Malaysia and Hong Kong Special Administrative Region (SAR) of the People's Republic of China yesterday signed the Agreement on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (DTAA Malaysia-Hong Kong). The agreement will also allow Malaysia and Hong Kong tax authorities to exchange taxpayers' information to prevent income tax avoidance and evasion. The DTAA Malaysia-Hong Kong will come into force after both sides completed the ratification procedures. (Bernama)
Eleven banks have joined the Malaysian Electronic Clearing Corporation Sdn Bhd's (MyClear) Renminbi settlement services in the Real-time Electronic Transfer of Funds and Settlement System (RENTAS). They are Malayan Banking Bhd, CIMB Bank Bhd, Public Bank Bhd, Hong Leong Bank Bhd, RHB Bank Bhd, AmBank (M) Bhd, Alliance Bank Malaysia Bhd, Bank Islam Malaysia Bhd, Bank Muamalat Malaysia Bhd, Hong Leong Investment Bank Bhd and OSK Investment Bank Bhd. Financial institutions that joined before 18 May would enjoy the RMB RENTAS service fee waiver until 31 Dec. (Bernama)
S&P has warned that Malaysia’s record spending binge, aimed at shoring up support before elections as early as next month, may risk the country’s first credit-rating downgrade since the Asian financial crisis. Moody’s and Fitch also said Malaysia must take steps to bring down its debt-to-GDP ratio, which the IMF projects may climb to a 20-year high of 55.9% this year. (Bloomberg)
Global food prices are rising again, pushed higher by costlier oil, strong demand from Asia and bad weather in parts of Europe, South America and the United States, the World Bank said. (Reuters)
China’s foreign reserves dropped by US$4.69bn from Feb to US$3.3tr in Mar due to losses in euro-denominated assets because the euro weakened against the US dollar. (China Daily)
Growth of China's tax revenues logged an increase of 10.3% yoy to Rmb2.59tr in 1Q12, pulling back 22.1% pt from the same period last year, as a result of the country's cooling economy. (Xinhua)
Non-performing loans in China's banking institutions dropped by 15.35% yoy down to Rmb1.05tr (US$166.47bn) as of the end of last year, due to government policies aimed at ensuring the strength of China's banking sector. (Global Times)
Japan’s total machine tool orders grew 1.6% yoy in Mar (-8.6% in Feb), whilst on a mom basis, the measure jumped 11.9% (5.7% in Feb). (Bloomberg)
Standard & Poor's cut its outlook on India's long-term sovereign rating from stable to negative, restating its rating of BBB- but warning of a one-in-three chance of a downgrade over the next 24 months “if the external position continues to deteriorate, growth prospects diminish, or progress on fiscal reforms remains slow in a weakened political setting.” (WSJ)
Philippines: Budget deficit in March as Aquino boosts spending
The Philippines reported a budget deficit in March, reversing a surplus the previous month, after the government stepped up spending to bolster the economy. The shortfall was PHP28.6bn (USD671m), compared with a previously reported PHP10.66bn-surplus for February. President Benigno Aquino plans to increase spending to a record this year while seeking USD16bn of investments in projects including mass rail systems and airports to boost growth. Government spending rose 15% in March while revenue climbed 7.7%. (Bloomberg)
South Korea: Economy expands at fastest pace in a year
South Korea’s economy expanded at the fastest pace in a year even as austerity measures in Europe and a slowdown in China cloud the outlook for exports. GDP rose 0.9% in the first quarter from the previous three months, when it gained 0.3%. The economy grew 2.8% y-o-y. Exports increased 3.4% in 1Q from 4Q2011, when overseas shipments declined 2.3%. Corporate investment in facilities rose 10.8% from 4Q2011, when it fell 4.3%, while government spending increased 3.1% after dropping 0.8%. Nonetheless, Bank of Korea governor Kim Chong Soo said last week that “downside risks are expected to remain high for some time” due to volatile oil prices and Europe’s sovereign-debt crisis. (Bloomberg)
UK: Succumbs to first double-dip recession since 1970s
The UK economy shrank in the first quarter as Britain slid into its first double-dip recession since the 1970s, forcing Prime Minister David Cameron to defend his spending cuts in Parliament. GDP fell 0.2% from 4Q2011, when it declined 0.3%. A technical recession is defined as two straight quarters of contraction. The economy was unchanged y-o-y. The quarterly drop in GDP was due to a 3% slump in construction, the most since the 1Q2009, and a 0.4% decline in industrial production. Manufacturing contracted 0.1% and services, the largest part of the economy, expanded by 0.1%, boosted by transport, storage and communication. The data contrasts with a gauge of factory optimism by the Confederation of British Industry showing confidence among manufacturers rose to the highest level in two years this month. The British Chambers of Commerce said the GDP data is likely to be revised higher by the statistics office. (Bloomberg)
ECB President Mario Draghi said euro-zone nations needed a "growth pact" to complement their existing agreements to enforce fiscal discipline, but gave nothing that suggested he would support loosening budget restrictions. (WSJ)
European Stocks Advance; Swedbank, Electrolux Rally(Source: Bloomberg)
European stocks advanced for a second day as companies from Apple Inc. to Swed bank AB and Electrolux AB reported earnings that beat estimates. The benchmark Stoxx Europe 600 Index gained 1 percent to 256.96 at the close of trading. The measure has advanced 5.1 percent this year as the European Central Bank disbursed more than 1 trillion euros ($1.3 trillion) to the region’s lenders to spur the availability of credit and boost the economy.
Stocks Advance on Earnings, Fed as Treasuries Trim Drop(Source: Bloomberg)
Stocks rose for a second day as earnings beat estimates at companies from Apple Inc. to Boeing Co., while Federal Reserve Chairman Ben S. Bernanke said he remains prepared to do more to stimulate growth if needed. Treasuries pared earlier losses and the dollar weakened. The Standard & Poor’s 500 Index jumped 1.4 percent to close at 1,390.69 at 4 p.m. in New York. The Nasdaq-100 Index rallied 2.7 percent, the most in 2012, with Apple surging 8.9 percent for its best gain in more than three years.
US: Drop in US durables orders masks investment gain
Orders for US durable goods fell in March by the most in three years, depressed by a pullback in demand for aircraft that masked gains in business investment. Bookings for goods meant to last at least three years dropped 4.2%. Sales of non-military capital equipment excluding planes, however, climbed for a second month. Demand for transportation equipment dropped 12.5%, led by a 48% plunge in civilian aircraft bookings. Bookings for automobiles and parts increased 0.1% after a 2% rise in February. Shipments of non-defense capital goods excluding aircraft, used in calculating GDP, increased 2.6% in March after rising 1.4% the previous month. (Bloomberg)
US: New home sales exceeds estimates
Demand for new US homes was stronger than projected in March, showing more jobs and cheaper borrowing costs are helping stabilize the market. Houses sold at a 328,000 annual rate (against forecast of 319,000), down from an upwardly revised 353,000 pace in February. However, new-home sales have lost their ability to forecast the broader market as demand shifts to previously owned houses. New properties made up almost 7% of the market last year, down from a high of 15% during the last decade’s housing boom. Sales of previously owned homes fell 2.6% in March to a 4.48m annual rate. The median new homes sales price increased 6.3% in March y-o-y to USD234,500. (Bloomberg)
US Treasury Secretary Timothy Geithner said the economy is “gradually getting stronger,” but warned that the US faces risks from the crisis in Europe, whilst the confrontation with Iran has driven up oil prices. The US will also be facing a “fiscal cliff” at year-end that will necessitate “bipartisan agreement on reforms to restore fiscal sustainability.” (Bloomberg)
More than 100 smaller US banks were able to tap government programs to pay off bailout money they received during the financial crisis but those still owing face a perilous future, federal watchdog Special Inspector General for the Troubled Asset Relief Program noted. (Reuters)
The US housing market is likely to remain weak and may take a generation or more to rebound due to a weak labour market, high gas prices and a general sense of consumer unease, co-creator of the Standard & Poor’s/Case-Shiller Home Price Index Robert Shiller said. (Reuters)
US: Bernanke “prepared to do more” after policy is left unchanged
Ben Bernanke said the Federal Reserve stands ready to add to its stimulus if necessary even after leaving its policy unchanged and upgrading its view of the economy for this year. “We remain prepared to do more as needed to make sure that this recovery continues and that inflation stays close to target,” he said. Policy makers upgraded their forecasts and now see the jobless rate at between 7.8% and 8%, compared with January estimates of 8.2% to 8.5%. The economy is forecast to expand at 2.4% to 2.9%, compared with 2.2% to 2.7%. Projections for the inflation rate rose to 1.9% to 2%, from 1.4% to 1.8%. (Bloomberg)
Thursday, April 26, 2012
20120426 1019 Malaysia Market Related News.
Najib Spending Binge Could Risk Downgrade Without Revenue Boost (Source: Bloomberg)
Malaysian Prime Minister Najib Razak’s record spending binge, aimed at shoring up support before elections as early as next month, may risk the country’s first credit-rating downgrade since the Asian financial crisis. Standard & Poor’s “might have to think about” a potential cut in a few years unless the next government enacts measures to boost revenue and reduce subsidies after the vote, Takahira Ogawa, an analyst at the rating company, said in an interview. Moody’s Investors Service and Fitch Ratings also said Malaysia must take steps to bring down its debt-to-GDP ratio, which the International Monetary Fund projects may climb to a 20-year high of 55.9 percent this year.
Najib, 58, has raised civil servant salaries and pensions, waived school fees and boosted handouts for the poor in a bid to extend the ruling party’s 55-year lock on power. His National Front coalition won its lowest-ever share of the vote in 2008, and failure to secure a clear mandate may lead to political gridlock that would impede plans to strengthen public finances. “Elections have delayed the required policy adjustments and aggravated the fiscal situation as populist policies take center stage,” said Chua Hak Bin, an economist at Bank of America Merrill Lynch in Singapore. “Not going through with structural reforms, including introducing a broad-based consumption tax and reducing fuel subsidies, will eventually hurt Malaysia’s credit standing.”
Malaysian Prime Minister Najib Razak’s record spending binge, aimed at shoring up support before elections as early as next month, may risk the country’s first credit-rating downgrade since the Asian financial crisis. Standard & Poor’s “might have to think about” a potential cut in a few years unless the next government enacts measures to boost revenue and reduce subsidies after the vote, Takahira Ogawa, an analyst at the rating company, said in an interview. Moody’s Investors Service and Fitch Ratings also said Malaysia must take steps to bring down its debt-to-GDP ratio, which the International Monetary Fund projects may climb to a 20-year high of 55.9 percent this year.
Najib, 58, has raised civil servant salaries and pensions, waived school fees and boosted handouts for the poor in a bid to extend the ruling party’s 55-year lock on power. His National Front coalition won its lowest-ever share of the vote in 2008, and failure to secure a clear mandate may lead to political gridlock that would impede plans to strengthen public finances. “Elections have delayed the required policy adjustments and aggravated the fiscal situation as populist policies take center stage,” said Chua Hak Bin, an economist at Bank of America Merrill Lynch in Singapore. “Not going through with structural reforms, including introducing a broad-based consumption tax and reducing fuel subsidies, will eventually hurt Malaysia’s credit standing.”
20120426 1019 Global Market Related News.
Asian Stocks Rise on Bernanke Remarks, South Korean GDP (Source: Bloomberg)
Asian stocks rose, with the regional benchmark index heading for its second day of gains, after Federal Reserve Chairman Ben S. Bernanke said he’s prepared to do more to stimulate U.S. growth and South Korea’s economy expanded at the fastest pace in a year. Samsung Electronics Co., South Korea’s biggest consumer electronics maker, gained 1.5 percent. Honda Motor Co. (7267), a carmaker that counts North America as its largest market, increased 1.1 percent in Tokyo. Hitachi Chemical Co. jumped 6.8 percent as Credit Suisse Group AG raised its rating to outperform, the equivalent of buy, after the company forecast higher profits in the year ending March 2013. “The Federal Reserve didn’t rule out the possibility of additional monetary easing,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “That’s leading to confidence among investors.”
The MSCI Asia Pacific Index increased 0.5 percent to 124.18 as of 10:23 a.m. in Tokyo, with more than two shares rising for each that fell. Asian stocks extended a global rally spurred by better-than-estimated profits at companies from Apple Inc. to Boeing Co.
Japanese Stock Futures Gain on U.S. Home Sales, Earnings (Source: Bloomberg)
Japanese stocks gained for a second day, with the Nikkei 225 (NKY) Stock Average heading for a one-week high, after Federal Reserve Chairman Ben S. Bernanke said he’s prepared to do more to stimulate U.S economic growth. Gains were limited as Fanuc Corp. slid the most in eight months. Honda Motor Co. (7267), a carmaker that gets almost 45 percent of its sales in North America, gained 1.6 percent. Canon Inc. added 0.7 percent after the camera maker raised its earnings forecast. Fanuc Corp., the second-heaviest weighted stock on the Nikkei, plunged 5.7 percent after the maker of factory robots forecasted lower operating profit. The Nikkei 225 rose 0.5 percent to 9,604.15 as of 9:22 a.m. in Tokyo, heading for the highest close since April 18. Volume on the gauge was almost a quarter below the 30-day intraday average. The broader Topix Index gained 0.7 percent to 814.88, with almost three times as many shares advancing as declining.
“The Federal Reserve didn’t rule out the possibility of additional monetary easing,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “That’s leading to confidence among investors.”
Nasdaq-100 Has Biggest Advance in 2012 as Apple Jumps (Source: Bloomberg)
U.S. stocks advanced, giving the Nasdaq-100 Index (NDX) its biggest gain this year, as Apple Inc.’s earnings almost doubled and Federal Reserve Chairman Ben S. Bernanke said he’s prepared to do more to stimulate growth. Apple, the most valuable company, surged 8.9 percent for the biggest gain since November 2008. Boeing Co. (BA) added 5.3 percent as earnings beat estimates after the company delivered more commercial jets while pushing production to record levels. Caterpillar Inc. (CAT), the world’s largest maker of construction equipment, slumped 4.6 percent as revenue missed projections. The Nasdaq-100 Index jumped 2.7 percent to 2,709.62 at 4 p.m. New York time. The Standard & Poor’s 500 Index added 1.4 percent to 1,390.69. The Dow Jones Industrial Average rose 89.16 points, or 0.7 percent, to 13,090.72. Apple (AAPL) is not a member of the 30-stock gauge. About 6.8 billion shares changed hands on U.S. exchanges, almost in line with the three-month average.
“It’s encouraging,” James Swanson, who oversees about $250 billion as chief investment strategist at Boston-based MFS Investment Management, said in a telephone interview. “The earnings season shows that companies can have good profitability in a low growth environment. As long as these earnings hold up, I’d say that’s a bright sign for the market.”
Stocks Advance on Earnings, Fed as Treasuries Trim Drop (Source: Bloomberg)
Stocks (MXWD) rose for a second day as earnings beat estimates at companies from Apple Inc. (AAPL) to Boeing Co. (BA), while Federal Reserve Chairman Ben S. Bernanke said he remains prepared to do more to stimulate growth if needed. Treasuries pared earlier losses and the dollar weakened. The Standard & Poor’s 500 Index jumped 1.4 percent to close at 1,390.69 at 4 p.m. in New York. The Nasdaq-100 Index (NDX) rallied 2.7 percent, the most in 2012, with Apple surging 8.9 percent for its best gain in more than three years. Ten-year Treasury note yields added one basis point to 1.99 percent after gaining six points earlier. The dollar fell versus 13 of 16 major peers. Cattle rebounded after tumbling yesterday following the first U.S. case of mad-cow disease in six years.
Apple late yesterday posted earnings that almost doubled, reflecting growing demand for the iPhone in China and helping the most-valuable company rebound following a 12 percent slide from its record on April 9. The Fed said policy makers expect the economy to accelerate gradually, increasing forecasts for 2012 growth and reducing projections for the jobless rate. Bernanke said the central bank remains prepared to take additional action if needed to boost the economy.
European Stocks Advance; Swedbank, Electrolux Rally (Source: Bloomberg)
European stocks advanced for a second day as companies from Apple Inc. to Swedbank AB (SWEDA) and Electrolux AB (ELUXB) reported earnings that beat estimates. A gauge of European bank shares climbed, with Swedbank AB jumping to its highest price in almost a month. Electrolux AB, the world’s second-biggest appliance maker, rallied 6.5 percent. Temenos Group AG (TEMN) soared 19 percent as the Swiss banking-software maker’s first-quarter sales beat estimates and it confirmed its full-year outlook. The benchmark Stoxx Europe 600 Index (SXXP) gained 1 percent to 256.96 at the close of trading. The measure has advanced 5.1 percent this year as the European Central Bank disbursed more than 1 trillion euros ($1.3 trillion) to the region’s lenders to spur the availability of credit and boost the economy.
“Strong results from Apple and other European companies are helping the market today,” said Otto Waser, chief investment officer at Research & Asset Management AG in Zurich. “We’re in an environment where market participants buy and sell depending on the newsflow, but the market still lacks a clear trend. We’ve seen stronger moves and bigger changes of direction lately, leaving some investors nervous.”
Treasuries Snap Decline on Forecasts for Slowing Growth (Source: Bloomberg)
Treasuries snapped a two-day decline on speculation a report tomorrow will show U.S. economic growth slowed, after Federal Reserve Chairman Ben S. Bernanke said he is ready to do more to spur expansion. Treasuries have returned 1.3 percent this month as decelerating growth and Europe’s debt crisis increased demand for the relative safety of U.S. debt, based on Bank of America Merrill Lynch indexes. Corporate bonds in the nation returned 0.8 percent, the figures show. The U.S. is scheduled to sell $29 billion of seven-year notes today. “The Fed is very determinedly accommodative,” said Jay Mueller, who manages about $3 billion of bonds at Wells Capital Management in Milwaukee. “They’re going to stay accommodative.” Benchmark 10-year yields were little changed at 1.98 percent as of 9:22 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security due in February 2022 changed hands at 100 1/8.
FOREX-Euro near 3-wk high on Dutch debt sale, Apple results
TOKYO, April 25 (Reuters) - The euro hovered near a three-week high against the dollar on Wednesday after euro zone sovereign debt attracted decent demand and strong earnings from Apple boosted risk appetite, while focus turned to the outcome of a Federal Reserve meeting.
"Ahead of the Fed FOMC outcome today trading is likely to be relatively restrained, with the risk rally struggling to make much headway," said Mitul Kotecha of Credit Agricole Corporate and Investment Bank.
Dollar Stays Lower on Fed Easing Speculation Before GDP (Source: Bloomberg)
The dollar remained lower against its peers before data tomorrow that may show U.S. growth slowed in the first quarter, fueling speculation the Federal Reserve will consider additional stimulus. The euro traded within 0.1 percent of a three-week high as Asian stocks extended gains to a second day after Fed Chairman Ben S. Bernanke said he’s prepared to “do more” to spur the economy, boosting demand for higher-yielding assets. Demand for the yen was limited amid speculation the Bank of Japan (8301) will add to easing measures at its meeting tomorrow. New Zealand’s dollar rose even after the nation’s Reserve Bank left interest rates at a record low. “Certainly, the underlying trend in the dollar is softness,” said Andrew Salter, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. (ANZ) in Sydney. “Bernanke’s statement was perceived to be dovish by the market.”
The dollar traded at $1.3229 per euro at 9:29 a.m. in Tokyo from $1.3217 at the New York close yesterday, when it touched $1.3237 , the weakest since April 4. The U.S. currency was little changed at 81.35 yen. The yen bought 107.61 per euro from 107.51, after sliding 0.2 percent yesterday.
China Sets Strongest Yuan Reference Rate Since July 2005 (Source: Bloomberg)
China’s central bank set the yuan’s reference rate 0.15 percent higher at 6.2829 per dollar today, the strongest level since July 2005.
Aussie Dollar Remains Higher; N.Z. Swaps Drop After RBNZ Meeting (Source: Bloomberg)
Australia’s dollar remained higher after gaining yesterday as Asian stocks extended a global rally, boosting demand for riskier assets. New Zealand’s two-year swap rate slid to the least in 12 weeks after the nation’s Reserve Bank left interest rates at a record low. Demand for the Australian and New Zealand currencies was supported after Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank stands ready to introduce more stimulus measures if necessary. “Global sentiment has been strong for the past two days, and that’s helped high-beta currencies like the Aussie and kiwi rise,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. (WBC), Australia’s second-largest lender. The Reserve Bank of New Zealand meeting “was a bit more dovish than we would’ve expected, and we note that New Zealand interest rates have fallen, and that makes a lot of sense to us.”
Australia’s dollar was at $1.0361 at 10:27 a.m. in Sydney after having gained 0.4 percent to $1.0353 yesterday. New Zealand’s currency rose 0.3 percent to 81.54 U.S. cents. Two- year swap rates in the smaller nation slid as much as 9 1/2 basis points to 2.76 percent, the lowest since Feb. 2.
Bernanke Says ‘Prepared to Do More’ as Policy Unchanged (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the central bank stands ready to add to its stimulus if necessary even after leaving its policy unchanged today and upgrading its view of the economy for this year. “We remain prepared to do more as needed to make sure that this recovery continues and that inflation stays close to target,” he said at a press conference today following a meeting of the Federal Open Market Committee in Washington. Additional bond-buying is still “very much on the table.” Treasuries pared losses after Bernanke kept speculation alive that the Fed might embark on a third round of monetary easing after expanding its balance sheet to a record of almost $3 trillion. Central bankers today raised their forecasts for growth and the labor market this year while repeating that borrowing costs are likely to remain “exceptionally low” at least through late 2014.
The FOMC “expects economic growth to remain moderate over coming quarters and then to pick up gradually,” it said in a statement after a two-day meeting. The statement pointed to “some signs of improvement” in housing while saying the industry at the heart of the financial crisis “remains depressed.”
Drop in U.S. Durables Orders Masks Investment Gain: Economy (Source: Bloomberg)
Orders for U.S. durable goods fell in March by the most in three years, depressed by a pullback in demand for aircraft that masked gains in business investment. Bookings for goods meant to last at least three years dropped 4.2 percent, more than forecast and the biggest decrease since January 2009, Commerce Department data showed today in Washington. Sales of non-military capital equipment excluding planes climbed for a second month, prompting some economists to raise first-quarter forecasts for gross domestic product. Demand for cars and auto supplies is supporting companies from 3M Co. (MMM) to Texas Instruments Inc., showing manufacturing will underpin the world’s largest economy. At the same time, factories may give way to service industries as a pillar of the expansion as a slowdown in global growth curbs exports.
“There’s some caution looking ahead,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York. “The new orders would suggest that there’s perhaps a modest reassessment taking place.” The shipments figure “actually bodes well for GDP” in the first quarter, he said.
Geithner Says Economy Faces Risk From Europe Crisis, Iran (Source: Bloomberg)
Treasury Secretary Timothy F. Geithner said the U.S. faces risks from the crisis in Europe while the confrontation with Iran has helped drive up oil prices. “We still face some risks ahead,” Geithner said to the Portland City Club today. “We still live in a dangerous and uncertain world, with Europe confronting a severe and protracted crisis. The world is engaged in a critical struggle with Iran, which has added to upward pressure on oil prices.” Geithner’s comments in Oregon come as Federal Reserve Chairman Ben S. Bernanke said today that he remains prepared to do more to stimulate growth if needed. Federal Reserve policy makers said they expect growth to gradually accelerate, while refraining from new actions to lower borrowing costs. Crude oil for June delivery rose 57 cents to $104.12 a barrel on the New York Mercantile Exchange, a one-week high. Prices have advanced 1.8 percent in the past four days, the longest rally since the period ended Feb. 24.
Bernanke Rejects Criticism He Ignores His Own Policy Advice (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said pushing up inflation to cut joblessness would be “reckless,” and he rejected criticism that he isn’t following his own advice to the Bank of Japan more than a decade ago on how to avert economic stagnation. “The question is, does it make sense to actively seek a higher inflation rate in order to achieve” a slightly faster reduction in the unemployment rate, Bernanke said today to reporters after a Federal Open Market Committee meeting. “The view of the committee is that that would be very reckless.” Paul Krugman, a Princeton University economist and Nobel laureate, said in an April 24 New York Times Magazine article that the Fed should raise its 2 percent inflation target to reduce unemployment. Such a policy shift would align with Bernanke’s comment in 2000 that the BOJ should pursue faster inflation to curb the risk of deflation, he said.
“While the Fed went to great lengths to rescue the financial system, it has done far less to rescue workers,” Krugman said. “Many economists, ranging from the chief economist of the International Monetary Fund to one of Mitt Romney’s top economic advisers, have argued, as I have, that higher expected inflation would aid an economy” because it would persuade investors and businesses “that sitting on cash is a bad idea,” Krugman said.
Bernanke Says Fed May Name Officials Making Rate Forecasts (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the central bank is considering identifying the interest-rate forecasts of individual policy makers as it reviews ways to improve its communications with the public. The Fed is looking “for ways to improve transparency, and we’re looking at everything,” Bernanke said at a press conference today following a meeting of the Federal Open Market Committee in Washington. Giving the names of the individuals making forecasts is “on the table.” The Fed currently releases a chart showing dots which correspond to the interest-rate forecasts of its 17 policy makers and a table showing the range of their forecasts for inflation, growth and unemployment. The chart doesn’t give the names of the policy makers. Only 10 of them are voting members of the FOMC in any given year, and the chart and table do not explain the preferences of the FOMC’s voting membership.
The FOMC’s committee on communications discussed providing more information that “could convey a sense of how the committee might adjust policy in response to changes in the economic outlook,” according to minutes of the Fed’s March meeting.
China Helps First-Home Buyers as Market Cools: Mortgages (Source: Bloomberg)
Kevin Xi had no trouble getting a mortgage to buy a 1.53 million yuan ($242,563) one-bedroom apartment in Beijing last month, even as China’s government tries to cool the housing market. He even got a 10 percent reduction on interest. “I didn’t expect to get such a good rate,” said Xi, 27, an employee of a property company whose 960,000 yuan mortgage loan with Bank of China Ltd. was approved within five working days. “I thought only employees from government agencies or state-owned companies qualified.” The government is pushing in two directions as it seeks to slow price growth while avoiding a collapse. It’s lowering borrowing costs for first-time homebuyers to encourage purchases while Premier Wen Jiabao keeps curbs in place to stem the speculators who have helped drive home prices up by as much as 140 percent since 1998. China’s 18 percent first-quarter drop in home sales contributed to the slowest economic growth in almost three years.
“Property is an important sector for China’s economy,” said Jack Gong, a Hong Kong-based property analyst at Jefferies Group Inc. “The central government will not forcefully crack down on the market even if it is not supporting it. Fine-tuning the mortgage policies shows the government’s clear intention to uphold economic growth.”
South Korea’s Economy Expands at Fastest Pace in a Year (Source: Bloomberg)
South Korea’s economy expanded at the fastest pace in a year even as austerity measures in Europe and a slowdown in China cloud the outlook for exports. Gross domestic product rose 0.9 percent in the first quarter from the previous three months, when it gained 0.3 percent, the Bank of Korea said today. That matches the median estimate of 13 economists surveyed by Bloomberg News. The U.K. sinking into its first double-dip recession since the 1970s highlights the risk of slumping demand for Asian exports as governments in developed nations cut spending to improve their finances. Bank of Korea Governor Kim Choong Soo said last week that “downside risks are expected to remain high for some time” due to volatile oil prices and Europe’s sovereign-debt crisis.
“The biggest challenge facing South Korea’s economy now is weakening export momentum, with Europe suffering a slump and many emerging countries slowing,” said Park Sang Hyun, chief economist at HI Investment & Securities Co. in Seoul. “The central bank is unlikely to raise interest rates for an extended period.”
Cameron Braces for U.K. Confidence Shock as Recession Returns (Source: Bloomberg)
Prime Minister David Cameron’s government is bracing itself as the first U.K. recession since he took office threatens to deliver a shock to confidence. As the premier persists with the fiscal squeeze that has defined his administration, he now faces twin dangers from political fallout and economic damage. While Cameron insists his austerity program has kept U.K. government bond yields low and aided the economy, he said yesterday that a 0.2 percent first- quarter contraction was “very disappointing.” “The headlines all over the place will do damage to confidence,” said Brian Hilliard, an economist at Societe Generale in London, who was the only one of 40 economists in a Bloomberg News survey to correctly forecast the outcome. “It will increase the pressure on Cameron at a time when he’s making many missteps on other issues.”
News of a double-dip recession and the threat it poses to sentiment among consumers and businesses risks compounding the woes of the Conservative premier after a month when the opposition Labour Party increased its lead in opinion polls. Cameron is nursing the fallout from negative reaction to his tax cuts for the rich and countering suggestions that the government improperly favored News Corp. in a takeover battle.
Europe Shifts Crisis Focus to Growth as Merkel Backs Draghi Call (Source: Bloomberg)
Europe may add an annex to its budget treaty spelling out how countries can boost growth as the bloc shifts its emphasis on tackling the debt crisis, a German government official said. Steps to raise competitiveness along with structural reforms are likely to feature in the prescriptions for growth, with a target date for completion by the June 18-19 Group of 20 leaders’ summit in Mexico, the official said on condition of anonymity because the discussions are private and not complete. The change in tack was signaled yesterday by European Central Bank President Mario Draghi, whose call for a “growth compact” was quickly endorsed by German Chancellor Angela Merkel. Francois Hollande, the French presidential election front-runner, seized on Draghi’s remarks as evidence of the need for treaty changes to promote growth.
Draghi’s comment “illustrates the depth of concern felt by the ECB about the weak outlook for the euro area economy,” said Julian Callow, chief European economist at Barclays Capital. “It perhaps could be a closet call for Germany to provide greater fiscal stimulus given its low budget deficit.”
Draghi Softens Tone on Inflation, Calls for Growth Compact (Source: Bloomberg)
European Central Bank President Mario Draghi softened his tone on the inflation outlook and called for a “growth compact” as the sovereign debt crisis weighs on the euro-area economy. While inflation will remain above the ECB’s 2 percent limit this year, it will slow in 2013 and “underlying price pressures should remain modest,” Draghi told lawmakers in Brussels today. That’s a contrast to the “upside risks” to inflation he warned of three weeks ago. Risks to the economic outlook remain on the downside, Draghi said. Since the ECB lifted its 2012 inflation forecast to 2.4 percent in March, the debt crisis has worsened, threatening to derail a fragile economic recovery. Spending cuts across the region are already damping growth, prompting a backlash against the German-led austerity drive in countries such as France. Draghi, whose call for a fiscal compact to toughen budget rules was adopted by European Union leaders, today urged them to take similar steps to foster growth.
Asian stocks rose, with the regional benchmark index heading for its second day of gains, after Federal Reserve Chairman Ben S. Bernanke said he’s prepared to do more to stimulate U.S. growth and South Korea’s economy expanded at the fastest pace in a year. Samsung Electronics Co., South Korea’s biggest consumer electronics maker, gained 1.5 percent. Honda Motor Co. (7267), a carmaker that counts North America as its largest market, increased 1.1 percent in Tokyo. Hitachi Chemical Co. jumped 6.8 percent as Credit Suisse Group AG raised its rating to outperform, the equivalent of buy, after the company forecast higher profits in the year ending March 2013. “The Federal Reserve didn’t rule out the possibility of additional monetary easing,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “That’s leading to confidence among investors.”
The MSCI Asia Pacific Index increased 0.5 percent to 124.18 as of 10:23 a.m. in Tokyo, with more than two shares rising for each that fell. Asian stocks extended a global rally spurred by better-than-estimated profits at companies from Apple Inc. to Boeing Co.
Japanese Stock Futures Gain on U.S. Home Sales, Earnings (Source: Bloomberg)
Japanese stocks gained for a second day, with the Nikkei 225 (NKY) Stock Average heading for a one-week high, after Federal Reserve Chairman Ben S. Bernanke said he’s prepared to do more to stimulate U.S economic growth. Gains were limited as Fanuc Corp. slid the most in eight months. Honda Motor Co. (7267), a carmaker that gets almost 45 percent of its sales in North America, gained 1.6 percent. Canon Inc. added 0.7 percent after the camera maker raised its earnings forecast. Fanuc Corp., the second-heaviest weighted stock on the Nikkei, plunged 5.7 percent after the maker of factory robots forecasted lower operating profit. The Nikkei 225 rose 0.5 percent to 9,604.15 as of 9:22 a.m. in Tokyo, heading for the highest close since April 18. Volume on the gauge was almost a quarter below the 30-day intraday average. The broader Topix Index gained 0.7 percent to 814.88, with almost three times as many shares advancing as declining.
“The Federal Reserve didn’t rule out the possibility of additional monetary easing,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “That’s leading to confidence among investors.”
Nasdaq-100 Has Biggest Advance in 2012 as Apple Jumps (Source: Bloomberg)
U.S. stocks advanced, giving the Nasdaq-100 Index (NDX) its biggest gain this year, as Apple Inc.’s earnings almost doubled and Federal Reserve Chairman Ben S. Bernanke said he’s prepared to do more to stimulate growth. Apple, the most valuable company, surged 8.9 percent for the biggest gain since November 2008. Boeing Co. (BA) added 5.3 percent as earnings beat estimates after the company delivered more commercial jets while pushing production to record levels. Caterpillar Inc. (CAT), the world’s largest maker of construction equipment, slumped 4.6 percent as revenue missed projections. The Nasdaq-100 Index jumped 2.7 percent to 2,709.62 at 4 p.m. New York time. The Standard & Poor’s 500 Index added 1.4 percent to 1,390.69. The Dow Jones Industrial Average rose 89.16 points, or 0.7 percent, to 13,090.72. Apple (AAPL) is not a member of the 30-stock gauge. About 6.8 billion shares changed hands on U.S. exchanges, almost in line with the three-month average.
“It’s encouraging,” James Swanson, who oversees about $250 billion as chief investment strategist at Boston-based MFS Investment Management, said in a telephone interview. “The earnings season shows that companies can have good profitability in a low growth environment. As long as these earnings hold up, I’d say that’s a bright sign for the market.”
Stocks Advance on Earnings, Fed as Treasuries Trim Drop (Source: Bloomberg)
Stocks (MXWD) rose for a second day as earnings beat estimates at companies from Apple Inc. (AAPL) to Boeing Co. (BA), while Federal Reserve Chairman Ben S. Bernanke said he remains prepared to do more to stimulate growth if needed. Treasuries pared earlier losses and the dollar weakened. The Standard & Poor’s 500 Index jumped 1.4 percent to close at 1,390.69 at 4 p.m. in New York. The Nasdaq-100 Index (NDX) rallied 2.7 percent, the most in 2012, with Apple surging 8.9 percent for its best gain in more than three years. Ten-year Treasury note yields added one basis point to 1.99 percent after gaining six points earlier. The dollar fell versus 13 of 16 major peers. Cattle rebounded after tumbling yesterday following the first U.S. case of mad-cow disease in six years.
Apple late yesterday posted earnings that almost doubled, reflecting growing demand for the iPhone in China and helping the most-valuable company rebound following a 12 percent slide from its record on April 9. The Fed said policy makers expect the economy to accelerate gradually, increasing forecasts for 2012 growth and reducing projections for the jobless rate. Bernanke said the central bank remains prepared to take additional action if needed to boost the economy.
European Stocks Advance; Swedbank, Electrolux Rally (Source: Bloomberg)
European stocks advanced for a second day as companies from Apple Inc. to Swedbank AB (SWEDA) and Electrolux AB (ELUXB) reported earnings that beat estimates. A gauge of European bank shares climbed, with Swedbank AB jumping to its highest price in almost a month. Electrolux AB, the world’s second-biggest appliance maker, rallied 6.5 percent. Temenos Group AG (TEMN) soared 19 percent as the Swiss banking-software maker’s first-quarter sales beat estimates and it confirmed its full-year outlook. The benchmark Stoxx Europe 600 Index (SXXP) gained 1 percent to 256.96 at the close of trading. The measure has advanced 5.1 percent this year as the European Central Bank disbursed more than 1 trillion euros ($1.3 trillion) to the region’s lenders to spur the availability of credit and boost the economy.
“Strong results from Apple and other European companies are helping the market today,” said Otto Waser, chief investment officer at Research & Asset Management AG in Zurich. “We’re in an environment where market participants buy and sell depending on the newsflow, but the market still lacks a clear trend. We’ve seen stronger moves and bigger changes of direction lately, leaving some investors nervous.”
Treasuries Snap Decline on Forecasts for Slowing Growth (Source: Bloomberg)
Treasuries snapped a two-day decline on speculation a report tomorrow will show U.S. economic growth slowed, after Federal Reserve Chairman Ben S. Bernanke said he is ready to do more to spur expansion. Treasuries have returned 1.3 percent this month as decelerating growth and Europe’s debt crisis increased demand for the relative safety of U.S. debt, based on Bank of America Merrill Lynch indexes. Corporate bonds in the nation returned 0.8 percent, the figures show. The U.S. is scheduled to sell $29 billion of seven-year notes today. “The Fed is very determinedly accommodative,” said Jay Mueller, who manages about $3 billion of bonds at Wells Capital Management in Milwaukee. “They’re going to stay accommodative.” Benchmark 10-year yields were little changed at 1.98 percent as of 9:22 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security due in February 2022 changed hands at 100 1/8.
FOREX-Euro near 3-wk high on Dutch debt sale, Apple results
TOKYO, April 25 (Reuters) - The euro hovered near a three-week high against the dollar on Wednesday after euro zone sovereign debt attracted decent demand and strong earnings from Apple boosted risk appetite, while focus turned to the outcome of a Federal Reserve meeting.
"Ahead of the Fed FOMC outcome today trading is likely to be relatively restrained, with the risk rally struggling to make much headway," said Mitul Kotecha of Credit Agricole Corporate and Investment Bank.
Dollar Stays Lower on Fed Easing Speculation Before GDP (Source: Bloomberg)
The dollar remained lower against its peers before data tomorrow that may show U.S. growth slowed in the first quarter, fueling speculation the Federal Reserve will consider additional stimulus. The euro traded within 0.1 percent of a three-week high as Asian stocks extended gains to a second day after Fed Chairman Ben S. Bernanke said he’s prepared to “do more” to spur the economy, boosting demand for higher-yielding assets. Demand for the yen was limited amid speculation the Bank of Japan (8301) will add to easing measures at its meeting tomorrow. New Zealand’s dollar rose even after the nation’s Reserve Bank left interest rates at a record low. “Certainly, the underlying trend in the dollar is softness,” said Andrew Salter, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. (ANZ) in Sydney. “Bernanke’s statement was perceived to be dovish by the market.”
The dollar traded at $1.3229 per euro at 9:29 a.m. in Tokyo from $1.3217 at the New York close yesterday, when it touched $1.3237 , the weakest since April 4. The U.S. currency was little changed at 81.35 yen. The yen bought 107.61 per euro from 107.51, after sliding 0.2 percent yesterday.
China Sets Strongest Yuan Reference Rate Since July 2005 (Source: Bloomberg)
China’s central bank set the yuan’s reference rate 0.15 percent higher at 6.2829 per dollar today, the strongest level since July 2005.
Aussie Dollar Remains Higher; N.Z. Swaps Drop After RBNZ Meeting (Source: Bloomberg)
Australia’s dollar remained higher after gaining yesterday as Asian stocks extended a global rally, boosting demand for riskier assets. New Zealand’s two-year swap rate slid to the least in 12 weeks after the nation’s Reserve Bank left interest rates at a record low. Demand for the Australian and New Zealand currencies was supported after Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank stands ready to introduce more stimulus measures if necessary. “Global sentiment has been strong for the past two days, and that’s helped high-beta currencies like the Aussie and kiwi rise,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. (WBC), Australia’s second-largest lender. The Reserve Bank of New Zealand meeting “was a bit more dovish than we would’ve expected, and we note that New Zealand interest rates have fallen, and that makes a lot of sense to us.”
Australia’s dollar was at $1.0361 at 10:27 a.m. in Sydney after having gained 0.4 percent to $1.0353 yesterday. New Zealand’s currency rose 0.3 percent to 81.54 U.S. cents. Two- year swap rates in the smaller nation slid as much as 9 1/2 basis points to 2.76 percent, the lowest since Feb. 2.
Bernanke Says ‘Prepared to Do More’ as Policy Unchanged (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the central bank stands ready to add to its stimulus if necessary even after leaving its policy unchanged today and upgrading its view of the economy for this year. “We remain prepared to do more as needed to make sure that this recovery continues and that inflation stays close to target,” he said at a press conference today following a meeting of the Federal Open Market Committee in Washington. Additional bond-buying is still “very much on the table.” Treasuries pared losses after Bernanke kept speculation alive that the Fed might embark on a third round of monetary easing after expanding its balance sheet to a record of almost $3 trillion. Central bankers today raised their forecasts for growth and the labor market this year while repeating that borrowing costs are likely to remain “exceptionally low” at least through late 2014.
The FOMC “expects economic growth to remain moderate over coming quarters and then to pick up gradually,” it said in a statement after a two-day meeting. The statement pointed to “some signs of improvement” in housing while saying the industry at the heart of the financial crisis “remains depressed.”
Drop in U.S. Durables Orders Masks Investment Gain: Economy (Source: Bloomberg)
Orders for U.S. durable goods fell in March by the most in three years, depressed by a pullback in demand for aircraft that masked gains in business investment. Bookings for goods meant to last at least three years dropped 4.2 percent, more than forecast and the biggest decrease since January 2009, Commerce Department data showed today in Washington. Sales of non-military capital equipment excluding planes climbed for a second month, prompting some economists to raise first-quarter forecasts for gross domestic product. Demand for cars and auto supplies is supporting companies from 3M Co. (MMM) to Texas Instruments Inc., showing manufacturing will underpin the world’s largest economy. At the same time, factories may give way to service industries as a pillar of the expansion as a slowdown in global growth curbs exports.
“There’s some caution looking ahead,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York. “The new orders would suggest that there’s perhaps a modest reassessment taking place.” The shipments figure “actually bodes well for GDP” in the first quarter, he said.
Geithner Says Economy Faces Risk From Europe Crisis, Iran (Source: Bloomberg)
Treasury Secretary Timothy F. Geithner said the U.S. faces risks from the crisis in Europe while the confrontation with Iran has helped drive up oil prices. “We still face some risks ahead,” Geithner said to the Portland City Club today. “We still live in a dangerous and uncertain world, with Europe confronting a severe and protracted crisis. The world is engaged in a critical struggle with Iran, which has added to upward pressure on oil prices.” Geithner’s comments in Oregon come as Federal Reserve Chairman Ben S. Bernanke said today that he remains prepared to do more to stimulate growth if needed. Federal Reserve policy makers said they expect growth to gradually accelerate, while refraining from new actions to lower borrowing costs. Crude oil for June delivery rose 57 cents to $104.12 a barrel on the New York Mercantile Exchange, a one-week high. Prices have advanced 1.8 percent in the past four days, the longest rally since the period ended Feb. 24.
Bernanke Rejects Criticism He Ignores His Own Policy Advice (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said pushing up inflation to cut joblessness would be “reckless,” and he rejected criticism that he isn’t following his own advice to the Bank of Japan more than a decade ago on how to avert economic stagnation. “The question is, does it make sense to actively seek a higher inflation rate in order to achieve” a slightly faster reduction in the unemployment rate, Bernanke said today to reporters after a Federal Open Market Committee meeting. “The view of the committee is that that would be very reckless.” Paul Krugman, a Princeton University economist and Nobel laureate, said in an April 24 New York Times Magazine article that the Fed should raise its 2 percent inflation target to reduce unemployment. Such a policy shift would align with Bernanke’s comment in 2000 that the BOJ should pursue faster inflation to curb the risk of deflation, he said.
“While the Fed went to great lengths to rescue the financial system, it has done far less to rescue workers,” Krugman said. “Many economists, ranging from the chief economist of the International Monetary Fund to one of Mitt Romney’s top economic advisers, have argued, as I have, that higher expected inflation would aid an economy” because it would persuade investors and businesses “that sitting on cash is a bad idea,” Krugman said.
Bernanke Says Fed May Name Officials Making Rate Forecasts (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the central bank is considering identifying the interest-rate forecasts of individual policy makers as it reviews ways to improve its communications with the public. The Fed is looking “for ways to improve transparency, and we’re looking at everything,” Bernanke said at a press conference today following a meeting of the Federal Open Market Committee in Washington. Giving the names of the individuals making forecasts is “on the table.” The Fed currently releases a chart showing dots which correspond to the interest-rate forecasts of its 17 policy makers and a table showing the range of their forecasts for inflation, growth and unemployment. The chart doesn’t give the names of the policy makers. Only 10 of them are voting members of the FOMC in any given year, and the chart and table do not explain the preferences of the FOMC’s voting membership.
The FOMC’s committee on communications discussed providing more information that “could convey a sense of how the committee might adjust policy in response to changes in the economic outlook,” according to minutes of the Fed’s March meeting.
China Helps First-Home Buyers as Market Cools: Mortgages (Source: Bloomberg)
Kevin Xi had no trouble getting a mortgage to buy a 1.53 million yuan ($242,563) one-bedroom apartment in Beijing last month, even as China’s government tries to cool the housing market. He even got a 10 percent reduction on interest. “I didn’t expect to get such a good rate,” said Xi, 27, an employee of a property company whose 960,000 yuan mortgage loan with Bank of China Ltd. was approved within five working days. “I thought only employees from government agencies or state-owned companies qualified.” The government is pushing in two directions as it seeks to slow price growth while avoiding a collapse. It’s lowering borrowing costs for first-time homebuyers to encourage purchases while Premier Wen Jiabao keeps curbs in place to stem the speculators who have helped drive home prices up by as much as 140 percent since 1998. China’s 18 percent first-quarter drop in home sales contributed to the slowest economic growth in almost three years.
“Property is an important sector for China’s economy,” said Jack Gong, a Hong Kong-based property analyst at Jefferies Group Inc. “The central government will not forcefully crack down on the market even if it is not supporting it. Fine-tuning the mortgage policies shows the government’s clear intention to uphold economic growth.”
South Korea’s Economy Expands at Fastest Pace in a Year (Source: Bloomberg)
South Korea’s economy expanded at the fastest pace in a year even as austerity measures in Europe and a slowdown in China cloud the outlook for exports. Gross domestic product rose 0.9 percent in the first quarter from the previous three months, when it gained 0.3 percent, the Bank of Korea said today. That matches the median estimate of 13 economists surveyed by Bloomberg News. The U.K. sinking into its first double-dip recession since the 1970s highlights the risk of slumping demand for Asian exports as governments in developed nations cut spending to improve their finances. Bank of Korea Governor Kim Choong Soo said last week that “downside risks are expected to remain high for some time” due to volatile oil prices and Europe’s sovereign-debt crisis.
“The biggest challenge facing South Korea’s economy now is weakening export momentum, with Europe suffering a slump and many emerging countries slowing,” said Park Sang Hyun, chief economist at HI Investment & Securities Co. in Seoul. “The central bank is unlikely to raise interest rates for an extended period.”
Cameron Braces for U.K. Confidence Shock as Recession Returns (Source: Bloomberg)
Prime Minister David Cameron’s government is bracing itself as the first U.K. recession since he took office threatens to deliver a shock to confidence. As the premier persists with the fiscal squeeze that has defined his administration, he now faces twin dangers from political fallout and economic damage. While Cameron insists his austerity program has kept U.K. government bond yields low and aided the economy, he said yesterday that a 0.2 percent first- quarter contraction was “very disappointing.” “The headlines all over the place will do damage to confidence,” said Brian Hilliard, an economist at Societe Generale in London, who was the only one of 40 economists in a Bloomberg News survey to correctly forecast the outcome. “It will increase the pressure on Cameron at a time when he’s making many missteps on other issues.”
News of a double-dip recession and the threat it poses to sentiment among consumers and businesses risks compounding the woes of the Conservative premier after a month when the opposition Labour Party increased its lead in opinion polls. Cameron is nursing the fallout from negative reaction to his tax cuts for the rich and countering suggestions that the government improperly favored News Corp. in a takeover battle.
Europe Shifts Crisis Focus to Growth as Merkel Backs Draghi Call (Source: Bloomberg)
Europe may add an annex to its budget treaty spelling out how countries can boost growth as the bloc shifts its emphasis on tackling the debt crisis, a German government official said. Steps to raise competitiveness along with structural reforms are likely to feature in the prescriptions for growth, with a target date for completion by the June 18-19 Group of 20 leaders’ summit in Mexico, the official said on condition of anonymity because the discussions are private and not complete. The change in tack was signaled yesterday by European Central Bank President Mario Draghi, whose call for a “growth compact” was quickly endorsed by German Chancellor Angela Merkel. Francois Hollande, the French presidential election front-runner, seized on Draghi’s remarks as evidence of the need for treaty changes to promote growth.
Draghi’s comment “illustrates the depth of concern felt by the ECB about the weak outlook for the euro area economy,” said Julian Callow, chief European economist at Barclays Capital. “It perhaps could be a closet call for Germany to provide greater fiscal stimulus given its low budget deficit.”
Draghi Softens Tone on Inflation, Calls for Growth Compact (Source: Bloomberg)
European Central Bank President Mario Draghi softened his tone on the inflation outlook and called for a “growth compact” as the sovereign debt crisis weighs on the euro-area economy. While inflation will remain above the ECB’s 2 percent limit this year, it will slow in 2013 and “underlying price pressures should remain modest,” Draghi told lawmakers in Brussels today. That’s a contrast to the “upside risks” to inflation he warned of three weeks ago. Risks to the economic outlook remain on the downside, Draghi said. Since the ECB lifted its 2012 inflation forecast to 2.4 percent in March, the debt crisis has worsened, threatening to derail a fragile economic recovery. Spending cuts across the region are already damping growth, prompting a backlash against the German-led austerity drive in countries such as France. Draghi, whose call for a fiscal compact to toughen budget rules was adopted by European Union leaders, today urged them to take similar steps to foster growth.
20120426 1018 Global Commodities Related News.
Market Recap: Wheat Futures (Source: CME)
Chicago and Kansas City wheat futures saw two-sided trade today but settled low-range with Chicago 4 to 8 cents lower and Kansas City narrowly mixed. Minneapolis wheat rallied late to finish fractionally to 4 1/4 cents higher, with the exception of the May contract. Futures took their cue from the corn market today, which also saw a mixed day of trade and softened into the close.
Wheat Market Recap Report (Source: CME)
July Wheat finished down 6 at 626 1/2, 16 1/4 off the high and 2 1/2 up from the low. December Wheat closed down 5 1/2 at 665 3/4. This was 2 1/4 up from the low and 13 1/2 off the high. July wheat pushed from higher to lower on the session to close moderately lower on the day. Less fear of cold weather issues ahead plus ideas that the winter wheat crop yield potential is very high helped to pressure. The surge in soybeans, positive outside market forces and a surge higher in the stock market helped to support the strong opening. However, a lack of new buying interest and a push lower in corn sparked a fairly aggressive selling pace from fund traders and a moderately lower on the day trade in wheat into the mid-session. Less cold weather in the forecast for the eastern Corn Belt plus more rain in the forecast for the plains were seen as negative weather forces which helped to pressure. Libya expected to import near 1 million tonnes in 2012. July Minneapolis wheat was down sharply on the day into the mid-session and down to the lowest level since January 20th. July Oats closed down 3/4 at 341 3/4. This was 6 1/2 up from the low and 3 1/4 off the high.
Corn Market Recap for 4/25/2012 (Source: CME)
July Corn finished down 7 at 601, 16 off the high and 1/4 up from the low. December Corn closed down 3 1/2 at 538. This was 2 up from the low and 8 3/4 off the high. July corn closed moderately lower on the day after first trading moderately higher on the session. Funds were noted as aggressive sellers of near 12,000 contracts on the session. The market followed the soybean rally overnight and then got a boost near the opening due to more active sales announcements from China. However, similar to yesterday, there was buy the rumor, sell the fact type session which pulled the market lower on the day into the mid-session. Slower ethanol demand and weaker wheat prices were also seen as negative forces. Private exporters reported a sale of 420,000 tonnes of US corn to unknown destination for the 2012/13 season. In addition, exporters reported a sale of 262,500 tones of US corn for China. Of the sale, 90,000 was for the 2011/12 season and 172,500 for the 2012/13 season. Ethanol production for the week ending April 20th averaged 865,000 barrels per day. This is down 2.15% vs. last week and down 2.04% vs. last year. Corn used in last week's production is estimated at 92.1 million bushels. Corn use needs to average 94.2 million bushels per week to meet this crop year's USDA estimate. Stocks were 21.852 million barrels. This is down 0.53% vs. last week and up 13.32% vs. last year. The outlook for sharply higher production this summer has continued to spark selling. The May USDA report will be the first look at the 2012/13 ending stocks. Traders see stocks near 1.8 billion bushels for the May report as compared with 801 million bushels for the 2011/12 season. July Rice finished up 0.075 at 16, 0.04 off the high and 0.15 up from the low.
Market Recap: Corn Futures (Source: CME)
Corn futures got off to a firmer start but buying interest quickly dried up and futures drifted lower. Old-crop corn ended 7 to 7 1/4 cents lower, with September down 6 1/2 cents. New-crop corn ended mostly between 2 to 3 cents lower. Funds were active sellers of 12,000 contracts today (60 million bushels). The inability of the market to rally on positive news signals traders' focus is on the potential for a large 2012 crop.
Moroccan Agmin sees cereals harvest at 4.8 mln T (Source: CME)
Morocco's cereals harvest should reach 4.8 million tonnes this year, the agriculture minister said on Tuesday, which is far below last year's level and the crop budget for 2012, but slightly above the most recent forecasts. Aziz Akhannouch made the announcement in remarks carried by the official MAP news agency. He did not give a breakdown per variety.
Canadian farmers to plant more wheat than expected (Source: CME)
Canadian farmers intend to plant nearly a million acres more wheat than the industry expected in the first year of an open grain market, along with a record-large canola crop, Statistics Canada reported Tuesday in its initial forecast of 2012 planting intentions. Drier-than-normal weather in Western Canada, stretching back to last summer, brought millions of previously flooded acres back into production this spring, lifting plantings of most major crops.
Is the bloom off new crop corn's rose? (Source: CME)
Bullish corn traders continue to view the robust tone of spot domestic corn basis levels as a sign that this market has further upside potential in the weeks and months ahead. But a slight cooling in the basis at key export locations as well as the recent downward grind in the price of corn in China raise the prospect that old-crop corn may have had its day as the grain market to watch and is now set for a stretch of low-key range-bound action until we get deeper into the new crop-growing season.
GRAINS-US soy at highest since 2008; wheat, corn rise
SINGAPORE, April 25 (Reuters) - Chicago soybeans rose to their highest in nearly four years, building on the previous session's rally on expectations of strong demand for U.S. beans amid shrinking South American supplies.
"The soybean market is going to go higher as the entire edible oil sector is going to be severely constrained for the rest of the year," said Abah Ofon, a commodities analyst at Standard Chartered in Singapore.
Malawi maize crop seen down, still in surplus
BLANTYRE, April 25 (Reuters) - Malawi's maize crop is forecast to fall this season by around 7 percent to 3.6 million tonnes, the southern African country's agriculture ministry said on Wednesday.
It also said in a statement it projects a surplus of around 567,000 tonnes but a clearer picture will emerge when two more forecasts are made during harvesting. Production was around 3.8 to 3.9 million tonnes last year.
Ethiopia 11/12 grain output high-attache
April 24 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Ethiopia:
"Ethiopia is one of the largest grain producing countries in Africa, although it is still a food insecure country and a net importer of grain. Cereals are predominantly produced by smallholders, and are consumed as food, with only residues and by-products fed to livestock. Due to good rainfall in 2011, production of all grains in Marketing Year (MY) 2011/12 was high.
Canadian farmers to plant more wheat than expected
WINNIPEG, Manitoba, April 24 (Reuters) - Canadian farmers intend to plant nearly a million acres more wheat than the industry expected in the first year of an open grain market, along with a record-large canola crop, Statistics Canada reported Tuesday in its initial forecast of 2012 planting intentions.
Drier-than-normal weather in Western Canada, stretching back to last summer, brought millions of previously flooded acres back into production this spring, lifting plantings of most major crops.
S.Africa further cuts 2012 maize crop f'cast
JOHANNESBURG, April 24 (Reuters) - South Africa cut its 2012 maize output forecast by nearly 2 percent on Tuesday, bang in line with market expectations, citing continued unfavourable weather conditions.
The government's Crop Estimates Committee (CEC) said in its third production forecast for the May 2011-April 2012 season that the country is now expected to harvest 11.12 million tonnes of maize from 11.3 million tonnes in the previous forecast.
Moroccan Agmin sees cereals harvest at 4.8 mln T
RABAT, April 24 (Reuters) - Morocco's cereals harvest should reach 4.8 million tonnes this year, the agriculture minister said on Tuesday, which is far below last year's level and the crop budget for 2012, but slightly above the most recent forecasts.
Aziz Akhannouch made the announcement in remarks carried by the official MAP news agency. He did not give a breakdown per variety.
Vietnam Jan-April rice exports -28.1 pct y/y-govt
HANOI, April 24 (Reuters) - Vietnam's rice exports between January and April are estimated to be down 28.1 percent from the same period last year to 1.96 million tonnes, the government's General Statistics Office said on Tuesday.
Rice export revenues in the first four months fell an estimated 27.8 percent from a year earlier to $969 million, the statistics office said in its monthly report.
SOFTS-Sugar extends bounce, cocoa consolidates
LONDON, April 25 (Reuters) - Raw sugar futures extended their recovery from an 11-month low hit earlier this week, boosted by a weaker dollar. Raw sugar futures were higher, supported by the dollar hitting a three-week low against a basket of currencies, as the market extended its recovery from an 11-month low hit on Monday after funds liquidated long positions.
Costa Rica sees 5 pct drop in coffee crop next season
SAN JOSE, April 24 (Reuters) - Costa Rica coffee production is forecast to drop 5 percent in the upcoming 2012/13 harvest due to the biennial nature of the crop, as coffee trees usually produce less after a boom year.
The small Central American country, known for its high-quality arabica beans, sees next season's production down nearly 90,000 bags, reaching a total of 1.71 million bags, the national coffee institute ICAFE said on Tuesday.
India seen net sugar exporter again in 12/13-attache
April 24 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in India:
"Indian sugar production is poised to increase to 29.8 million tonnes (raw value basis) in marketing year (MY) 2012/13 (October-September) due to an expected increase in sugarcane production. Anticipating surplus sugar production and strong export demand for 2012/13, India will continue to be a net exporter of sugar for second consecutive year, with exports likely to reach as much as 2.5 million tonnes. Continued strong demand from bulk consumers will push sugar consumption to 26.5 million tonnes."
Dry weather to prevent record Argentina sugar crop-attache
April 24 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Argentina:
"Argentine sugar production in marketing year 2012/13 is projected at 2.04 million tonnes (raw value). Everything was set for a record crop, primarily as result of additional planted area, but dry weather in most part of the growing season negatively affected most plantations without irrigation. Domestic consumption is forecast to increase marginally, while exports could expand to 260,000 tonnes (raw value)."
Rain to help young Brazil cane but slow the harvest
SAO PAULO, April 24 (Reuters) - Brazil's world-leading sugarcane belt will get widespread rain later this week that will help to speed growth in much of the main center-south crop that dry weather in February and March had stunted, local weather forecaster Somar said.
The new, heavy rainfall expected over all of Sao Paulo and Parana states in the second half of this week will likely push back the start of harvesting until next week, meteorologist Marco Antonio dos Santos said in a bulletin released late on Monday.
Vietnam April coffee exports up 18.8 pct on yr
HANOI, April 24 (Reuters) - Vietnam's coffee exports this month are estimated to jump 18.8 percent from a year ago to 150,000 tonnes, or 2.5 million bags, the government's General Statistics Office said on Tuesday, in line with market expectations.
Coffee loading between October 2011 and April, the first seven months of the 2011/2012 coffee crop year, dropped an estimated 2.8 percent from a year earlier to 909,700 tonnes, or 15.2 million 60-kg bags, the statistics office said.
Rubber Futures Gain 0.1% to 306.7 Yen/Kg in Tokyo (Source: Bloomberg)
Rubber futures gained 0.1 percent in Tokyo. The October-delivery contract rose to 306.7 yen a kilogram at 9:00 a.m. local time.
Euro Coal-May S.African trades at $99.70/T
LONDON, April 24 (Reuters) - European prompt physical coal prices softened again on Tuesday but few trades were reported.
A May loading South African capesize cargo traded at $99.70 a tonne, falling below $100 once more, but the price reflects the discount which a very prompt cargo would have, traders said.
Coal India mulls 15 mln T imports -suppliers
LONDON, April 24 (Reuters) - The world's largest coal miner, Coal India (CIL) , has been discussing importing up to 15 million tonnes of thermal coal with suppliers, but there are numerous obstacles to overcome before a tender can be issued, supplier sources said.
"Coal India is clearly under a lot of pressure to make up the shortfall in its own output but a lot needs to be covered before they can import," one Delhi-based source said.
U.S. coal exports to China may double in 2012-Xcoal
BEIJING, April 19 (Reuters) - U.S. coal exports to China could more than double to over 12 million tonnes in 2012 thanks to depressed freight rates and a fall in domestic demand in the United States, the chief of top U.S. coal exporter Xcoal Energy & Resources said.
The expected increase in coal shipments could further push down coal prices in Asia where a supply glut following a deluge from the United States and Colombia has forced prices to slump recently.
Oil Trades Near Weekly High on Demand Outlook After Fed (Source: Bloomberg)
Oil traded near the highest level in more than a week in New York after Federal Reserve policy makers said they expect growth to accelerate, boosting speculation that fuel demand will rise. Futures were little changed after gaining 0.6 percent yesterday. Economic growth is expected to “remain moderate over coming quarters and then to pick up gradually,” the Federal Open Market Committee said in a statement. Prices declined earlier as U.S. supplies gained and Iran’s envoy in Moscow said his country is considering a proposal to halt the expansion of its nuclear program. Crude for June delivery was at $104.05 a barrel, down 7 cents, in electronic trading on the New York Mercantile Exchange at 9:46 a.m. Sydney time. The contract yesterday rose 57 cents to $104.12, the highest close since April 17. Prices are 5.3 percent higher this year.
Brent oil for June settlement increased 0.8 percent to $119.12 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s front month premium to West Texas Intermediate closed at $15. Iran is considering a Russian proposal to halt the expansion of its nuclear program in order to avert new sanctions, Iranian Ambassador Mahmoud-Reza Sajjadi said in Moscow yesterday. Oil prices have climbed this year amid speculation that tension with Iran may disrupt global supplies.
OIL-Brent hovers above $118, waiting for Fed
SINGAPORE, April 25 (Reuters) - Brent crude hovered above $118 a barrel on Wednesday as investors marked time ahead of the outcome of the U.S. Federal Reserve's policy meeting, with some investors hoping to hear hints of further monetary easing in the world's top oil user.
"We are not expecting drastic changes from the Fed, but we are hoping to hear hints about QE3," said Ken Hasegawa, a commodity derivatives manager at Newedge Brokerage.
Mine Setbacks Mean ‘Disappointing’ Copper Output, Barclays Says (Source: Bloomberg)
Copper supplies relative to demand will fall to a four-year low as operating glitches, labor shortages and declining ore-grade quality cut mine supplies, boosting prospects for a price rebound, Barclays Capital said. Stockpiles will be sufficient to last for 2.7 weeks by the end of the year at projected demand, down from 3.2 weeks at the end of 2011 and 3.6 weeks at the end of 2010, Gayle Berry and Nicholas Snowdon, analysts at Barclays Capital, said in a telephone interview. Copper will average $9,300 a metric ton in the fourth quarter, the bank said in a report on April 12. The commodity has averaged $8,300 so far this year.
Prices have more than doubled since the end of 2008 as miners struggled to keep pace with rising demand. Freeport- McMoRan Copper & Gold Inc., the world’s top publicly traded copper producer, cut its 2012 sales forecasts last week after violence among employees halted output at its Grasberg mine in Indonesia for more than two weeks in February and March. Rio Tinto Group said on April 17 that production of the metal dropped 18 percent in the first quarter because of lower ore grades at its Kennecott Utah operation. “All of these issues are going to keep the level of disruptions elevated,” Snowdon said. “There are new projects hitting the market, but it’s a relatively disappointing outlook” for supply, he said.
Iron Ore-Spot falls on slow demand, Shanghai steel at 7-wk lows
SINGAPORE, April 24 (Reuters) - Prices of imported iron ore in top consumer China fell on Tuesday as buying interest for the steel-making raw material weakened along with slow demand for steel, with Shanghai rebar futures hitting near seven-week lows.
A slower pace of decline in inventories of steel products held by Chinese traders has raised concern about demand going forward, but some analysts say the continued drop in stockpiles since mid-February suggests demand is picking up, albeit modestly.
Vale Q1 net seen falling 45 pct on prices, volumes
RIO DE JANEIRO, April 24 (Reuters) - First-quarter profit at Vale , the world's biggest iron-ore producer, likely fell by nearly half from a year earlier due to lower prices for its main products, heavy rain and spending on new mines, analysts surveyed by Reuters said.
The Rio de Janeiro-based company is expected to announce late Wednesday net income of $3.8 billion for the quarter ending March 31, according to the average estimate of six analysts surveyed by Reuters. That's 45 percent less than the same quarter in 2011 and 19 percent less than in the previous quarter.
Indian state to resume iron ore mining in July-minister
NEW DELHI, April 24 (Reuters) - Iron ore production by privately owned miners in India's Karnataka state will likely resume in July, the country's mines minister said on Tuesday, after what will have been a year's hiatus due to a government and judicial crackdown on illegal operations.
Dinsha Patel said initial production from the southern state would go to local steel mills, but a resumption of mining means the world's third-biggest supplier of iron ore could hope to regain its $6 billion, 100 million tonnes average annual exports, mainly to China, in 2012/13.
Baltic sea index up, panamax rates rise 4.9 pct
April 24 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose for a 10th straight session on Tuesday on higher rates for smaller vessels.
The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, rose 26 points or 2.39 percent to 1,116 points.
Chicago and Kansas City wheat futures saw two-sided trade today but settled low-range with Chicago 4 to 8 cents lower and Kansas City narrowly mixed. Minneapolis wheat rallied late to finish fractionally to 4 1/4 cents higher, with the exception of the May contract. Futures took their cue from the corn market today, which also saw a mixed day of trade and softened into the close.
Wheat Market Recap Report (Source: CME)
July Wheat finished down 6 at 626 1/2, 16 1/4 off the high and 2 1/2 up from the low. December Wheat closed down 5 1/2 at 665 3/4. This was 2 1/4 up from the low and 13 1/2 off the high. July wheat pushed from higher to lower on the session to close moderately lower on the day. Less fear of cold weather issues ahead plus ideas that the winter wheat crop yield potential is very high helped to pressure. The surge in soybeans, positive outside market forces and a surge higher in the stock market helped to support the strong opening. However, a lack of new buying interest and a push lower in corn sparked a fairly aggressive selling pace from fund traders and a moderately lower on the day trade in wheat into the mid-session. Less cold weather in the forecast for the eastern Corn Belt plus more rain in the forecast for the plains were seen as negative weather forces which helped to pressure. Libya expected to import near 1 million tonnes in 2012. July Minneapolis wheat was down sharply on the day into the mid-session and down to the lowest level since January 20th. July Oats closed down 3/4 at 341 3/4. This was 6 1/2 up from the low and 3 1/4 off the high.
Corn Market Recap for 4/25/2012 (Source: CME)
July Corn finished down 7 at 601, 16 off the high and 1/4 up from the low. December Corn closed down 3 1/2 at 538. This was 2 up from the low and 8 3/4 off the high. July corn closed moderately lower on the day after first trading moderately higher on the session. Funds were noted as aggressive sellers of near 12,000 contracts on the session. The market followed the soybean rally overnight and then got a boost near the opening due to more active sales announcements from China. However, similar to yesterday, there was buy the rumor, sell the fact type session which pulled the market lower on the day into the mid-session. Slower ethanol demand and weaker wheat prices were also seen as negative forces. Private exporters reported a sale of 420,000 tonnes of US corn to unknown destination for the 2012/13 season. In addition, exporters reported a sale of 262,500 tones of US corn for China. Of the sale, 90,000 was for the 2011/12 season and 172,500 for the 2012/13 season. Ethanol production for the week ending April 20th averaged 865,000 barrels per day. This is down 2.15% vs. last week and down 2.04% vs. last year. Corn used in last week's production is estimated at 92.1 million bushels. Corn use needs to average 94.2 million bushels per week to meet this crop year's USDA estimate. Stocks were 21.852 million barrels. This is down 0.53% vs. last week and up 13.32% vs. last year. The outlook for sharply higher production this summer has continued to spark selling. The May USDA report will be the first look at the 2012/13 ending stocks. Traders see stocks near 1.8 billion bushels for the May report as compared with 801 million bushels for the 2011/12 season. July Rice finished up 0.075 at 16, 0.04 off the high and 0.15 up from the low.
Market Recap: Corn Futures (Source: CME)
Corn futures got off to a firmer start but buying interest quickly dried up and futures drifted lower. Old-crop corn ended 7 to 7 1/4 cents lower, with September down 6 1/2 cents. New-crop corn ended mostly between 2 to 3 cents lower. Funds were active sellers of 12,000 contracts today (60 million bushels). The inability of the market to rally on positive news signals traders' focus is on the potential for a large 2012 crop.
Moroccan Agmin sees cereals harvest at 4.8 mln T (Source: CME)
Morocco's cereals harvest should reach 4.8 million tonnes this year, the agriculture minister said on Tuesday, which is far below last year's level and the crop budget for 2012, but slightly above the most recent forecasts. Aziz Akhannouch made the announcement in remarks carried by the official MAP news agency. He did not give a breakdown per variety.
Canadian farmers to plant more wheat than expected (Source: CME)
Canadian farmers intend to plant nearly a million acres more wheat than the industry expected in the first year of an open grain market, along with a record-large canola crop, Statistics Canada reported Tuesday in its initial forecast of 2012 planting intentions. Drier-than-normal weather in Western Canada, stretching back to last summer, brought millions of previously flooded acres back into production this spring, lifting plantings of most major crops.
Is the bloom off new crop corn's rose? (Source: CME)
Bullish corn traders continue to view the robust tone of spot domestic corn basis levels as a sign that this market has further upside potential in the weeks and months ahead. But a slight cooling in the basis at key export locations as well as the recent downward grind in the price of corn in China raise the prospect that old-crop corn may have had its day as the grain market to watch and is now set for a stretch of low-key range-bound action until we get deeper into the new crop-growing season.
GRAINS-US soy at highest since 2008; wheat, corn rise
SINGAPORE, April 25 (Reuters) - Chicago soybeans rose to their highest in nearly four years, building on the previous session's rally on expectations of strong demand for U.S. beans amid shrinking South American supplies.
"The soybean market is going to go higher as the entire edible oil sector is going to be severely constrained for the rest of the year," said Abah Ofon, a commodities analyst at Standard Chartered in Singapore.
Malawi maize crop seen down, still in surplus
BLANTYRE, April 25 (Reuters) - Malawi's maize crop is forecast to fall this season by around 7 percent to 3.6 million tonnes, the southern African country's agriculture ministry said on Wednesday.
It also said in a statement it projects a surplus of around 567,000 tonnes but a clearer picture will emerge when two more forecasts are made during harvesting. Production was around 3.8 to 3.9 million tonnes last year.
Ethiopia 11/12 grain output high-attache
April 24 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Ethiopia:
"Ethiopia is one of the largest grain producing countries in Africa, although it is still a food insecure country and a net importer of grain. Cereals are predominantly produced by smallholders, and are consumed as food, with only residues and by-products fed to livestock. Due to good rainfall in 2011, production of all grains in Marketing Year (MY) 2011/12 was high.
Canadian farmers to plant more wheat than expected
WINNIPEG, Manitoba, April 24 (Reuters) - Canadian farmers intend to plant nearly a million acres more wheat than the industry expected in the first year of an open grain market, along with a record-large canola crop, Statistics Canada reported Tuesday in its initial forecast of 2012 planting intentions.
Drier-than-normal weather in Western Canada, stretching back to last summer, brought millions of previously flooded acres back into production this spring, lifting plantings of most major crops.
S.Africa further cuts 2012 maize crop f'cast
JOHANNESBURG, April 24 (Reuters) - South Africa cut its 2012 maize output forecast by nearly 2 percent on Tuesday, bang in line with market expectations, citing continued unfavourable weather conditions.
The government's Crop Estimates Committee (CEC) said in its third production forecast for the May 2011-April 2012 season that the country is now expected to harvest 11.12 million tonnes of maize from 11.3 million tonnes in the previous forecast.
Moroccan Agmin sees cereals harvest at 4.8 mln T
RABAT, April 24 (Reuters) - Morocco's cereals harvest should reach 4.8 million tonnes this year, the agriculture minister said on Tuesday, which is far below last year's level and the crop budget for 2012, but slightly above the most recent forecasts.
Aziz Akhannouch made the announcement in remarks carried by the official MAP news agency. He did not give a breakdown per variety.
Vietnam Jan-April rice exports -28.1 pct y/y-govt
HANOI, April 24 (Reuters) - Vietnam's rice exports between January and April are estimated to be down 28.1 percent from the same period last year to 1.96 million tonnes, the government's General Statistics Office said on Tuesday.
Rice export revenues in the first four months fell an estimated 27.8 percent from a year earlier to $969 million, the statistics office said in its monthly report.
SOFTS-Sugar extends bounce, cocoa consolidates
LONDON, April 25 (Reuters) - Raw sugar futures extended their recovery from an 11-month low hit earlier this week, boosted by a weaker dollar. Raw sugar futures were higher, supported by the dollar hitting a three-week low against a basket of currencies, as the market extended its recovery from an 11-month low hit on Monday after funds liquidated long positions.
Costa Rica sees 5 pct drop in coffee crop next season
SAN JOSE, April 24 (Reuters) - Costa Rica coffee production is forecast to drop 5 percent in the upcoming 2012/13 harvest due to the biennial nature of the crop, as coffee trees usually produce less after a boom year.
The small Central American country, known for its high-quality arabica beans, sees next season's production down nearly 90,000 bags, reaching a total of 1.71 million bags, the national coffee institute ICAFE said on Tuesday.
India seen net sugar exporter again in 12/13-attache
April 24 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in India:
"Indian sugar production is poised to increase to 29.8 million tonnes (raw value basis) in marketing year (MY) 2012/13 (October-September) due to an expected increase in sugarcane production. Anticipating surplus sugar production and strong export demand for 2012/13, India will continue to be a net exporter of sugar for second consecutive year, with exports likely to reach as much as 2.5 million tonnes. Continued strong demand from bulk consumers will push sugar consumption to 26.5 million tonnes."
Dry weather to prevent record Argentina sugar crop-attache
April 24 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Argentina:
"Argentine sugar production in marketing year 2012/13 is projected at 2.04 million tonnes (raw value). Everything was set for a record crop, primarily as result of additional planted area, but dry weather in most part of the growing season negatively affected most plantations without irrigation. Domestic consumption is forecast to increase marginally, while exports could expand to 260,000 tonnes (raw value)."
Rain to help young Brazil cane but slow the harvest
SAO PAULO, April 24 (Reuters) - Brazil's world-leading sugarcane belt will get widespread rain later this week that will help to speed growth in much of the main center-south crop that dry weather in February and March had stunted, local weather forecaster Somar said.
The new, heavy rainfall expected over all of Sao Paulo and Parana states in the second half of this week will likely push back the start of harvesting until next week, meteorologist Marco Antonio dos Santos said in a bulletin released late on Monday.
Vietnam April coffee exports up 18.8 pct on yr
HANOI, April 24 (Reuters) - Vietnam's coffee exports this month are estimated to jump 18.8 percent from a year ago to 150,000 tonnes, or 2.5 million bags, the government's General Statistics Office said on Tuesday, in line with market expectations.
Coffee loading between October 2011 and April, the first seven months of the 2011/2012 coffee crop year, dropped an estimated 2.8 percent from a year earlier to 909,700 tonnes, or 15.2 million 60-kg bags, the statistics office said.
Rubber Futures Gain 0.1% to 306.7 Yen/Kg in Tokyo (Source: Bloomberg)
Rubber futures gained 0.1 percent in Tokyo. The October-delivery contract rose to 306.7 yen a kilogram at 9:00 a.m. local time.
Euro Coal-May S.African trades at $99.70/T
LONDON, April 24 (Reuters) - European prompt physical coal prices softened again on Tuesday but few trades were reported.
A May loading South African capesize cargo traded at $99.70 a tonne, falling below $100 once more, but the price reflects the discount which a very prompt cargo would have, traders said.
Coal India mulls 15 mln T imports -suppliers
LONDON, April 24 (Reuters) - The world's largest coal miner, Coal India (CIL) , has been discussing importing up to 15 million tonnes of thermal coal with suppliers, but there are numerous obstacles to overcome before a tender can be issued, supplier sources said.
"Coal India is clearly under a lot of pressure to make up the shortfall in its own output but a lot needs to be covered before they can import," one Delhi-based source said.
U.S. coal exports to China may double in 2012-Xcoal
BEIJING, April 19 (Reuters) - U.S. coal exports to China could more than double to over 12 million tonnes in 2012 thanks to depressed freight rates and a fall in domestic demand in the United States, the chief of top U.S. coal exporter Xcoal Energy & Resources said.
The expected increase in coal shipments could further push down coal prices in Asia where a supply glut following a deluge from the United States and Colombia has forced prices to slump recently.
Oil Trades Near Weekly High on Demand Outlook After Fed (Source: Bloomberg)
Oil traded near the highest level in more than a week in New York after Federal Reserve policy makers said they expect growth to accelerate, boosting speculation that fuel demand will rise. Futures were little changed after gaining 0.6 percent yesterday. Economic growth is expected to “remain moderate over coming quarters and then to pick up gradually,” the Federal Open Market Committee said in a statement. Prices declined earlier as U.S. supplies gained and Iran’s envoy in Moscow said his country is considering a proposal to halt the expansion of its nuclear program. Crude for June delivery was at $104.05 a barrel, down 7 cents, in electronic trading on the New York Mercantile Exchange at 9:46 a.m. Sydney time. The contract yesterday rose 57 cents to $104.12, the highest close since April 17. Prices are 5.3 percent higher this year.
Brent oil for June settlement increased 0.8 percent to $119.12 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s front month premium to West Texas Intermediate closed at $15. Iran is considering a Russian proposal to halt the expansion of its nuclear program in order to avert new sanctions, Iranian Ambassador Mahmoud-Reza Sajjadi said in Moscow yesterday. Oil prices have climbed this year amid speculation that tension with Iran may disrupt global supplies.
OIL-Brent hovers above $118, waiting for Fed
SINGAPORE, April 25 (Reuters) - Brent crude hovered above $118 a barrel on Wednesday as investors marked time ahead of the outcome of the U.S. Federal Reserve's policy meeting, with some investors hoping to hear hints of further monetary easing in the world's top oil user.
"We are not expecting drastic changes from the Fed, but we are hoping to hear hints about QE3," said Ken Hasegawa, a commodity derivatives manager at Newedge Brokerage.
Mine Setbacks Mean ‘Disappointing’ Copper Output, Barclays Says (Source: Bloomberg)
Copper supplies relative to demand will fall to a four-year low as operating glitches, labor shortages and declining ore-grade quality cut mine supplies, boosting prospects for a price rebound, Barclays Capital said. Stockpiles will be sufficient to last for 2.7 weeks by the end of the year at projected demand, down from 3.2 weeks at the end of 2011 and 3.6 weeks at the end of 2010, Gayle Berry and Nicholas Snowdon, analysts at Barclays Capital, said in a telephone interview. Copper will average $9,300 a metric ton in the fourth quarter, the bank said in a report on April 12. The commodity has averaged $8,300 so far this year.
Prices have more than doubled since the end of 2008 as miners struggled to keep pace with rising demand. Freeport- McMoRan Copper & Gold Inc., the world’s top publicly traded copper producer, cut its 2012 sales forecasts last week after violence among employees halted output at its Grasberg mine in Indonesia for more than two weeks in February and March. Rio Tinto Group said on April 17 that production of the metal dropped 18 percent in the first quarter because of lower ore grades at its Kennecott Utah operation. “All of these issues are going to keep the level of disruptions elevated,” Snowdon said. “There are new projects hitting the market, but it’s a relatively disappointing outlook” for supply, he said.
Iron Ore-Spot falls on slow demand, Shanghai steel at 7-wk lows
SINGAPORE, April 24 (Reuters) - Prices of imported iron ore in top consumer China fell on Tuesday as buying interest for the steel-making raw material weakened along with slow demand for steel, with Shanghai rebar futures hitting near seven-week lows.
A slower pace of decline in inventories of steel products held by Chinese traders has raised concern about demand going forward, but some analysts say the continued drop in stockpiles since mid-February suggests demand is picking up, albeit modestly.
Vale Q1 net seen falling 45 pct on prices, volumes
RIO DE JANEIRO, April 24 (Reuters) - First-quarter profit at Vale , the world's biggest iron-ore producer, likely fell by nearly half from a year earlier due to lower prices for its main products, heavy rain and spending on new mines, analysts surveyed by Reuters said.
The Rio de Janeiro-based company is expected to announce late Wednesday net income of $3.8 billion for the quarter ending March 31, according to the average estimate of six analysts surveyed by Reuters. That's 45 percent less than the same quarter in 2011 and 19 percent less than in the previous quarter.
Indian state to resume iron ore mining in July-minister
NEW DELHI, April 24 (Reuters) - Iron ore production by privately owned miners in India's Karnataka state will likely resume in July, the country's mines minister said on Tuesday, after what will have been a year's hiatus due to a government and judicial crackdown on illegal operations.
Dinsha Patel said initial production from the southern state would go to local steel mills, but a resumption of mining means the world's third-biggest supplier of iron ore could hope to regain its $6 billion, 100 million tonnes average annual exports, mainly to China, in 2012/13.
Baltic sea index up, panamax rates rise 4.9 pct
April 24 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose for a 10th straight session on Tuesday on higher rates for smaller vessels.
The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, rose 26 points or 2.39 percent to 1,116 points.
20120426 1018 Soy Oil & Palm Oil Related News.
Soybean Complex Market Recap (Source: CME)
July Soybeans finished up 11 at 1476, 20 3/4 off the high and 11 up from the low. November Soybeans closed up 18 1/2 at 1370 1/2. This was 20 1/2 up from the low and 1 1/4 off the high. July Soymeal closed up 1.5 at 417.2. This was 3.0 up from the low and 9.4 off the high. July Soybean Oil finished up 0.34 at 56.03, 0.26 off the high and 0.33 up from the low. July soybeans closed 11 cents higher on the day and to a new high close but closed more than 20 cents off of the early highs. Weakness in the other grains and ideas that the market is overbought helped to spark the long liquidation selling to pull the market off of the highs. Rumors of China buying more US soybeans and continued talk of declining production estimates for South America, especially Argentina, helped to drive the market sharply higher. The rally pushed nearby soybean futures to the highest level since July of 2008. Nearby meal has led the market higher, pushing to the highest level since July of 2009. There are rumors that China bought near 1 million tonnes of soybeans with a mix of old and new crop. Cash basis levels at the gulf remain firm as producer selling has been light even after the recent surge in pries. A turn lower in corn and wheat helped drag the market well off of the early highs. The weekly hatchery report showed that eggs set in the past week were down 4.5% from last year.
Market Recap: Soybean Futures (Source: CME)
Soybean futures closed 8 to 12 1/4 cents higher in the May through September contract. The November through March 2013 contract finished 16 to 18 1/2 cents higher. Futures started very strong with old-crop contracts leading the way amid expectations declining South American crop forecasts will lead to additional strong demand for U.S. soybeans. But after the initial wave of buying worked through the market, intra-day profit-taking kicked in.
Oil World cuts Argentine soybean crop estimate (Source: CME)
Hamburg-based oilseeds analyst Oil World said on Tuesday it has again cut its forecast of Argentina's 2012 soybean crop because of drought damage, this time by 1.5 million tonnes. Oil World now forecasts Argentina's 2012 soybean crop at 42.5 million tonnes, down from 49.2 million in 2011. The deteriorating harvest outlook is likely to support global soybean prices, it said.
US soy at highest since 2008 (Source: CME)
Chicago soybeans rose to their highest in nearly four years, building on the previous session's rally on expectations of strong demand for U.S. beans amid shrinking South American supplies. "The soybean market is going to go higher as the entire edible oil sector is going to be severely constrained for the rest of the year," said Abah Ofon, a commodities analyst at Standard Chartered in Singapore.
VEGOILS-Oil World cuts Argentine soybean crop estimate
HAMBURG, April 24 (Reuters) - Hamburg-based oilseeds analyst Oil World said on Tuesday it has again cut its forecast of Argentina's 2012 soybean crop because of drought damage, this time by 1.5 million tonnes.
Oil World now forecasts Argentina's 2012 soybean crop at 42.5 million tonnes, down from 49.2 million in 2011. The deteriorating harvest outlook is likely to support global soybean prices, it said.
July Soybeans finished up 11 at 1476, 20 3/4 off the high and 11 up from the low. November Soybeans closed up 18 1/2 at 1370 1/2. This was 20 1/2 up from the low and 1 1/4 off the high. July Soymeal closed up 1.5 at 417.2. This was 3.0 up from the low and 9.4 off the high. July Soybean Oil finished up 0.34 at 56.03, 0.26 off the high and 0.33 up from the low. July soybeans closed 11 cents higher on the day and to a new high close but closed more than 20 cents off of the early highs. Weakness in the other grains and ideas that the market is overbought helped to spark the long liquidation selling to pull the market off of the highs. Rumors of China buying more US soybeans and continued talk of declining production estimates for South America, especially Argentina, helped to drive the market sharply higher. The rally pushed nearby soybean futures to the highest level since July of 2008. Nearby meal has led the market higher, pushing to the highest level since July of 2009. There are rumors that China bought near 1 million tonnes of soybeans with a mix of old and new crop. Cash basis levels at the gulf remain firm as producer selling has been light even after the recent surge in pries. A turn lower in corn and wheat helped drag the market well off of the early highs. The weekly hatchery report showed that eggs set in the past week were down 4.5% from last year.
Market Recap: Soybean Futures (Source: CME)
Soybean futures closed 8 to 12 1/4 cents higher in the May through September contract. The November through March 2013 contract finished 16 to 18 1/2 cents higher. Futures started very strong with old-crop contracts leading the way amid expectations declining South American crop forecasts will lead to additional strong demand for U.S. soybeans. But after the initial wave of buying worked through the market, intra-day profit-taking kicked in.
Oil World cuts Argentine soybean crop estimate (Source: CME)
Hamburg-based oilseeds analyst Oil World said on Tuesday it has again cut its forecast of Argentina's 2012 soybean crop because of drought damage, this time by 1.5 million tonnes. Oil World now forecasts Argentina's 2012 soybean crop at 42.5 million tonnes, down from 49.2 million in 2011. The deteriorating harvest outlook is likely to support global soybean prices, it said.
US soy at highest since 2008 (Source: CME)
Chicago soybeans rose to their highest in nearly four years, building on the previous session's rally on expectations of strong demand for U.S. beans amid shrinking South American supplies. "The soybean market is going to go higher as the entire edible oil sector is going to be severely constrained for the rest of the year," said Abah Ofon, a commodities analyst at Standard Chartered in Singapore.
VEGOILS-Oil World cuts Argentine soybean crop estimate
HAMBURG, April 24 (Reuters) - Hamburg-based oilseeds analyst Oil World said on Tuesday it has again cut its forecast of Argentina's 2012 soybean crop because of drought damage, this time by 1.5 million tonnes.
Oil World now forecasts Argentina's 2012 soybean crop at 42.5 million tonnes, down from 49.2 million in 2011. The deteriorating harvest outlook is likely to support global soybean prices, it said.
Wednesday, April 25, 2012
20120425 1112 Global Market & Commodities Related News.
GLOBAL MARKETS-Shares recover on earnings; focus shifts to Fed
TOKYO, April 25 (Reuters) - Asian shares rose on Wednesday as firm U.S. corporate earnings, signs of an improving U.S. housing market, and healthy demand for euro zone sovereign debt stoked risk appetite, while focus shifted to the Federal Reserve's meeting.
"The latest round of housing data releases seems to support our view that further easing is not needed. In the short term, equities could struggle if QE3 appears off the table," Barclays Capital analysts said in a research note.
COMMODITIES-Soy near 4-year highs; copper jumps
NEW YORK, April 24 (Reuters) - U.S. soybean prices settled up near four-year highs on Tuesday on strong exports and concern about rival crops in South America, while upbeat home sales in the United States boosted prices of copper which relies on construction.
"The strong demand base for soybeans is leading the charge higher," said Brian Hoops, analyst for Midwest Market Solutions.
OIL-Brent slips, narrows spread vs stronger US oil
NEW YORK, April 24 (Reuters) - Brent crude prices fell and U.S. crude edged up o n T uesday, narrowing the spread between the two benchmarks, while weak gasoline futures weighed on the complex as market participants rotated positions ahead of weekly inventory reports.
"(A)n expected upswing in imports during the coming weeks, soft Gulf coast and Midwest cash markets and possible sale of Sunoco's Philadelphia refinery all tilt in favor of renewed gasoline futures weakness," Jim Ritterbusch, president at Ritterbusch & Associates, said in a report.
NATURAL GAS-US natgas futures end down, first loss in 3 sessions
NEW YORK, April 24 (Reuters) - U.S. natural gas futures ended lower on Tuesday for the first time in three sessions as mild extended forecasts and record-high supplies pressured prices despite cooler weather this week and some technical buying after last week's 10-year low.
"The fundamentals look a little flat here from the weather side, so we're chalking up the early move (up) to technical momentum that has since sputtered out," Gelber & Associates analyst Pax Saunders said in a report.
EURO COAL-May S.African trades at $99.70/T
LONDON, April 24 (Reuters) - European prompt physical coal prices softened again on Tuesday but few trades were reported.
A May loading South African capesize cargo traded at $99.70 a tonne, falling below $100 once more, but the price reflects the discount which a very prompt cargo would have, traders said.
TOKYO, April 25 (Reuters) - Asian shares rose on Wednesday as firm U.S. corporate earnings, signs of an improving U.S. housing market, and healthy demand for euro zone sovereign debt stoked risk appetite, while focus shifted to the Federal Reserve's meeting.
"The latest round of housing data releases seems to support our view that further easing is not needed. In the short term, equities could struggle if QE3 appears off the table," Barclays Capital analysts said in a research note.
COMMODITIES-Soy near 4-year highs; copper jumps
NEW YORK, April 24 (Reuters) - U.S. soybean prices settled up near four-year highs on Tuesday on strong exports and concern about rival crops in South America, while upbeat home sales in the United States boosted prices of copper which relies on construction.
"The strong demand base for soybeans is leading the charge higher," said Brian Hoops, analyst for Midwest Market Solutions.
OIL-Brent slips, narrows spread vs stronger US oil
NEW YORK, April 24 (Reuters) - Brent crude prices fell and U.S. crude edged up o n T uesday, narrowing the spread between the two benchmarks, while weak gasoline futures weighed on the complex as market participants rotated positions ahead of weekly inventory reports.
"(A)n expected upswing in imports during the coming weeks, soft Gulf coast and Midwest cash markets and possible sale of Sunoco's Philadelphia refinery all tilt in favor of renewed gasoline futures weakness," Jim Ritterbusch, president at Ritterbusch & Associates, said in a report.
NATURAL GAS-US natgas futures end down, first loss in 3 sessions
NEW YORK, April 24 (Reuters) - U.S. natural gas futures ended lower on Tuesday for the first time in three sessions as mild extended forecasts and record-high supplies pressured prices despite cooler weather this week and some technical buying after last week's 10-year low.
"The fundamentals look a little flat here from the weather side, so we're chalking up the early move (up) to technical momentum that has since sputtered out," Gelber & Associates analyst Pax Saunders said in a report.
EURO COAL-May S.African trades at $99.70/T
LONDON, April 24 (Reuters) - European prompt physical coal prices softened again on Tuesday but few trades were reported.
A May loading South African capesize cargo traded at $99.70 a tonne, falling below $100 once more, but the price reflects the discount which a very prompt cargo would have, traders said.
20120425 0958 Global Economy Related News.
South Korea: Consumer confidence rises to 11-month high
South Korean consumer confidence rose to the highest level in almost a year as improving signs for the US economy and European debt crisis offset worries over North Korea. The sentiment index was at 104 in April, the strongest since May 2011, rising from 101 in March, the Bank of Korea said. A reading above 100 indicates optimists outnumber pessimists. (Bloomberg)
Japan: Bank of Japan seen anteing up on stimulus as yen impact fades
Japan‟s central bank is set to ante up on stimulus measures as a rebound in the yen shows that the impact of a JPY10trn (USD123bn) expansion in asset purchases in February is fading. All 14 economists in a Bloomberg News survey predict additional easing when the Bank of Japan releases new inflation forecasts on 27 April. Most expect an increase ranging from JPY5trn to JPY10trn. (Bloomberg)
UK: March deficit larger than forecast
Britain posted a larger budget deficit than economists forecast in March, underscoring the challenge facing Chancellor of the Exchequer George Osborne as he tries to cut borrowing. Net borrowing excluding support for banks was GBP18.2bn (USD29.4bn), compared with GBP18bn a year earlier, the Office for National Statistics said. (Bloomberg)
US: Sales of new US homes exceeded estimates in March
Demand for new US homes was stronger than projected in March, showing more jobs and cheaper borrowing costs are helping stabilize the market. Houses sold at a 328,000 annual rate, down from an upwardly revised 353,000 pace in February that was the highest in two years, according to Commerce Department data. The median estimate in a Bloomberg News survey forecast a rate of 319,000. (Bloomberg)
US: Consumer confidence in US little changed as outlook cools
Confidence among US consumers was little changed in April as expectations over the outlook tempered increased optimism about the present. The Conference Board‟s confidence index was at 69.2 compared to a revised 69.5 in the prior month, figures from the New York-based private research group showed. The median forecast of economists surveyed by Bloomberg News called for a reading of 69.6. (Bloomberg)
South Korean consumer confidence rose to the highest level in almost a year as improving signs for the US economy and European debt crisis offset worries over North Korea. The sentiment index was at 104 in April, the strongest since May 2011, rising from 101 in March, the Bank of Korea said. A reading above 100 indicates optimists outnumber pessimists. (Bloomberg)
Japan: Bank of Japan seen anteing up on stimulus as yen impact fades
Japan‟s central bank is set to ante up on stimulus measures as a rebound in the yen shows that the impact of a JPY10trn (USD123bn) expansion in asset purchases in February is fading. All 14 economists in a Bloomberg News survey predict additional easing when the Bank of Japan releases new inflation forecasts on 27 April. Most expect an increase ranging from JPY5trn to JPY10trn. (Bloomberg)
UK: March deficit larger than forecast
Britain posted a larger budget deficit than economists forecast in March, underscoring the challenge facing Chancellor of the Exchequer George Osborne as he tries to cut borrowing. Net borrowing excluding support for banks was GBP18.2bn (USD29.4bn), compared with GBP18bn a year earlier, the Office for National Statistics said. (Bloomberg)
US: Sales of new US homes exceeded estimates in March
Demand for new US homes was stronger than projected in March, showing more jobs and cheaper borrowing costs are helping stabilize the market. Houses sold at a 328,000 annual rate, down from an upwardly revised 353,000 pace in February that was the highest in two years, according to Commerce Department data. The median estimate in a Bloomberg News survey forecast a rate of 319,000. (Bloomberg)
US: Consumer confidence in US little changed as outlook cools
Confidence among US consumers was little changed in April as expectations over the outlook tempered increased optimism about the present. The Conference Board‟s confidence index was at 69.2 compared to a revised 69.5 in the prior month, figures from the New York-based private research group showed. The median forecast of economists surveyed by Bloomberg News called for a reading of 69.6. (Bloomberg)
20120425 0957 Malaysia Corporate Related News.
Malakoff Corp to venture into Pakistan’s power industry
Malakoff Corp is looking to energy hungry Pakistan to find new investment opportunities and has proposed to its government the setting up two power plants including a 1,200MW imported coal-fired project and a 250MW wind power project. Pakistan is currently processing wind power projects on a fast-track basis to stem an energy crisis from occurring in the country. (Malaysian Reserve)
MRCB invests RM40m to build linking bridges at KL Sentral
Malaysian Resources Corp (MRCB) has invested about RM40m to build several linking bridges to facilitate smooth movement between buildings at KL Sentral. CEO Datuk Mohamed Razeek Hussain said the connection to Lot E, a green platinum building, has been completed, with escalators and elevators for the handicapped. He said the linking bridges would be completed by end-July or in August. (Malaysian Reserve)
No intention to review lending guidelines, says Zeti
Bank Negara Malaysia (BNM) has no intention to review its new guidelines on responsible lending for the time being, said governor Tan Sri Dr Zeti Akhtar Aziz. “Whatever needs to be resolved will be through bilateral discussion. Right now we have no intention,” she said yesterday when commenting on reports that the guidelines would be reviewed. (Financial Daily)
DRB-Hicom assures it will not cut Proton vendors
Conglomerate DRB-Hicom, which has extensive interests in auto component manufacturing, will not overhaul the auto parts supply network that supports Proton Holdings following its takeover of the national carmaker. Proton‟s parts suppliers said they received assurances that no group will be “cut out” from the vendor programme during a meeting with top level DRB-Hicom representative earlier this month. (Financial Daily)
Pestech to raise RM13m via IPO
Pestech International, an integrated electric power technology company aims to raise RM12.88m via an IPO of 12.88m new ordinary shares of RM0.50 each at an issue price of RM1 apiece. Pestech said the IPO would also involve an offer for sale of 8.58m existing shares. It said a portion of the proceeds from the IPO would be used for product development and business expansion in existing and developing markets. (Financial Daily)
Malakoff Corp is looking to energy hungry Pakistan to find new investment opportunities and has proposed to its government the setting up two power plants including a 1,200MW imported coal-fired project and a 250MW wind power project. Pakistan is currently processing wind power projects on a fast-track basis to stem an energy crisis from occurring in the country. (Malaysian Reserve)
MRCB invests RM40m to build linking bridges at KL Sentral
Malaysian Resources Corp (MRCB) has invested about RM40m to build several linking bridges to facilitate smooth movement between buildings at KL Sentral. CEO Datuk Mohamed Razeek Hussain said the connection to Lot E, a green platinum building, has been completed, with escalators and elevators for the handicapped. He said the linking bridges would be completed by end-July or in August. (Malaysian Reserve)
No intention to review lending guidelines, says Zeti
Bank Negara Malaysia (BNM) has no intention to review its new guidelines on responsible lending for the time being, said governor Tan Sri Dr Zeti Akhtar Aziz. “Whatever needs to be resolved will be through bilateral discussion. Right now we have no intention,” she said yesterday when commenting on reports that the guidelines would be reviewed. (Financial Daily)
DRB-Hicom assures it will not cut Proton vendors
Conglomerate DRB-Hicom, which has extensive interests in auto component manufacturing, will not overhaul the auto parts supply network that supports Proton Holdings following its takeover of the national carmaker. Proton‟s parts suppliers said they received assurances that no group will be “cut out” from the vendor programme during a meeting with top level DRB-Hicom representative earlier this month. (Financial Daily)
Pestech to raise RM13m via IPO
Pestech International, an integrated electric power technology company aims to raise RM12.88m via an IPO of 12.88m new ordinary shares of RM0.50 each at an issue price of RM1 apiece. Pestech said the IPO would also involve an offer for sale of 8.58m existing shares. It said a portion of the proceeds from the IPO would be used for product development and business expansion in existing and developing markets. (Financial Daily)
20120425 0956 Malaysia Market Related News.
Malaysia’s Top Fund to Buy More Consumer, Plantation Stocks (Source: Bloomberg)
Malaysia’s best-performing fund in the past year is buying consumer and plantation stocks that are benefiting from government efforts to bolster domestic growth and a rally in palm oil prices. Kenanga Growth Fund, with assets of 59 million ringgit ($19 million) as of March 31, favors companies including Dutch Lady Milk Industries Bhd. (DLM) and Nestle (Malaysia) Bhd., Chen Fan Fai, investment director at Kenanga Investors Bhd., said in an interview in Kuala Lumpur on April 23. The fund beat 370 other Malaysian equity mutual funds in the past year with an 18 percent return, according to data compiled by Bloomberg. Dutch Lady has doubled in the past year, outpacing the FTSE Bursa Malaysia KLCI Index’s (FBMKLCI) 3.9 percent gain.
Gauges of consumer and plantation stocks are the best performers of 10 industry groups on the Malaysian bourse in the past year on optimism Prime Minister Najib Razak’s 2012 budget plan to distribute cash to low-income families, raise wages for civil servants and boost spending on transportation will bolster growth and consumption. Palm-oil futures have surged 9.2 percent this year and hit a 13-month high on April 10. “Consumer stocks have done well because they are more resilient in any downturn and the government’s drive to boost income levels will also be positive for consumption,” Chen said. “We have always liked plantation stocks because demand for crude palm oil is ever on the rise.”
Election Concerns
The Kenanga Growth Fund (KUTNETF) beat 97 percent of its peers in the past three years and 98 percent of them over five years, according to data compiled by Bloomberg. It was named Malaysia’s best equity fund in 2011 by Morningstar Inc. Chen said he’s willing to buy stocks even before an election that Najib may call as early as June, according to four government officials who spoke on condition of anonymity last month. Concern a poor election result for Najib would disrupt the government’s spending plans has limited the KLCI index’s gain to 3.4 percent this year, the second-worst performance among Asia- Pacific benchmark indexes after Sri Lanka, according to data compiled by Bloomberg. The MSCI Emerging-Markets Index (MXEF) has risen 10 percent in 2012. Investors will probably be wary of the stock market before the polls, Tan Ting Min, an analyst at the Malaysian unit of Credit Suisse Group AG, wrote in a report dated March 7.
“Investors don’t like uncertainties,” said Kenanga’s Chen. “Uncertainties can be positive or negative. The outcome is not certain so nobody knows which way it’s going to go. We take a view that there is not going to be a change in the government.”
Higher Valuations
Gains by Malaysian consumer stocks pushed valuations relative to the Bloomberg World Consumer Non Cyclical Index (BWCNCY) to a four-month high on April 13. The Bursa Malaysia Consumer (KLCSU) Index of 136 stocks, which includes carmakers Tan Chong Motor Holdings Bhd. and Proton Holdings Bhd., has rallied 11 percent in the past 12 months, outpacing a 3.9 percent gain in the KLCI index. The Selangor state-based Nestle Malaysia (NESZ), the local unit of the world’s biggest food company, has advanced 16 percent. “We focus more on consumption,” Chen said. “Sector-wise, that’s probably our biggest bet.” Southeast Asia’s third-biggest economy may expand 4.2 percent in 2012 on domestic demand, thanks to increased private investment and state spending, the Malaysian Institute of Economic Research, a partly government-funded institute, said in a statement on April 17. The body earlier estimated 3.7 percent growth. This is in line with the central bank’s revised forecast of 4 percent to 5 percent on March 22.
Plantation Rally
Najib unveiled economic and government transformation plans in 2010 and identified $444 billion of private sector-led projects this decade to bolster growth and achieve high-income status by 2020. The Bursa Malaysia Plantation Index (KLPLN) of 43 members including IOI Corp. and Kuala Lumpur Kepong Bhd. (KLK) has surged 15 percent in the past year. The plantation measure trades at 13.9 times estimated profit, compared with a record-low 6.25 times in October 2008, weekly data compiled by Bloomberg shows. Palm oil will advance to 3,800 ringgit a metric ton in Kuala Lumpur by Dec. 31, the highest level since February 2011, according to the median of 11 analyst and trader estimates compiled by Bloomberg. Palm oil futures fell as much as 0.8 percent to 3,448 ringgit a metric ton yesterday. “Palm oil prices have been firmer than expected,” Chen said. “The offshoot of this will be higher income for families in the rural area who are involved in agriculture. This will also give a boost to consumption.”
Malaysia’s best-performing fund in the past year is buying consumer and plantation stocks that are benefiting from government efforts to bolster domestic growth and a rally in palm oil prices. Kenanga Growth Fund, with assets of 59 million ringgit ($19 million) as of March 31, favors companies including Dutch Lady Milk Industries Bhd. (DLM) and Nestle (Malaysia) Bhd., Chen Fan Fai, investment director at Kenanga Investors Bhd., said in an interview in Kuala Lumpur on April 23. The fund beat 370 other Malaysian equity mutual funds in the past year with an 18 percent return, according to data compiled by Bloomberg. Dutch Lady has doubled in the past year, outpacing the FTSE Bursa Malaysia KLCI Index’s (FBMKLCI) 3.9 percent gain.
Gauges of consumer and plantation stocks are the best performers of 10 industry groups on the Malaysian bourse in the past year on optimism Prime Minister Najib Razak’s 2012 budget plan to distribute cash to low-income families, raise wages for civil servants and boost spending on transportation will bolster growth and consumption. Palm-oil futures have surged 9.2 percent this year and hit a 13-month high on April 10. “Consumer stocks have done well because they are more resilient in any downturn and the government’s drive to boost income levels will also be positive for consumption,” Chen said. “We have always liked plantation stocks because demand for crude palm oil is ever on the rise.”
Election Concerns
The Kenanga Growth Fund (KUTNETF) beat 97 percent of its peers in the past three years and 98 percent of them over five years, according to data compiled by Bloomberg. It was named Malaysia’s best equity fund in 2011 by Morningstar Inc. Chen said he’s willing to buy stocks even before an election that Najib may call as early as June, according to four government officials who spoke on condition of anonymity last month. Concern a poor election result for Najib would disrupt the government’s spending plans has limited the KLCI index’s gain to 3.4 percent this year, the second-worst performance among Asia- Pacific benchmark indexes after Sri Lanka, according to data compiled by Bloomberg. The MSCI Emerging-Markets Index (MXEF) has risen 10 percent in 2012. Investors will probably be wary of the stock market before the polls, Tan Ting Min, an analyst at the Malaysian unit of Credit Suisse Group AG, wrote in a report dated March 7.
“Investors don’t like uncertainties,” said Kenanga’s Chen. “Uncertainties can be positive or negative. The outcome is not certain so nobody knows which way it’s going to go. We take a view that there is not going to be a change in the government.”
Higher Valuations
Gains by Malaysian consumer stocks pushed valuations relative to the Bloomberg World Consumer Non Cyclical Index (BWCNCY) to a four-month high on April 13. The Bursa Malaysia Consumer (KLCSU) Index of 136 stocks, which includes carmakers Tan Chong Motor Holdings Bhd. and Proton Holdings Bhd., has rallied 11 percent in the past 12 months, outpacing a 3.9 percent gain in the KLCI index. The Selangor state-based Nestle Malaysia (NESZ), the local unit of the world’s biggest food company, has advanced 16 percent. “We focus more on consumption,” Chen said. “Sector-wise, that’s probably our biggest bet.” Southeast Asia’s third-biggest economy may expand 4.2 percent in 2012 on domestic demand, thanks to increased private investment and state spending, the Malaysian Institute of Economic Research, a partly government-funded institute, said in a statement on April 17. The body earlier estimated 3.7 percent growth. This is in line with the central bank’s revised forecast of 4 percent to 5 percent on March 22.
Plantation Rally
Najib unveiled economic and government transformation plans in 2010 and identified $444 billion of private sector-led projects this decade to bolster growth and achieve high-income status by 2020. The Bursa Malaysia Plantation Index (KLPLN) of 43 members including IOI Corp. and Kuala Lumpur Kepong Bhd. (KLK) has surged 15 percent in the past year. The plantation measure trades at 13.9 times estimated profit, compared with a record-low 6.25 times in October 2008, weekly data compiled by Bloomberg shows. Palm oil will advance to 3,800 ringgit a metric ton in Kuala Lumpur by Dec. 31, the highest level since February 2011, according to the median of 11 analyst and trader estimates compiled by Bloomberg. Palm oil futures fell as much as 0.8 percent to 3,448 ringgit a metric ton yesterday. “Palm oil prices have been firmer than expected,” Chen said. “The offshoot of this will be higher income for families in the rural area who are involved in agriculture. This will also give a boost to consumption.”
20120425 0955 Global Market Related News.
Asian Stocks Snap Four-Day Loss on U.S. Homes Sales (Source: Bloomberg)
Asian stocks rose, with the regional benchmark index heading for its first advance in five days, as better-than-estimated company earnings and signs the U.S. housing market is stabilizing boosted the outlook for Asian exporters. Sony Corp., Japan’s biggest exporter of consumer electronics, gained 1 percent. Samsung Electronics Co. (005930), a supplier and competitor of Apple Inc., rose 1.3 percent in Seoul after the maker of iPhones and iPads reported profit almost doubled in the three months ended March. LG Display Co. climbed 3.2 percent after the world’s second-largest maker of liquid- crystal displays said it may return to profit this quarter. “A recovery trend on earnings is being seen both in Japan and the U.S. at the moment, boosting markets,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The U.S. economy is still in mild recovery.”
The MSCI Asia Pacific Index (MXAP) gained 0.4 percent to 123.70 as of 9:32 a.m. in Tokyo, with about five shares rising for each that fell. The gauge has fallen 1.4 percent in the past four days as political uncertainties in Europe deepened concern governments in the region will struggled to contain the sovereign-debt crisis and amid signs China’s economy is slowing.
Japanese Stock Futures Gain on U.S. Home Sales, Earnings (Source: Bloomberg)
Japanese stocks headed for their first advance in five days as better-than-estimated earnings at companies from Shimano Inc. to Apple Inc. and signs the U.S. housing market is stabilizing boosted the outlook for exporters. Shimano Inc. jumped 3.6 percent after the bicycle parts maker’s quarterly profit more than tripled. Sharp Corp. (6753), which supplies components for Apple’s iPhone, rose 1.5 percent after the U.S. company’s net income almost doubled last quarter. Sony Corp., Japan’s biggest exporter of consumer electronics, gained 1.4 percent as the yen weakened. “In addition to a weakening yen, a recovery trend on earnings is being seen both in Japan and the U.S. at the moment, boosting markets,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The U.S. economy is still in mild recovery.”
The Nikkei 225 Stock Average (NKY) gained 1.1 percent to 9,575.83 as of 9:12 a.m. in Tokyo, with volume a third lower than the 30- day average. The broader Topix Index rose 1 percent to 812.19, with more than seven times as many shares advancing as falling.
U.S. Stocks Rise Amid Better-Than-Forecast Earnings (Source: Bloomberg)
U.S. stocks advanced, following yesterday’s decline in the Standard & Poor’s 500 Index, amid better-than-estimated earnings at companies from AT&T Inc. to 3M (MMM) Co. and as data indicated the housing market is stabilizing. AT&T, the largest U.S. telephone company, and 3M, the maker of Post-it Notes, rose at least 1.5 percent. International Business Machines Corp. added 0.7 percent after the company boosted its buyback plan by $7 billion and raised its dividend. Juniper Networks Inc. increased 7.2 percent as revenue beat analysts’ projections. Apple Inc. (AAPL) jumped 7.5 percent at 5 p.m. New York time as profit almost doubled last quarter. The S&P 500 rose 0.4 percent to 1,371.97 at 4 p.m. New York time. The Dow Jones Industrial Average added 74.39 points, or 0.6 percent, to 13,001.56. The Nasdaq Composite Index lost 0.3 percent to 2,961.60. About 6.2 billion shares changed hands on U.S. exchanges, or 7.8 percent below the three-month average.
“Stocks have room to move higher,” said David Kelly, who helps oversee about $394 billion as chief market strategist at JPMorgan Funds in New York. “Earnings are healthy. The bar has been lowered so far that you can just walk over it. Housing is on the mend. A sign of a market top is when people are exuberant. There’s no exuberance as witnessed yesterday.”
Europe Stocks Rebound From Three-Month Low; Nordea Gains (Source: Bloomberg)
European stocks rebounded from a three-month low as earnings from Nordea Bank AB (NDA) to Kone Oyj (KNEBV) topped analyst estimates and sales of new homes in the U.S. exceeded forecasts. Nordea, the Nordic region’s biggest lender, rose 3.8 percent and Kone, a Finnish maker of elevators and escalators, surged 8.2 percent. TeliaSonera AB (TLSN) rallied 6.6 percent after saying it will receive 22 billion kronor ($3.3 billion) in dividends and proceeds from the sale of a stake in OAO MegaFon. Michelin & Cie. climbed 6.1 percent on increased revenue. The benchmark Stoxx Europe 600 Index (SXXP) gained 1 percent to 254.37 in London. The measure has advanced 4 percent this year as the European Central Bank disbursed 1 trillion euros ($1.3 trillion) to the region’s lenders to spur the availability of credit and boost the economy.
“Equities are stronger than in the fall, as central banks have moved to support the market with liquidity and removing the structural risks to banks, so markets should weather the recent turmoil better than last year,” said Hans Peterson, the chief investment officer of SEB Private Bank in Stockholm. “Investors are concerned about growth prospects, which may turn into a drag on the market, but that’s not the case yet.”
Yen Drops Versus Peers on Prospects BOJ to Add Stimulus (Source: Bloomberg)
The yen fell versus all of its 16 most-traded counterparts on speculation Bank of Japan (8301) officials will add to stimulus measures at a policy meeting this week. The yen remained lower after a one-day decline against the euro on expectations Asian stocks will climb after shares overseas rose, damping demand for haven assets. The greenback held a drop from yesterday versus the 17-nation euro before Federal Reserve policy makers conclude a two-day gathering today. The so-called Aussie dollar advanced after the first U.S. case of mad cow disease in six years increased prospects that demand for Australian beef will rise. “The yen is likely to remain weak heading into the BOJ meeting,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711), a currency margin company. “Gains in stocks are also negative for the yen.”
The yen traded at 107.41 per euro at 9:03 a.m. in Tokyo after declining 0.5 percent to 107.32 yesterday. Japan’s currency fetched 81.39 per dollar from 81.32. The greenback was little changed at $1.3196 per euro.
FOREX-Euro subdued ahead of Dutch auction; Aussie falls
LONDON, April 24 (Reuters) - The euro steadied against the dollar on Tuesday but further gains looked unlikely ahead of a debt sale in the Netherlands that will be watched for any sign of lacklustre demand after the country's governing coalition collapsed.
"If we do not see a disaster in the bond auction the euro will be driven by this sideways movement in a range-trading environment. But the euro zone is running out of safe haven assets," said Ulrich Leuchtmann, head of FX research at Commerzbank.
Sales of New U.S. Homes Exceeded Estimates in March: Economy (Source: Bloomberg)
Demand for new U.S. homes was stronger than projected in March, showing more jobs and cheaper borrowing costs are helping stabilize the market. Houses sold at a 328,000 annual rate, down from an upwardly revised 353,000 pace in February that was the highest in two years, according to Commerce Department data issued today in Washington. The median estimate in a Bloomberg News survey forecast a rate of 319,000. Other reports showed home prices are stabilizing and consumer confidence was little changed. Job gains, mortgage rates close to all-time lows and cheaper properties are underpinning residential real estate, which has been the economy’s weak spot. At the same time, immediate progress will be limited by distressed properties that will continue to hold down property values.
“Housing is going to gradually dig out of this deep hole because the job market is going to be firming,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, the only analyst to correctly forecast the sales pace. “The one thing is the foreclosure pipeline,” Sweet said. Home values “may still have a little more room to fall, but this will probably be the year that prices find a bottom.”
Consumer Confidence in U.S. Little Changed as Outlook Cools (Source: Bloomberg)
Confidence among U.S. consumers was little changed in April as expectations over the outlook tempered increased optimism about the present. The Conference Board’s confidence index was at 69.2 com- pared to a revised 69.5 in the prior month, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called for a reading of 69.6. The smallest increase in employment in five months may have raised concern that growth is not fast enough to reduce unemployment. The report also showed households trimmed buying plans for automobiles, homes and vacations, showing that more jobs will be needed to boost consumer spending, which accounts for about 70 percent of the economy. “Overall, consumers are more upbeat about the state of the economy, but they remain cautiously optimistic,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement.
Home Prices in U.S. Cities Fell at Slower Pace in February (Source: Bloomberg)
Home prices in 20 U.S. cities dropped at a slower pace in the year ended February, pointing to stabilization in the real-estate market. The S&P/Case-Shiller index of property values fell 3.5 percent from a year earlier, the smallest 12-month drop since February 2011, a report from the group showed today in New York. The median forecast of economists surveyed by Bloomberg News projected a 3.4 percent fall. The index climbed from the prior month on a seasonally adjusted basis for the first time since April of last year. Steadying home values are needed to lay the groundwork for a sustained rebound in the housing industry by giving prospective buyers confidence. Near record-low borrowing costs and more hiring may help the market absorb the foreclosures still in the pipeline, which may mean housing will no longer hinder economic growth. “Mortgage rates are very, very low, but you really need to see strong job growth,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “It’s still a very long way to go before we get a full recovery.” Stock-index futures were little changed after the report. The contract on the Standard & Poor’s 500 Index maturing in June was at 1,363.4 at 9:21 a.m. in New York, up less that 0.1 percent from yesterday’s close.
Gundlach Says Fed Won’t Preemptively Raise Rates (Source: Bloomberg)
The Federal Reserve won’t preemptively raise interest rates to suppress inflation, said Jeffrey Gundlach, chief executive officer of DoubleLine Capital LP. “That is just not going to happen as long as we’re in this debt morass,” Gundlach said today at a conference in National Harbor, Maryland, held by the Investment Management Consultants Association, a membership group for brokers and investment advisers. “With all of this debt building up, one thing that’s been saving us is the interest rate on the debt has been collapsing,” Gundlach said. U.S. federal debt has risen to more than $15 trillion in 2011 from about $863 billion in 1980, according to the Federal Reserve. The Fed has held the federal funds rate at near zero since December 2008. In January the Federal Open Market Committee said economic conditions will probably warrant holding rates “exceptionally low” through 2014.
Raising rates would be “like shooting yourself in the head,” Gundlach said. Los Angeles-based DoubleLine manages more than $32 billion, primarily in fixed income. Treasury 10-year yields fell to 1.93 percent yesterday from about 4.64 percent five years ago, according to data compiled by Bloomberg.
Apple Profit Rises 94% on Growing Global IPhone Demand (Source: Bloomberg)
Apple Inc. (AAPL) profit almost doubled last quarter, reflecting robust demand for the iPhone in China and purchases of a new version of the iPad, allaying the growth concerns that sliced shares 12 percent in two weeks. Net income in the fiscal second quarter climbed 94 percent to $11.6 billion, or $12.30 a share, as sales rose 59 percent to $39.2 billion, Cupertino, California-based Apple said today in a statement. Analysts had predicted profit of $10.02 a share on revenue of $36.9 billion, data compiled by Bloomberg show. Chief Executive Officer Tim Cook is relying more on regions outside the U.S. for sales growth. Apple sold 35.1 million iPhones in the period after releasing the latest model in China and 21 other countries in January. That helped make up for sales declines from the previous quarter at the top U.S. mobile-phone carriers, Verizon Wireless and AT&T Inc. It also quelled speculation that Apple’s growth pace may slacken.
“This report should erase any doubt in investors’ minds that this company can’t continue to deliver,” said Jack Ablin, chief investment officer of Harris Private Bank in Chicago, which oversees about $60 billion, including Apple shares. “It’s astounding.”
Bank of Japan Seen Anteing Up on Stimulus as Yen Impact Fades (Source: Bloomberg)
Japan’s central bank is set to ante up on stimulus measures as a rebound in the yen shows that the impact of a 10 trillion yen ($123 billion) expansion in asset purchases in February is fading. All 14 economists in a Bloomberg News survey predict additional easing when the Bank of Japan releases new inflation forecasts on April 27. Most expect an increase ranging from 5 trillion yen to 10 trillion yen. One dynamic that may undermine stimulus efforts is Governor Masaaki Shirakawa’s own comments, repeated in the U.S. last week, that monetary policy has only a limited role in ending deflation and supporting growth. Former Bank of Japan (8301) board member Atsushi Mizuno says investors are confused on where the central bank stands, while JPMorgan Chase & Co. says failing to ease could see the yen strengthen further.
“The BOJ will have to clearly show powerful easing amid high market expecations and elevated political pressure,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo and a former BOJ official. “Otherwise, investors will be more confused and the view will become more widespread that there is no change in the BOJ’s passive stance.” The yen traded around 81.1 per dollar in Tokyo yesterday after sinking to an 11-month low of 84.18 on March 15. Yields for benchmark 10-year bonds fell to the lowest since October 2010 this week on easing speculation.
BOJ Should Boost Monthly Bond Buys by 20%, Ex-Board Member Says (Source: Bloomberg)
The Bank of Japan (8301) should bolster its monthly purchases of government bonds by a fifth and double its inflation target at its April 27 policy meeting, a former board member said. Governor Masaaki Shirakawa and his board should also commit to pursuing monetary easing through 2014, mirroring the U.S. Federal Reserve’s pledge to keep rates near zero, Nobuyuki Nakahara, who served on the BOJ board from 1998 to 2002, said in a statement e-mailed to Bloomberg News today. The BOJ currently buys 1.8 trillion yen ($22 billion) in government debt each month. Some ruling Democratic Party of Japan lawmakers have called on the BOJ to do more to end deflation after it pledged to buy more government debt and introduced a 1 percent inflation target in February. Simply bolstering the size of the bank’s asset- purchase fund, its main policy tool, won’t translate into meaningful increases in monetary base or the central bank’s balance sheet, Nakahara said.
BOE’s Miles Says April Vote for More Stimulus Vindicated (Source: Bloomberg)
Bank of England policy maker David Miles said his vote for more so-called quantitative easing this month still looks vindicated as the economy is weak and data today might even show it contracted in the first quarter. “The weakness of demand, given the amount of spare capacity in the economy, still made a strategy of having monetary policy even more expansionary the right one,” Miles said in an interview in London yesterday. “On reflection that seems to me still the right strategy.” Miles was the sole official seeking more stimulus, after his colleague Adam Posen switched his vote and policy makers said inflation may turn out faster than forecast even though the U.K. economy might be in a recession. First-quarter gross domestic product data will be released at 9:30 a.m. in London. “It seems pretty likely that right now, growth in the economy is pretty weak, probably marginally positive, but pretty weak,” Miles said. “It wouldn’t be a great surprise if the GDP number was a small negative number.”
U.K. 10-year gilts rose to an intraday high after the comments yesterday, with the yield dropping three basis points to 2.10 percent.
French Bond Yields Test Hollande’s Economic Fealty (Source: Bloomberg)
Investors are steering away from French bonds as they cast a wary eye on election frontrunner Francois Hollande’s calls to ease austerity. French government debt ranked as the third-worst performer in Europe this month after Spanish and Italian securities as of yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. The decline in French bonds occurred in an anticipation of Hollande winning the first round of balloting against President Nicolas Sarkozy on April 22, which he did. “It’s not time to buy French bonds,” said Tom Elliott, a global strategist at JPMorgan Asset Management in London. “The bond market is still uncertain just how Socialist Hollande will turn out to be, or whether he will turn out to be a fairly centrist president.”
For Hollande, who leads in the polls for the decisive May 6 final round against Sarkozy, the jittery markets show investors want to be reassured of his commitment to economic rigor in the face of signs of crisis fatigue in Europe and at home. Hollande plans to reverse Sarkozy’s plan to raise the sales tax and cut labor costs. He also wants to renegotiate the euro area’s so- called fiscal pact to include a commitment to growth.
Asian stocks rose, with the regional benchmark index heading for its first advance in five days, as better-than-estimated company earnings and signs the U.S. housing market is stabilizing boosted the outlook for Asian exporters. Sony Corp., Japan’s biggest exporter of consumer electronics, gained 1 percent. Samsung Electronics Co. (005930), a supplier and competitor of Apple Inc., rose 1.3 percent in Seoul after the maker of iPhones and iPads reported profit almost doubled in the three months ended March. LG Display Co. climbed 3.2 percent after the world’s second-largest maker of liquid- crystal displays said it may return to profit this quarter. “A recovery trend on earnings is being seen both in Japan and the U.S. at the moment, boosting markets,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The U.S. economy is still in mild recovery.”
The MSCI Asia Pacific Index (MXAP) gained 0.4 percent to 123.70 as of 9:32 a.m. in Tokyo, with about five shares rising for each that fell. The gauge has fallen 1.4 percent in the past four days as political uncertainties in Europe deepened concern governments in the region will struggled to contain the sovereign-debt crisis and amid signs China’s economy is slowing.
Japanese Stock Futures Gain on U.S. Home Sales, Earnings (Source: Bloomberg)
Japanese stocks headed for their first advance in five days as better-than-estimated earnings at companies from Shimano Inc. to Apple Inc. and signs the U.S. housing market is stabilizing boosted the outlook for exporters. Shimano Inc. jumped 3.6 percent after the bicycle parts maker’s quarterly profit more than tripled. Sharp Corp. (6753), which supplies components for Apple’s iPhone, rose 1.5 percent after the U.S. company’s net income almost doubled last quarter. Sony Corp., Japan’s biggest exporter of consumer electronics, gained 1.4 percent as the yen weakened. “In addition to a weakening yen, a recovery trend on earnings is being seen both in Japan and the U.S. at the moment, boosting markets,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The U.S. economy is still in mild recovery.”
The Nikkei 225 Stock Average (NKY) gained 1.1 percent to 9,575.83 as of 9:12 a.m. in Tokyo, with volume a third lower than the 30- day average. The broader Topix Index rose 1 percent to 812.19, with more than seven times as many shares advancing as falling.
U.S. Stocks Rise Amid Better-Than-Forecast Earnings (Source: Bloomberg)
U.S. stocks advanced, following yesterday’s decline in the Standard & Poor’s 500 Index, amid better-than-estimated earnings at companies from AT&T Inc. to 3M (MMM) Co. and as data indicated the housing market is stabilizing. AT&T, the largest U.S. telephone company, and 3M, the maker of Post-it Notes, rose at least 1.5 percent. International Business Machines Corp. added 0.7 percent after the company boosted its buyback plan by $7 billion and raised its dividend. Juniper Networks Inc. increased 7.2 percent as revenue beat analysts’ projections. Apple Inc. (AAPL) jumped 7.5 percent at 5 p.m. New York time as profit almost doubled last quarter. The S&P 500 rose 0.4 percent to 1,371.97 at 4 p.m. New York time. The Dow Jones Industrial Average added 74.39 points, or 0.6 percent, to 13,001.56. The Nasdaq Composite Index lost 0.3 percent to 2,961.60. About 6.2 billion shares changed hands on U.S. exchanges, or 7.8 percent below the three-month average.
“Stocks have room to move higher,” said David Kelly, who helps oversee about $394 billion as chief market strategist at JPMorgan Funds in New York. “Earnings are healthy. The bar has been lowered so far that you can just walk over it. Housing is on the mend. A sign of a market top is when people are exuberant. There’s no exuberance as witnessed yesterday.”
Europe Stocks Rebound From Three-Month Low; Nordea Gains (Source: Bloomberg)
European stocks rebounded from a three-month low as earnings from Nordea Bank AB (NDA) to Kone Oyj (KNEBV) topped analyst estimates and sales of new homes in the U.S. exceeded forecasts. Nordea, the Nordic region’s biggest lender, rose 3.8 percent and Kone, a Finnish maker of elevators and escalators, surged 8.2 percent. TeliaSonera AB (TLSN) rallied 6.6 percent after saying it will receive 22 billion kronor ($3.3 billion) in dividends and proceeds from the sale of a stake in OAO MegaFon. Michelin & Cie. climbed 6.1 percent on increased revenue. The benchmark Stoxx Europe 600 Index (SXXP) gained 1 percent to 254.37 in London. The measure has advanced 4 percent this year as the European Central Bank disbursed 1 trillion euros ($1.3 trillion) to the region’s lenders to spur the availability of credit and boost the economy.
“Equities are stronger than in the fall, as central banks have moved to support the market with liquidity and removing the structural risks to banks, so markets should weather the recent turmoil better than last year,” said Hans Peterson, the chief investment officer of SEB Private Bank in Stockholm. “Investors are concerned about growth prospects, which may turn into a drag on the market, but that’s not the case yet.”
Yen Drops Versus Peers on Prospects BOJ to Add Stimulus (Source: Bloomberg)
The yen fell versus all of its 16 most-traded counterparts on speculation Bank of Japan (8301) officials will add to stimulus measures at a policy meeting this week. The yen remained lower after a one-day decline against the euro on expectations Asian stocks will climb after shares overseas rose, damping demand for haven assets. The greenback held a drop from yesterday versus the 17-nation euro before Federal Reserve policy makers conclude a two-day gathering today. The so-called Aussie dollar advanced after the first U.S. case of mad cow disease in six years increased prospects that demand for Australian beef will rise. “The yen is likely to remain weak heading into the BOJ meeting,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711), a currency margin company. “Gains in stocks are also negative for the yen.”
The yen traded at 107.41 per euro at 9:03 a.m. in Tokyo after declining 0.5 percent to 107.32 yesterday. Japan’s currency fetched 81.39 per dollar from 81.32. The greenback was little changed at $1.3196 per euro.
FOREX-Euro subdued ahead of Dutch auction; Aussie falls
LONDON, April 24 (Reuters) - The euro steadied against the dollar on Tuesday but further gains looked unlikely ahead of a debt sale in the Netherlands that will be watched for any sign of lacklustre demand after the country's governing coalition collapsed.
"If we do not see a disaster in the bond auction the euro will be driven by this sideways movement in a range-trading environment. But the euro zone is running out of safe haven assets," said Ulrich Leuchtmann, head of FX research at Commerzbank.
Sales of New U.S. Homes Exceeded Estimates in March: Economy (Source: Bloomberg)
Demand for new U.S. homes was stronger than projected in March, showing more jobs and cheaper borrowing costs are helping stabilize the market. Houses sold at a 328,000 annual rate, down from an upwardly revised 353,000 pace in February that was the highest in two years, according to Commerce Department data issued today in Washington. The median estimate in a Bloomberg News survey forecast a rate of 319,000. Other reports showed home prices are stabilizing and consumer confidence was little changed. Job gains, mortgage rates close to all-time lows and cheaper properties are underpinning residential real estate, which has been the economy’s weak spot. At the same time, immediate progress will be limited by distressed properties that will continue to hold down property values.
“Housing is going to gradually dig out of this deep hole because the job market is going to be firming,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, the only analyst to correctly forecast the sales pace. “The one thing is the foreclosure pipeline,” Sweet said. Home values “may still have a little more room to fall, but this will probably be the year that prices find a bottom.”
Consumer Confidence in U.S. Little Changed as Outlook Cools (Source: Bloomberg)
Confidence among U.S. consumers was little changed in April as expectations over the outlook tempered increased optimism about the present. The Conference Board’s confidence index was at 69.2 com- pared to a revised 69.5 in the prior month, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called for a reading of 69.6. The smallest increase in employment in five months may have raised concern that growth is not fast enough to reduce unemployment. The report also showed households trimmed buying plans for automobiles, homes and vacations, showing that more jobs will be needed to boost consumer spending, which accounts for about 70 percent of the economy. “Overall, consumers are more upbeat about the state of the economy, but they remain cautiously optimistic,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement.
Home Prices in U.S. Cities Fell at Slower Pace in February (Source: Bloomberg)
Home prices in 20 U.S. cities dropped at a slower pace in the year ended February, pointing to stabilization in the real-estate market. The S&P/Case-Shiller index of property values fell 3.5 percent from a year earlier, the smallest 12-month drop since February 2011, a report from the group showed today in New York. The median forecast of economists surveyed by Bloomberg News projected a 3.4 percent fall. The index climbed from the prior month on a seasonally adjusted basis for the first time since April of last year. Steadying home values are needed to lay the groundwork for a sustained rebound in the housing industry by giving prospective buyers confidence. Near record-low borrowing costs and more hiring may help the market absorb the foreclosures still in the pipeline, which may mean housing will no longer hinder economic growth. “Mortgage rates are very, very low, but you really need to see strong job growth,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “It’s still a very long way to go before we get a full recovery.” Stock-index futures were little changed after the report. The contract on the Standard & Poor’s 500 Index maturing in June was at 1,363.4 at 9:21 a.m. in New York, up less that 0.1 percent from yesterday’s close.
Gundlach Says Fed Won’t Preemptively Raise Rates (Source: Bloomberg)
The Federal Reserve won’t preemptively raise interest rates to suppress inflation, said Jeffrey Gundlach, chief executive officer of DoubleLine Capital LP. “That is just not going to happen as long as we’re in this debt morass,” Gundlach said today at a conference in National Harbor, Maryland, held by the Investment Management Consultants Association, a membership group for brokers and investment advisers. “With all of this debt building up, one thing that’s been saving us is the interest rate on the debt has been collapsing,” Gundlach said. U.S. federal debt has risen to more than $15 trillion in 2011 from about $863 billion in 1980, according to the Federal Reserve. The Fed has held the federal funds rate at near zero since December 2008. In January the Federal Open Market Committee said economic conditions will probably warrant holding rates “exceptionally low” through 2014.
Raising rates would be “like shooting yourself in the head,” Gundlach said. Los Angeles-based DoubleLine manages more than $32 billion, primarily in fixed income. Treasury 10-year yields fell to 1.93 percent yesterday from about 4.64 percent five years ago, according to data compiled by Bloomberg.
Apple Profit Rises 94% on Growing Global IPhone Demand (Source: Bloomberg)
Apple Inc. (AAPL) profit almost doubled last quarter, reflecting robust demand for the iPhone in China and purchases of a new version of the iPad, allaying the growth concerns that sliced shares 12 percent in two weeks. Net income in the fiscal second quarter climbed 94 percent to $11.6 billion, or $12.30 a share, as sales rose 59 percent to $39.2 billion, Cupertino, California-based Apple said today in a statement. Analysts had predicted profit of $10.02 a share on revenue of $36.9 billion, data compiled by Bloomberg show. Chief Executive Officer Tim Cook is relying more on regions outside the U.S. for sales growth. Apple sold 35.1 million iPhones in the period after releasing the latest model in China and 21 other countries in January. That helped make up for sales declines from the previous quarter at the top U.S. mobile-phone carriers, Verizon Wireless and AT&T Inc. It also quelled speculation that Apple’s growth pace may slacken.
“This report should erase any doubt in investors’ minds that this company can’t continue to deliver,” said Jack Ablin, chief investment officer of Harris Private Bank in Chicago, which oversees about $60 billion, including Apple shares. “It’s astounding.”
Bank of Japan Seen Anteing Up on Stimulus as Yen Impact Fades (Source: Bloomberg)
Japan’s central bank is set to ante up on stimulus measures as a rebound in the yen shows that the impact of a 10 trillion yen ($123 billion) expansion in asset purchases in February is fading. All 14 economists in a Bloomberg News survey predict additional easing when the Bank of Japan releases new inflation forecasts on April 27. Most expect an increase ranging from 5 trillion yen to 10 trillion yen. One dynamic that may undermine stimulus efforts is Governor Masaaki Shirakawa’s own comments, repeated in the U.S. last week, that monetary policy has only a limited role in ending deflation and supporting growth. Former Bank of Japan (8301) board member Atsushi Mizuno says investors are confused on where the central bank stands, while JPMorgan Chase & Co. says failing to ease could see the yen strengthen further.
“The BOJ will have to clearly show powerful easing amid high market expecations and elevated political pressure,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo and a former BOJ official. “Otherwise, investors will be more confused and the view will become more widespread that there is no change in the BOJ’s passive stance.” The yen traded around 81.1 per dollar in Tokyo yesterday after sinking to an 11-month low of 84.18 on March 15. Yields for benchmark 10-year bonds fell to the lowest since October 2010 this week on easing speculation.
BOJ Should Boost Monthly Bond Buys by 20%, Ex-Board Member Says (Source: Bloomberg)
The Bank of Japan (8301) should bolster its monthly purchases of government bonds by a fifth and double its inflation target at its April 27 policy meeting, a former board member said. Governor Masaaki Shirakawa and his board should also commit to pursuing monetary easing through 2014, mirroring the U.S. Federal Reserve’s pledge to keep rates near zero, Nobuyuki Nakahara, who served on the BOJ board from 1998 to 2002, said in a statement e-mailed to Bloomberg News today. The BOJ currently buys 1.8 trillion yen ($22 billion) in government debt each month. Some ruling Democratic Party of Japan lawmakers have called on the BOJ to do more to end deflation after it pledged to buy more government debt and introduced a 1 percent inflation target in February. Simply bolstering the size of the bank’s asset- purchase fund, its main policy tool, won’t translate into meaningful increases in monetary base or the central bank’s balance sheet, Nakahara said.
BOE’s Miles Says April Vote for More Stimulus Vindicated (Source: Bloomberg)
Bank of England policy maker David Miles said his vote for more so-called quantitative easing this month still looks vindicated as the economy is weak and data today might even show it contracted in the first quarter. “The weakness of demand, given the amount of spare capacity in the economy, still made a strategy of having monetary policy even more expansionary the right one,” Miles said in an interview in London yesterday. “On reflection that seems to me still the right strategy.” Miles was the sole official seeking more stimulus, after his colleague Adam Posen switched his vote and policy makers said inflation may turn out faster than forecast even though the U.K. economy might be in a recession. First-quarter gross domestic product data will be released at 9:30 a.m. in London. “It seems pretty likely that right now, growth in the economy is pretty weak, probably marginally positive, but pretty weak,” Miles said. “It wouldn’t be a great surprise if the GDP number was a small negative number.”
U.K. 10-year gilts rose to an intraday high after the comments yesterday, with the yield dropping three basis points to 2.10 percent.
French Bond Yields Test Hollande’s Economic Fealty (Source: Bloomberg)
Investors are steering away from French bonds as they cast a wary eye on election frontrunner Francois Hollande’s calls to ease austerity. French government debt ranked as the third-worst performer in Europe this month after Spanish and Italian securities as of yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. The decline in French bonds occurred in an anticipation of Hollande winning the first round of balloting against President Nicolas Sarkozy on April 22, which he did. “It’s not time to buy French bonds,” said Tom Elliott, a global strategist at JPMorgan Asset Management in London. “The bond market is still uncertain just how Socialist Hollande will turn out to be, or whether he will turn out to be a fairly centrist president.”
For Hollande, who leads in the polls for the decisive May 6 final round against Sarkozy, the jittery markets show investors want to be reassured of his commitment to economic rigor in the face of signs of crisis fatigue in Europe and at home. Hollande plans to reverse Sarkozy’s plan to raise the sales tax and cut labor costs. He also wants to renegotiate the euro area’s so- called fiscal pact to include a commitment to growth.
20120425 0955 Global Commodities Related News.
GRAINS-U.S. wheat up for 2nd day on weather; soy rebounds
SINGAPORE, April 24 (Reuters) - U.S. wheat edged up , while corn was little changed after climbing 1.6 percent in the last session on forecasts for crop-threatening cold weather and talk of Chinese buying.
"U.S. corn plantings were a bit lower than what the market had expected because of the rain and there has been talk of potential cold weather which will not be good for the early planted corn," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.
Ukraine exports 1.75 mln T grain so far in April
KIEV, April 24 (Reuters) - Ukraine has exported 1.75 million tonnes of grain, mostly corn, so far in April, Interfax Ukraine news agency quoted official data as showing on Tuesday.
The agency said the volume included 1.13 million tonnes of corn, 490,000 tonnes of wheat and 120,000 tonnes of barley.
Ukraine '12 wheat crop could fall to 11-14 mln T
KIEV, April 24 (Reuters) - Ukraine is set for a sharp fall in the 2012 wheat harvest, with the crop expected at 11 million to 14 million tonnes versus 22.3 million in 2011 due to poor weather during sowing and wintering, a senior weather forecaster said on Tuesday.
"If we have rains in May, the harvest could be 14 million tonnes. Otherwise, 11 to 12 million," Tetyana Adamenko, head of the agricultural department of Ukraine's meteorological service, told Reuters.
US corn planting slows; soy seeding off to record start
CHICAGO, April 23 (Reuters) - U.S. farmers east of the Mississippi River made good planting progress, while growers in western areas of the Corn Belt were slowed by rainy weather, a U.S. Agriculture Department report showed on Monday.
The USDA's weekly crop progress and conditions report showed that U.S. corn seeding was 28 percent completed as of April 22, up from 17 percent a week ago and ahead of the five-year average of 15 percent, but down from analysts expectations.
Ukraine 2012 early grain sowing near end
KIEV, April 23 (Reuters) - Ukrainian farms have almost completed the 2012 early spring sowing at 3.6 million hectares as of April 23 or 96 percent of the expected area, the Farm Ministry said on Monday.
The ministry said in a statement farmers had also started the sowing of corn and sunflower, which should replace winter grains in areas hit by poor weather this winter.
EU raises wheat, cuts barley, rapeseed yield outlook
PARIS, April 23 (Reuters) - The European Commission's crop-monitoring unit on Monday raised slightly its forecast for the average yield of this year's soft wheat crop in the European Union but trimmed its outlook for barley and rapeseed yields.
"In general the current prospects for EU 27 yields are on average," the Monitoring Agricultural Resources (MARS) research unit said in a report.
Market Recap: Wheat Futures (Source: CME)
Wheat futures were stronger much of the day, but softened in late trade to end mostly weaker and near session lows. Chicago wheat ended steady to 4 1/4 cents lower, Kansas City was mostly around 2 cents lower and Minneapolis ended mostly 7 to 8 cents lower, although far-deferreds ended mixed. Early support came on spillover from neighboring pits as well as help from positive outside markets.
Wheat Market Recap Report (Source: CME)
July Wheat finished unchanged at 632 1/2, 14 1/2 off the high and 1 3/4 up from the low. December Wheat closed down 3/4 at 671 1/4. This was 1 3/4 up from the low and 14 off the high. May wheat closed slightly lower on the session after trading as much as 14 1/4 cents higher early today. A positive tilt to outside markets and cold weather concerns for the weekend and early next week for crops in Illinois, Indiana and Ohio helped to support active buying and more short-covering in wheat this morning. This pushed the market to the highest level since April 13th with July wheat now up as much as 37 3/4 cents from last weeks lows. A smaller Ukraine crop estimate added to the positive tone. Crop conditions declined slightly and spring wheat progress remains on a record fast pace. July Minneapolis wheat closed down 8 1/2 cents with the fast planting pace for spring wheat helping to pressure. Canadian wheat planted area was pegged at 24.3 million acres, up 13% from last year and about 1 million acres above trade expectations. A private forecaster in Europe pegged German wheat production at 22.2 million tonnes this year from 22.7 million last year. The market is beginning to view the May production report with an eye on big yield and production estimates for the winter wheat crop. July Oats closed up 15 3/4 at 342 1/2. This was 13 1/2 up from the low and 2 1/2 off the high.
Market Recap: Corn Futures (Source: CME)
Corn futures closed 2 1/2 to 4 1/2 cents lower in all but the September contract, which settled 3/4 cent higher. Corn futures finished in the lower end of today's range. Corn futures were initially supported by news of a daily corn sale totaling 480,000 metric tons to an unknown destination. Traders assumed this was confirmation of the rumored Chinese purchases.
Corn Market Recap for 4/24/2012 (Source: CME)
July Corn finished down 4 1/2 at 608, 13 3/4 off the high and 3 up from the low. December Corn closed down 4 at 541 1/2. This was 3 3/4 up from the low and 8 1/2 off the high. May corn moved from sharply higher on the day early in the session to close moderately lower on the day. The market saw confirmation of China demand from the USDA sales news this morning and the market surged higher early in the day to post the early high. However, "buy the rumor, sell the fact selling helped to spark a sell-off from the highs with the market trading just slightly higher on the day into the mid-session and December corn moving down on the day. December corn closed 4 cents lower after trading as much as 5 1/2 higher early. The early rally pushed the market to the highest level since April 13th. Private exporters reported a sale of 480,000 tonnes of US corn to unknown destination for the 2011/12 season. Traders believe this sale is to China. The slower than expected plantings pace and a cold weather outlook for the next week helped to support the market as well. September corn gained 4 3/4 cents on the December corn as traders see "less" chances of early harvested corn due to the slower plantings pace and a cool outlook for the next 10 days. Taiwan bought 60,000 tonnes of corn from Brazil. July Rice finished down 0.005 at 15.925, 0.005 off the high and 0.055 up from the low.
Dow's new corn: "time bomb" or farmers' dream? (Source: CME)
A new biotech corn developed by Dow AgroSciences could answer the prayers of U.S. farmers plagued by a fierce epidemic of super-weeds. Or it could trigger a flood of dangerous chemicals that may make weeds even more resistant and damage other important U.S. crops.
Or, it could do both."Enlist," entering the final stages of regulatory approval, has become the latest flashpoint in the debate about the risks and rewards about farm technology. With a deadline to submit public comments on Dow's proposal at the end of this week, more than 5,000 individuals and groups have already weighed in. Dow Agrosciences, a unit of Dow Chemical Co , hopes to have the product approved this year and released by the 2013 crop.
Algeria's Q1 grain imports down 12.7 pct y/y (Source: CME)
Algeria's wheat imports in the first quarter of this year were down 12.7 percent on the same period in 2011, customs data showed, after an easing off in social unrest and a more promising domestic harvest softened demand.
US corn planting slows; soy seeding off to record start (Source: CME)
U.S. farmers east of the Mississippi River made good planting progress, while growers in western areas of the Corn Belt were slowed by rainy weather, a U.S. Agriculture Department report showed on Monday.
The USDA's weekly crop progress and conditions report showed that U.S. corn seeding was 28 percent completed as of April 22, up from 17 percent a week ago and ahead of the five-year average of 15 percent, but down from analysts expectations.
SOFTS-Sugar, coffee steady above multi-month lows
LONDON, April 24 (Reuters) - Raw sugar futures on ICE steadied in early trading, hovering above the previous session's 11-month low, while arabica coffee also firmed, consolidating above an 18-month low hit on April 16.
Raw sugar futures consolidated, with the lower price range expected to stimulate further interest on the physical market, following recent purchases by Egypt and Tunisia.
Vietnam Coffee-New crop may rise, trade moderate
HANOI, April 24 (Reuters) - Vietnamese coffee trading has been moderate as prices held near a key level in the past week even as stock levels were good and the next harvest may show a gain over the previous period, traders and an industry official said on Tuesday.
Output from the next 2012/2013 coffee crop in Daklak, Vietnam's top growing province, is forecast to rise around 10 percent to 430,000-450,000 tonnes, or 7.2 million to 7.5 million bags, thanks to good weather, an industry official said.
India could export 3 mln tonnes sugar in 2012/13 - industry
NEW DELHI, April 24 (Reuters) - India could export 3 million tonnes of sugar in 2012/13 -- the same as approved so far this year -- with output of at least 25 million tonnes, a senior industry official said, keeping the world's second-biggest producer exporting for a third straight year.
India, which is the world's biggest consumer of sugar, returned to exports in 2010 after a severe drought in 2009 forced it to import about 2.5 million tonnes, sending global prices sharply higher.
Brazil cotton exports seen record large -producers
SAO PAULO, April 23 (Reuters) - Brazil's 2011/12 cotton exports should jump by more than half from last season to a record 1.3 million tonnes, the national producers' association said, as cooling domestic demand shifts the sector's focus to foreign markets.
Increasing demand by China was providing a new outlet for the fiber at a time when imports of synthetic fiber from their depressed demand at home, said Sergio De Marco, president of the Brazilian Cotton Producers' Association, Abrapa.
Good weather spell lifts Ivorian mid-crop cocoa hopes
ABIDJAN, April 23 (Reuters) - Adequate rains mixed with sunny spells last week in most of Ivory Coast's cocoa growing regions provided adequate growth conditions for the top producer's April to September mid-crop cocoa, farmers and analysts said on Monday.
In western, southern and eastern cocoa regions, farmers said rainfall during past week offered ideal conditions to boost the development of cocoa pods, however, continued dry conditions in the coastal regions raised some concerns.
China seen importing 3 mln T sugar in 2011/12-ISO
NEW DELHI, April 23 (Reuters) - China is likely to import 3 million tonnes of sugar in 2011/12, a top official of the International Sugar Organisation (ISO) said at a conference in India, the world's second biggest producer after Brazil.
"China will remain a big importer. They produce around 11 million tonnes but they need 14.0-14.5 million tonnes," ISO Executive Director Peter Baron told reporters.
China sandstorm hits cotton crops, small impact on output
BEIJING/SHANGHAI, April 23 (Reuters) - Cotton crops just planted in China's northwestern province of Xinjiang have been damaged by a heavy sandstorm over the past week, but there will be limited impact on this year's harvest, analysts said on Monday.
China is the world's largest producer and consumer of cotton. A fall in its domestic supply, which rose 11 percent last year to 6.6 million tonnes, could hoist imports higher and roil world prices.
India to produce surplus sugar in 2012-13, extend exports
NEW DELHI, April 23 (Reuters) - Top sugar consumer India is expected to produce enough of the sweetener in the coming 2012-2013 productions season to allow exports for the third consecutive year, the head of its sugar mill body said on Monday.
India, the world's second-largest producer of sugar after Brazil, was hit by a severe drought in 2009 and had to import about 2.5 million tonnes, sending global prices on a rally. India returned to exports in 2010/11.
Coal Seen Rebounding as China Sets Steel Output Record (Source: Bloomberg)
Coking coal prices are set to rebound as early as July from four straight quarterly declines as China and India seek raw material overseas to fire new steel production in the world’s fastest-growing major economies. Contract prices that fell to $206 a metric ton for the quarter ending June 30 may rebound to average $225 a ton this financial year, based on the mean estimate of 10 analysts, steelmakers and mining companies surveyed by Bloomberg. Contracts of coking coal, a key ingredient used to make steel, peaked at $330 in the June quarter last year. China, the largest steel producer, is leading demand growth forecast at almost 10 percent this year. It started about 10 new blast furnaces in the past six months, lifting output to a record in March, according to market researcher Custeel.com. India, the third-biggest steelmaker, is set to boost capacity a third to more than 100 million tons by March in a five-year $1 trillion plan to build roads, bridges and railway networks.
“Rising Indian imports will have a positive impact on coking coal,” said Natalie Robertson, an analyst at ANZ Banking Group Ltd. in Melbourne. “The near-term prices will more closely track development in China.” China may surpass Japan as the biggest coking coal importer by 2015, a position it may eventually relinquish to India, Robertson said.
Oil Trades Near One-Week High as U.S. Stockpiles Decline (Source: Bloomberg)
Oil traded near the highest level in a week in New York after the American Petroleum Institute said crude inventories fell in the U.S., the world’s biggest consumer of the commodity. Futures were little changed after rising 0.4 percent yesterday. U.S. stockpiles decreased by 985,000 barrels last week, the industry-funded API said. An Energy Department report today is forecast to show a gain of 2.8 million barrels. The Arabian Gulf Oil Co., Libya’s largest crude producer, warned that it may have to cease production because of protests, according to the state-run Libya News Agency. Crude for June delivery was at $103.74 a barrel, up 19 cents, in electronic trading on the New York Mercantile Exchange at 8:47 a.m. Tokyo time. The contract rose 44 cents to $103.55 yesterday, the highest close since April 17. Front-month prices are 5 percent higher this year.
Brent oil for June settlement declined 55 cents, or 0.5 percent, to $118.16 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract closed at a premium of $14.61 to New York futures. The spread between the contracts surged to a record $27.88 on Oct. 14.
OIL-Brent steady under $119, supply worries aid; Europe eyed
SINGAPORE, April 24 (Reuters) - Brent oil steadied near $119 a barrel on Tuesday, as a production stoppage in the North Sea and potential supply disruptions from Iran kept prices off lows hit in the previous session amid concerns about a euro zone crisis.
"The whole macro picture at the moment just doesn't look good for crude. It's looking pretty bearish," said Jim Ritterbusch, president of oil trading consultant Ritterbusch & Associates in Galena, Illinois.
China cuts Iran oil imports in March most this year
BEIJING/SEOUL, April 23 (Reuters) - China halved its Iranian crude imports in March compared with a year earlier due to disputes over contract terms, its deepest cut so far this year as Western sanctions complicate Tehran's oil exports.
South Korea cut its imports by 40 percent in March from a year earlier, official data showed, as it sought to secure an exemption from U.S. sanctions. Japan, which has secured a waiver, made steep cuts in April imports.
Iran squeezed by Asia oil import cutbacks
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, April 24 (Reuters) - Virtually every day there is news on how Iran's oil exports to Asia are being squeezed by Western sanctions, but the question that still remains unresolved is just how much pain is Tehran feeling.
The latest sign that Iran may be starting to feel the pinch is that half of the Islamic Republic's tanker fleet is being used for floating storage, presumably because buyers for cargoes can't be found.
Gold May Decline on Concern Over Slack Physical Demand (Source: Bloomberg)
Gold rose for the third time in four sessions as a weaker dollar increased the appeal of the precious metal as an alternative investment. The dollar declined as much as 0.4 percent against a basket of currencies as lower yields of Spanish and Italian bonds eased concerns that Europe’s debt crisis is worsening. The pound reached an almost six-month high against the dollar after the Debt Management Office said Britain’s net-financing requirements had fallen. “News of some stability in Europe is pushing the dollar lower,” Sterling Smith, a market analyst at Country Hedging in St. Paul, Minnesota, said in a telephone interview. “People are willing to consider riskier assets today.” Gold futures for June delivery climbed 0.7 percent to settle at $1,643.80 an ounce at 1:42 p.m. on the Comex in New York. Prices have gained 4.9 percent this year.
Mexico boosted its gold reserves by 16.8 metric tons to 122.6 tons last month, according to data on the International Monetary Fund’s website. Nations including Turkey, Russia and Kazakhstan also increased bullion holdings in March, the data show.
SINGAPORE, April 24 (Reuters) - U.S. wheat edged up , while corn was little changed after climbing 1.6 percent in the last session on forecasts for crop-threatening cold weather and talk of Chinese buying.
"U.S. corn plantings were a bit lower than what the market had expected because of the rain and there has been talk of potential cold weather which will not be good for the early planted corn," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.
Ukraine exports 1.75 mln T grain so far in April
KIEV, April 24 (Reuters) - Ukraine has exported 1.75 million tonnes of grain, mostly corn, so far in April, Interfax Ukraine news agency quoted official data as showing on Tuesday.
The agency said the volume included 1.13 million tonnes of corn, 490,000 tonnes of wheat and 120,000 tonnes of barley.
Ukraine '12 wheat crop could fall to 11-14 mln T
KIEV, April 24 (Reuters) - Ukraine is set for a sharp fall in the 2012 wheat harvest, with the crop expected at 11 million to 14 million tonnes versus 22.3 million in 2011 due to poor weather during sowing and wintering, a senior weather forecaster said on Tuesday.
"If we have rains in May, the harvest could be 14 million tonnes. Otherwise, 11 to 12 million," Tetyana Adamenko, head of the agricultural department of Ukraine's meteorological service, told Reuters.
US corn planting slows; soy seeding off to record start
CHICAGO, April 23 (Reuters) - U.S. farmers east of the Mississippi River made good planting progress, while growers in western areas of the Corn Belt were slowed by rainy weather, a U.S. Agriculture Department report showed on Monday.
The USDA's weekly crop progress and conditions report showed that U.S. corn seeding was 28 percent completed as of April 22, up from 17 percent a week ago and ahead of the five-year average of 15 percent, but down from analysts expectations.
Ukraine 2012 early grain sowing near end
KIEV, April 23 (Reuters) - Ukrainian farms have almost completed the 2012 early spring sowing at 3.6 million hectares as of April 23 or 96 percent of the expected area, the Farm Ministry said on Monday.
The ministry said in a statement farmers had also started the sowing of corn and sunflower, which should replace winter grains in areas hit by poor weather this winter.
EU raises wheat, cuts barley, rapeseed yield outlook
PARIS, April 23 (Reuters) - The European Commission's crop-monitoring unit on Monday raised slightly its forecast for the average yield of this year's soft wheat crop in the European Union but trimmed its outlook for barley and rapeseed yields.
"In general the current prospects for EU 27 yields are on average," the Monitoring Agricultural Resources (MARS) research unit said in a report.
Market Recap: Wheat Futures (Source: CME)
Wheat futures were stronger much of the day, but softened in late trade to end mostly weaker and near session lows. Chicago wheat ended steady to 4 1/4 cents lower, Kansas City was mostly around 2 cents lower and Minneapolis ended mostly 7 to 8 cents lower, although far-deferreds ended mixed. Early support came on spillover from neighboring pits as well as help from positive outside markets.
Wheat Market Recap Report (Source: CME)
July Wheat finished unchanged at 632 1/2, 14 1/2 off the high and 1 3/4 up from the low. December Wheat closed down 3/4 at 671 1/4. This was 1 3/4 up from the low and 14 off the high. May wheat closed slightly lower on the session after trading as much as 14 1/4 cents higher early today. A positive tilt to outside markets and cold weather concerns for the weekend and early next week for crops in Illinois, Indiana and Ohio helped to support active buying and more short-covering in wheat this morning. This pushed the market to the highest level since April 13th with July wheat now up as much as 37 3/4 cents from last weeks lows. A smaller Ukraine crop estimate added to the positive tone. Crop conditions declined slightly and spring wheat progress remains on a record fast pace. July Minneapolis wheat closed down 8 1/2 cents with the fast planting pace for spring wheat helping to pressure. Canadian wheat planted area was pegged at 24.3 million acres, up 13% from last year and about 1 million acres above trade expectations. A private forecaster in Europe pegged German wheat production at 22.2 million tonnes this year from 22.7 million last year. The market is beginning to view the May production report with an eye on big yield and production estimates for the winter wheat crop. July Oats closed up 15 3/4 at 342 1/2. This was 13 1/2 up from the low and 2 1/2 off the high.
Market Recap: Corn Futures (Source: CME)
Corn futures closed 2 1/2 to 4 1/2 cents lower in all but the September contract, which settled 3/4 cent higher. Corn futures finished in the lower end of today's range. Corn futures were initially supported by news of a daily corn sale totaling 480,000 metric tons to an unknown destination. Traders assumed this was confirmation of the rumored Chinese purchases.
Corn Market Recap for 4/24/2012 (Source: CME)
July Corn finished down 4 1/2 at 608, 13 3/4 off the high and 3 up from the low. December Corn closed down 4 at 541 1/2. This was 3 3/4 up from the low and 8 1/2 off the high. May corn moved from sharply higher on the day early in the session to close moderately lower on the day. The market saw confirmation of China demand from the USDA sales news this morning and the market surged higher early in the day to post the early high. However, "buy the rumor, sell the fact selling helped to spark a sell-off from the highs with the market trading just slightly higher on the day into the mid-session and December corn moving down on the day. December corn closed 4 cents lower after trading as much as 5 1/2 higher early. The early rally pushed the market to the highest level since April 13th. Private exporters reported a sale of 480,000 tonnes of US corn to unknown destination for the 2011/12 season. Traders believe this sale is to China. The slower than expected plantings pace and a cold weather outlook for the next week helped to support the market as well. September corn gained 4 3/4 cents on the December corn as traders see "less" chances of early harvested corn due to the slower plantings pace and a cool outlook for the next 10 days. Taiwan bought 60,000 tonnes of corn from Brazil. July Rice finished down 0.005 at 15.925, 0.005 off the high and 0.055 up from the low.
Dow's new corn: "time bomb" or farmers' dream? (Source: CME)
A new biotech corn developed by Dow AgroSciences could answer the prayers of U.S. farmers plagued by a fierce epidemic of super-weeds. Or it could trigger a flood of dangerous chemicals that may make weeds even more resistant and damage other important U.S. crops.
Or, it could do both."Enlist," entering the final stages of regulatory approval, has become the latest flashpoint in the debate about the risks and rewards about farm technology. With a deadline to submit public comments on Dow's proposal at the end of this week, more than 5,000 individuals and groups have already weighed in. Dow Agrosciences, a unit of Dow Chemical Co , hopes to have the product approved this year and released by the 2013 crop.
Algeria's Q1 grain imports down 12.7 pct y/y (Source: CME)
Algeria's wheat imports in the first quarter of this year were down 12.7 percent on the same period in 2011, customs data showed, after an easing off in social unrest and a more promising domestic harvest softened demand.
US corn planting slows; soy seeding off to record start (Source: CME)
U.S. farmers east of the Mississippi River made good planting progress, while growers in western areas of the Corn Belt were slowed by rainy weather, a U.S. Agriculture Department report showed on Monday.
The USDA's weekly crop progress and conditions report showed that U.S. corn seeding was 28 percent completed as of April 22, up from 17 percent a week ago and ahead of the five-year average of 15 percent, but down from analysts expectations.
SOFTS-Sugar, coffee steady above multi-month lows
LONDON, April 24 (Reuters) - Raw sugar futures on ICE steadied in early trading, hovering above the previous session's 11-month low, while arabica coffee also firmed, consolidating above an 18-month low hit on April 16.
Raw sugar futures consolidated, with the lower price range expected to stimulate further interest on the physical market, following recent purchases by Egypt and Tunisia.
Vietnam Coffee-New crop may rise, trade moderate
HANOI, April 24 (Reuters) - Vietnamese coffee trading has been moderate as prices held near a key level in the past week even as stock levels were good and the next harvest may show a gain over the previous period, traders and an industry official said on Tuesday.
Output from the next 2012/2013 coffee crop in Daklak, Vietnam's top growing province, is forecast to rise around 10 percent to 430,000-450,000 tonnes, or 7.2 million to 7.5 million bags, thanks to good weather, an industry official said.
India could export 3 mln tonnes sugar in 2012/13 - industry
NEW DELHI, April 24 (Reuters) - India could export 3 million tonnes of sugar in 2012/13 -- the same as approved so far this year -- with output of at least 25 million tonnes, a senior industry official said, keeping the world's second-biggest producer exporting for a third straight year.
India, which is the world's biggest consumer of sugar, returned to exports in 2010 after a severe drought in 2009 forced it to import about 2.5 million tonnes, sending global prices sharply higher.
Brazil cotton exports seen record large -producers
SAO PAULO, April 23 (Reuters) - Brazil's 2011/12 cotton exports should jump by more than half from last season to a record 1.3 million tonnes, the national producers' association said, as cooling domestic demand shifts the sector's focus to foreign markets.
Increasing demand by China was providing a new outlet for the fiber at a time when imports of synthetic fiber from their depressed demand at home, said Sergio De Marco, president of the Brazilian Cotton Producers' Association, Abrapa.
Good weather spell lifts Ivorian mid-crop cocoa hopes
ABIDJAN, April 23 (Reuters) - Adequate rains mixed with sunny spells last week in most of Ivory Coast's cocoa growing regions provided adequate growth conditions for the top producer's April to September mid-crop cocoa, farmers and analysts said on Monday.
In western, southern and eastern cocoa regions, farmers said rainfall during past week offered ideal conditions to boost the development of cocoa pods, however, continued dry conditions in the coastal regions raised some concerns.
China seen importing 3 mln T sugar in 2011/12-ISO
NEW DELHI, April 23 (Reuters) - China is likely to import 3 million tonnes of sugar in 2011/12, a top official of the International Sugar Organisation (ISO) said at a conference in India, the world's second biggest producer after Brazil.
"China will remain a big importer. They produce around 11 million tonnes but they need 14.0-14.5 million tonnes," ISO Executive Director Peter Baron told reporters.
China sandstorm hits cotton crops, small impact on output
BEIJING/SHANGHAI, April 23 (Reuters) - Cotton crops just planted in China's northwestern province of Xinjiang have been damaged by a heavy sandstorm over the past week, but there will be limited impact on this year's harvest, analysts said on Monday.
China is the world's largest producer and consumer of cotton. A fall in its domestic supply, which rose 11 percent last year to 6.6 million tonnes, could hoist imports higher and roil world prices.
India to produce surplus sugar in 2012-13, extend exports
NEW DELHI, April 23 (Reuters) - Top sugar consumer India is expected to produce enough of the sweetener in the coming 2012-2013 productions season to allow exports for the third consecutive year, the head of its sugar mill body said on Monday.
India, the world's second-largest producer of sugar after Brazil, was hit by a severe drought in 2009 and had to import about 2.5 million tonnes, sending global prices on a rally. India returned to exports in 2010/11.
Coal Seen Rebounding as China Sets Steel Output Record (Source: Bloomberg)
Coking coal prices are set to rebound as early as July from four straight quarterly declines as China and India seek raw material overseas to fire new steel production in the world’s fastest-growing major economies. Contract prices that fell to $206 a metric ton for the quarter ending June 30 may rebound to average $225 a ton this financial year, based on the mean estimate of 10 analysts, steelmakers and mining companies surveyed by Bloomberg. Contracts of coking coal, a key ingredient used to make steel, peaked at $330 in the June quarter last year. China, the largest steel producer, is leading demand growth forecast at almost 10 percent this year. It started about 10 new blast furnaces in the past six months, lifting output to a record in March, according to market researcher Custeel.com. India, the third-biggest steelmaker, is set to boost capacity a third to more than 100 million tons by March in a five-year $1 trillion plan to build roads, bridges and railway networks.
“Rising Indian imports will have a positive impact on coking coal,” said Natalie Robertson, an analyst at ANZ Banking Group Ltd. in Melbourne. “The near-term prices will more closely track development in China.” China may surpass Japan as the biggest coking coal importer by 2015, a position it may eventually relinquish to India, Robertson said.
Oil Trades Near One-Week High as U.S. Stockpiles Decline (Source: Bloomberg)
Oil traded near the highest level in a week in New York after the American Petroleum Institute said crude inventories fell in the U.S., the world’s biggest consumer of the commodity. Futures were little changed after rising 0.4 percent yesterday. U.S. stockpiles decreased by 985,000 barrels last week, the industry-funded API said. An Energy Department report today is forecast to show a gain of 2.8 million barrels. The Arabian Gulf Oil Co., Libya’s largest crude producer, warned that it may have to cease production because of protests, according to the state-run Libya News Agency. Crude for June delivery was at $103.74 a barrel, up 19 cents, in electronic trading on the New York Mercantile Exchange at 8:47 a.m. Tokyo time. The contract rose 44 cents to $103.55 yesterday, the highest close since April 17. Front-month prices are 5 percent higher this year.
Brent oil for June settlement declined 55 cents, or 0.5 percent, to $118.16 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract closed at a premium of $14.61 to New York futures. The spread between the contracts surged to a record $27.88 on Oct. 14.
OIL-Brent steady under $119, supply worries aid; Europe eyed
SINGAPORE, April 24 (Reuters) - Brent oil steadied near $119 a barrel on Tuesday, as a production stoppage in the North Sea and potential supply disruptions from Iran kept prices off lows hit in the previous session amid concerns about a euro zone crisis.
"The whole macro picture at the moment just doesn't look good for crude. It's looking pretty bearish," said Jim Ritterbusch, president of oil trading consultant Ritterbusch & Associates in Galena, Illinois.
China cuts Iran oil imports in March most this year
BEIJING/SEOUL, April 23 (Reuters) - China halved its Iranian crude imports in March compared with a year earlier due to disputes over contract terms, its deepest cut so far this year as Western sanctions complicate Tehran's oil exports.
South Korea cut its imports by 40 percent in March from a year earlier, official data showed, as it sought to secure an exemption from U.S. sanctions. Japan, which has secured a waiver, made steep cuts in April imports.
Iran squeezed by Asia oil import cutbacks
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, April 24 (Reuters) - Virtually every day there is news on how Iran's oil exports to Asia are being squeezed by Western sanctions, but the question that still remains unresolved is just how much pain is Tehran feeling.
The latest sign that Iran may be starting to feel the pinch is that half of the Islamic Republic's tanker fleet is being used for floating storage, presumably because buyers for cargoes can't be found.
Gold May Decline on Concern Over Slack Physical Demand (Source: Bloomberg)
Gold rose for the third time in four sessions as a weaker dollar increased the appeal of the precious metal as an alternative investment. The dollar declined as much as 0.4 percent against a basket of currencies as lower yields of Spanish and Italian bonds eased concerns that Europe’s debt crisis is worsening. The pound reached an almost six-month high against the dollar after the Debt Management Office said Britain’s net-financing requirements had fallen. “News of some stability in Europe is pushing the dollar lower,” Sterling Smith, a market analyst at Country Hedging in St. Paul, Minnesota, said in a telephone interview. “People are willing to consider riskier assets today.” Gold futures for June delivery climbed 0.7 percent to settle at $1,643.80 an ounce at 1:42 p.m. on the Comex in New York. Prices have gained 4.9 percent this year.
Mexico boosted its gold reserves by 16.8 metric tons to 122.6 tons last month, according to data on the International Monetary Fund’s website. Nations including Turkey, Russia and Kazakhstan also increased bullion holdings in March, the data show.
Subscribe to:
Posts (Atom)