month, a sign manufacturers are contributing to growth. Output at factories, mines and utilities increased 0.2%, in line with the median estimate in a Bloomberg News survey, after being little changed in August, figures from the Federal Reserve showed yesterday. Factory production, which makes up 75% of the total, climbed for a third month. (Bloomberg)
US stocks fall as Germany damps optimism on Europe debt plan
Global stocks and the euro fell as Germany damped expectations for a fast resolution to Europe‟s debt crisis and a report showed New York-area manufacturing shrank more than forecast. The S&P 500 Index slid 1.9% to
1,200.86 while the Dow Jones Industrial Average fell 2.1% to 11,397.00. The MSCI All-Country World Index slipped 1.2% following last week‟s 5.4% rally. Steffen Seibert, German Chancellor Angela Merkel‟s chief spokesman, said European Union leaders won‟t provide the quick ending to the debt crisis that global policy makers are pushing for at a 23 Oct summit. (Bloomberg)
Japan: The government downgraded its assessment of the economy for the first time since April as the strengthening yen and slowing global growth weighed on the prospects for an export-driven recovery. "The Japanese economy is still picking up although the pace is decelerating," the Cabinet Office said in its monthly report. (Source: Bloomberg)
Philippine: Remittances increase may help support economy. Remittances sent home by Philippine citizens abroad increased at a faster pace in August, aiding domestic consumption even as a weakening global economy hurts the Southeast Asian nation's exports. The funds increased 11.1% YoY to USD 1.67b, the central bank said in a statement in Manila. Remittances grew 6.1% YoY in July, according to previously reported data. The gain was the fastest since 2009, according to Bloomberg data. (Source: Bloomberg)
Malaysia attracted RM35.8bn in investments, foreign and domestic, in 585 approved manufacturing projects in the first eight months of this year. Deputy Minister of International Trade and Industry, Datuk Mukhriz Mahathir Mohamad, said of the total, RM19.4bn (54.2%) was foreign direct investments (FDIs) and RM16.4bn (45.8%) domestic direct investments (DDIs). The five key sectors which attracted the FDIs were electronics and electrical products, basic metal products, chemicals and chemical products, non-metallic mineral products and food manufacturing. The sectors which attracted DDIs were transport equipment, petrolium products, including petrochemicals, basic metal products, fabricated metallic products and electronic and electrical products. (Bernama)
Thailand: Thai floods adding to European risks may pause rates in boost to Yingluck
Thailand may pause tomorrow after seven interest-rate increases as the worst floods in five decades and weakening global growth threaten to curb output and weaken demand for exports. The Bank of Thailand will keep its benchmark one-day bond repurchase rate at 3.5%, according to 16 of 17 economists surveyed by Bloomberg News ahead of a decision due at 2:30 p.m. in Bangkok tomorrow. One predicted a 25-basis point cut. The country has raised borrowing costs more than any other major Asian economy after India, where there have been 10 rate increases since the beginning of July 2010. Floods that have killed more than 300 people, shutting factories and wiping out crops, may convince the nation‟s central bank to heed calls from Prime Minister Yingluck Shinawatra‟s government to put growth ahead of efforts to cool inflation. (Bloomberg)
EU: Germany shoots down ‘dreams’ of swift fix
Germany said European Union leaders won‟t provide the complete fix to the euro-area debt crisis that global policy makers are pushing for at a summit on 23 Oct. German Chancellor Angela Merkel has made it clear that “dreams that are taking hold again now that with this package everything will be solved and everything will be over on Monday won‟t be able to be fulfilled,” Steffen Seibert, Merkel‟s chief spokesman, said at a briefing in Berlin yesterday. The search for an end to the crisis “surely extends well into next year.” Group of 20 finance ministers and central bankers concluded weekend talks in Paris endorsing parts of Europe‟s emerging plan to avoid a Greek default, bolster banks and curb contagion. Providing a week to act, they set the 23 Oct meeting of European leaders in Brussels as the deadline. (Bloomberg)
US: Central banks sell most US bonds since 2007
International central banks are selling the most Treasuries since the credit crisis began just as institutional investors load up on U.S. government bonds. The Federal Reserve said its holdings of U.S. government debt on behalf of central bankers and institutional investors outside America has plunged USD76.5bn in the last seven weeks, the most since August 2007. At the same time, bond mutual funds are adding Treasuries, banks have increased their holdings 45% in the past five years and the Fed has added USD656bn to its balance sheet this year. Rather than a referendum on the US‟ USD1.3trn budget deficit and rising debt burden, sales by foreign policy makers may have more to do with supporting their currencies after the Brazilian real weakened 11% and Taiwan‟s dollar lost 4.4% against the US dollar since June. (Bloomberg)
US: Manufacturing in New York Fed region shrinks more than economists forecast
Manufacturing in the New York region contracted in October at a faster pace than forecast, reflecting a lack of confidence in the US recovery that failed to be confirmed by measures of orders and sales. The Federal Reserve Bank of New York‟s general economic index rose to minus 8.5 from minus 8.8 in September. Economists projected an improvement to minus 4, based on the median of 53 forecasts in a Bloomberg News survey. Readings less than zero signal companies in the so-called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut, are cutting back. The central bank‟s measures of bookings and shipments climbed to the highest levels in five months, indicating the industry at the heart of the economic recovery may be regaining momentum. (Bloomberg)
US: Industrial production in US increases 0.2% on demand for cars, computers
Industrial production in the US advanced in September on growing demand for automobiles and computers after stalling the prior month, a sign manufacturers are contributing to growth. Output at factories, mines and utilities increased 0.2%, in line with the median estimate in a Bloomberg News survey, after being little changed in August, figures from the Federal Reserve showed yesterday. Factory production, which makes up 75% of the total, climbed for a third month. (Bloomberg)
US stocks fall as Germany damps optimism on Europe debt plan
Global stocks and the euro fell as Germany damped expectations for a fast resolution to Europe‟s debt crisis and a report showed New York-area manufacturing shrank more than forecast. The S&P 500 Index slid 1.9% to
1,200.86 while the Dow Jones Industrial Average fell 2.1% to 11,397.00. The MSCI All-Country World Index slipped 1.2% following last week‟s 5.4% rally. Steffen Seibert, German Chancellor Angela Merkel‟s chief spokesman, said European Union leaders won‟t provide the quick ending to the debt crisis that global policy makers are pushing for at a 23 Oct summit. (Bloomberg)
Japan: The government downgraded its assessment of the economy for the first time since April as the strengthening yen and slowing global growth weighed on the prospects for an export-driven recovery. "The Japanese economy is still picking up although the pace is decelerating," the Cabinet Office said in its monthly report. (Source: Bloomberg)
Philippine: Remittances increase may help support economy. Remittances sent home by Philippine citizens abroad increased at a faster pace in August, aiding domestic consumption even as a weakening global economy hurts the Southeast Asian nation's exports. The funds increased 11.1% YoY to USD 1.67b, the central bank said in a statement in Manila. Remittances grew 6.1% YoY in July, according to previously reported data. The gain was the fastest since 2009, according to Bloomberg data. (Source: Bloomberg)
20111018 1041 Malaysia Corporate Related News.
Ingress Corp, which supplies auto-parts to Honda Motor Co, said its Thai factory was hit by floodwater. It took precautionary steps to move finished goods, raw materials and work-in-progress at its Ayutthaya plant before the flood. Ingress is insured and hasn’t yet been able to assess the damage and recovery time. (Bloomberg, BT)
Syarikat Bekalan Air Selangor (Syabas) has received a RM110m, 20 year loan facility from the government. Syabas, a 70% owned subsidiary of Puncak Niaga will utilise the loan to finance the capital expenditure works on the old pipe replacement project for 14 critical areas in Selangor, Kuala Lumpur and Putrajaya. The tenure will include a grace period of two years and interest rate of 3% per annum. (Financial Daily)
MAS-GMR Aerospace Engineering (MGAE) 50:50 joint venture is to be launched soon. The joint venture was a third party Airframe maintenance, repair and overhaul facility is located at the Rajiv Gandhi International Airport in Hyderabad. This facility would be audited by the European Aviation Safety Agency and if the facility met EASA’s stringent criteria, it would be able to attract European-registered aircraft for MRO services. (Bernama)
Some 100m Hap Seng Consolidated Bhd shares were traded in the offmarket yesterday in a deal valued at RM154m or RM1.54/share. On the trading floor yesterday, Hap Seng shares were actively traded, closing 12 sen higher at RM1.60, while the Hap Seng warrant was up 4.5 sen to 54 sen a warrant. The 100m shares, accounting for about 4.6% of the share spread in Hap Seng, could possibly suggest the emergence of a new shareholder in the company. Tan Sri Lau Cho Kun indirectly controls some 69.3% of Hap Seng, while funds such as the EPF own around 2.61%. (BT)
The Johor Premium Outlets will open on December 2nd instead of November 11th as planned. The upscale outlets will feature more than 80 brands offering factory prices at discounts of 25% to 65%. The state tourism and domestic Trade committee chairman Hoo Seong Chang revealed that tourist arrivals into the state increased by more than 480,000 in the first half of the year compared to the first six months of last year. Tourist arrivals into Johor totalled 8.3m. 70% of them were Singaporean. (the Star)
Wijaya Baru Global Bhd (WBG) is banking on its Indonesian timber extraction venture to help boost revenue by more than 10x in 2012 to US$90m (RM282m). Early this month, WBG said it is buying two companies with rights to extract timber in Papua Province in Indonesia. The companies have rights for an area measuring 80,000ha. Timber extraction is expected to commence by the end of the 1Q12. "This year, we expect to return to the black with marginal profit," CEO Datuk Faizal Abdullah said. "Next year, we expect a modest profit for the group from the sale of timber, but in 2013, we are expecting a surge," Faizal told BT in an interview. (BT)
HELP International has put its plans to expand its education business to Changsu, China on hold, following the termination of its joint-venture agreement with Asia Pacific Land. AP Land sold its 70% stake in Khas Cergas which operates Victoria International College and under the initial agreement, HELP was to take over the operations of the college. The termination of the JV is also due to complications in receiving the green light from the local authorities. (Financial Daily)
Century Logistics 51%-owned subsidiary has acquired a vessel from Pengkalan Megaria for US$4.8m (RM14.9m). The acquisition of MT Qaseh, a 7,119 dwt oil product tanker will enable Century to expand further downstream in its oil and gas logistics activities. (Malaysian Reserve)
SILK Holdings Bhd has won RM55.3m worth of contracts from Petronas Carigali Sdn Bhd to supply anchor handling tug supply vessel to the oil company. (BT)
Xian Leng Holdings Bhd has appointed PricewaterhouseCoopers Advisory Services Sdn Bhd to conduct a special audit on the company’s finances. Xian Leng previously said there could be some “financial irregularities” involving RM17.4m. (BT)
Japan’s luxury automotive brand, Infiniti, has made Malaysia its second market in ASEAN with its newly launched showroom. Infiniti’s target in Malaysia is to capture 5%, at minimum, of the local luxury car market by the end of 2016. (Malaysian Reserve)
Leader Universal gets privatization offer from founder
HNG Capital SB, a private vehicle of founder Datuk Seri H‟ng Bok San, has tabled an offer of RM480.1m, or RM1.10 per share, to buy out Leader Universal‟s entire business and undertakings. The offer price is below its net asset per share of RM1.36 but at a 30.9% premium to its last traded price of RM0.84 per share. H‟ng and family control about 14% of the Penang-based cable and wire maker. If the buyout is approved, the deal will leave Leader a cash-rich PN17 status company that intends to return the proceeds from the sale in cash to shareholders excluding H‟ng and the joint offerors. (Malaysian Reserve)
OCBC bids RM450m for PacificMas units
PacificMas received a RM450m part-cash offer from OCBC Capital SB for its subsidiaries. The offer comprises cash of RM164.23m and a deferred RM285.77m payment within 12 months from the date of the acquisition agreement. OCBC Capital has offered to purchase a 100% stake in Pac Lease, PB Pacific SB, PacificMas Fidelity SB and PacificMas Capital as well as an 85% stake in Pacific Mutual Mutual Fund. OCBC Capital has proposed that PacificMas liquidate all its remaining residual assets and distribute its remaining cash via a special dividend or capital repayment exercise. OCBC is currently PacificMas‟ major shareholder with a 63.5% stake and the acquisition marks a transfer from OCBC to its wholly-owned subsidiary OCBC Capital. (Malaysian Reserve)
Resorts World Casino NYC to open 28 Oct
Genting‟s Resorts World Casino NYC (RWNY) is set to open in 10 days at Aqueduct Racetrack in Queens, NY. The New York casino, with 5,000 gaming machines spread over two floors, will kick off with 2,485 video lottery terminals and electronic table games. The intention is to have the entire 700,000 sq ft development fully open by mid-December, just in time to capture the Christmas and New Year crowd. (Financial Daily)
Sharil appointed chairman of MCMC
Datuk Mohamed Sharil Tarmizi has been appointed the new chairman of the Malaysian Communications and Multimedia Commission (MCMC) effective since 16 Oct. He succeeded Tan Sri Khalid Ramli, whose two-year term expired on 15 Oct. Sharil has experience in the legal, communications and multimedia industry as well as in financial advisory and strategy consulting. He is presently assisting the World Bank in the development of the Broadband Toolkit. (StarBiz)
Penang cancels Boustead project
The Penang state government has cancelled a plan to allow Boustead to reclaim up to 0.16 ha of land off the Penang Bridge. Boustead was initially given the rights as part of compensation package for agreeing to scale down a hotel development project in the state's heritage zone. A statement from CM Lim Guan Eng‟s office said the state government has decided not to pursue the land reclamation at Bayan Bay to Boustead. Boustead will still be required to comply with the World Heritage building height control of 18m within the heritage core zone of George Town. Boustead was in the midst of constructing a one-block 300-room Royale Bintang Hotel in George Town's heritage zone in 2009, when works were halted following reports the development could place George Town's heritage status in jeopardy. (BT)
Mah Sing Group: RM2.5b sales target next year. In order to achieve its sales target of RM2.5b, Mah Sing Group plans to adjust their product mix in line with today's sentiment and needs. Mah Sing Group will focus on lower-priced and smaller units of serviced apartments in the next two years to cater to demand of the young population. (Source: The Star)
Proton: Offers lifetime warranty on power windows. Proton has once and for all moved to erase any doubt over defective power windows by offering a lifetime warranty for all new Proton models registered from Sept 1, 2011 and vehicles that are still under the manufacturers warranty as at Sept 1. (Source: The Star)
Construction: Second Penang Bridge ahead of schedule. Construction of the second Penang bridge is likely to be completed two months ahead of its projected November 2013 schedule. It is likely that work on the new bridge will achieve 70% progress by the end of this year. (Source: Business Times)
Transportation: Better KTM Komuter service by Jan 2012. KTM Komuter users can look forward to better commuting experience this January when the first of the 38 six-car electrical multiple unit (EMU) is put into service. To complement the new trains, an automatic fare collection system was being implemented and full refund will be given for trips that are delayed by more than 30 minutes. (Source: The Sun, The Star)
Syarikat Bekalan Air Selangor (Syabas) has received a RM110m, 20 year loan facility from the government. Syabas, a 70% owned subsidiary of Puncak Niaga will utilise the loan to finance the capital expenditure works on the old pipe replacement project for 14 critical areas in Selangor, Kuala Lumpur and Putrajaya. The tenure will include a grace period of two years and interest rate of 3% per annum. (Financial Daily)
MAS-GMR Aerospace Engineering (MGAE) 50:50 joint venture is to be launched soon. The joint venture was a third party Airframe maintenance, repair and overhaul facility is located at the Rajiv Gandhi International Airport in Hyderabad. This facility would be audited by the European Aviation Safety Agency and if the facility met EASA’s stringent criteria, it would be able to attract European-registered aircraft for MRO services. (Bernama)
Some 100m Hap Seng Consolidated Bhd shares were traded in the offmarket yesterday in a deal valued at RM154m or RM1.54/share. On the trading floor yesterday, Hap Seng shares were actively traded, closing 12 sen higher at RM1.60, while the Hap Seng warrant was up 4.5 sen to 54 sen a warrant. The 100m shares, accounting for about 4.6% of the share spread in Hap Seng, could possibly suggest the emergence of a new shareholder in the company. Tan Sri Lau Cho Kun indirectly controls some 69.3% of Hap Seng, while funds such as the EPF own around 2.61%. (BT)
The Johor Premium Outlets will open on December 2nd instead of November 11th as planned. The upscale outlets will feature more than 80 brands offering factory prices at discounts of 25% to 65%. The state tourism and domestic Trade committee chairman Hoo Seong Chang revealed that tourist arrivals into the state increased by more than 480,000 in the first half of the year compared to the first six months of last year. Tourist arrivals into Johor totalled 8.3m. 70% of them were Singaporean. (the Star)
Wijaya Baru Global Bhd (WBG) is banking on its Indonesian timber extraction venture to help boost revenue by more than 10x in 2012 to US$90m (RM282m). Early this month, WBG said it is buying two companies with rights to extract timber in Papua Province in Indonesia. The companies have rights for an area measuring 80,000ha. Timber extraction is expected to commence by the end of the 1Q12. "This year, we expect to return to the black with marginal profit," CEO Datuk Faizal Abdullah said. "Next year, we expect a modest profit for the group from the sale of timber, but in 2013, we are expecting a surge," Faizal told BT in an interview. (BT)
HELP International has put its plans to expand its education business to Changsu, China on hold, following the termination of its joint-venture agreement with Asia Pacific Land. AP Land sold its 70% stake in Khas Cergas which operates Victoria International College and under the initial agreement, HELP was to take over the operations of the college. The termination of the JV is also due to complications in receiving the green light from the local authorities. (Financial Daily)
Century Logistics 51%-owned subsidiary has acquired a vessel from Pengkalan Megaria for US$4.8m (RM14.9m). The acquisition of MT Qaseh, a 7,119 dwt oil product tanker will enable Century to expand further downstream in its oil and gas logistics activities. (Malaysian Reserve)
SILK Holdings Bhd has won RM55.3m worth of contracts from Petronas Carigali Sdn Bhd to supply anchor handling tug supply vessel to the oil company. (BT)
Xian Leng Holdings Bhd has appointed PricewaterhouseCoopers Advisory Services Sdn Bhd to conduct a special audit on the company’s finances. Xian Leng previously said there could be some “financial irregularities” involving RM17.4m. (BT)
Japan’s luxury automotive brand, Infiniti, has made Malaysia its second market in ASEAN with its newly launched showroom. Infiniti’s target in Malaysia is to capture 5%, at minimum, of the local luxury car market by the end of 2016. (Malaysian Reserve)
HNG Capital SB, a private vehicle of founder Datuk Seri H‟ng Bok San, has tabled an offer of RM480.1m, or RM1.10 per share, to buy out Leader Universal‟s entire business and undertakings. The offer price is below its net asset per share of RM1.36 but at a 30.9% premium to its last traded price of RM0.84 per share. H‟ng and family control about 14% of the Penang-based cable and wire maker. If the buyout is approved, the deal will leave Leader a cash-rich PN17 status company that intends to return the proceeds from the sale in cash to shareholders excluding H‟ng and the joint offerors. (Malaysian Reserve)
OCBC bids RM450m for PacificMas units
PacificMas received a RM450m part-cash offer from OCBC Capital SB for its subsidiaries. The offer comprises cash of RM164.23m and a deferred RM285.77m payment within 12 months from the date of the acquisition agreement. OCBC Capital has offered to purchase a 100% stake in Pac Lease, PB Pacific SB, PacificMas Fidelity SB and PacificMas Capital as well as an 85% stake in Pacific Mutual Mutual Fund. OCBC Capital has proposed that PacificMas liquidate all its remaining residual assets and distribute its remaining cash via a special dividend or capital repayment exercise. OCBC is currently PacificMas‟ major shareholder with a 63.5% stake and the acquisition marks a transfer from OCBC to its wholly-owned subsidiary OCBC Capital. (Malaysian Reserve)
Resorts World Casino NYC to open 28 Oct
Genting‟s Resorts World Casino NYC (RWNY) is set to open in 10 days at Aqueduct Racetrack in Queens, NY. The New York casino, with 5,000 gaming machines spread over two floors, will kick off with 2,485 video lottery terminals and electronic table games. The intention is to have the entire 700,000 sq ft development fully open by mid-December, just in time to capture the Christmas and New Year crowd. (Financial Daily)
Sharil appointed chairman of MCMC
Datuk Mohamed Sharil Tarmizi has been appointed the new chairman of the Malaysian Communications and Multimedia Commission (MCMC) effective since 16 Oct. He succeeded Tan Sri Khalid Ramli, whose two-year term expired on 15 Oct. Sharil has experience in the legal, communications and multimedia industry as well as in financial advisory and strategy consulting. He is presently assisting the World Bank in the development of the Broadband Toolkit. (StarBiz)
Penang cancels Boustead project
The Penang state government has cancelled a plan to allow Boustead to reclaim up to 0.16 ha of land off the Penang Bridge. Boustead was initially given the rights as part of compensation package for agreeing to scale down a hotel development project in the state's heritage zone. A statement from CM Lim Guan Eng‟s office said the state government has decided not to pursue the land reclamation at Bayan Bay to Boustead. Boustead will still be required to comply with the World Heritage building height control of 18m within the heritage core zone of George Town. Boustead was in the midst of constructing a one-block 300-room Royale Bintang Hotel in George Town's heritage zone in 2009, when works were halted following reports the development could place George Town's heritage status in jeopardy. (BT)
Mah Sing Group: RM2.5b sales target next year. In order to achieve its sales target of RM2.5b, Mah Sing Group plans to adjust their product mix in line with today's sentiment and needs. Mah Sing Group will focus on lower-priced and smaller units of serviced apartments in the next two years to cater to demand of the young population. (Source: The Star)
Proton: Offers lifetime warranty on power windows. Proton has once and for all moved to erase any doubt over defective power windows by offering a lifetime warranty for all new Proton models registered from Sept 1, 2011 and vehicles that are still under the manufacturers warranty as at Sept 1. (Source: The Star)
Construction: Second Penang Bridge ahead of schedule. Construction of the second Penang bridge is likely to be completed two months ahead of its projected November 2013 schedule. It is likely that work on the new bridge will achieve 70% progress by the end of this year. (Source: Business Times)
Transportation: Better KTM Komuter service by Jan 2012. KTM Komuter users can look forward to better commuting experience this January when the first of the 38 six-car electrical multiple unit (EMU) is put into service. To complement the new trains, an automatic fare collection system was being implemented and full refund will be given for trips that are delayed by more than 30 minutes. (Source: The Sun, The Star)
20111018 0947 Global Market Related News.
China reported 3rd quarter 9.1% GDP growth below expectation. Slowest pace in 2 years.
Asian Stocks Drop Most in 2 Weeks as Europe Debt Optimism Fades (Source: Bloomberg)
Asian stocks fell, driving the region’s benchmark index toward its biggest drop in two weeks, as Germany damped expectations for a fast resolution to Europe’s debt crisis, souring the outlook for Asian exporters and banks. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, slipped 2.8 percent in Sydney after commodity prices slumped. Sony Corp., which gets about 70 percent of its revenue overseas, dropped 3.3 percent in Tokyo. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, lost 1.8 percent after U.S. banks Citigroup Inc. and Wells Fargo & Co. said quarterly revenue dropped.
“The implied lack of urgency by European policy makers will create additional uncertainty regarding a robust, all- encompassing solution to Europe’s growing list of problems,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Increased uncertainty will feed through to investor nervousness and is likely to see risk reduced by investors as they move to lock in gains from the past couple of weeks.”
Central Banks Selling Most Treasuries Since 2007 Prove No Barrier to Rally (Source: Bloomberg)
International central banks are selling the most Treasuries since the credit crisis began just as institutional investors load up on U.S. government bonds. The Federal Reserve said its holdings of U.S. government debt on behalf of central bankers and institutional investors outside America has plunged $76.5 billion in the last seven weeks, the most since August 2007. At the same time, bond mutual funds are adding Treasuries, banks have increased their holdings 45 percent in the past five years and the Fed has added $656 billion to its balance sheet this year.
Rather than a referendum on the U.S.’s $1.3 trillion budget deficit and rising debt burden, sales by foreign policy makers may have more to do with supporting their currencies after the Brazilian real weakened 11 percent and Taiwan’s dollar lost 4.4 percent against the U.S. dollar since June. With economists forecasting inflation slowing to 2.1 percent in 2012 from 3.1 percent this year and the Fed’s commitment to keeping interest rates near zero, investors say the demand that pushed government bond yields to record lows last month will be sustained.
U.S. Stocks Drop as Germany Damps Optimism Over Crisis, Wells Fargo Slumps (Source: Bloomberg)
U.S. stocks declined, after the biggest weekly gain in the Standard & Poor’s 500 Index since 2009, as financial shares slumped and the German government damped optimism of a quick fix to Europe’s debt crisis. Banks in the S&P 500 tumbled 6.3 percent as a group. Citigroup Inc. (C) and Wells Fargo & Co. (WFC) slipped at least 1.6 percent as revenue dropped amid economic weakness and market turmoil linked to Europe. Alcoa Inc. (AA) and Caterpillar Inc. (CAT) retreated more than 3 percent to pace losses among companies most-tied to the economy. Gannett Co. sank 8.7 percent after profit fell as newspaper advertising declined. The S&P 500 decreased 1.9 percent to 1,200.86 at 4 p.m. New York time. The benchmark gauge for American equities rallied 6 percent last week. The Dow Jones Industrial Average retreated 247.49 points, or 2.1 percent, to 11,397 today.
Fed’s Evans Says U.S. Faces ‘Massive’ Job Shortfalls, Calls for New Steps (Source: Bloomberg)
Federal Reserve Bank of Chicago President Charles Evans said the U.S. faces “massive shortfalls in output and employment” and called for new policy steps to ensure the Fed meets its congressional mandate. The 53-year-old regional bank chief reiterated his proposal, initially unveiled in a speech last month, to keep the target for the benchmark U.S. interest rate near zero until either unemployment falls below 7 percent or the medium-term inflation outlook rises above 3 percent. He said he would support more asset purchases if those objectives aren’t reached. “Some may find such a policy proposal to be hard to understand, or even risky,” he said today of his plan in the text of a speech in Detroit. “But these are not ordinary times.”
Manufacturing in New York Fed Region Shrinks More Than Economists Forecast (Source: Bloomberg)
Manufacturing in the New York region contracted in October at a faster pace than forecast, reflecting a lack of confidence in the U.S. recovery that failed to be confirmed by measures of orders and sales. The Federal Reserve Bank of New York’s general economic index rose to minus 8.5 from minus 8.8 in September. Economists projected an improvement to minus 4, based on the median of 53 forecasts in a Bloomberg News survey. Readings less than zero signal companies in the so-called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut, are cutting back. The central bank’s measures of bookings and shipments climbed to the highest levels in five months, indicating the industry at the heart of the economic recovery may be regaining momentum. Growth in China and other emerging economies may continue to lift demand for U.S.-made cars and machinery, complementing a pickup in consumer spending.
Industrial Production in U.S. Increases 0.2% on Demand for Cars, Computers (Source: Bloomberg)
Industrial production in the U.S. advanced in September on growing demand for automobiles and computers after stalling the prior month, a sign manufacturers are contributing to growth. Output at factories, mines and utilities increased 0.2 percent, in line with the median estimate in a Bloomberg News survey, after being little changed in August, figures from the Federal Reserve showed today. Factory production, which makes up 75 percent of the total, climbed for a third month. Companies like General Motors Co. (GM) and Alcoa Inc. (AA) are getting a lift as Japan recovers from the earthquake and tsunami, and as demand from emerging markets and business investment boosts orders. At the same time, shipments to Europe may cool as the region’s debt crisis lingers, indicating factory assembly lines will probably not be running at full tilt.
Lacker Says Fed’s Attempts to Boost GDP Growth May Risk Stoking Inflation (Source: Bloomberg)
Federal Reserve Bank of Richmond President Jeffrey Lacker said the central bank risks stoking inflation by trying to boost growth because the recovery is hampered by conditions that are unaffected by monetary policy. “The factors likely to be restraining growth -- from empty houses to prospective tax rates -- are nonmonetary and largely beyond the power of the central bank to offset through easier monetary conditions,” Lacker said today in the text of a speech to be delivered in Salisbury, Maryland. “History has repeatedly demonstrated that if a central bank attempts to add monetary stimulus to offset nonmonetary disturbances to growth, the result is higher inflation.” Lacker said he opposed the Fed’s decision last month to push down long-term interest rates by selling $400 billion of short-term Treasury securities and replacing them with the same amount of longer-term bonds, a move known as Operation Twist.
Wells Fargo Slumps as Lower Revenue Mars Record Profit (Source: Bloomberg)
Wells Fargo & Co. (WFC), the largest U.S. home lender, led decliners among bank stocks after reporting that third-quarter revenue declined and margins narrowed. Investors focused on a 6 percent decline in revenue from a year earlier to $19.6 billion. That missed the $20.2 billion estimate of analysts as low interest rates cut into profit on loans, according to a statement by the San Francisco-based bank. “Given this low-rate environment, I think investors are very focused on direction of bank margins, and Wells was a little bit weaker than expected on the net interest margin,” David George, a bank analyst at Robert W. Baird & Co. in St. Louis, said in an interview with Betty Liu on Bloomberg Television’s “In the Loop.”
Japan Stocks Fall as Germany Damps Optimism on Crisis Solution (Source: Bloomberg)
Japanese stocks dropped, with the benchmark Nikkei 225 (NKY) Stock Average headed for its biggest decline in two weeks, as Germany damped expectations for a fast resolution to Europe’s sovereign-debt crisis. Sony Corp., Japan’s biggest exporter of consumer electronics, lost 3.5 percent. Mitsubishi UFJ Financial Group Inc., Japan’s largest lender by market value, lost 1.8 percent after U.S. banks Citigroup Inc. and Wells Fargo & Co. said quarterly revenue dropped amid economic weakness linked to Europe. Yaskawa Electric Corp. slid as much as 11 percent after the maker of motion controllers slashed its profit forecast. The Nikkei 225 dropped 1.4 percent to 8,759.03 as of 9:28 a.m. in Tokyo, set for its steepest decline since Oct. 3. The broader Topix index fell 1.1 percent to 753.19 after Steffen Seibert, spokesman for German Chancellor Angela Merkel, said Europe’s leaders won’t provide a quick fix to the debt crisis that global policy makers are pushing for at an Oct. 23 summit.
Euro Leaders’ Crisis Campaign Bogs Down (Source: Bloomberg)
Europe’s options for overcoming the debt crisis narrowed as Germany doused expectations of a breakthrough at this weekend’s summit and central bankers balked at extended bond purchases. European stocks and the euro reversed initial gains yesterday, slumping after German Chancellor Angela Merkel’s office knocked down what it called “dreams” that the Oct. 23 summit will be the last word in taming the crisis. Christian Noyer, head of France’s central bank, ruled out a ramping up of the European Central Bank’s bond-buying program as part of a multi-pronged strategy to shield countries like Italy. While Group of 20 finance ministers and central bankers pressed European Union leaders to set out a strategy by the end of the week, divisions flared over an emerging plan to avoid a Greek default, bolster banks and curb contagion.
France Risks AAA on Bulked Up ESFS Bailout Fund: Euro Credit (Source: Bloomberg)
Proposals to beef up Europe’s bailout fund by offering to guarantee portions of the debt owed by the region’s weaker governments threaten to trash France’s top credit rating. The nation’s 10-year notes are the third-worst performers this quarter -- behind only Greece and Belgium -- as traders speculate the European Financial Stability Facility will be used to insure the first portion of losses in the event of a sovereign default. France’s rating is under pressure, Moody’s Investors Service said yesterday, and investors now demand to be paid a record 93.2 basis points more to hold its bonds rather than German notes, up from 29 basis points in April. “France is the key factor here,” said Bob McKee, chief economist at Independent Strategy Ltd. in London. “Offering insurance increases France’s contingent liability and that puts pressure on its rating. If France loses its AAA status, that in turn increases the pressure on Germany.”
East Europe’s Economic Growth Hurt by ‘Protracted’ Euro Crisis, EBRD Says (Source: Bloomberg)
Economic growth in eastern Europe is slowing “substantially” as a “protracted” euro-area debt crisis infects the region, the European Bank for Reconstruction and Development said. The EBRD cut its 2012 growth forecast for the 29 east European and central Asian nations in which it invests to 3.2 percent from 4.4 percent in July, according to a report released today. Growth will slow from this year’s 4.5 percent, the EBRD said, revising its previous estimate of 4.8 percent. While three months ago the EBRD assumed “a relatively benign external environment” with contained spillover risks from the euro area, it now says the escalating crisis has infected eastern Europe through intertwined trade and banking links. The development bank expects drawn-out repercussions from the euro region’s troubles, which will ultimately be contained, under its main scenario.
European Stocks Decline; Greek Banks, G4S Retreat as BP Climbs (Source: Bloomberg)
European stocks fell, paring three weeks of gains for the Stoxx Europe 600 Index, as a German government spokesman said that euro-area leaders will not provide a complete fix to the debt crisis at their next meeting. National Bank of Greece SA (ETE), the country’s biggest lender, led bank shares lower. G4S Plc (GFS) slumped 22 percent after agreeing to acquire ISS A/S. BP Plc gained 2.2 percent after saying that Anadarko Petroleum Corp. will pay $4 billion to settle all claims for last year’s Gulf of Mexico oil spill. The Stoxx 600 retreated 1 percent to 236.22 at the close in London, erasing an earlier gain of as much as 1.5 percent, after Germany’s government said the Oct. 23 European Union summit will fail to end the sovereign debt crisis. The benchmark measure had rallied for the past three weeks, its longest stretch of weekly gains since April.
Swiss Stocks Fall, Snapping Three Weeks of Gains; Novartis Drops (Source: Bloomberg)
Swiss stocks declined, snapping three weeks of gains, as Germany said European Union leaders won’t find a swift solution to the euro-area debt crisis. Novartis AG (NOVN), Europe’s second-biggest drugmaker by sales, dropped 1.1 percent after Vontobel Holding AG (VONN) downgraded the company’s shares. UBS AG (UBSN), Switzerland’s largest lender, fell 1.3 percent. The Swiss Market Index (SMI), a measure of the biggest and most actively traded companies, fell 0.6 percent to 5,724.77 at 3:22 p.m. in Zurich. The gauge has tumbled 11 percent this year as disappointing European and U.S. economic reports fueled concern that the global recovery is faltering. The broader Swiss Performance Index declined 0.5 percent.
Policy Aides With Canada Data Hurt Confidence (Source: Bloomberg)
Statistics Canada sends at least 69 government workers and political aides economic reports a day before publication, a practice that investors say undermines market confidence. Finance Department officials and ministerial staff can see up to nine different reports, including employment and inflation, according to government documents requested by Bloomberg News under freedom of information law, as well as responses to e-mails and interviews. Staff at the Privy Council Office, the international trade and human resources departments, and central bank also see data early, officials said, bringing the tally to at least 69. “It’s very dangerous from an ‘integrity of the numbers’ standpoint if there’s a sense that this stuff is floating all around and there’s some people who can make money off it beforehand,” said David Dodge, a former Bank of Canada governor and deputy minister of finance. “More restrictive is better than less restrictive.”
Thai Floods May Bring Yingluck Rate Pause (Source: Bloomberg)
Thailand may pause tomorrow after seven interest-rate increases as the worst floods in five decades and weakening global growth threaten to curb output and weaken demand for exports. The Bank of Thailand will keep its benchmark one-day bond repurchase rate at 3.5 percent, according to 16 of 17 economists surveyed by Bloomberg News ahead of a decision due at 2:30 p.m. in Bangkok tomorrow. One predicted a 25-basis point cut. The country has raised borrowing costs more than any other major Asian economy after India, where there have been 10 rate increases since the beginning of July 2010. Floods that have killed more than 300 people, shutting factories and wiping out crops, may convince the nation’s central bank to heed calls from Prime Minister Yingluck Shinawatra’s government to put growth ahead of efforts to cool inflation. The Philippines, hurt by typhoons in recent weeks, may also hold rates this week as the International Monetary Fund warns of “severe” risks to Asia from Europe’s debt crisis.
Dollar, Yen Weaken Against Most Peers Before China Reports Economic Growth (Source: Bloomberg)
The yen and dollar declined versus most major counterparts before reports in China and the U.S. forecast to show expansions in the world’s largest economies are being sustained, damping demand for safer assets. Japan’s currency fell against the euro before a U.S. Commerce Department release tomorrow that’s projected to show housing starts rose in September. Australia’s currency gained versus the dollar before China releases data which economists predict will indicate its gross domestic product expanded more than 9 percent for a ninth straight quarter. New Zealand’s currency advanced after the nation’s central bank signaled interest rates will probably need to increase. “People are still looking to buy the dips in currencies like the euro and Aussie as we’re seeing a slighter better growth profile coming from the U.S.” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “The Chinese numbers will give us some confirmation that China’s in a reasonably strong place.”
The yen declined 0.2 percent to 105.78 per euro as of 9:57 a.m. in Tokyo after gaining 1.5 percent to 105.55 yesterday in New York. The dollar fell 0.2 percent to $1.3767 per euro from $1.3738 yesterday. Australia’s currency advanced 0.4 percent to $1.0199 and 78.36 yen. New Zealand’s currency advanced 0.2 percent to 79.30 U.S. cents and 60.94 yen. China is forecast to report that third-quarter gross domestic product increased 9.3 percent from a year earlier, according to the median estimate of economists in a Bloomberg News survey before today’s data. Housing starts in the U.S. rose to 590,000 last month from 571,000 in August, the first increase in three months, another survey of economists shows before the Commerce Department report tomorrow.
Asian Stocks Drop Most in 2 Weeks as Europe Debt Optimism Fades (Source: Bloomberg)
Asian stocks fell, driving the region’s benchmark index toward its biggest drop in two weeks, as Germany damped expectations for a fast resolution to Europe’s debt crisis, souring the outlook for Asian exporters and banks. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, slipped 2.8 percent in Sydney after commodity prices slumped. Sony Corp., which gets about 70 percent of its revenue overseas, dropped 3.3 percent in Tokyo. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, lost 1.8 percent after U.S. banks Citigroup Inc. and Wells Fargo & Co. said quarterly revenue dropped.
“The implied lack of urgency by European policy makers will create additional uncertainty regarding a robust, all- encompassing solution to Europe’s growing list of problems,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Increased uncertainty will feed through to investor nervousness and is likely to see risk reduced by investors as they move to lock in gains from the past couple of weeks.”
Central Banks Selling Most Treasuries Since 2007 Prove No Barrier to Rally (Source: Bloomberg)
International central banks are selling the most Treasuries since the credit crisis began just as institutional investors load up on U.S. government bonds. The Federal Reserve said its holdings of U.S. government debt on behalf of central bankers and institutional investors outside America has plunged $76.5 billion in the last seven weeks, the most since August 2007. At the same time, bond mutual funds are adding Treasuries, banks have increased their holdings 45 percent in the past five years and the Fed has added $656 billion to its balance sheet this year.
Rather than a referendum on the U.S.’s $1.3 trillion budget deficit and rising debt burden, sales by foreign policy makers may have more to do with supporting their currencies after the Brazilian real weakened 11 percent and Taiwan’s dollar lost 4.4 percent against the U.S. dollar since June. With economists forecasting inflation slowing to 2.1 percent in 2012 from 3.1 percent this year and the Fed’s commitment to keeping interest rates near zero, investors say the demand that pushed government bond yields to record lows last month will be sustained.
U.S. Stocks Drop as Germany Damps Optimism Over Crisis, Wells Fargo Slumps (Source: Bloomberg)
U.S. stocks declined, after the biggest weekly gain in the Standard & Poor’s 500 Index since 2009, as financial shares slumped and the German government damped optimism of a quick fix to Europe’s debt crisis. Banks in the S&P 500 tumbled 6.3 percent as a group. Citigroup Inc. (C) and Wells Fargo & Co. (WFC) slipped at least 1.6 percent as revenue dropped amid economic weakness and market turmoil linked to Europe. Alcoa Inc. (AA) and Caterpillar Inc. (CAT) retreated more than 3 percent to pace losses among companies most-tied to the economy. Gannett Co. sank 8.7 percent after profit fell as newspaper advertising declined. The S&P 500 decreased 1.9 percent to 1,200.86 at 4 p.m. New York time. The benchmark gauge for American equities rallied 6 percent last week. The Dow Jones Industrial Average retreated 247.49 points, or 2.1 percent, to 11,397 today.
Fed’s Evans Says U.S. Faces ‘Massive’ Job Shortfalls, Calls for New Steps (Source: Bloomberg)
Federal Reserve Bank of Chicago President Charles Evans said the U.S. faces “massive shortfalls in output and employment” and called for new policy steps to ensure the Fed meets its congressional mandate. The 53-year-old regional bank chief reiterated his proposal, initially unveiled in a speech last month, to keep the target for the benchmark U.S. interest rate near zero until either unemployment falls below 7 percent or the medium-term inflation outlook rises above 3 percent. He said he would support more asset purchases if those objectives aren’t reached. “Some may find such a policy proposal to be hard to understand, or even risky,” he said today of his plan in the text of a speech in Detroit. “But these are not ordinary times.”
Manufacturing in New York Fed Region Shrinks More Than Economists Forecast (Source: Bloomberg)
Manufacturing in the New York region contracted in October at a faster pace than forecast, reflecting a lack of confidence in the U.S. recovery that failed to be confirmed by measures of orders and sales. The Federal Reserve Bank of New York’s general economic index rose to minus 8.5 from minus 8.8 in September. Economists projected an improvement to minus 4, based on the median of 53 forecasts in a Bloomberg News survey. Readings less than zero signal companies in the so-called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut, are cutting back. The central bank’s measures of bookings and shipments climbed to the highest levels in five months, indicating the industry at the heart of the economic recovery may be regaining momentum. Growth in China and other emerging economies may continue to lift demand for U.S.-made cars and machinery, complementing a pickup in consumer spending.
Industrial Production in U.S. Increases 0.2% on Demand for Cars, Computers (Source: Bloomberg)
Industrial production in the U.S. advanced in September on growing demand for automobiles and computers after stalling the prior month, a sign manufacturers are contributing to growth. Output at factories, mines and utilities increased 0.2 percent, in line with the median estimate in a Bloomberg News survey, after being little changed in August, figures from the Federal Reserve showed today. Factory production, which makes up 75 percent of the total, climbed for a third month. Companies like General Motors Co. (GM) and Alcoa Inc. (AA) are getting a lift as Japan recovers from the earthquake and tsunami, and as demand from emerging markets and business investment boosts orders. At the same time, shipments to Europe may cool as the region’s debt crisis lingers, indicating factory assembly lines will probably not be running at full tilt.
Lacker Says Fed’s Attempts to Boost GDP Growth May Risk Stoking Inflation (Source: Bloomberg)
Federal Reserve Bank of Richmond President Jeffrey Lacker said the central bank risks stoking inflation by trying to boost growth because the recovery is hampered by conditions that are unaffected by monetary policy. “The factors likely to be restraining growth -- from empty houses to prospective tax rates -- are nonmonetary and largely beyond the power of the central bank to offset through easier monetary conditions,” Lacker said today in the text of a speech to be delivered in Salisbury, Maryland. “History has repeatedly demonstrated that if a central bank attempts to add monetary stimulus to offset nonmonetary disturbances to growth, the result is higher inflation.” Lacker said he opposed the Fed’s decision last month to push down long-term interest rates by selling $400 billion of short-term Treasury securities and replacing them with the same amount of longer-term bonds, a move known as Operation Twist.
Wells Fargo Slumps as Lower Revenue Mars Record Profit (Source: Bloomberg)
Wells Fargo & Co. (WFC), the largest U.S. home lender, led decliners among bank stocks after reporting that third-quarter revenue declined and margins narrowed. Investors focused on a 6 percent decline in revenue from a year earlier to $19.6 billion. That missed the $20.2 billion estimate of analysts as low interest rates cut into profit on loans, according to a statement by the San Francisco-based bank. “Given this low-rate environment, I think investors are very focused on direction of bank margins, and Wells was a little bit weaker than expected on the net interest margin,” David George, a bank analyst at Robert W. Baird & Co. in St. Louis, said in an interview with Betty Liu on Bloomberg Television’s “In the Loop.”
Japan Stocks Fall as Germany Damps Optimism on Crisis Solution (Source: Bloomberg)
Japanese stocks dropped, with the benchmark Nikkei 225 (NKY) Stock Average headed for its biggest decline in two weeks, as Germany damped expectations for a fast resolution to Europe’s sovereign-debt crisis. Sony Corp., Japan’s biggest exporter of consumer electronics, lost 3.5 percent. Mitsubishi UFJ Financial Group Inc., Japan’s largest lender by market value, lost 1.8 percent after U.S. banks Citigroup Inc. and Wells Fargo & Co. said quarterly revenue dropped amid economic weakness linked to Europe. Yaskawa Electric Corp. slid as much as 11 percent after the maker of motion controllers slashed its profit forecast. The Nikkei 225 dropped 1.4 percent to 8,759.03 as of 9:28 a.m. in Tokyo, set for its steepest decline since Oct. 3. The broader Topix index fell 1.1 percent to 753.19 after Steffen Seibert, spokesman for German Chancellor Angela Merkel, said Europe’s leaders won’t provide a quick fix to the debt crisis that global policy makers are pushing for at an Oct. 23 summit.
Euro Leaders’ Crisis Campaign Bogs Down (Source: Bloomberg)
Europe’s options for overcoming the debt crisis narrowed as Germany doused expectations of a breakthrough at this weekend’s summit and central bankers balked at extended bond purchases. European stocks and the euro reversed initial gains yesterday, slumping after German Chancellor Angela Merkel’s office knocked down what it called “dreams” that the Oct. 23 summit will be the last word in taming the crisis. Christian Noyer, head of France’s central bank, ruled out a ramping up of the European Central Bank’s bond-buying program as part of a multi-pronged strategy to shield countries like Italy. While Group of 20 finance ministers and central bankers pressed European Union leaders to set out a strategy by the end of the week, divisions flared over an emerging plan to avoid a Greek default, bolster banks and curb contagion.
France Risks AAA on Bulked Up ESFS Bailout Fund: Euro Credit (Source: Bloomberg)
Proposals to beef up Europe’s bailout fund by offering to guarantee portions of the debt owed by the region’s weaker governments threaten to trash France’s top credit rating. The nation’s 10-year notes are the third-worst performers this quarter -- behind only Greece and Belgium -- as traders speculate the European Financial Stability Facility will be used to insure the first portion of losses in the event of a sovereign default. France’s rating is under pressure, Moody’s Investors Service said yesterday, and investors now demand to be paid a record 93.2 basis points more to hold its bonds rather than German notes, up from 29 basis points in April. “France is the key factor here,” said Bob McKee, chief economist at Independent Strategy Ltd. in London. “Offering insurance increases France’s contingent liability and that puts pressure on its rating. If France loses its AAA status, that in turn increases the pressure on Germany.”
East Europe’s Economic Growth Hurt by ‘Protracted’ Euro Crisis, EBRD Says (Source: Bloomberg)
Economic growth in eastern Europe is slowing “substantially” as a “protracted” euro-area debt crisis infects the region, the European Bank for Reconstruction and Development said. The EBRD cut its 2012 growth forecast for the 29 east European and central Asian nations in which it invests to 3.2 percent from 4.4 percent in July, according to a report released today. Growth will slow from this year’s 4.5 percent, the EBRD said, revising its previous estimate of 4.8 percent. While three months ago the EBRD assumed “a relatively benign external environment” with contained spillover risks from the euro area, it now says the escalating crisis has infected eastern Europe through intertwined trade and banking links. The development bank expects drawn-out repercussions from the euro region’s troubles, which will ultimately be contained, under its main scenario.
European Stocks Decline; Greek Banks, G4S Retreat as BP Climbs (Source: Bloomberg)
European stocks fell, paring three weeks of gains for the Stoxx Europe 600 Index, as a German government spokesman said that euro-area leaders will not provide a complete fix to the debt crisis at their next meeting. National Bank of Greece SA (ETE), the country’s biggest lender, led bank shares lower. G4S Plc (GFS) slumped 22 percent after agreeing to acquire ISS A/S. BP Plc gained 2.2 percent after saying that Anadarko Petroleum Corp. will pay $4 billion to settle all claims for last year’s Gulf of Mexico oil spill. The Stoxx 600 retreated 1 percent to 236.22 at the close in London, erasing an earlier gain of as much as 1.5 percent, after Germany’s government said the Oct. 23 European Union summit will fail to end the sovereign debt crisis. The benchmark measure had rallied for the past three weeks, its longest stretch of weekly gains since April.
Swiss Stocks Fall, Snapping Three Weeks of Gains; Novartis Drops (Source: Bloomberg)
Swiss stocks declined, snapping three weeks of gains, as Germany said European Union leaders won’t find a swift solution to the euro-area debt crisis. Novartis AG (NOVN), Europe’s second-biggest drugmaker by sales, dropped 1.1 percent after Vontobel Holding AG (VONN) downgraded the company’s shares. UBS AG (UBSN), Switzerland’s largest lender, fell 1.3 percent. The Swiss Market Index (SMI), a measure of the biggest and most actively traded companies, fell 0.6 percent to 5,724.77 at 3:22 p.m. in Zurich. The gauge has tumbled 11 percent this year as disappointing European and U.S. economic reports fueled concern that the global recovery is faltering. The broader Swiss Performance Index declined 0.5 percent.
Policy Aides With Canada Data Hurt Confidence (Source: Bloomberg)
Statistics Canada sends at least 69 government workers and political aides economic reports a day before publication, a practice that investors say undermines market confidence. Finance Department officials and ministerial staff can see up to nine different reports, including employment and inflation, according to government documents requested by Bloomberg News under freedom of information law, as well as responses to e-mails and interviews. Staff at the Privy Council Office, the international trade and human resources departments, and central bank also see data early, officials said, bringing the tally to at least 69. “It’s very dangerous from an ‘integrity of the numbers’ standpoint if there’s a sense that this stuff is floating all around and there’s some people who can make money off it beforehand,” said David Dodge, a former Bank of Canada governor and deputy minister of finance. “More restrictive is better than less restrictive.”
Thai Floods May Bring Yingluck Rate Pause (Source: Bloomberg)
Thailand may pause tomorrow after seven interest-rate increases as the worst floods in five decades and weakening global growth threaten to curb output and weaken demand for exports. The Bank of Thailand will keep its benchmark one-day bond repurchase rate at 3.5 percent, according to 16 of 17 economists surveyed by Bloomberg News ahead of a decision due at 2:30 p.m. in Bangkok tomorrow. One predicted a 25-basis point cut. The country has raised borrowing costs more than any other major Asian economy after India, where there have been 10 rate increases since the beginning of July 2010. Floods that have killed more than 300 people, shutting factories and wiping out crops, may convince the nation’s central bank to heed calls from Prime Minister Yingluck Shinawatra’s government to put growth ahead of efforts to cool inflation. The Philippines, hurt by typhoons in recent weeks, may also hold rates this week as the International Monetary Fund warns of “severe” risks to Asia from Europe’s debt crisis.
Dollar, Yen Weaken Against Most Peers Before China Reports Economic Growth (Source: Bloomberg)
The yen and dollar declined versus most major counterparts before reports in China and the U.S. forecast to show expansions in the world’s largest economies are being sustained, damping demand for safer assets. Japan’s currency fell against the euro before a U.S. Commerce Department release tomorrow that’s projected to show housing starts rose in September. Australia’s currency gained versus the dollar before China releases data which economists predict will indicate its gross domestic product expanded more than 9 percent for a ninth straight quarter. New Zealand’s currency advanced after the nation’s central bank signaled interest rates will probably need to increase. “People are still looking to buy the dips in currencies like the euro and Aussie as we’re seeing a slighter better growth profile coming from the U.S.” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “The Chinese numbers will give us some confirmation that China’s in a reasonably strong place.”
The yen declined 0.2 percent to 105.78 per euro as of 9:57 a.m. in Tokyo after gaining 1.5 percent to 105.55 yesterday in New York. The dollar fell 0.2 percent to $1.3767 per euro from $1.3738 yesterday. Australia’s currency advanced 0.4 percent to $1.0199 and 78.36 yen. New Zealand’s currency advanced 0.2 percent to 79.30 U.S. cents and 60.94 yen. China is forecast to report that third-quarter gross domestic product increased 9.3 percent from a year earlier, according to the median estimate of economists in a Bloomberg News survey before today’s data. Housing starts in the U.S. rose to 590,000 last month from 571,000 in August, the first increase in three months, another survey of economists shows before the Commerce Department report tomorrow.
20111018 0946 Global Commodities Related News.
Corn (Source: CME)
Corn futures finish little changed as the fall harvest continues at quick pace, due in part to mild weather. Quick sales are helping farmers refill grain bins and keep users well supplied. But futures were weighed down by a selloff in soybeans as outside markets add to the negative tone with returning fears about Europe's debt crisis. Corn futures have pulled back 20% since June on easing inventory concerns and economic worries. CBOT December corn fell 1/2c to $6.40 1/2 a bushel while November soybeans dropped 1.5% to $12.51.
Wheat (Source: CME)
At the Kansas City Board of Trade, hard red winter wheat for December delivery rose 1% to $7.14 1/4 a bushel amid concerns about dryness hurting the crop that will be harvested next spring. Hard red spring wheat for December delivery edged up 0.4% to $8.95 3/4 a bushel at MGEX in Minneapolis
Rice (Source: CME)
US rice futures finish down as buyers moved to the sidelines as harvest winds down. It's unusual that buyers are scarce as they would normally make purchases in the cash market as prices drop on the influx of new supplies, analysts say. CBOT November rice falls 10c to $16.52 1/2 per hundredweight.
Canada Will Introduce Wheat Board Legislation Tuesday (Source: CME)
The Canadian government will introduce legislation Tuesday to dismantle the Canadian Wheat Board's monopoly, and aims to pass the law by the end of the year. Agriculture Minister Gerry Ritz made the announcement in a speech at a farm in Acme, Alta. earlier. "The Canadian Wheat Board monopoly, born in a different time to meet different needs, has cast a chill on key parts of the grain sector in Western Canada," he said. "The six-decade-old Canadian Wheat Board monopoly is yesterday's solution to yesterday's problems." Ritz said the legislation, when passed, will give farmers marketing freedom that "will unlock new value-added investment, new jobs, and new growth for Canada's economy."
Record Yields Seen For Some Australian Wheat Crops (Source: CME)
Northern areas of Western Australia's wheat belt are on track for record production, barring the unlikely chance of heavy rainfall at harvest, which is already under way, Duncan Gay, the manager of the northern Geraldton port zone for Cooperative Bulk Handling Ltd., said. CBH, which markets grain and dominates storage and export logistics in the state, estimates total production this crop year ending March 31 at 12.5 million metric tons, if achieved the second-highest on record but still down from a range 13 million-14 million tons estimated a week ago by the state government's Department of Agriculture. Typically, 70% of grain produced in the state is wheat, which based on these figures suggests wheat production this crop year in a range 8.8 million-9.8 million tons, nearly all of which is available for export, doubling from drought-reduced output in 2010-11 of 4.7 million.
Seasonal conditions this year in the northern wheat belt have "set this crop up beautifully and farmers are just starting to reap the rewards now," Gay said in a telephone interview. Rain during the harvest could result in a downgrading of quality, "they're going to have some exceptional yields," he said. Similar conditions for crops can be seen in northern areas of the Kwinana port zone, but not in the zone's southern half, while the southern Albany port zone's crops are above-average and southeastern Esperance port zone crops are below-average, he said. Exports of wheat, barley and canola through CBH's four export terminals, including at Geraldton, suffered costly delays in late 2008 as sustained rainfall delayed harvest and played havoc with shipping schedules. Gay said he doesn't believe this will recur this year given CBH's new system for allocating loading of exports and a strong shipping program booked mostly by CBH"s grain marketing unit through the company's ports.
Kazakh state grain trader plans return to exports
ASTANA, Oct 17 (Reuters) - Kazakhstan's state-owned grain trader will return to the export market this season, shipping up to 1.5 million tonnes of what promises to be the country's biggest post-Soviet grain crop, the head of the company said.
Beibitkhan Kabdrakhmanov, chairman of the management board at the Food Contract Corporation, forecast that Kazakhstan would have an exportable grain surplus of around 13 million tonnes in the current marketing year.
Brazil 2011/12 soy crop could expand 5 pct
SAO PAULO, Oct 14 (Reuters) - World No. 2 soy producer and exporter Brazil could top this year's record harvest by 5 percent in the 2011/12 crop through higher yields and expanded planting, the head of grain crushing industry association Abiove told Reuters on Friday.
Carlo Lovatelli, president of Abiove, Brazil's Association of Vegetable Oil Industries, said he believed investments in the sector had risen, helped by higher prices for the oilseed and that this would help keep output on an upward trajectory.
US soy falls on seeding estimate; wheat, corn steady
SINGAPORE, Oct 17 (Reuters) - Chicago soybean futures slid 0.8 percent as a forecast of higher acreage in the United States prompted investors to book profit, after last week's gains that were the highest in more than 2 years.
"Soybeans rose sharply last week and there could be some profit taking now as Chinese buyers are absent from the market," said Ker Chung Yang, a commodities analyst at Phillip Futures in Singapore.
Rains boost Argentine 2011/12 wheat outlook-gov't
BUENOS AIRES, Oct 14 (Reuters) - Heavy rain in Argentina this week helped improve most of the 2011/12 wheat crop, which was badly hurt by dryness last month, the Agriculture Ministry said on Friday.
The rain, however, came too late to avert yield losses in some wheat areas, the ministry said in its weekly report, adding that new showers in other areas will be needed to guarantee good plant development.
Informa trims U.S. 2012 corn plantings forecast
CHICAGO, Oct 14 (Reuters) - Analytical firm Informa Economics lowered its forecast of U.S. 2012 corn plantings to 93.1 million acres (37.7 million hectares) from its previous forecast of 94.3 million, trade sources said on Friday.
However, if realized, the forecast still would represent the most acres planted to corn since 2007 and the second-most since 1944.
Ukraine sows 85% winter grain despite poor weather
KIEV, Oct 14 (Reuters) - Ukrainian farms have sown 6.9 million hectares of winter grains for the 2012 harvest, or 85 percent of the expected area, even while cold weather has followed severe drought, the Agriculture Ministry said on Friday.
The ministry said in a report farms had sown 5.9 million hectares for winter wheat, or 90 percent of the total targeted area of 6.6 million hectares.
Light rains cause brief snafu for U.S. harvest
CHICAGO, Oct 14 (Reuters) - Light rainfall late this week and some modest showers early next week will cause a brief slowdown in harvesting the U.S. corn and soybean crops, an agricultural meteorologist said on Friday.
"A few instances of rain, nothing real important and no major delays," said Andy Karst, meteorologist for World Weather Inc.
Ukraine grain exports at a record low - lobby
KIEV, Oct 14 (Reuters) - Ukraine's grain exports totalled 400,000 tonnes in the first 13 days of October or just a half of the export volume in the same period in September, the Ukrainian Agrarian Confederation said on Friday.
Ukraine's parliament last week cancelled export duties for wheat and maize but kept in place the levy on exports of barley.
EU sees stable wheat supply, lower exports this year
PARIS, Oct 14 (Reuters) - Wheat production and stocks in the European Union will be little changed in 2011/12 compared with last season, data released by the EU's executive showed on Friday.
The data came in a first-ever short-term agricultural outlook published by the EU's executive, following its pledge to provide regular estimates as part of a plan by G20 countries to raise transparency in agricultural markets.
Russia Medvedev sees '11 grain harvest at 95 mln T
MOSCOW, Oct 14 (Reuters) - President Dmitry Medvedev said on Friday that Russia is expected to harvest 95 million tonnes of grain this year.
"The grain harvest reached 90 mln tonnes, we have plans in mind (to harvest) 95 mln tonnes," Medvedev said at a meeting with agricultural sector workers at his Gorky residence.
Rubber may gain on concern about Thai floods
KUALA LUMPUR, Oct 17 (Reuters) - Tokyo rubber futures may gain this week, prompted by concern that flooding in Thailand, the world's largest rubber producer, will disrupt transportation of the commodity to ports and factories.
"Thailand's floods are raising concern that there will be major disruptions to the delivery of rubber," said Ker Chung Yang, an investment analyst at Phillip Futures in Singapore.
India's Sept sugar stocks up 38 pct y/y-sources
NEW DELHI, Oct 17 (Reuters) - India's Sept. 1 sugar stocks were at 8.83 million tonnes, up from 6.4 million tonnes in the previous year, industry sources said on Monday, equivalent to some four months of domestic demand.
On Aug. 1, sugar inventory was at 10.47 million tonnes against 7.6 million tonnes in the previous year.
Thai floods delay sugar crushing, unlikely to hit rubber
BANGKOK, Oct 17 (Reuters) - Thailand's worst flooding in five decades is expected to delay the 2011/12 cane-crushing season by a few weeks to late November but crop damage is likely to be limited, senior industry officials said on Monday.
Crushing had been expected to start by late October or early November.
Colombia 2012 secondary coffee crop at risk from rains
BOGOTA, Oct 14 (Reuters) - Some of Colombia's coffee provinces soaked up sunnier weather in a key flowering period, but there are dark clouds on the horizon threatening the 2012 secondary crop with higher-than-normal rains, farmers said this week.
Key regions in the world's biggest producer of high-quality Arabica beans may get 30 percent more rainfall than average in the critical flowering months of October and November, retarding bean development and raising the risk of disease.
Brazil coffee belt in bloom, lingering rain helps
BRASILIA, Oct 14 (Reuters) - Coffee fields in parts of Brazil's southeastern coffee belt are awash with white blossoms, boding well for the 2012 crop with the protection of wet weather to avoid losing flowers at this critical phase.
The 2012 harvest is almost certain to be larger than last year's, occurring in an on-year in the biennial cycle but agronomists do not expect to be able to estimate its the size of the world's largest coffee crop until around December.
India sugar mills want quick export clearance
MUMBAI, Oct 14 (Reuters) - India's expected sugar surplus in the 2011/12 season could make room for exports of 4 million tonnes and the government should allow exports quickly so millers can take advantage of supply delays from flood-hit Thailand, a senior industry official said.
India competes with Thailand in shipping white sugar to Middle East and Asian countries.
Nigeria cocoa grinder eyes Asia, Latam markets
LAGOS, Oct 14 (Reuters) - Nigerian cocoa grinder, FTN Cocoa Processors , has doubled its capacity to 20,000 tonnes ahead of its plans to explore Asian and Latin American markets after a slump in demand from Europe, its executive director said on Friday.
Akin Laoye told Reuters the expansion was initially planned to take advantage of growing demand from Western markets, but the economic slowdown prompted the company to look elsewhere.
Vietnam raises 2011 rubber exports forecast
HO CHI MINH CITY, Oct 17 (Reuters) - Vietnam, the world's fourth largest natural rubber exporter, has raised its rubber export forecast for this year to 780,000-800,000 tonnes from a prior projection of 770,000 tonnes due to higher output, an industry official said on Monday.
"The output is rising as the planting area has been expanded," General Secretary Tran Thi Thuy Hoa of the Vietnam Rubber Association said.
Coal fundamentals to take a back seat in 2012
LONDON, Oct 13 (Reuters) - Coal supply is likely to be in surplus next year, even while Chinese demand rises, but these factors may have only a limited impact on prices, which have been barely twitching in a market hampered by a sharp drop in trading volumes.
When traders, utilities and miners gather in Madrid for the coal industry's biggest annual event next week, fundamentals of supply and demand may take a back seat to the search for lucrative market niches and the likelihood of disappointing bonuses.
S.Korea Sept LNG imports jump 59 pct y/y; coal imports up 30 pct
SEOUL, Oct 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) rose 59 percent in September from a year earlier, customs data showed on Saturday.
South Korea, the world's second-largest LNG buyer after Japan, imported 3.67 million tonnes of LNG last month, compared with 2.31 million tonnes in September 2010, Korea Customs Service data showed.
US coal consumption up 3 pct last week - Genscape
Oct 14 (Reuters) - U.S. coal consumption rose 3 percent last week but was down 6 percent from the same week a year ago, according to power industry data monitor Genscape on Friday.
Coal use swings up and down seasonally, and varies from week to week and region to region, depending on electricity demand to run air-conditioners or power heaters.
Euro Coal-Dec DES ARA trades at $117/T, down $6
LONDON, Oct 14 (Reuters) - Prompt physical coal prices fell again on Friday although few fresh trades were reported, but in contrast, oil and gas prices rose.
Many coal market players were already travelling to Madrid for an industry event.
Oil Trades Near Two-Day Low on U.S. Supply Forecast, Europe Crisis Outlook (Source: Bloomberg)
Oil traded near the lowest close in two days in New York on speculation that U.S. crude supplies rose last week and Europe’s consumption may falter as it struggles to contain its debt crisis. Futures were little changed, after slipping 0.5 percent yesterday. German Chancellor Angela Merkel said expectation that rescue plans to be announced at an Oct. 23 summit will speedily solve Europe’s problems were “dreams.” China may say today its economy grew more than 9 percent last quarter while an Energy Department report tomorrow may show U.S. stockpiles climbed for a second week, according to a Bloomberg News survey. “A negative dose of reality regarding a fast solution to Europe’s debt crisis weighed on sentiment,” Mark Pervan, Melbourne-based head of commodity research at Australia & New Zealand Banking Group Ltd., said in a note today. “Today, China’s data dump for September will be closely watched.”
Bullish iron ore miners collide with price reality: Clyde Russell
SINGAPORE, Oct 17 (Reuters) - It may just be bravado but iron ore producers seem remarkably sanguine about the recent precipitous drop in the price of the steel-making ingredient.
It could be that the miners remain confident because they have yet to see cargoes being cancelled, or that China, the buyer of two-thirds of seaborne iron ore, imported the most since January last month.
Iron Ore-Shanghai rebar at contract low, ore to extend losses
SINGAPORE, Oct 17 (Reuters) - Spot iron ore prices may extend losses this week after sliding to their lowest in more than 11 months as key steel prices in top consumer China, which fell to a contract low on Monday, continue to restrain buying interest.
Supply of iron ore in the spot market has risen sharply with cargoes meant for long-term, or three-month, contracts being sold at spot rates because Chinese mills were not keen on buying the material at contract rates that are far higher than spot.
China seeks iron ore contract tweaks as prices fall
SINGAPORE, Oct 13 (Reuters) - Chinese steel mills are seeking to postpone iron ore shipments or renegotiate fourth-quarter contracts as spot prices fall to their lowest level since November 2010, traders said on Thursday.
China is the world's biggest buyer of iron ore, a major money maker for miners Vale , Rio Tinto and BHP Billiton which together control around two thirds of the global seaborne market.
Gold Falls From Three-Week High After Dollar Rebounds; Silver Declines (Source: Bloomberg)
Gold futures fell from a three-week high as the dollar’s rally reduced demand for the precious metal as an alternative asset. Silver also dropped. The greenback climbed as much as 0.8 percent against a basket of six major currencies as Germany damped expectations for a fast resolution to Europe’s debt crisis. The dollar jumped 6 percent last month, while gold slumped 11 percent. “The dollar’s strength is weighing on gold,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Also, some people are waiting on the sidelines because of the volatility in prices.” Gold futures for December delivery declined 0.4 percent to settle at $1,676.60 an ounce at 1:41 p.m. on the Comex in New York. Earlier, the price reached $1,696.80, the highest for a most-active contract since Sept. 23. Last week, the metal gained 2.9 percent, the most in more than a month.
Baltic index up for 8th day, bounce seen short-term
LONDON, Oct 14 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to its highest in over ten months on Friday although the pace of gains slowed.
Brokers said growing vessel supply, which was outpacing commodity demand, was set to cap dry bulk freight rate gains in the coming months with economic uncertainty adding to headwinds.
Corn futures finish little changed as the fall harvest continues at quick pace, due in part to mild weather. Quick sales are helping farmers refill grain bins and keep users well supplied. But futures were weighed down by a selloff in soybeans as outside markets add to the negative tone with returning fears about Europe's debt crisis. Corn futures have pulled back 20% since June on easing inventory concerns and economic worries. CBOT December corn fell 1/2c to $6.40 1/2 a bushel while November soybeans dropped 1.5% to $12.51.
Wheat (Source: CME)
At the Kansas City Board of Trade, hard red winter wheat for December delivery rose 1% to $7.14 1/4 a bushel amid concerns about dryness hurting the crop that will be harvested next spring. Hard red spring wheat for December delivery edged up 0.4% to $8.95 3/4 a bushel at MGEX in Minneapolis
Rice (Source: CME)
US rice futures finish down as buyers moved to the sidelines as harvest winds down. It's unusual that buyers are scarce as they would normally make purchases in the cash market as prices drop on the influx of new supplies, analysts say. CBOT November rice falls 10c to $16.52 1/2 per hundredweight.
Canada Will Introduce Wheat Board Legislation Tuesday (Source: CME)
The Canadian government will introduce legislation Tuesday to dismantle the Canadian Wheat Board's monopoly, and aims to pass the law by the end of the year. Agriculture Minister Gerry Ritz made the announcement in a speech at a farm in Acme, Alta. earlier. "The Canadian Wheat Board monopoly, born in a different time to meet different needs, has cast a chill on key parts of the grain sector in Western Canada," he said. "The six-decade-old Canadian Wheat Board monopoly is yesterday's solution to yesterday's problems." Ritz said the legislation, when passed, will give farmers marketing freedom that "will unlock new value-added investment, new jobs, and new growth for Canada's economy."
Record Yields Seen For Some Australian Wheat Crops (Source: CME)
Northern areas of Western Australia's wheat belt are on track for record production, barring the unlikely chance of heavy rainfall at harvest, which is already under way, Duncan Gay, the manager of the northern Geraldton port zone for Cooperative Bulk Handling Ltd., said. CBH, which markets grain and dominates storage and export logistics in the state, estimates total production this crop year ending March 31 at 12.5 million metric tons, if achieved the second-highest on record but still down from a range 13 million-14 million tons estimated a week ago by the state government's Department of Agriculture. Typically, 70% of grain produced in the state is wheat, which based on these figures suggests wheat production this crop year in a range 8.8 million-9.8 million tons, nearly all of which is available for export, doubling from drought-reduced output in 2010-11 of 4.7 million.
Seasonal conditions this year in the northern wheat belt have "set this crop up beautifully and farmers are just starting to reap the rewards now," Gay said in a telephone interview. Rain during the harvest could result in a downgrading of quality, "they're going to have some exceptional yields," he said. Similar conditions for crops can be seen in northern areas of the Kwinana port zone, but not in the zone's southern half, while the southern Albany port zone's crops are above-average and southeastern Esperance port zone crops are below-average, he said. Exports of wheat, barley and canola through CBH's four export terminals, including at Geraldton, suffered costly delays in late 2008 as sustained rainfall delayed harvest and played havoc with shipping schedules. Gay said he doesn't believe this will recur this year given CBH's new system for allocating loading of exports and a strong shipping program booked mostly by CBH"s grain marketing unit through the company's ports.
Kazakh state grain trader plans return to exports
ASTANA, Oct 17 (Reuters) - Kazakhstan's state-owned grain trader will return to the export market this season, shipping up to 1.5 million tonnes of what promises to be the country's biggest post-Soviet grain crop, the head of the company said.
Beibitkhan Kabdrakhmanov, chairman of the management board at the Food Contract Corporation, forecast that Kazakhstan would have an exportable grain surplus of around 13 million tonnes in the current marketing year.
Brazil 2011/12 soy crop could expand 5 pct
SAO PAULO, Oct 14 (Reuters) - World No. 2 soy producer and exporter Brazil could top this year's record harvest by 5 percent in the 2011/12 crop through higher yields and expanded planting, the head of grain crushing industry association Abiove told Reuters on Friday.
Carlo Lovatelli, president of Abiove, Brazil's Association of Vegetable Oil Industries, said he believed investments in the sector had risen, helped by higher prices for the oilseed and that this would help keep output on an upward trajectory.
US soy falls on seeding estimate; wheat, corn steady
SINGAPORE, Oct 17 (Reuters) - Chicago soybean futures slid 0.8 percent as a forecast of higher acreage in the United States prompted investors to book profit, after last week's gains that were the highest in more than 2 years.
"Soybeans rose sharply last week and there could be some profit taking now as Chinese buyers are absent from the market," said Ker Chung Yang, a commodities analyst at Phillip Futures in Singapore.
Rains boost Argentine 2011/12 wheat outlook-gov't
BUENOS AIRES, Oct 14 (Reuters) - Heavy rain in Argentina this week helped improve most of the 2011/12 wheat crop, which was badly hurt by dryness last month, the Agriculture Ministry said on Friday.
The rain, however, came too late to avert yield losses in some wheat areas, the ministry said in its weekly report, adding that new showers in other areas will be needed to guarantee good plant development.
Informa trims U.S. 2012 corn plantings forecast
CHICAGO, Oct 14 (Reuters) - Analytical firm Informa Economics lowered its forecast of U.S. 2012 corn plantings to 93.1 million acres (37.7 million hectares) from its previous forecast of 94.3 million, trade sources said on Friday.
However, if realized, the forecast still would represent the most acres planted to corn since 2007 and the second-most since 1944.
Ukraine sows 85% winter grain despite poor weather
KIEV, Oct 14 (Reuters) - Ukrainian farms have sown 6.9 million hectares of winter grains for the 2012 harvest, or 85 percent of the expected area, even while cold weather has followed severe drought, the Agriculture Ministry said on Friday.
The ministry said in a report farms had sown 5.9 million hectares for winter wheat, or 90 percent of the total targeted area of 6.6 million hectares.
Light rains cause brief snafu for U.S. harvest
CHICAGO, Oct 14 (Reuters) - Light rainfall late this week and some modest showers early next week will cause a brief slowdown in harvesting the U.S. corn and soybean crops, an agricultural meteorologist said on Friday.
"A few instances of rain, nothing real important and no major delays," said Andy Karst, meteorologist for World Weather Inc.
Ukraine grain exports at a record low - lobby
KIEV, Oct 14 (Reuters) - Ukraine's grain exports totalled 400,000 tonnes in the first 13 days of October or just a half of the export volume in the same period in September, the Ukrainian Agrarian Confederation said on Friday.
Ukraine's parliament last week cancelled export duties for wheat and maize but kept in place the levy on exports of barley.
EU sees stable wheat supply, lower exports this year
PARIS, Oct 14 (Reuters) - Wheat production and stocks in the European Union will be little changed in 2011/12 compared with last season, data released by the EU's executive showed on Friday.
The data came in a first-ever short-term agricultural outlook published by the EU's executive, following its pledge to provide regular estimates as part of a plan by G20 countries to raise transparency in agricultural markets.
Russia Medvedev sees '11 grain harvest at 95 mln T
MOSCOW, Oct 14 (Reuters) - President Dmitry Medvedev said on Friday that Russia is expected to harvest 95 million tonnes of grain this year.
"The grain harvest reached 90 mln tonnes, we have plans in mind (to harvest) 95 mln tonnes," Medvedev said at a meeting with agricultural sector workers at his Gorky residence.
Rubber may gain on concern about Thai floods
KUALA LUMPUR, Oct 17 (Reuters) - Tokyo rubber futures may gain this week, prompted by concern that flooding in Thailand, the world's largest rubber producer, will disrupt transportation of the commodity to ports and factories.
"Thailand's floods are raising concern that there will be major disruptions to the delivery of rubber," said Ker Chung Yang, an investment analyst at Phillip Futures in Singapore.
India's Sept sugar stocks up 38 pct y/y-sources
NEW DELHI, Oct 17 (Reuters) - India's Sept. 1 sugar stocks were at 8.83 million tonnes, up from 6.4 million tonnes in the previous year, industry sources said on Monday, equivalent to some four months of domestic demand.
On Aug. 1, sugar inventory was at 10.47 million tonnes against 7.6 million tonnes in the previous year.
Thai floods delay sugar crushing, unlikely to hit rubber
BANGKOK, Oct 17 (Reuters) - Thailand's worst flooding in five decades is expected to delay the 2011/12 cane-crushing season by a few weeks to late November but crop damage is likely to be limited, senior industry officials said on Monday.
Crushing had been expected to start by late October or early November.
Colombia 2012 secondary coffee crop at risk from rains
BOGOTA, Oct 14 (Reuters) - Some of Colombia's coffee provinces soaked up sunnier weather in a key flowering period, but there are dark clouds on the horizon threatening the 2012 secondary crop with higher-than-normal rains, farmers said this week.
Key regions in the world's biggest producer of high-quality Arabica beans may get 30 percent more rainfall than average in the critical flowering months of October and November, retarding bean development and raising the risk of disease.
Brazil coffee belt in bloom, lingering rain helps
BRASILIA, Oct 14 (Reuters) - Coffee fields in parts of Brazil's southeastern coffee belt are awash with white blossoms, boding well for the 2012 crop with the protection of wet weather to avoid losing flowers at this critical phase.
The 2012 harvest is almost certain to be larger than last year's, occurring in an on-year in the biennial cycle but agronomists do not expect to be able to estimate its the size of the world's largest coffee crop until around December.
India sugar mills want quick export clearance
MUMBAI, Oct 14 (Reuters) - India's expected sugar surplus in the 2011/12 season could make room for exports of 4 million tonnes and the government should allow exports quickly so millers can take advantage of supply delays from flood-hit Thailand, a senior industry official said.
India competes with Thailand in shipping white sugar to Middle East and Asian countries.
Nigeria cocoa grinder eyes Asia, Latam markets
LAGOS, Oct 14 (Reuters) - Nigerian cocoa grinder, FTN Cocoa Processors , has doubled its capacity to 20,000 tonnes ahead of its plans to explore Asian and Latin American markets after a slump in demand from Europe, its executive director said on Friday.
Akin Laoye told Reuters the expansion was initially planned to take advantage of growing demand from Western markets, but the economic slowdown prompted the company to look elsewhere.
Vietnam raises 2011 rubber exports forecast
HO CHI MINH CITY, Oct 17 (Reuters) - Vietnam, the world's fourth largest natural rubber exporter, has raised its rubber export forecast for this year to 780,000-800,000 tonnes from a prior projection of 770,000 tonnes due to higher output, an industry official said on Monday.
"The output is rising as the planting area has been expanded," General Secretary Tran Thi Thuy Hoa of the Vietnam Rubber Association said.
Coal fundamentals to take a back seat in 2012
LONDON, Oct 13 (Reuters) - Coal supply is likely to be in surplus next year, even while Chinese demand rises, but these factors may have only a limited impact on prices, which have been barely twitching in a market hampered by a sharp drop in trading volumes.
When traders, utilities and miners gather in Madrid for the coal industry's biggest annual event next week, fundamentals of supply and demand may take a back seat to the search for lucrative market niches and the likelihood of disappointing bonuses.
S.Korea Sept LNG imports jump 59 pct y/y; coal imports up 30 pct
SEOUL, Oct 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) rose 59 percent in September from a year earlier, customs data showed on Saturday.
South Korea, the world's second-largest LNG buyer after Japan, imported 3.67 million tonnes of LNG last month, compared with 2.31 million tonnes in September 2010, Korea Customs Service data showed.
US coal consumption up 3 pct last week - Genscape
Oct 14 (Reuters) - U.S. coal consumption rose 3 percent last week but was down 6 percent from the same week a year ago, according to power industry data monitor Genscape on Friday.
Coal use swings up and down seasonally, and varies from week to week and region to region, depending on electricity demand to run air-conditioners or power heaters.
Euro Coal-Dec DES ARA trades at $117/T, down $6
LONDON, Oct 14 (Reuters) - Prompt physical coal prices fell again on Friday although few fresh trades were reported, but in contrast, oil and gas prices rose.
Many coal market players were already travelling to Madrid for an industry event.
Oil Trades Near Two-Day Low on U.S. Supply Forecast, Europe Crisis Outlook (Source: Bloomberg)
Oil traded near the lowest close in two days in New York on speculation that U.S. crude supplies rose last week and Europe’s consumption may falter as it struggles to contain its debt crisis. Futures were little changed, after slipping 0.5 percent yesterday. German Chancellor Angela Merkel said expectation that rescue plans to be announced at an Oct. 23 summit will speedily solve Europe’s problems were “dreams.” China may say today its economy grew more than 9 percent last quarter while an Energy Department report tomorrow may show U.S. stockpiles climbed for a second week, according to a Bloomberg News survey. “A negative dose of reality regarding a fast solution to Europe’s debt crisis weighed on sentiment,” Mark Pervan, Melbourne-based head of commodity research at Australia & New Zealand Banking Group Ltd., said in a note today. “Today, China’s data dump for September will be closely watched.”
Bullish iron ore miners collide with price reality: Clyde Russell
SINGAPORE, Oct 17 (Reuters) - It may just be bravado but iron ore producers seem remarkably sanguine about the recent precipitous drop in the price of the steel-making ingredient.
It could be that the miners remain confident because they have yet to see cargoes being cancelled, or that China, the buyer of two-thirds of seaborne iron ore, imported the most since January last month.
Iron Ore-Shanghai rebar at contract low, ore to extend losses
SINGAPORE, Oct 17 (Reuters) - Spot iron ore prices may extend losses this week after sliding to their lowest in more than 11 months as key steel prices in top consumer China, which fell to a contract low on Monday, continue to restrain buying interest.
Supply of iron ore in the spot market has risen sharply with cargoes meant for long-term, or three-month, contracts being sold at spot rates because Chinese mills were not keen on buying the material at contract rates that are far higher than spot.
China seeks iron ore contract tweaks as prices fall
SINGAPORE, Oct 13 (Reuters) - Chinese steel mills are seeking to postpone iron ore shipments or renegotiate fourth-quarter contracts as spot prices fall to their lowest level since November 2010, traders said on Thursday.
China is the world's biggest buyer of iron ore, a major money maker for miners Vale , Rio Tinto and BHP Billiton which together control around two thirds of the global seaborne market.
Gold Falls From Three-Week High After Dollar Rebounds; Silver Declines (Source: Bloomberg)
Gold futures fell from a three-week high as the dollar’s rally reduced demand for the precious metal as an alternative asset. Silver also dropped. The greenback climbed as much as 0.8 percent against a basket of six major currencies as Germany damped expectations for a fast resolution to Europe’s debt crisis. The dollar jumped 6 percent last month, while gold slumped 11 percent. “The dollar’s strength is weighing on gold,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Also, some people are waiting on the sidelines because of the volatility in prices.” Gold futures for December delivery declined 0.4 percent to settle at $1,676.60 an ounce at 1:41 p.m. on the Comex in New York. Earlier, the price reached $1,696.80, the highest for a most-active contract since Sept. 23. Last week, the metal gained 2.9 percent, the most in more than a month.
Baltic index up for 8th day, bounce seen short-term
LONDON, Oct 14 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to its highest in over ten months on Friday although the pace of gains slowed.
Brokers said growing vessel supply, which was outpacing commodity demand, was set to cap dry bulk freight rate gains in the coming months with economic uncertainty adding to headwinds.
20111018 0944 Soy Oil & Palm Oil Related News.
Soybeans (Source: CME)
Profit-taking weighed on US soybean as farmers were expected to sell out after prices posted big gains last week. Soybeans suffered bigger correction than corn futures after strong prior week tied to tighter USDA supply outlook. Weaker outside markets also pressured soybeans after signs emerged in Europe that the debt crisis could drag on longer than hoped. CBOT November soybeans close down 19c, or 1.5%, at $12.51. CBOT December soymeal closes down $3.60, or 01.1%, at $324 per short ton. December soyoil was down 64 cents, or 1.2%, at 52.90 cents per pound.
Soybean Meal/Oil (Source: CME)
CBOT December soymeal closed down $3.60, or 01.1%, at $324 per short ton. December soyoil was down 64 cents, or 1.2%, at 52.90 cents per pound.
Palm oil hits 3-week high on exports, economy
KUALA LUMPUR, Oct 17 (Reuters) - Malaysian palm oil futures rose to their highest in nearly three weeks on solid export growth and expectations that euro zone policy makers will come up with a plan to solve the region's debt woes.
"Export data is supportive and the market is watching the euro zone issues. One camp is talking about how high exports may reduce palm oil stocks as output may have hit its peak this year," said a trader with a foreign brokerage in Kuala Lumpur.
Profit-taking weighed on US soybean as farmers were expected to sell out after prices posted big gains last week. Soybeans suffered bigger correction than corn futures after strong prior week tied to tighter USDA supply outlook. Weaker outside markets also pressured soybeans after signs emerged in Europe that the debt crisis could drag on longer than hoped. CBOT November soybeans close down 19c, or 1.5%, at $12.51. CBOT December soymeal closes down $3.60, or 01.1%, at $324 per short ton. December soyoil was down 64 cents, or 1.2%, at 52.90 cents per pound.
Soybean Meal/Oil (Source: CME)
CBOT December soymeal closed down $3.60, or 01.1%, at $324 per short ton. December soyoil was down 64 cents, or 1.2%, at 52.90 cents per pound.
Palm oil hits 3-week high on exports, economy
KUALA LUMPUR, Oct 17 (Reuters) - Malaysian palm oil futures rose to their highest in nearly three weeks on solid export growth and expectations that euro zone policy makers will come up with a plan to solve the region's debt woes.
"Export data is supportive and the market is watching the euro zone issues. One camp is talking about how high exports may reduce palm oil stocks as output may have hit its peak this year," said a trader with a foreign brokerage in Kuala Lumpur.
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