Friday, February 10, 2012

20120210 0920 Global Market Related News.

Asian Stocks Decline as European Leaders Hold Back Greek Debt Rescue Aid (Source: Bloomberg)
Asian stocks fell as European finance ministers held back a rescue package for Greece ahead of a parliamentary vote on a newly-agreed austerity plan. Samsung Electronics Co. (005930), a Japanese consumer electronics maker that gets about 20 percent of sales from Europe, slid 1.6 percent. AOC Holdings Inc., an oil and gas explorer, declined 8.8 percent in Tokyo after cutting its full-year net income forecast by 55 percent. Rio Tinto Group, the world’s third- biggest mining company, dropped 2.2 percent in Sydney after posting a second-half loss. “Greece reached some sort of agreement, but it’s still up for negotiation whether the rest of the European authorities will accept that agreement,” said Stephen Halmarick, Sydney- based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion.

Japanese Stocks Swing Between Gains, Losses After Greek Bailout Held Back (Source: Bloomberg)
Feb. 10 (Bloomberg) -- Japanese stocks swung between gains and losses as European finance ministers held back a bailout for Greece in a rebuff that left lawmakers in Athens under pressure to endorse a newly minted austerity plan. Canon Inc. (7751), a Japanese camera maker that gets 31 percent of its revenue in Europe, rose 0.6 percent. Komatsu Ltd. (6301), a construction machinery maker that generates 23 percent of its sales in China, fell 0.7 percent before a report today expected to show mainland exports and imports fell in January. Nippon Yusen K.K. (9101) led shippers higher after JP Morgan Securities raised its investment rating. The Nikkei 225 Stock Average fell 0.1 percent to 8,994.06 as of 9:22 a.m. in Tokyo, set for a 1.8 percent advance this week. The broader Topix Index gained 0.1 percent to 783.37, headed for a 3 percent gain on the week.

Stocks in U.S. Advance as Greece Reaches Agreement on Austerity Measures (Source: Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third day, as Greek political leaders struck a deal on a package of austerity measures needed to secure international rescue funds. Technology (S5INFT) shares had the biggest gain among 10 industries in the S&P 500, adding 1 percent. Akamai Technologies Inc. (AKAM), the operator of a server network that lets businesses speed data delivery, and Visa Inc. (V), the world’s biggest payments network, advanced at least 3.7 percent as earnings topped analysts’ projections. United Technologies Corp. (UTX) rallied 2.5 percent as it is said to be studying the sale of a pumps business. The S&P 500 increased 0.2 percent to 1,351.95 as of 4 p.m. New York time. The benchmark gauge declined as much as 0.4 percent earlier today. The Dow Jones Industrial Average advanced 6.51 points, or 0.1 percent, to 12,890.46. The Russell 2000 Index of small companies lost 0.4 percent to 824.99.

European Stocks Advance as Greek Leaders Agree on Austerity; Daimler Gains (Source: Bloomberg)
European stocks rose for the first time in four days as Greek political leaders reached a consensus on austerity measures and the European Central Bank held its benchmark interest rate at a record low. Daimler AG (DAI), the maker of Mercedes-Benz cars, jumped to the highest in six months after reporting a 39 percent increase in quarterly profit. Hugo Boss AG (BOS) climbed as fourth-quarter operating income beat estimates. Credit Suisse Group AG (CSGN) fell 3.5 percent after posting an unexpected loss. The Stoxx Europe 600 Index advanced 0.2 percent to 263.64 at the close in London. The benchmark measure has rallied 23 percent from last year’s low and 7.8 percent this year on mounting optimism that euro-area policy makers will contain the region’s debt crisis.

U.K. Stocks Climb on Greek Austerity Deal, BOE Decision; BG Group Advances (Source: Bloomberg)
U.K. stocks rose, snapping three days of declines, as Greek political leaders struck a deal on austerity measures and the Bank of England raised its asset- purchase target. BG Group Plc (BG/) climbed 3.2 percent after saying it plans to sell $5 billion of assets in the next two years. GlaxoSmithKline Plc (GSK) increased 1.2 percent. Rio Tinto Group fell 1.5 percent after reporting a loss in the second half. The FTSE 100 Index advanced 19.54, or 0.3 percent, to 5,895.47 at the close in London. The gauge has rallied 19 percent from last year’s lowest level on Oct. 4. The FTSE All- Share Index and Ireland’s ISEQ Index added 0.4 percent each.

China’s Stocks Rise to 2-Month High as Consumer, Property Stocks Advance (Source: Bloomberg)
China’s stocks advanced, driving the benchmark index to a two-month high, as a cash crunch eased and investors bought shares of companies whose earnings benefit from rising prices. Liquor maker Kweichow Moutai Co. (600519) led an advance for consumer-staples producers after January inflation unexpectedly rebounded to 4.5 percent during the Chinese new year holiday on accelerating food prices. Ledman Optoelectronic Co. jumped 3.4 percent after benchmark money-market rates fell, signaling improving liquidity. China Vanke Co. paced a two-day rally for property developers. Jiangxi Copper Co. slid 2 percent as Greek leaders fell short of a full agreement on a rescue plan. “The Spring Festival effect boosted January inflation and it’s a one-off rebound,” said Dai Ming, a fund manager at Shanghai Kingsun Investment Management & Consulting Co. “Prices will come down in the following months. But the central bank will be reluctant to relax monetary policies since the inflation rate is still perceived as high.”

Stocks, Euro, Commodities Gain as Treasuries Fall on Greece Austerity Deal (Source: Bloomberg)
Stocks and the euro rose, Treasuries fell and commodities extended their longest rally of the year as Greek politicians agreed on austerity plans needed to qualify for international aid and U.S. jobless claims decreased. The Standard & Poor’s 500 Index increased 0.2 percent to close at a seven-month high of 1,351.95 at 4 p.m. in New York. The Dow Jones Industrial Average rose 6.51 points to 12,890.46, the highest since May 2008. The euro strengthened 0.2 percent to $1.3287, near a two-month high. Thirty-year Treasury yields climbed to a three-month high following an auction. The S&P GSCI Index of 24 commodities advanced for a fifth straight day as industrial metals led gains and oil approached $100 a barrel.
Political leaders in Athens announced an agreement that may clear the way for a deal to cut the nation’s debt and win its second rescue in two years. European finance chiefs were set to defer ratifying a 130 billion-euro ($173 billion) rescue for Greece, pressing the government in Athens to put the newly struck austerity plan into action.

Euro hits 2-month high as market bets on Greece deal
TOKYO, Feb 9 (Reuters) - The euro hit a fresh two-month high on views that Greece was inching closer to a bailout deal even though Greek parties stopped short of signing off on austerity measures.
"I do think they will reach a deal by the euro zone finance ministers' meeting," said Katsunori Kitakura, chief dealer at Chuo Mitsui Banking and Trust.

American Consumers’ Confidence Gains With Improvement in Job Data: Economy (Source: Bloomberg)
Fewer Americans than forecast filed claims for jobless benefits last week and consumer confidence rose to the highest level in a year, pointing to gains in spending as job prospects brighten. Applications for jobless benefits decreased 15,000 in the week ended Feb. 4 to 358,000, Labor Department figures showed today in Washington. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg News survey. The Bloomberg Consumer Comfort Index rose to minus 41.7 in the period to Feb. 5 from minus 44.8 the previous week. The drop in firings comes a week after a report showed joblessness dropped to a three-year low in January, adding to evidence the labor market is recovering. More favorable views of the economy and finances mean consumers will continue to pick up the pace of spending.

Treasury Is to Sell Floating Rate Notes in Second Half, Bond Dealers Say (Source: Bloomberg)
The U.S. may begin selling floating- rate notes for the first time in the second half of the year to help sustain demand for Treasuries while funding record budget deficits, according to Wall Street bond dealers. Issuance may total about $10 billion a month, based on forecasts from nine of the 21 primary dealers that act as counterparties for the Federal Reserve. The Treasury Borrowing Advisory Committee, the group of bond dealers and investors that meets quarterly with the Treasury to share insights on the debt market, unanimously endorsed the sales, according to minutes of the group’s meeting released Feb. 1. A Treasury official who briefed reporters on condition of not being named said the next day that a decision on floating-rate notes could be made as soon as May.
The notes, in what would be the Treasury’s first new security since it began offering inflation-linked debt in 1997, would likely appeal to investors concerned that the Fed’s pledge to keep the federal funds rate at a record low through 2014 and other stimulus measures will eventually lead to an acceleration of inflation. The Treasury has said it may sell the securities to minimize borrowing costs, improve liquidity and expand its investor base as it funds a $1.1 trillion shortfall this year.

Banks Agree to $25B Deal to End Probe (Source: Bloomberg)
Bank of America Corp., JPMorgan Chase & Co. and three other U.S. banks reached a $25 billion settlement with 49 states and the federal government to end a probe of abusive foreclosure practices stemming from the collapse of the housing bubble. In what the U.S. called the largest federal-state civil settlement in the nation’s history, the banks have committed $20 billion in various forms of mortgage relief plus payments of $5 billion to state and federal governments. “There are something like 10 million-plus homes under water to the tune of half a trillion dollars,” said Lynn Turner, the former chief accounting officer at the Securities and Exchange Commission and a managing director at consulting firm Litinomics Inc. in Los Angeles. “I don’t think this settlement, which lets all the bank executives off the hook for filing false documents with courts, is going to make much of a dent.”

China’s January Exports Probably Fell: Minister (Source: Bloomberg)
Chinese Commerce Minister Chen Deming said exports probably fell in January after foreign trade slowed in the second half of last year, as he pledged to maintain “stability” in the yuan’s exchange rate. Overseas sales last month “cannot make us optimistic” and are “expected to have negative year-on-year growth due to Chinese New Year and other factors,” Chen said yesterday in a written response to Bloomberg News. “Chinese trading companies, particularly small and micro businesses, have come under growing pressure.” Hong Kong’s Hang Seng Index fell as much as 0.4 percent following the comments. Slowing trade adds pressure for monetary loosening to support economic growth even with officials yet to claim victory over inflation. Consumer-price gains picked up for the first time in six months in January, pushed up by holiday spending, a government report showed yesterday. Export data are due today, with the median estimate of analysts showing a 1.4 percent decline from a year earlier.

Australia Central Bank Says Slower Growth, Inflation Boost Rate-Cut Scope (Source: Bloomberg)
The Reserve Bank of Australia lowered its forecasts for growth and inflation this year, enabling policy makers to reduce the benchmark interest rate should the economy weaken significantly. “Inflation is forecast to remain around the midpoint of the target range for most of the next couple of years,” the central bank said today in its quarterly monetary policy statement. The outlook for consumer prices provides “scope for easier monetary policy should demand conditions weaken materially,” it said. The RBA sees average growth of 3.5 percent in 2012, down from its Nov. 4 estimate of 4 percent. Consumer prices will rise 3 percent in the year through to the fourth quarter, less than a previous prediction of 3.25 percent, the central bank said, while underlying inflation is predicted to be unchanged at 2.75 percent. The estimates are based on the overnight cash rate target remaining at its current level of 4.25 percent, it said.

Greece Rebuffed on Aid Over Austerity Vote (Source: Bloomberg)
European finance ministers held back a rescue package for Greece in a rebuff that left lawmakers in Athens under government pressure to endorse a newly minted austerity plan or exit the euro. “In short: no disbursement without implementation,” Luxembourg Prime Minister Jean-Claude Juncker said in Brussels late yesterday after chairing emergency talks of euro-area policy makers. He set another extraordinary meeting for Feb. 15. The refusal to deliver a 130 billion-euro ($173 billion) bailout for Greece reflected the euro area’s frustration with the country’s bickering politicians and the prospect that they may again backtrack on fiscal commitments not passed into law.

Bank of England Adds $79 Billion to Stimulus as Crisis Threatens Economy (Source: Bloomberg)
Bank of England officials pumped another 50 billion pounds ($79 billion) into the U.K. economy to protect a nascent recovery from the threat posed by Europe’s debt crisis. The nine-member Monetary Policy Committee raised the target for bond purchases to 325 billion pounds, more than a quarter of current outstanding gilts, according to a statement in London today. The increase was forecast by 34 of 50 economists in a Bloomberg News survey. Fifteen economists forecast a 75 billion- pound increase and one no change. The MPC also held its benchmark interest rate at a record-low 0.5 percent. The stimulus expansion suggests policy makers remain concerned that Europe’s failure to stem its debt turmoil poses a risk to Britain and may pull inflation below their 2 percent goal. While they noted an improvement in some business surveys last month, they said the growth outlook remains weak and that they had “concerns” about debt in some euro-area nations.

Greece Must Pass Austerity Plan Into Law to Get Troika Aid, Juncker Says (Source: Bloomberg)
Greece must pass its latest austerity package into law and identify 325 million euros in spending cuts before euro-area governments endorse a second bailout for the country, Luxembourg Prime Minister Jean-Claude Juncker said. “Despite the important progress achieved over the last days we didn’t yet have all necessary elements on the table to take decisions today,” Juncker said in Brussels after chairing an emergency meeting of euro-area finance ministers. Greek politicial leaders must also back the pact and provide assurances it will be carried through after forthcoming elections, Juncker said. European finance ministers will meet again next week.

Euro Finance Chiefs to Defer on Greece (Source: Bloomberg)
European finance chiefs are set to defer ratifying a 130 billion-euro ($173 billion) rescue for Greece, pressing the government in Athens to put a newly struck austerity plan into action. “It’s up to the Greek government by concrete actions -- through legislation, other actions -- to convince its European partners that the second program can be made to work,” European Union Economic and Monetary Affairs Commissioner Olli Rehn said today as he arrived for an emergency meeting of euro-area finance ministers in Brussels. European stocks rose for the first time in four days and the euro reached a two-month high against the dollar as the accord in Athens after all-night talks spurred optimism over enactment of the financial lifeline and debt-swap agreement needed for Greece to dodge default and economic collapse.

Greece Delivers Austerity Accord to Win Approval for Bailout (Source: Bloomberg)
Greek political leaders announced agreement on austerity measures, clearing the way for a deal to cut the nation’s debt and win its second rescue in two years. “Discussions between the Greek government and the troika were successfully completed this morning,” Greek Prime Minister Lucas Papademos’s office said in an e-mailed statement today in Athens. “Political leaders have agreed with the result of those negotiations. Therefore there is a general agreement in the context of the new program ahead of tonight’s euro group meeting.” The statement didn’t include any details. The accord came after Greek Finance Minister Evangelos Venizelos arrived in Brussels for an emergency meeting of euro- region finance ministers to discuss the 130 billion-euro ($173 billion) lifeline and a debt swap that will impose a loss of about 70 percent for investors.

Draghi Softens Outlook on Risks as ECB Refuses to Show Its Hand on Greece (Source: Bloomberg)
European Central Bank President Mario Draghi signaled the economic outlook has improved, suggesting policy makers may be less inclined to add to stimulus as Greece reached agreement on austerity measures to secure a bailout. “The economic outlook remains subject to high uncertainty and downside risks,” Draghi said at a press conference in Frankfurt today. Last month, he said the outlook was subject to “substantial” downside risks. The ECB left its benchmark interest rate at a record low of 1 percent, as predicted by 55 of 57 economists in a Bloomberg News survey, and Draghi said officials didn’t discuss a rate change. “With the more optimistic outlook, a March rate cut is still possible but far from certain,” said Christian Schulz, senior economist at Berenberg Bank in London. “If the rebound in confidence indicators gains strength and more hard data confirms the trend, the ECB may leave rates unchanged.”

EU Sanctions on Iran’s Largest Ports Will Slash Legal Trade If Enforced (Source: Bloomberg)
New European Union sanctions on Iran’s largest ports operator will curb billions of euros in otherwise legal trade, if EU authorities police those seeking ways around the rules, according to trade lawyers, shipping and insurance executives and EU officials. The EU’s announcement of an Iranian oil embargo on Jan. 23 overshadowed an asset freeze approved the same day on Tidewater Middle East Co., Iran’s dominant ports operator, a move with consequences for European companies all along the trade and supply chain. The EU was Iran’s top trade partner in 2010, with about 13 billion euros ($17.3 billion) in non-petroleum trade that year, European Commission and International Monetary Fund figures show.
The new measure forbids any EU person or entity from making direct or indirect payments for Tidewater’s benefit. That means exporters, importers, shipowners and charterers can’t pay loading fees at Tidewater’s seven ports, including the Shaheed Rajaee complex at Bandar Abbas. Ninety percent of Iran’s container traffic passes through that port at the mouth of the Strait of Hormuz.

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