Commercial Business & Forex Trading

The Dollar Extended

2009-10-25T05:49:00.000-07:00

The dollar extended its winning streak against the Japanese yen to four days and gained on the British pound and other major currencies as U.S. equities declined Friday, taking the wind out of the sails of investors who had been piling into riskier assets. The dollar also rose for a third straight day against the euro, which had touched a 14-month high earlier this week. The greenback's gains stemmed from traders reversing bets that the dollar would continue falling, said analysts at Action Economics. The U.S. Dollar Index (DXY), a measure of the U.S. unit against a trade-weighted basket of currencies, rose to 75.488, up from 75.047 in North American activity late Thursday. "The rally in risk assets looks like it is stalling and people are thinking it's an overstretched market," said Brian Dolan, currency strategist at Forex.com. "We all just have to take a step back every now and then." The dollar rose to the highest in a month against the Japanese currency, recently fetching 92.10 yen, up from 91.36 yen on Thursday. The euro traded at $1.5004, compared to $1.5023. The pound dropped about 1.9% against the dollar, pulling back after an unexpected drop in gross domestic product in the United Kingdom raised concerns about the possibility of further quantitative-easing measures. Both currency and stock markets shrugged off a Friday report showing resales of U.S. houses jumped 9.4% in September to a seasonally adjusted annual rate of 5.57 million, the highest in more than two years and more than analysts' predicted. "As we close in on the end of the period in which one can successfully close on their home in time to qualify for the first-time home buyers' credit, a tick higher for the month is not surprising at all and entirely within reasonable expectation levels," said Dan Greenhaus, chief economic strategist at Miller Tabak, in emailed comments. U.S. stocks also extended a decline after the data, signaling to currency traders a reduction in risk appetite -- something that's tended to support the dollar for many months. The Standard & Poor's 500 Index (SPX), down 1.4% in afternoon action, is poised to end the week nearly flat despite many companies reported earnings that beat expectations. For its part, the greenback is poised to close the week lower for a third time, with the Dollar Index falling to the lowest level since August 2008. The euro has also had a good week, rising past the psychologically important $1.50 level to the highest in 14 months. Bucking that trend, the dollar is poised to gain for a third week on the yen after reaching the highest level since mid-September. Pressure on the pound Byond the big three currencies, the pound plunged after data showed the U.K. recession had unexpectedly extended into a sixth straight quarter. Data showed that the U.K.'s GDP dropped 0.4% in the third quarter, compared to expectations that it would rise 0.1%. Sterling's weakness reflected expectations that the Bank of England may have to continue with its asset-purchasing program and that interest rates will remain low for a longer period. "With just under two weeks to go until that decision, today's dismal GDP reading will certainly tip the market consensus odds from a pause in quantitative easing to an increase in quantitative easing, and this is likely to weigh on the pound considerably," said Stephen Gallo, head of market analysis at Schneider Foreign Exchange. There had been speculation ahead of the GDP data that the central bank could soon start to withdraw some of its monetary stimulus. "With the Bank of England set to publish its inflation report and re-assess quantitative easing in November, an extension of the asset purchase facility is on the cards," said Charles Davis, senior economist at the Centre for Economics and Business Research. Davis added he expects asset purchases to reach 250 billion pounds, up from the current level of 175 billion pounds, and for U.K. interest rates to remain at 0.5% through 2010 and into 2011. The pound traded at $1.6309, down for the first week in three. At the same time, it was sharply lower against other major currencies including the euro.

Argentine Bonds Were Mixed Friday As Markets Digested News

2009-10-25T05:46:00.000-07:00

Argentine bonds were mixed Friday as markets digested news that the government plans to offer a new swap deal to the holders of defaulted debt. The benchmark peso-denominated bond fell 1.92% in price terms to ARS102 ($26.70), bringing the yield to 11.99%. The dollar-denominated Boden 2012 rose 0.47% in price terms to ARS318.50, to yield 12.13%. On Thursday, Economy Minister Amado Boudou said legislation will be sent to Congress on Monday that would exchange up to $20 billion in defaulted bonds. The bill would suspend a law that forbids the renegotiation of defaulted debt. To exchange the bonds, the government is planning to reopen a debt swap that was completed in 2005, though the terms of the new offer are expected to be worse. Investors will have to accept a discount of at least 65% of face value to participate in the new transaction, Boudou said, adding that the government would like to see at least 60% of the outstanding defaulted debt included in the reopening. Stocks fared poorly on Friday, in line with losses on Wall Street, which slumped due to declining commodities. Argentina's Merval Index slipped 0.58% to close at 2,295.88 points. The peso climbed to 3.8200 to the dollar from 3.8225 on Thursday. The Central Bank stepped into currency markets heavily throughout the week to prop up the greenback. The government bought dollars to sate strong demand for pesos as the dollar declines against most of the world's currencies and investors sought local currency to buy Argentine government debt.

Leaders from Germany's Center-Right Parties

2009-10-25T05:37:00.000-07:00

Leaders from Germany's center-right parties on Saturday announced a raft of policies that will guide their new coalition government. Including some EUR24 billion in tax cuts and plans to extend the lifespan of Germany's nuclear power plants, the policies foresee a significant shift from the outgoing grand coalition Chancellor Angela Merkel's Christian Democrats shared with the center-left Social Democrats. The parties also agreed to extend the lifespan of nuclear power plans and move the responsibility for banking supervision to Germany's Deutsche Bundesbank central bank. Some key points of the agreement: TAXES: -Parties agreed on EUR24 billion in income tax cuts starting in 2011. -The coalition agreed on a simplification of tax brackets and to confront so-called cold progression, in which taxpayers end up in higher tax brackets even though their real, inflation-adjusted incomes aren't growing through pay raises. -Parties agreed to amend the business taxation system from Jan. 1, 2010, by easing companies' ability to deduct interest expenses and losses from their corporate tax bill. -Parties will explore ways to strengthen holdings in Germany; reforming rules for deducting losses and cross-border taxation of company profits among options to be explored. -Inheritance taxation will be changed by lowering the tax burden for siblings and their children and by amending rules to make the passing-on of businesses more "crisis-proof." -The allowance paid for children will be raised by EUR20 per child and the tax-free family allowance will be increased to EUR7,008 next year. BUDGET: -Tax revenues are to be used to help keep non-wage labor costs stable, by paying around EUR16 billion to the federal labor agency and around EUR4 billion to the public health-care system next year. -Parties agreed on eight "golden rules" for budget policy with the aim of limiting new debt and spending. The rules include more power for the cabinet when setting up the draft budget, implementing Germany's constitutional debt cap rule from 2011, committing to keep the rise in government spending below the rate of gross domestic product growth, and banning any extra spending on top of existing budget and financial plans. FINANCIAL MARKETS: -The Deutsche Bundesbank central bank will be put in charge of banking supervision, at the expense of financial services watchdog BaFin, which is currently sharing the oversight with the Bundesbank. -Parties will give priority to respecting the European Union's Stability and Growth Pact and respecting the independence of the European Central Bank and Bundesbank. -Parties aim to set stricter capital requirement rules for banks and establish regulation of all financial market products, actors and markets. -The coalition will call for changes in compensation for financial sector workers by linking compensation more strongly to the long-term success, and forcing pay cuts in a difficult economic situation. -Parties want to prevent the moral hazard of systemically crucial institutions by launching suitable legal instruments for a restructuring and winding-down procedure in order to either liquidate a systemic company of the financial sector that got into trouble in a market-sensitive way, or to stabilize it before it gets into insolvency. -The country's private equity is to be boosted by creating a "common attractive venture capital market" and abolishing "unnecessary hurdles" to the German REITs market. -Parties will examine whether to launch a unified and standardized securitization law to set a transparent standard. -Coalition will promote efforts to set up a European rating agency. ENERGY: -Parties agreed to extend the lifespan of Germany's 17 nuclear power plants, effectively abandoning a nuclear phase-out scheduled for 2021. The government will negotiate conditions of the extension with utilities, particularly on how windfall profits from keeping plans open can be spent. -Calling nuclear energy a "bridge technology," the parties preserved a ban on building new nuclear power plants in Germany and said nuclear power will remain in use until "renewable energy can reliably replace it." -Parties will aim to reduce carbon dioxide emissions to 40% below 1990 levels by 2020. -Within the next year, parties want to draw up new goals for the percentage of power to be drawn from renewable sources and those from traditional outlets. -Setting up a single electricity transmission grid network operator, or Deutsche Netz AG. LABOR MARKET: -The parties oppose a general minimum wage and will review existing minimum wages in specific sectors. They also advocate a legal ban on "immoral" wages, defined as one-third below average wages in a given sector. TRANSPORTATION: -The parties plan a step-by-step privatization of rail operator Deutsche Bahn AG "once capital market conditions support this." The also plan promoted greater independence for and increased competition among operators on the nation's railways. The current grand coalition government called off the planned partial privatization of Deutsche Bahn last autumn due to bad market conditions. HEALTH INSURANCE: -Injecting around EUR4 billion budget into the public health-care system next year and boosting competition in the system. -Setting up a commission that will work on a reform of the health fund, which pools fixed-rate health-insurance payments from employers and workers. For now, the fixed insurance premiums, currently set at 14.9% of workers' gross pay, will stay in place. But in future, insurers will have more leeway to set their own premium levels. -Keeping extra payments from individuals at 1% of income that insurers can demand if the insurers' costs resulting from medical treatment exceed their intake from the health fund.

Greenback ended on Thursday

2009-10-22T18:42:00.000-07:00

Greenback ended on Thursday near the lows of the year across the board, with the exception of the Yen. Stocks fell in Asia and in Europe but in Wall Street equities rose posting important gains. The surge in stocks weakened the Dollar that moved away from intra-day highs and ended near the lows of the year.

Corporate earnings and an increase in the Leading Indicators helped stocks surge during the American session weakening the Dollar. EUR/USD fell to 1.4945 during the Asian session but from there started to rise at a slow pace and erased previous losses. The pair finished a few pips below 14-month high at 1.5025.

The ecPulse.com analysis team affirms: “The U.S stocks closed in a green zone due to strong optimism spread within the stock market as a result of cheerful and better-than forecasts earnings reported from huge and known U.S corporations such as Traveler's Cos. to Mc Donald's Corp, boosting hopes accordingly that the crisis is actually close to an end, whereas the DJIA managed to breach the 10,000 barrier to the upside.”

GBP/USD managed to recover after falling to 1.6485 (intra-day low). The pair approached to the resistance zone at 1.6640. USD/CHF peaked at 1.0125 during the European session but failed to hold and regained the downside. The pair fell almost a hundred pips from the highs of the day finding support at 1.0040, a few pips above yesterday lows.

Similar situation applies to currencies tied to commodities. Dollar rose sharply the first half of the day but then failed to hold and pullback below the opening level. AUD/USD tested levels below 0.9200 but finished the day at 0.9270. NZD/USD fell momentarily below 0.7500 but then recovered rising to 0.7600.

For the first time of the week the Dollar did not fall to fresh low for the year across the board.

The Yen continued to lose ground across the board, falling to a one-month low against the Dollar and Cable and to a 2-month low to the Euro.

Friday,Asian Shares Grew Higher

2009-10-22T18:34:00.000-07:00

Asian shares were higher Friday after better-than-expected earnings boosted Wall Street, with Australian stocks in the lead. South Korea's Hynix Semiconductor though failed to get much of a lift from its third quarter report. Australia's S&P/ASX 200 was up 1.0%, with Japan's Nikkei 225 up 0.4% and Korea's Kospi Composite up 0.3%. New Zealand's NZX-50 was 0.3% higher. Dow Jones Industrial Average futures were up 20 points in screen trade. "Obviously there were some good results overseas," said Patersons senior private client adviser Chris Blair. "U.S. companies still need stronger revenue to back up the share price momentum, but the bulls are winning at this stage." Leading the charge in Sydney were Westpac, up 2.0% and BHP Billiton, up 0.8%. Retail conglomerate Wesfarmers jumped 5.3% after news that first quarter food & liquor sales rose 7.3% on the year, with total sales up 6.1%. But Woodside Petroleum fell 1.5% after third quarter production dropped 5.0% on year and sales declined 40%. It also suffered a significant setback to its efforts to secure gas supply for the expansion of its Pluto project, with two potential suppliers opting to funnel gas to a Chevron project instead. Shipping stocks were leading in Japan with the Topix marine transport subindex up 1.6%, helped by a higher Baltic dry index. "Earnings-related catalysts may lead the market today as well as exporters as worries over the strong yen are receding for now," said Yoshinori Nagano, senior strategist at Daiwa Asset Management. Mitsui O.S.K. rose 2.3% and Kawasaki Kisen gained 2.1%. Korean stocks were pulled higher by car makers, with Hyundai Motor rising 2.9%, while Kia Motors added 2.9% before its third quarter results later Friday. Hynix was only 0.5% higher after news the world's second-largest producer of computer memory chips by revenue swung to a net profit of KRW246.3 billion, versus a net loss of KRW1.67 trillion a year ago. The result was lower than expected - a Dow Jones Newswires poll of analysts had forecast a net profit of KRW352.9 billion. Still, "demand for dynamic random access memory chips will likely remain solid and corporate demand for PCs is expected to revive next year partly due to the (push) to replace old ones with (computers to take) Windows 7," said Lee Sun-tae at Meritz Securities. In New Zealand, trading volumes were described as healthy, though analysts said there were few cues. "It's a dull, drab market," Craigs Investment Partners broker James Porteous said. Leading the gainers was jewelry retailer Michael Hill International, rising 3.0%. PGG Wrightson fell 2.9% ahead of a capital raising, despite associate Pyne Gould late Thursday completing the second leg of a NZ$267 million capital raising. Better risk appetite was the theme in the foreign exchange market, with the euro briefly hitting its highest level since August 13 against the U.S. dollar, touching $1.5051. It was more recently at $1.5037, from $1.5031 late in New York. The single currency rose initially to Y137.61 against the yen - its best level since August 13 - before coming back to Y137.55, from Y137.20 in New York, with the U.S. dollar at Y91.50, from Y91.28. Dollar weakness extended to other currencies, with the British pound hitting $1.6676, its highest level since September 14, and Y152.56 against the yen, its best point since September 11. "In the mid- and long-term, the dollar's falling trend will likely remain intact," said Yuji Saito, Societe Generale's FX group head. Lead Japanese government bond futures were lower, at 138.36 points, down 0.02. Spot gold rose 40 cents from New York, to $1,060.20 a troy ounce. "Gold prices will continue to be influenced heavily by U.S. dollar movements, in our opinion," HSBC analyst James Steel said. HSBC currency strategists were targeting the euro to soon reach $1.5160, with gold as a result to remain well bid. LME three-month copper was $25 higher from the London kerb, at $6,610 a metric ton. Triland analysts said a pattern of copper rallying, then backtracking on profit-taking showed "a clear tension with participants not feeling comfortable with such a rally." Nymex front-month crude oil futures were up two cents at $81.21 a barrel on Globex.

Australian imports fell

2009-10-22T18:31:00.000-07:00

A price index of Australian imports fell 3.0% in the third quarter of 2009 from the second quarter, the Australian Bureau of Statistics said Friday. The decrease in the import price index was mainly driven by the appreciation of the Australian dollar against all major trading currencies, as well as lower prices paid for general and industrial machinery and equipment, the bureau said. These were partly offset by rises in prices for petroleum, petroleum products, and related materials The price index for exports fell 9.6% in the third quarter from the second. The decrease in the export price index was mainly due to falls in prices received for coal, coke and briquettes, and for metal ores and metal scrap, the bureau said. The appreciation of the Australian dollar also contributed to the fall. The falls were partly offset by higher prices for nonferrous metals, petroleum and petroleum products. The export price index fell by 20.7% over the year to the third quarter, the largest annual decrease since the data were first reported in the third quarter of 1974, the bureau said.

Weakening Columbian Peso

2009-10-22T18:26:00.000-07:00

The Colombian peso Thursday weakened ahead of the Central Bank's monetary meeting, to be held on Friday, as investors expect the board will take steps to limit the peso appreciation. The Colombian peso weakened to 1,916.60 pesos to the dollar, from COP1,895.6 on Wednesday. "Foreigners were the main sellers as they expect the bank may decide to put limitations on the entry of foreign capitals in the country to limit the demand for pesos," Julian Cardenas, a market analyst with local brokerage Corredores Asociados, said. Last week, Finance Minister Oscar Ivan Zuluaga said the Central Bank's seven-member board, where he sits, will discuss the possibility of taking measures to limit the peso appreciation. "With those comments and the market reaction they triggered, Zuluaga has left no choice to the bank but to start buying dollars," Cardenas said. The benchmark IGBC stock index fell 0.7%, to 11,008.88 points. Shares of state-controlled power company Isagen SA (ISAGEN.BO) fell 0.7%, to COP2,095, while the shares of state-controlled oil company Ecopetrol SA (ECOPETROL.BO) fell 1.3%, to COP2,635. On the debt market, meanwhile, the yield on the benchmark 2020 Colombian peso-denominated bond rose to 8.619% from 8.596% on Wednesday.

Ski Season Approaches

2009-10-18T07:39:00.000-07:00

As the 2009/2010 ski season approaches, research from the Post Office has shown that the overall cost of skiing has fallen in France and the US.
Due to continued economic uncertainty, a weak pound, and the rise of airline fuel surcharges, the number of Britons taking skiing holidays has significantly fallen. In the season 2008/09 numbers fell to just over one million people, a 13% decrease on the previous season.
As a result of this some ski resorts, notably in France and the US, have cut the overall cost of their products and services in order to attract skiers to their resorts.
According to the Post Office Ski Resort Report 2009, which compared the projected costs of a six-day lift pass and ski equipment hire alongside essentials such as meals and alcohol, it found that combined costs will fall in certain resorts in France and the US by 11%.
Other countries, however, have increased their prices considerably – with Norway upping costs by 26% and Finland and Germany by 23%. The most expensive countries to ski in are Canada, Switzerland and the US, whilst the cheapest are Romania, Bulgaria, Slovakia, Slovenia, Italy and France.
France remains a good choice for many skiers, with a lift pass in the French resort of Courchevel costing £129.95, while a pass in the neighbouring Swiss resort of Verbier will cost nearly twice that, at £205.99.
A spokesperson for Alpine Elements, a company that specialises in high altitude ski holidays throughout the French Alps, said: “It’s good to see Courchevel trying to curb the effects of the economic downturn by enticing skiers with cheaper prices. The slopes are still there and the snow is still thick.”
Alpine Elements offer a variety of ski holidays to Courchevel and various other resorts throughout the French Alps. They also offer discounts for group ski holidays, ski lessons for beginners and skiing insurance cover.

$1.6 billion (£1bn) Net Income through Google

2009-10-18T07:37:00.000-07:00

Google has reported a 7% rise in third quarter revenues, reporting a record $1.6 billion (£1bn) net income, compared to just $1.3bn for the same period in 2008.
Revenue for the quarter was $4.38bn, which was ahead of analysts’ expectations of around $1.3bn.
A large amount of revenue comes from inside the US, where Google is headquartered; however, UK revenue also contributed a healthy amount, with a percentage share of 13% for the quarter.
Eric Schmidt, Google CEO, said: “Google had a strong quarter – we saw 7% year-over-year revenue growth despite the tough economic conditions.
“While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future.”
One of the big winners for Google in the three months to 30 September 2009 was its revenue through its partner sites, which through AdSense, raised $1.8bn, or 30% of total revenues, and Google-owned sites, which generated revenues of $3.96bn, or 67% of total revenues. These represent increases of 7% and 8% respectively compared to 2008.
Earlier this week, the search engine announced that Arthur Levinson has resigned from his position on Google’s Board of Directors with immediate effect. Levinson is also on the board of Apple, and reports suggest this is the reason for the announcement as the two companies have become increasingly competitive in recent years. Google CEO Schmidt, quit his role on the Apple board two months ago, citing similar reasons.
Google employs nearly 20,000 full-time workers across its worldwide base, and is highly regarded as the number one search engine globally.
Its shares rose by 20 points on the Nasdaq stock exchange today.

25% increase to the congestion charge along with London Travel Fares

2009-10-18T07:36:00.000-07:00

The Mayor of London, Boris Johnson, has announced that London travel fares will rise in 2010, along with a 25% increase to the congestion charge.
Oyster card pay-as-you-go bus journeys are to rise from £1 to £1.20, the Oyster pay-as-you-go Zone 1 tube fare will increase from £1.60 to £1.80 and the price of a seven-day bus pass will jump from £13.80 to £16.60.
Overall, bus fares are to go up by 12.7% and Tube fares will rise by 3.9%. The Mayor said he had protected free and concessionary fares for London’s elderly, young people and those on low incomes – meaning that 40% of bus passengers will continue to travel free or at a substantial concessionary rate.
He also set out changes to the operation of London’s Congestion Charge Scheme, including plans to make it easier to pay and avoid penalty charge notices through the introduction of payment on account in 2010. However the standard charge of £8 will rise by 25% to £10.
Making clear that his approach to fares and investment would bring stability to TfL’s financial position, Mr Johnson said: “Nobody wants to make an announcement like this, especially when Londoners are feeling the effects of the recession. It is not a decision that I have taken lightly. Indeed, I have been persuaded of the need for fare rises only after ensuring that every efficiency possible, at least £5 billion in total, is being made at TfL.”
It is understood that the higher fares will raise an extra £125?million a year, and the increase in the congestion charge a further £15 million – but TfL will lose £50?million when the western extension is scrapped.
The cuts to services and changes to TfL priorities will save £1.36?billion over the next three years, however it is looking to achieve £5?billion of savings overall.
The price rises on public transport will take effect in January.

£1.2 Billion Could be Saved a Year

2009-10-18T07:30:00.000-07:00

UK businesses could save £1.2 billion a year by switching to internet-based telephone systems, according to research from Britain’s first independent web-based phone company.
Cloud Net, the company behind the research, also claims that thousands of jobs would also be created as a reduction in technological costs pave the way for job security.
A detailed analysis of the UK’s 10 million traditional fixed line users. According to the study, the costs currently amount to around £2.5bn in line rent and calls, from a variety of resellers, plus the mounting costs of equipment rental.
Cloud Net, says its new third generation Voice over Internet Protocol (VoIP) offers switchboards to subscribers and low-cost line rental, and is being hailed as a major breakthrough in telecoms.
Subscribers pay around £6.50 a month for switchboard phones which operate through their broadband system and reportedly provide “crystal clear” sounds.
Cloud Net Chairman, David Hill, said: “There is no reason whatsoever for companies now not to use internet-based telephones as the quality is far superior to anything else on the market and offers all the services of traditional land-lines without the hassle.
“Our research has shown that businesses in Britain could save millions of pounds by switching to the VoIP system. There are ten million users across the UK and the savings would be enormous, giving industry and commerce a huge economic boost.”
Cloud Net launched its new service in September and has plans to cover the whole of the UK within two years.

Colombian Stock Index Rose

2009-10-18T07:28:00.000-07:00

The Colombian stock index rose Friday on investors' expectations the central bank may further cut interest rates in a bid to slow the peso appreciation. The benchmark IGBC stock index rose 0.7% to 10,942.50 points. "Investors bought stocks as some of them expect the country's central bank may cut interest rates," said Cesar Tovar, market analyst with local brokerage Nacional de Valores. Lower interest rates make companies' financial costs fall. On Thursday evening, Colombian Finance Minister Oscar Ivan Zuluaga said the central bank will evaluate whether to start buying dollars on the spot market to tame the appreciation of the peso. He said the bank will evaluate taking other measures. Shares of Grupo de Inversiones Suramericana SA (GRUPOSURA.BO) rose 1.8% to 23,200 Colombian pesos ($12.58). Shares of state-controlled telephone company Empresa de Telecomunicaciones de Bogota SA (ETB.BO), or ETB, rose 3.6% to COP901. The Colombian peso strengthened to 1,843.5 pesos to the dollar, from COP1,846 on Thursday. The yield on the benchmark peso-denominated government bond maturing in 2020 fell to 8.603% from 8.748% on Thursday.

Argentina's Stock Pulls Back

2009-10-18T07:26:00.000-07:00

Argentine stocks pulled back Friday as investors took profits following the new 2009 high set by the Merval Index earlier this week. Argentina's Merval Index shed 0.79% to close at 2,207.28 points. Despite the profit-taking, prices partially rebounded near the end of trade, marking continued investor interest in local shares, said Dionisio Corneille, head of the brokerage bearing his name. There were also some big gainers despite the general losses. Electricity transmission company Transener Cia. (TRAN) surged 8.85% to close at ARS1.23 ($0.32) on expectations of solid second quarter earnings and a repositioning from other service companies, which had left Transener behind during the recent rally, Corneille said. Telecom Argentina S.A. (TEO, TECO2.BA) jumped 1.53% to ARS13.25 following news late Thursday that the company paid off the last $352 million owed on a $1.9 billion loan extended in 2005. Telecom paid off the debt five years ahead of the payment plan agreed with creditors. Meanwhile, bonds posted moderate gains on continued momentum following government talk of resolving the ongoing conflict with the holders of defaulted debts and resuming relations with the International Monetary Fund. While government officials say they are looking to reach a deal, investors are keen to see the actual steps. Some opted to take profits due to the lack of progress, Corneille said. Goldman Sachs said Friday: "It is now imperative that the authorities move without much delay from market-friendly rhetorical statements to genuine good-faith steps to deliver on some of those promises. That outcome would preserve the current market goodwill and could also be the harbinger of additional positive market gains and sovereign credit rating upgrades." The benchmark peso-denominated bond rose 0.82% in price terms to ARS97.80, to yield 12.46%. The dollar-denominated Boden 2012 rose 0.62% in price terms to ARS307.40, to yield 14.32%. There was strong pressure on the dollar again Friday, forcing the government to buy $200 million to keep the peso from strengthening. The Central Bank pumped over $500 million into the local foreign exchange market this week to support the greenback. The peso fell to 3.8225 to the dollar on Friday from 3.8200 on Thursday.

Argentina's Industrial Output Fell Sharply

2009-10-18T07:22:00.000-07:00

Argentina's industrial output fell sharply in September on the year, indicating that the an economic recovery is still a ways off. Industrial production fell 10.5% from the same month a year earlier but rose 1.1% on the month, the think tank Orlando J Ferreres & Asociados, or OJF, reported Friday. Year-on-year output has now declined each month for the past year, according to OJF. That puts accumulated January through September output down 9.5% from a year earlier. Still, September's increase in the month-on-month data was the third of its kind in a row, indicating that the industry's doldrums seem to have bottomed out. OJF said results for the rest of the year will likely improve because they'll be compared with data from late 2008, when the global financial crisis was just starting to have an impact on Argentina. Moreover, a solid recovery in Brazil, Argentina's top trade partner, as well as a "calmer financial situation," should help the sector through next year, OJF said. The think tank's estimates coincide with other private sector estimates that indicate output has fallen sharply since the beginning of the global crisis. But the data clash with official government figures that show only a minor slowdown in production. The national statistics institute, Indec, will release official industrial output data on October 23. Indec last reported that August output declined 1.7% on the year but was up 0.6% on the month. Economists here routinely discard the reliability of official statistics, saying the data are tainted. Government officials deny the charges.

USD/CHF very low

2009-10-18T07:20:00.000-07:00

Despite falling on Friday, the Swiss Franc ended the week with sharp gains against the Dollar. USD/CHF finished below 1.0200 but far from intra-week lows that lie at 1.0117 (15-month low). The pair has fallen in 5 out of the last 6 weeks. USD/CHF is still under pressure and the downside bias has a strong support at a downtrend line in daily charts. On the upside has a key resistance level at 1.0230/50, a break above could send it higher. Against Cable, the Swiss fell sharply on Friday. GBP/CHF extended the rally and finished above 1.6600 at a two week high. The pair rose 450 pips in the last two days.

U.S dollar versus Euro & Japanese

2009-10-18T07:18:00.000-07:00

The U.S. dollar advanced versus the euro and Japanese yen on Friday as data showed gains in foreign funds flowing to the U.S. and weakness in consumer confidence spurred selling of stocks. The dollar and British pound rebounded from recent lows scored the previous day as traders reversed bets that the dollar will fall further, and U.S. equities declined, easing pressure to continue selling the greenback. "Going into the weekend, today's sell-off in the Dow provides players with a convenient excuse to take profit on short U.S. dollar positions and reload for next week," Michael Woolfolk, senior currency strategist at The Bank of New York Mellon, wrote in emailed comments. The U.S. dollar index (DXY) rose to 75.584, up from 75.480 in North American trade late Thursday after sliding to a series of 14-month lows earlier in the week. The dollar bought 90.82 yen, up from 90.59 yen, giving up bigger gains earlier in the session. The euro traded at $1.4903 versus the dollar, down from $1.4933 after failing to breach the psychologically important $1.50 level. Reducing the attractiveness of equities and supporting the dollar, a report showed U.S. consumer sentiment pulled back more than anticipated this month. The University of Michigan/Reuters index fell to 69.4 in early October from 73.5 in September. Analysts surveyed by MarketWatch expected, on average, for the index to read 72. That followed a report showed U.S. industrial production jumped 0.7% last month, topping expectations. Capacity utilization rose to 70.5% in September from a revised 69.9% in August, also higher than anticipated. "These diverging signals highlight the recent uncertainty" over whether third-quarter growth can be sustained, analysts at Action Economics wrote. "The downside risks as we approach year-end are clear." An earlier report from the U.S. Treasury Department showed foreign investors nearly doubled purchases of U.S. assets in August. Foreign official buyers sold more short-term assets and bought long-term securities. Private investors in other countries bought more U.S. equities and favored longer-term assets of all types, indicating more preference for riskier assets than Treasurys, noted foreign-exchange analysts at Barclays Capital. Gains in stocks and other indications of investor willingness to make more aggressive investments over the last several months have been detrimental to the dollar, as its safe-haven status is no longer desired. "Our overall assessment is that these numbers remain mediocre but are not nearly as negative as the July release," Barclays analysts wrote in a note. Focus also returned to the lack of fluctuations in the Chinese yuan, a day after the U.S. Treasury repeated its previous finding that China was not formally manipulating its currency. The People's Bank of China set the yuan's official rate 6.8270 against the dollar Friday, according to reports, down slightly from 6.8267 Thursday. The yuan is allowed to fluctuate on 0.5% on either side of the official daily rate. China's foreign-exchange policy risks "unwinding" some of the progress made in reducing global trade imbalances during the financial crisis, the U.S. Treasury said Thursday in its latest report on foreign-exchange trading. Weekly move The dollar index is still headed towards a second weekly loss, sliding more than 1% from last Friday. The yen has seen a roughly 1% increase since last Friday. The shared euro is still up about 1.4% versus the dollar this week. With much vocalization about the fall in the dollar's value, some analysts and policy makers alike point to the still orderly decline that has left the dollar index down 7% this year, which is not abnormal given the reversal of investor's need for safety in the credit crisis and a readjustment of imports and exports as consumer demand has slowed. "No policy maker is going to argue for a weak dollar," said Dallas Federal Reserve President Richard Fisher said Friday, according to news reports. Recent movement in the dollar "has to do with trade adjustment." Euro breather August trade data for the euro zone showed the 16-nation region swung to a larger-than- deficit with the rest of the world. The figures come amid rising unease among euro-zone officials and businesses over the strength of the euro, which fell slightly against the dollar to $1.4903 on Friday. From a technical standpoint, the euro remains "slightly overbought," versus the dollar, wrote Nicole Elliott, a technical analyst at Mizuho Corporate Bank. Nonetheless, a "weekly close above $1.4800 would confirm that the next leg of the (euro) rally has started," she said. British pound The battered pound was the biggest winner among major currencies, continuing to power higher versus the euro and the greenback a day after a Bank of England policy maker signaled satisfaction with the impact of the central bank's quantitative-easing strategy. The British pound gained ground versus the dollar rising to $1.6355, up from $1.6270 Thursday. The euro slipped 0.8% versus sterling to 91.11 pence. The British currency has advanced 2.6% this week against the dollar. Traders said the remarks by Paul Fisher, the bank's director of markets and member of the Monetary Policy Committee, were sufficient to trigger an explosive round of short covering. U.S. Commodity Futures Trading Commission data released last week showed a historic build-up of short positions against British pound futures, noted analysts at Brown Brothers Harriman. "The fundamentals for the pound are still negative, with interest rate differentials favoring other currencies," they wrote. "Next week's minutes of the Bank of England meeting may also reinforce the fragile nature of the economic recovery, and the likelihood of rates remaining at this low level for some time." Others cautioned that betting against the pound in the midst of a run of unexpectedly strong third-quarter earnings report by major banks could prove perilous. "We would caution against being short GBP [selling the British pound] when U.S. bank earnings are again generally beating expectations, as markets treat GBP as a proxy for the performance of the financial sector," said Adam Cole, global head of FX strategy at RBC Capital Markets in London. "Our short-term models also continue to show GBP heavily oversold relative to short rate expectations and bank stocks, consistent with other evidence that short-GBP is a seriously overcrowded trade currently," he wrote in emailed comments.

Mexican stocks snapped

2009-10-18T07:15:00.000-07:00

Mexican stocks snapped a 10-session winning streak and closed lower Friday as investors took advantage of earnings concerns and U.S. stock losses to book profits. The market's IPC index of leading issues closed down 0.9%, or 291.43 points, at 30,726.30. Volume was a moderate 212.8 million shares worth 6.3 billion pesos ($481 million). In the U.S., several disappointing earnings reports and a weaker-than-expected consumer confidence reading overshadowed above-estimate industrial production data for September, and stocks moved lower. The Dow Jones Industrials closed down 0.7%, just shy of the 10,000 mark reached this week for the first time in a year. Carlos Hermosillo, an equities analyst at the Vector brokerage, said that showing provided an excuse for selling after 10 consecutive sessions of gains in the local market that pushed the IPC up 8.5%. The extended rally ahead of the bulk of Mexico's third-quarter reports suggests earnings won't be bad, and the market will probably take a break to see if expectations are confirmed, he said. IPC heavyweight America Movil (AMX, AMX.MX) L shares fell 0.7% to MXN31.53, and cement company Cemex (CX, CEMEX.MX) CPO shares fell 3.2% to MXN17.44. Construction company Cicsa (CICSA.MX) B-1 shares gave up early gains and fell 1.7% to MXN8.09. Cicsa said it will carry out MXN3.68 billion in construction work on a toll road concession won Thursday by infrastructure company Ideal (IDEAL.MX). Both firms are controlled by billion Carlos Slim. The peso recovered from early losses against the U.S. dollar, but still closed weaker at MXN13.1050 compared with MXN13.0775 Thursday. Earlier Friday, the currency weakened as far as MXN13.18. RBS Securities said in a report that congressional approval of the government's 2010 budget proposal, which calls for higher taxes to offset lower oil revenue, could push the peso/dollar rate towards MXN12.60 in the near term. "Failure to approve the tax measures would likely trigger ratings downgrades," RBS said. Political parties in the lower house of Congress are expected to work over the weekend on the income side of the budget with the aim of passing it early next week. The final shape of the budget depends to a large extent on the opposition Institutional Revolutionary Party, or PRI, which is expected to support some if not all of the government's tax proposals. In its monthly monetary policy meeting, the Bank of Mexico on Friday left the overnight rate at 4.5%, saying it expects inflation to continue easing as the economy pulls out of recession. The central bank said gross domestic product probably expanded nearly 3% in the third quarter from the second quarter. That would mark an end to a string of four consecutive quarters of sequential contraction as Mexico suffered its deepest recession in decades.

U.S. Dollar Advanced

2009-10-15T07:45:00.000-07:00

The U.S. dollar advanced versus the euro and Japanese yen on Thursday after a trio of positive U.S. economic data reports failed to boost equities into positive territory, supporting the greenback. The U.S. currency had been lower in European and Asian trading, a day after Wall Street's Dow Jones Industrial Average pushed back above the 10,000 level for the first time in a year. Benchmark U.S. stock indexes declined in early trading, after the Dow Jones Industrial Average claimed 10,000 for the first time in a year. "Following Wednesday's sharp gains on Wall Street, the equity market may take some profits today, in spite of the better economic data," said analysts at Action Economics. The dollar index (DXY), a measure of the greenback against a trade-weighted basket of currencies, traded at 75.515, compared to 75.513 Wednesday. It rose as high as 75.765 earlier. The euro bought $1.4913, from $1.4915 in North American trade late Wednesday. In earlier trading, the dollar gained to have the euro buy as little as $1.4862. Rising equities have spelled weakness for the U.S. dollar as investors abandon the former safe haven for riskier assets. Still, some analysts expect the dollar to recover in coming months as the U.S. economy resumes growing. The dollar bought 90.47 Japanese yen, up 1.3% from 89.47 yen on Wednesday. The U.S. dollar bought 1.0303 Canadian dollars, up from C$1.0277 late Wednesday. The dollar index hit a 14-month low on Wednesday and has fallen by around 15% from its 2009 peak as investor's willingness to hold more risky assets have prompted world equities to rally since March. That's also pushed the euro toward the psychologically important $1.50 mark versus the U.S. dollar. The U.S. Labor Department said the number of people filing for state unemployment benefits fell by 10,000 to a seasonally adjusted 514,000 in the week ending Oct. 10. Economists surveyed by MarketWatch expected initial claims to fall to about 510,000. "The initial claims data continue to point to a slowdown in the rate of job losses and confirm that the economy is in a recovery," said analysts at RDQ Economics. "However, the level of initial jobless claims is still some 100,000 above the level that we associate with net job creation." The U.S. consumer price index rose a seasonally adjusted 0.2% in September. The core CPI -- which excludes volatile food and energy prices -- also increased 0.2% last month. The increases were a tenth of a percentage point higher than expected by economists surveyed by MarketWatch. Also, New York Federal Reserve Bank said manufacturing activity in the New York area improved at the fastest pace in five years. "The first batch of U.S. numbers were unambiguously positive, helping to keep the fire going" in currency markets, Kathy Lien, director of currency research at Global Forex Trading, wrote in an email. The dollar index gave up some of the gains following a report that showed manufacturing activity in the Philadelphia Federal Reserve's region expanded at a weaker-than expected pace in October. The Philly Fed index declined to 11.5 this month from 14.1 in September. Pound, Aussie dollar Also drawing attention in currency markets, the British pound earlier climbed 1.5% versus the dollar. The pound also jumped versus the euro, sending the shared currency down 1.8%. Paul Fisher, an official with the Bank of England, signaled satisfaction with the impact of the central bank's money-creating quantitative easing program that has weighed on the nation's currency. Analysts said the remarks led to speculation the BOE could pause the program in November. The pound jumped to $1.6236 from $1.5975 late Wednesday. A spate of recent comments from global finance officials concerned about the weakening dollar has failed to lift the greenback as investors bet major central banks won't back up their remarks by buying dollars. Earlier, the Australian dollar rose to a 14-month high after Reserve Bank of Australia Gov. Glenn Stevens reportedly implied in a speech that more interest-rate increases were coming. "If we were prepared to cut rates rapidly, to a very low level, in response to a threat but then were too timid to lessen that stimulus in a timely way when the threat had passed, we would have a bias in our monetary-policy framework," Stevens said, according to Dow Jones Newswires.

Advices About Empty Homes Insurances

2009-10-15T07:33:00.000-07:00

Where you own a house and you know that the property is going to be empty for more than a period of thirty days then you must check your current home insurance policy to see if your home is still covered. Most home insurance companies will not provide cover for houses that are empty for periods of more than thirty days, For this reason you will require the services of a specialist insurance broker or an insurance company that specialise in empty home insurance policies. An empty property insurance policy will ensure that your home has sufficient protection against a myriad of risks whilst your property is unoccupied.
Many different insurance companies provide policies for empty homes but finding the one to suit your requirements can be tricky. Not all the insurers will offer full cover on an empty home insurance policy. Some will omit theft or malicious damage from the cover. Others might not provide cover for say, a water leak within the property from a burst pipe. The important thing to remember is that you may be offered a cheap unoccupied property insurance quote, but does it provide all the cover that you may need. You certainly do not want to find out that you are NOT covered at a claim stage for something that you thought you were insured for.
Brokers and agents that specifically specialise in providing insurance cover for empty homes are probably the best port of call. Not only will they provide you with all the options but also they will provide advice and best methods in securing you unoccupied home from risks such as theft and water leaks. Also get the empty property insurance provider to email or post the full quote details to you so that you can check the terms and conditions thoroughly.
As a property owner you will be aware that having a valuable asset must be insured with the correct insurance cover in place. Try to obtain a few different quotes to assess the market. Again not all empty home insurance prices will be the same as the level of cover provided can differ considerably.

Complex Unoccupied Insurance

2009-10-15T07:27:00.000-07:00

Currently the uk insurance Market is saturated with insurers offering a range of property insurance policies ranging from a standard home insurance to complex unoccupied insurance. The temptation is to succumb to the big comparison sites and obtain premiums and terms in the hope that the results will meet your needs. An example of this practise would be a property owner obtaining a standard home insurance for an empty premises under the impression that the unoccupancy clause of 30 or 60 days will cover their property, pending tenants. This clause is designed more for the existing owner occupied policyholder who is merely away on holiday or other temporary reason. Insurers would take a dim view of a property empty at inception of the policy, especially where the property is not furnished sufficiently for normal habitable use. Of the insurance broking fraternity, there are specialist agents who have access to specific policies that cover a variety of risks including bed and breakfast concerns. Cover can also be arranged on a short term basis in some instances but ask for quotations including insurance premium tax (IPT) and any fees. Beware that short term policies do not reflect the annual premiums offered.
Also, be sure to ask the interest rate if the premium is financed for you by direct debit payments.
Active Insurance is a leading provider of landlords insurance and unoccupied home insurance for UK property owners.

Stock Markets Among Asia

2009-10-12T07:39:00.000-07:00

Most Asian stock markets ended lower Monday, with Hong Kong and Australian shares declining in thin trade as jittery investors locked in profits ahead of a string of key U.S. corporate results. Chinese stocks reversed some of their hefty gains from Friday on concerns about a deluge of share supply, while Indian and Singaporean stocks advanced following robust economic data. China's Shanghai Composite, which jumped 4.8% on Friday, slipped 0.6% to 2894.48. Hong Kong's Hang Seng Index fell 0.9% to 21299.35, Australia's S&P/ASX 200 gave up 0.3%, South Korea's Kospi fell 0.4%, while Taiwan's Taiex rose 0.4%. Japanese markets were closed for a holiday. Conita Hung, head of equities at Delta Asia Financial Group, said Hong Kong stocks were taking a breather. "I think it's just an adjustment after recent gains, I don't expect the market to turn around...If the U.S. dollar continues to fall, I expect the market to gain further on fund inflows," said Ms. Hung. In Hong Kong, shares of Aluminum Corp. of China fell 2.6% and Cnooc gave up 0.9%, shedding some of their recent gains. In afternoon trading, India's Sensex gained 2.3% and Singapore's Straits Times Index advanced 1.1%. The rise in Mumbai was helped by news that India's industrial production grew by 10.4% in August from the year-earlier month, beating estimates. Automobile and consumer stocks advanced, with Maruti Suzuki rising 2.8% and Mahindra & Mahindra up 2.8%, while cigarette maker ITC gained 3.7%. "India's industrial sector is back and back with a vengeance," HSBC's senior Asian economist Robert Prior-Wandesforde wrote in a report. "Inevitably, the strength of the release will raise concerns that the Reserve Bank of India will move rates higher when it meets on 27 October...we continue to expect the first cash reserve ratio hike to come in early 2010, with policy interest rates increasing from the April to June quarter." The Dow Jones Industrial Average futures contract reversed an early fall to rise 51 points in screen trade recently, after the DJIA added 0.8% Friday. "Markets are focused on the earnings season out of the U.S.," said Macquarie Equities adviser Brad Gordon. "This will provide the next leg of leads for all markets and investors are keenly looking out for the results." Shares of Industrial & Commercial Bank of China, China Construction Bank and Bank of China advanced in early Hong Kong trading on expectations of better third-quarter results as well as news that Central Huijin Investment, the domestic investment arm of China's sovereign wealth fund, intended to raise its stakes in them. But the stocks came off their highs in line with the broad market. ICBC fell 0.3%, CCB dropped 0.5% and Bank of China shed 0.7% in Hong Kong. Shanghai-listed shares of ICBC rose 0.4%, while CCB ended flat bank of China slipped 0.3%. In Sydney, shares of National Australia Bank dropped 1.9%, after Credit Suisse labeled banks as expensive compared with industrial stocks. Shares of Crown jumped 6.1% after a large parcel of stock was purchased at a premium late Friday, prompting speculation that billionaire part-owner James Packer could be building his stake in the casino company ahead of a potential privatization. Several technology stocks were higher in Taiwan and South Korea after a positive pre-weekend showing by their U.S. peers. Hon Hai Precision Industry rose 0.8% and Inotera Memories gained 6.9% in Taipei, while Hynix Semiconductor rose 1.8% in Seoul, after IBM added 3.0% and Intel climbed 1.5% Friday. Korean steelmakers and refiners dragged down the Seoul market on worries over their third quarter performance. SK Energy slumped 9.9%, Posco dropped 0.7% and Hyundai Steel lost 1%. In foreign-exchange markets the dollar was mixed against major currencies. It was recently buying 90.28 yen from 89.83 yen in late New York trade on Friday, while the euro was at $1.4758 from $1.4734 and 133.23 from 132.34 yen. The Singapore dollar declined against the U.S. dollar following the Monetary Authority of Singapore's decision to keep its neutral stance on the local currency policy despite raising its economic outlook for the year. The greenback was recently buying 1.3977 Singaporean dollars, from S$1.3950 just before the statement was released. Spot gold was at $1,056.40 per troy ounce, up $7.50 from its New York close. After the yellow metal lost some ground on Friday, "long liquidation and profit-taking could extend precious metals' losses in the near term," said HSBC's James Steel. But he added that the bullion rally "still appears essentially intact." Crude oil futures for November were recently up $1.11 at $72.88 per barrel on Globex.

International Leaders to Keep Rescue aid Flowing

2009-10-12T07:35:00.001-07:00

Latvia's coalition government Monday agreed to find spending cuts required by international lenders to keep rescue aid flowing to the crisis-struck Baltic country, a spokeswoman for the state chancellery said. In an extraordinary cabinet meeting, ministers reached "a conceptual agreement" for fiscal 2010 cuts of 500 million Latvian lati ($1.04 billion) by raising revenues by LVL180 million and cutting expenditure by LVL320 million, Zanda Sadre told Dow Jones Newswires. "It is obvious that Latvia will fulfill its obligations to international lenders," Finance Minister Einars Repse told reporters after the meeting, his press spokeswoman Diana Krampe confirmed. Further details, such as possible revenue-raising tax increases and areas of spending reductions, would be discussed at a yet-to-be-scheduled meeting later this week, Sadre said. "The ministry of finance will coordinate this government decision and corresponding additional fiscal consolidation measures with the International Monetary Fund," she added. Latvia had said previously that it would meet its 2010 budget deficit target of 8.5% of gross domestic product with LVL325 million ($676 million) in cuts - LVL225 million of which would come from spending reductions and LVL100 million through tax increases. The cabinet's decision to rein in spending further follows strong words of warning last week from European Commissioner for Economic and Monetary Affairs Joaquin Almunia and from Swedish Finance Minister Anders Borg that additional payments on the country's EUR7.5 billion bailout package will be held back if spending plans aren't further curtailed. Almunia is set to visit Riga on Tuesday. The E.U. and Sweden are key contributors to an IMF-led emergency loan put together late last year as Latvia slipped into economic crisis. The Baltic state's economy is expected to contract by a drastic 18% this year. Borg had said Latvia's planned cuts of LVL325 million for 2010 fell well short of its commitment under rescue loan terms, revised this summer, to lower next year's spending by LVL500 million. Hard hit by the global financial crisis, Latvia has already been forced by lenders to take harsh austerity measures in 2009's budget, slashing LVL500 million in cuts that pushed public sector wages sharply lower. Agreeing on more places to cut or ways to increase revenue for next year - an election year - has proven difficult for Latvia's five-party governing coalition, led by Prime Minister Valdis Dombrovskis. Dombrovskis has warned that further belt-tightening will impair the country's economic recovery effort, but vowed last week to do what's necessary to keep rescue program on track.

AUD/USD counted amongst high

2009-10-12T07:32:00.000-07:00

The Aussie has set back its previous losses against the Greenback during the European session after bouncing at 0.8980, intra-day low, to break MA55 hourly chart at 0.9035 and reach daily high level at 0.9075. Currently the pair is trading around 0.9060/70, recovering its previous losses and reaching 0.30% above today's opening price at 0.9040.According to TJ Marta, analyst at The Overnight Express, the pair is Consolidating: “AUD/USD (0.9065) is up slightly overnight, holding near new high since Aug ’08 established Thursday. Technical resistance for AUD/USD exists at 0.9090 (Oct 8 high) and 0.9275 (May ’08). Support lies at 0.8570 (Oct 2 low), 0.8545 (Sep 14 low) and 0.8478 (Aug high). AUD/USD has correlated most strongly with equities (S&P 500, positive) and commodities (CRB, positive). The correlation with gold (positive) is slipping.”

USD/JPY back to Old gains

2009-10-12T07:27:00.000-07:00

The Dollar has been unable to break 90.35/45 resistance against the Yen during the European session and USD/JPY has fallen around 65 pips from 90.45, 2-week high at 90.45, to trade below 90.00, close to 89.80.Currently the pair is trading 0.05% higher than opening price action at 89.70 to the current 89.75/85.Valeria Bednarik, FXstreet.com collaborator, comments that pair seem to be back on the previous downtrend channel: “Pair failure to break above 90.35/45 strong resistance area, and quickly come back to 90.00, completing a pullback to the daily descendant trend line pair attempt to break earlier today. Pair needs to close daily candle above 90.10 to confirm such break and had chances to extend the upside. With hourly indicators turning lower, does not seems likely for next sessions. Clearly above 90.70 area, not seen also today, will confirm some upside continuation.”Bednarik provides us with her levels: “Support levels: 89.80 89.60 89.20. Resistance levels: 90.10 90.40 90.80”We can remain that Nicolle Elliot, Senior Technical Analyst at Mizuho Corporate Bank, commented this morning on her expectations with a lower pair on the back of a Dollar oversold: “Having realised we were not going to break lower, dollar/yen is now testing trendline resistance. Bearish momentum has almost disappeared but then the US dollar is no longer oversold. Prices are likely to hold above 89.00 this week, with rallies probably stalling around 91.00/91.60. These are seen as selling opportunities for another downside re-test later this year.”
FXStreet.require('registerajaxCAGTabulat.js');

Bike Sales Increase

2009-10-09T20:00:00.000-07:00

The Association of Cycle Traders in the UK reports that sales at its members increased by 3.7% in August 2009. The association also states that the financial crisis isn’t harming the UK specialist cycle trade at all; in fact it is contributing to further increases in sales. This holds big promises for UK’s Cycle Show 2009 which will open its doors next Thursday for trade visitors.
During the first eight months of 2009 year to date sales growth is 4.6% compared to the same period of 2008, says the Association of Cycle Traders. And also results for September 2009 are looking promising, as it states on http://cycles.actsmart.biz: “Whether its pre Cycle Show fever or general market bravado, everyone appears to be talking up September's performance and the weather was certainly conducive to a good cycling month.”
UK’s Cycle Show 2009 will open its doors next Thursday, October 8 and is on this day only open for trade and press. According to the organizers the 2009 Cycle Show has more exhibitors, more talks from industry experts and more previews of 2010’s cycling trends. 2008 was a record year for the Cycle Show with 3,409 trade visitors out of a total of well over 20,000 visitors. UK’s Cycle Show takes place at Earls Court, London and offers next to a wide variety of exhibitors, test tracks, seated arena, BMX street course, a showcase arena and a cycling retail zone. The show is from 9th-11th October open to the public.

Web Videos Business

2009-10-09T19:54:00.000-07:00

Whereas the YouTube paradigm is amateurs doing interesting things with cameras, the newspapers’ Web videos are professional journalists operating like amateurs in the best old-fashioned sense. One of the Times’s new Web-video stars, David Carr (as the jolly-noir, movie-tasked Carpetbagger), recalls that when the Times’ video operation started fifteen months ago, his bosses said, “ ‘Let’s give it a whirl.’ Which is the exact opposite of the Times’ usual DNA. ‘Let’s give it a whirl’—that’s not something that comes up a lot.”At their best, the newspapers’ online videos are, minute for minute, superior to TV news.
As I write, CNN is airing a live press conference by Anna Nicole Smith’s lawyer and a loop of Smith vamping, while a significant breaking news story—the U.S. claim that Muqtada al-Sadr has left Iraq for Iran—is running in tiny type across the bottom of the screen. Given the dumb-and-dumber choices, I can easily imagine newspapers’ Web-video portals becoming the TV-journalism destinations of choice for smart people—that is, in the 21st century, the dominant nineteenth-century journalistic institution, newspapers, might beat the dominant twentieth-century institution, TV, at the premium part of its own game.
The medium is too new and unsettled to have anything like a best-practices rule book. Everyone is making it up as they go along. And a few of the on-the-fly inventions are awesome. The most attention-getting MSM Web video so far was the very meta one posted last month by the Times about a Washington Post columnist—the slickly produced, thirteen-minute-long “Hi—I’m Art Buchwald and I just died” obituary.
The Times’ and the Post’s strikingly different Web-video paths are illustrative of this flux moment. At the Times, the strategy is to merge operations with the regular newsroom, and convert as many of its journalists as possible to part-time videography. But the Post and washingtonpost.com remain distinct entities—a sore point for some people on the Web side. The Times highlights its several fresh daily videos prominently on the home page; the Post hides them beneath a tiny, generic “Photos & Videos” button.
The quality, of course, is all over the map. An amateur spirit is exciting, but amateurism in action is … not necessarily so. I get no added value from watching A. O. Scott and Ben Brantley deliver abridged versions of their written-for-print reviews. Washingtonpost.com’s extemporaneous version, a nervous editor interviewing wooden film critics, could be a public-access cable clip. Often, the Times reporters’ videos are like tentative, so-so versions of TV-news spots, unremarkable sound bites interlarded with scripted blah-blah boilerplate.
The lessons seem obvious: Don’t do Web video if you don’t have anything interesting to show, and don’t compete with TV unless you can do something they can’t or won’t. In other words, use the medium.

Surprise optimism in the Bank of Canada

2009-10-09T19:49:00.000-07:00

The Canadian dollar rose to new 12-month-plus highs Friday, as the currency's recent momentum was augmented by unexpectedly strong September employment figures and surprise optimism in the Bank of Canada's most recent business outlook survey. The U.S. dollar was trading at C$1.0428 at 3:39 p.m. EDT (1939 GMT), from C$1.0439 at 8:00 a.m. EDT (1200 GMT) and C$1.0510 late Thursday. The Canadian dollar rallied to new 2009 highs in the immediate wake of early news that the Canadian economy created a net total of 30,000 jobs in September, considerably stronger than the 5,000 expected by analysts and modestly better than the 27,500 jobs gained in August. The nation's unemployment rate also moved down to 8.4% from 8.7% in August. The currency then extended its gains to the brink of the C$1.0400 figure following the release of the central bank's outlook survey for the third quarter, which revealed firms facing easier credit conditions for the first time in two years and expressing much greater optimism regarding future sales prospects. The Canadian dollar's intraday high at C$1.0411 Friday was its strongest level since Sept. 29 of last year, according to EBS via CQG. The currency also vastly outperformed most other widely-traded currencies Friday as the U.S. dollar staged a week-ending rally, a divergence in performance that contributes to a generally optimistic tone for the Canadian dollar into next week and the potential for follow-on gains closer to the parity level with the U.S. dollar. "People are buying riskier assets, the high-yielding currencies are attractive, the carry trade is back on, and the U.S. dollar is being used as a funding currency," said chief currency strategist Shaun Osborne of TD Securities in Toronto. "It all points, I think, to quite a bit more outperformance for the Canadian dollar, even in the very short-term." Canadian financial markets will be closed Monday for Canada's Thanksgiving Day holiday. These are the exchange rates at 3:39 p.m. EDT (1939 GMT), 8:00 a.m. EDT (1200 GMT), and late Thursday. USD/CAD 1.0428 1.0439 1.0510
EUR/CAD 1.5351 1.5404 1.5551
CAD/JPY 86.15 85.01 84.18

Brazilian real gaining High in 13-months

2009-10-09T19:46:00.001-07:00

The Brazilian real closed a tad stronger to hit a 13-month high against the dollar Friday, despite the greenback's strengthening against other major currencies. The real closed at BRL1.736 to the dollar in trading on the Brazilian Mercantile and Futures Exchange, or BM&F, stronger than Thursday's close at BRL1.739. The real benefited from continuing foreign investor confidence in Brazil, which continues to invest strongly in local equities as the economic recovery firms. The Brazilian Central Bank intervened around midday to buy dollars on the spot market at BRL1.7395 to reduce liquidity. Brazil's government has plans to set up a new sovereign fund to invest dollars bought on the spot market, local business daily Valor Economico reported Friday. The sovereign fund would be invested in Brazilian treasury bonds, according to the report. The Finance Ministry had no immediate comment on the report. The central bank has been buying dollars at regular spot market auctions since May in order soak up excess investment dollars on the local market. The dollars go into reserves, which totaled $227 billion last Wednesday. Meanwhile, interest-rate futures contracts were mostly higher Friday as investors on the BM&F were slightly skittish. The most actively traded contract, that of January 2011, closed at 10.47%, slightly higher than Thursday's close at 10.45%. The contracts reflect investor expectations about annualized interest rates at future dates. Brazil's financial markets will be closed Monday for a public holiday and will reopen Tuesday.

EUR versus USD

2009-10-09T19:42:00.000-07:00

FXstreet.com (Córdoba) – The Euro has recovered part of previous losses against the Dollar and is holding above 1.4700. EUR/USD fell earlier to 1.4671, posting a fresh intra-day low. Form there the pair started to recover and the upside found resistance at 1.4720. EUR/USD is still moving with a downside bias for the session. Despite being traded 0.57% below today’s opening price, the Euro is consolidating a weekly gain of more than a hundred pips. The ecPulse.com analysis team affirms: “So far, the green Benjamin continues on strengthening slightly against the majors; the euro and the royal pound, after that the Fed Chairman; Bernanke, proclaimed that interest rates will be raised once that the economy of the U.S shows strong signs of a recovery. As a result, the euro-dollar is plunging slightly and may plummet further to the downside according to the one-hour stochastic oscillator.”

Canada Strggles for Lots of New Net Jobs

2009-10-09T19:38:00.000-07:00

Canada creates 31,000 net new jobs; 92,000 of them full time, loses 61,000 part-time ; exponentially stronger than expected US trade deficit narrows to $30.7 bln in August from 31.9 bln in July; better than expected Canada posts C$2 bln trade deficit in August Japanese PM Hatoyama: Employment situation to worsen; more measures needed BOC autumn business survey upbeat Canada's Harper: Still concerned about US economy Elliot Wave's Prechter: Dollar has bottomed; will rally next year or more; Equity market to fall substantially below March lows S&P 500 rises 0.6% to 1071.50 US bond yields rise sharply 10-year yield 3.38% Gold slightly lower at $1049; oil rises 0.6% to 72.27 The Canadian dollar was the star of the show today, extending its rally versus the dollar. The greenback fell as low as 1.0411 after shockingly strong Canadian employment data and an upbeat BOC business survey.We close at 1.0420. Most of the other majors gave some ground against the dollar, particularly the pound. Cable broke to the downside today after rejecting key resistance at 1.6120 just yesterday. Heavy selling by institutional investors and disappointment over Cameron's speech breaking no new ground at the Tory conference yesterday spilled over into today.We slipped as low as 1.5827 and close around 1.5840. 1.5768 is key near-term support. EUR/USD range-traded in choppy fashion around 1.4750 in early New York before breaing to the downside late in the European session. Chinese bids at 1.4700 were filled in on the way to 1.4674 lows. China was spotted buying again near the lows and prices lifted to 1.4720 late, which is now a resistance level. AUD/USD fell with EUR/USD with some pre-weekend profit-taking the prime driver. Chinese bids helped slow the decline in the 0.9020/25 area. 90.13 was the low and we close at 0.9040. Great weekend everyone!

Argentina Gains & Takes Profit Heavily

2009-10-09T19:34:00.000-07:00

Argentine bonds ended a week full of heavy gains and heavy profit-taking, closing mixed Friday amid anticipation of a deal with the International Monetary Fund to resume Article IV reviews. Meanwhile, stocks hit a new 2009 high on the back of positive earnings sentiment for U.S. companies on Wall Street. Argentina's Merval Index jumped 0.92% to close at 2,169.04 points. Banco Macro (BMA, BMA.BA) led the charge among the Merval components, rising 4.29% to ARS9.97 ($2.60), while Tenaris (TS, TEN.MI) jumped 3.35% to ARS3.35. ($0.87). Bonds lacked direction Friday and trade was muted as investors hesitated to take a position ahead of the long weekend and the lack of clarity regarding agreement with the IMF, Research for Traders said in a market note. Markets will be closed Monday for the Columbus Day holiday. The benchmark peso-denominated bond slipped 0.05% in price terms to ARS100, to yield 12.11%. The dollar-denominated Boden 2012 added 0.48% in price terms to ARS314.50, to yield 12.92%. A deal with the IMF would be a key first step for Argentina to regain access to international credit markets shut since the 2001 sovereign-debt default. The country appears ready to allow the review of its economy and policies under the Article IV consultations, which are carried out regularly on every member of the IMF. Argentina needs to sign up to an economic program with the IMF if it wants to reschedule $6.7 billion in defaulted debt owed to the Paris Club group of nations. The country is also trying to settle the conflict with the holdouts who refused to accept terms of the 2005 swap and hold about $20 billion in defaulted bonds. Argentina's recent indication that it might seek to resolve outstanding debt issues and return to the international capital markets could eventually improve the outlook on its B3 government bond rating, Moody's Investors Service said Thursday. Argentina's government bond rating is one of the lowest of any country rated by Moody's due to the hangover from the default and unconventional economic policies. "While no single factor will, by itself, lead to an upgrade, resolution of these long-standing issues will go a long way towards reducing current credit concerns to the extent that they are reflective of an enduring effort to make policies more predictable," Moody's said. The apparent shift to more market-friendly policies has already fueled a sharp rebound in bonds. "There is still a great interest among savers in Argentine bonds, as demonstrated by the currency inflow to the country," Research for Traders said. "The medium-term sovereign bond outlook remains positive." The peso rose to 3.8300 to the dollar, from 3.8350. The dollar came under pressure all week as investors sought pesos to purchase government bonds.

Friday,stocks fall for Columbia

2009-10-09T19:24:00.000-07:00

Colombia's stocks fell Friday as nervous investors are pocketing gains as the index approaches record highs. The benchmark IGBC stock index fell 1% to 11,181.44 points. The index had gained 6.2% in the month to Thursday. "Investors are nervous because the stock index has gained more than 40% so far this year, while the economic situation is still very weak," said Jorge Zuniga, a market analyst with local brokerage Asesores en Valores. The economy contracted 0.5% in the first half of this year compared with the same period in 2008, but some analysts say it has likely touched bottom and is heading for a timid recovery in the closing months of 2009. The most-traded shares Friday were the preferred shares of Bancolombia SA (CIB) as they fell 2.1% to 20,060 ($10.86). The price fell as a result of the arbitrage with Bancolombia's New York-listed shares, which lost value in peso terms as the Colombian currency has appreciated strongly in the past days. The peso appreciated to COP1,847 to the dollar on Friday from COP1,858 on Thursday. The peso hit its strongest level since Aug. 12, 2008. The yield on the benchmark peso-denominated government bond maturing in 2020 rose to 8.769%, from 8.764% on Thursday.

Further Decline Probable for AUD

2009-10-04T20:07:00.000-07:00

The Australian dollar was the weakest of the major currencies last week, and a bearish engulfing candle on the daily AUDUSD charts on October 1 suggests further declines could be in store. Since the Australian dollar still tends to move with other risky assets, traders should look for any fallout from the release of the G7 statement over the weekend. Though the statements don’t usually signal any sort of groundbreaking new biases, there are lingering concerns that there may be a more pronounced focus on currencies, and more specifically, US dollar weakness. Such a move would likely lead the US dollar higher, and thus, AUDUSD lower, on speculation of a coordinated intervention effort. Later in the week, the Australian dollar is going to encounter two of its most market-moving reports: a rate decision from the Reserve Bank of Australia and the net employment change.
On Tuesday, the Reserve Bank of Australia (RBA) is anticipated to leave their cash rate target unchanged for the sixth straight month at 3.00 percent, and the Australian dollar may only respond to a change in the bias of RBA Governor Glenn Stevens’ monetary policy statement. As it stands, Credit Suisse Overnight Index Swaps (OIS) are pricing in a 22 percent chance of a 25 basis point rate hike during this upcoming meeting, and 175 basis points worth of hikes over the next 12 months, which is generally in line with what we’ve seen since early August. It was actually in early July when the RBA’s bias shifted from dovish to neutral, as Stevens removed a line from his statement noting that “scope remains for some further easing of monetary policy.” As long as we see these RBA statements continue to provide progressively optimistic outlooks, the markets are likely to remain in favor of large rate increases over the next year. However, if the RBA starts to signal a more cautious tone, this sentiment could shift very quickly and lead the Australian dollar lower.
On Wednesday, the net employment change for the nation is anticipated to fall for a second straight month, this time by 10,000. As a result, the Australian unemployment rate is projected to edge up to a 6-year high of 6.0 percent from 5.8 percent, but this isn’t so bad when compared with other regions like the US, the UK, and the Euro-zone where unemployment has reached 26-year, 12-year, and 10-year highs. Regardless, the net employment change is similar to the US non-farm payrolls report in that the results are notoriously difficult to predict and thus, prone to providing “surprising” news that can trigger volatile moves in the Australian dollar.

Canada is Deeply Invested

2009-10-04T20:02:00.000-07:00

This past week was an economically quiet one for the Canadian dollar; but the currency was nonetheless experiencing significant price action. In the end, the loonie was able to produce gains against all its major counterparts – but they weren’t easily won. Volatility was extraordinary; but the abnormal level of activity wasn’t the Canadian dollar’s doing. Instead, it was taking its signals from aggressive cross-market winds in risk appetite that drove everything from the US dollar to crude oil. This same fundamental relationship will likely hold into the coming week; but we may also see the key economic indicators produce their own influence on the crosses.Before we delve into the possible drivers for price action; we first have to assess where the loonie stands in terms of market position. The benchmark USDCAD sums it up quite nicely. This pair is bridled to a wedge formation that currently holds its boundaries at 1.10 and 1.06. This congestion offers significant buffer room; but it cannot hold for long. Therefore, when we are considering the pace and direction of the currency next week; we will likely see chop with sharp and short-lived swings – that is until a meaningful breakout comes along. The most likely catalyst for spurring a new trend is a definitive shift in risk trends. However, unlike its US or Australian equivalent, the Canadian dollar sits in the middle of the risk spectrum. So, pairs like CADJPY and AUDCAD will take their guidance from the other side of the market. For USDCAD, it is a different story. Though the dollar is considered a funding currency with deep safe haven applications, the close ties between US and Canada smooth out the otherwise standout driver. To produce a genuine breakout for this economically entrenched major, we will need a definitive trend in risk appetite – like the surge in optimism through July that drove the major down nearly 1,000 points in less than a month. Fundamentals and sentiment have been long been out of whack; and the patterns that we have seen develop in key currencies, equities, bond funds and other market areas may signal that we may find resolution soon.Despite how the underlying current of risk appetite develops over the days and weeks ahead; we should also keep our eye on key economic data to cross the wires. This is important not only for short-term bursts of volatility (a good one of these at the extreme of a range could quickly change the market’s future) but for the outlook for growth and interest rates as well as the currency’s ultimate standing in the risk spectrum. There are more than a few significant economic releases due for release over the coming week; but topping the docket is Friday’s labor data. Net changes from month to month have been very choppy but the 8.7 percent level of unemployment (the highest since January of 1998) smoothes things out. Like it is with most economies, domestic consumption is vital to Canada. However, the outlook for employment isn’t bright. The OECD predicts the nation’s jobless rate could reach 9.8 percent in late 2009. That would be a severe strain for a recovery that is expected to pace the industrialized world out of its recession with 2.1 percent growth next year (according to the IMF’s World Economic Report). Given the considerable influence consumer spending will have, expect sensitivity to significant surprises in the jobs numbers. Should a domestic recovery struggle; there may still be hope through trade. However, where Australia has the strength of a strong Asian recovery to fall back on, Canada is deeply invested in the equally stagnant US. For this reason, we will look for any official statements as to a strong US dollar policy after the G7 meeting as talking down the exchange rate could provide a much appreciated boost to shipments. - JK

No risk for British Pound Till Thursday

2009-10-04T20:01:00.000-07:00

The British pound was one of the strongest major currencies last week, losing only against the Canadian dollar and ending essentially unchanged versus the US dollar. That said, the moves may have been more of a relief rally than anything else, as the British pound has depreciated 2 percent against the greenback, 4.3 percent against the euro, and almost 5 percent against the Japanese yen over the past month. Indeed, a handful of fundamental reports from the nation have been slightly better than expected, such as the 0.9 percent rise in Nationwide house prices, but more often than not, they are countered by contradicting data, such as the drop in the purchasing managers’ index (PMI) for the construction sector to 46.7 in September from 47.7.
One area that has seen significant improvement recently is the services sector. PMI for the UK’s services sector has consistently held above 50 since May, indicating an expansion in activity, and data due to be released on Monday is likely to show a continuation of the trend in September as PMI is projected to rise to a two-year high of 54.5 from 54.1. However, with the unemployment rate in the UK also steadily rising, there are some downside risks for the sector, and consumption as a whole.
The main event risk for the British pound will not come up until Thursday, though, when the Bank of England (BOE) will announce their latest rate decision. The BOE is anticipated to leave their Cash Rate target unchanged at 0.50 percent, but this won’t even be the market-moving part of the announcement. Instead, traders will be looking toward the BOE’s policy statement. This has consistently been the prime “news event” of recent rate decisions. Last month, the BOE indicated a neutral stance as they simply stated they would continue their £175 billion quantitative easing program, and this ultimately led the British pound to rally against the US dollar and euro immediately. A repeat of this statement is likely to trigger a similar reaction from the British pound, but on the other hand, any indication that the program may need to be expanded down the line would weigh very heavily on the currency. That said, such a scenario is highly unlikely. – TB

Japanese Yen likely to set the currency’s trajectory.

2009-10-04T19:54:00.000-07:00

The Japanese Yen will begin the week ahead at a major trend-defining juncture, with the behavior of risk appetite likely to set the currency’s trajectory. Global equity markets slumped for the second consecutive week amid increasingly mixed economic data capped by September’s disappointing US jobs report. We have long said that the apparent onset of a rebound witnessed over recent months owed mostly to extraordinary expansionary policy measures (both fiscal and monetary) around the world as well as the inventory restocking cycle, arguing that stocks were overvalued at the highest levels relative to earnings since 2003 in a year when global economic growth is set to shrink in real terms for the first time in the post-WWII period. If we are indeed at the cusp of a sobering correction lower that leads stocks lower, the spectrum of risk-correlated investments (commodities, carry trades) are likely to follow, with the Japanese unit rising as traders unwind short-Yen yield-seeking positions. Such an outcome would be tremendously significant from a technical perspective with prices testing major resistance established in January as the worst of the panic that gripped capital markets late last year began to recede. A break below this juncture would open the door for the currency to rise to levels unseen in well over a decade, threatening to send USDJPY below the 80.00 mark for the first time since 1995.
The economic calendar is fairly tame compared to last week’s overload of significant releases. The preliminary estimate of Augusts’ Leading Index are expected to show the metric rose for the sixth consecutive month, pointing to continued moderation in economic growth in the coming 6-9 months from the lows registered in the first quarter. On balance, much of this has already been priced into the exchange rate and is unlikely to produce a significant response from the market, with traders much more sensitive to negative news after seven months of buoyant confidence. The Current Account surplus is set to narrow to 1148.0 billion yen in August from 1265.6 billion in the previous month as exports continue to tumble on lackluster foreign demand. Indeed, last week’s Tankan survey of large manufacturers (who primarily cater to the overseas buyers) revealed firms expect sales to fall -10.5% through the 2009 fiscal year (12 months ending April 2010), more than doubling the drop in FY2008.

Euro Struggles

2009-10-04T19:51:00.000-07:00

There are more than a few concerns for fundamental euro traders in the days ahead. Where just a few months ago, the single currency was considered among the best speculatively positioned economies given its optimistic outlook for growth and hawkish bearings; we now see the euro struggling to find its place in a broad spectrum of relative risk and safety. In the normal scale of yield and risk, the euro stands just in the middle of the spectrum which leaves it to be jostled by speculative winds that find greater response from high yield (Aussie dollar) and struggling funding currencies (the US dollar). However, speculation is ever active; and some long-term considerations are starting to come to term. Among the most pressing concerns is the pace Euro Zone’s recover (especially in comparisons to that of the US) and the lingering potential for financial instability. Just this past week, the EU completed a five-month long stress test of its financial markets; and according to policy officials, the results are promising. ECB President Jean-Claude Trichet required the evaluation of the banking system be put up against an “adverse” scenario. In the end, none of those institutions surveyed were expected to see their tier one capital ratios fall below 6 percent (the Basel minimum is 4 percent) even in the worst of conditions. However, skepticism is likely to develop just as surely as it did after the US test. It is reasonable to question why there were only 22 banks for such a broad region and what the methodology they measure risk; but the real concern Is in the 400 billion euros of additional losses the market could sustain under the most extreme conditions. We have already seen 489 billion n losses so far; but other outfits have suggested the region could see far more ahead with the IMF suggesting European banks have disclosed only 40 percent of their losses.In the near-term, the outlook for growth and interest rates will take center stage. The World Economic Outlook has upgraded its outlook for expansion for the union with 0.3 percent expansion expected in 2010 and a more restrained (than previously expected) 4.2 percent contraction for the currency year. That a sluggish pace when compared to the 1.3 percent growth expected from the US or 2.7 percent positive turn for Japan. These are forecasts that are certainly weighing on the euro now; but data can quickly eat into this discounted scenario. It is worth mentioning that the timely, September PMI composite indicator has reported expansion for two months (after deteriorating since June of 2008). Maintaining the pace of production after inventories build up and facilitating consumer spending will be the keys to sustainable growth. Yet, officials are also looking for a crutch for recovery in a unified “strong dollar” position that could bolster export revenue. In a recent address, Trichet stated blatantly that a healthy greenback was “extremely important.” This can be interpreted indirectly that he is very concerned about the high level of his own currency.Where growth goes, interest rates will follow; but at this pace, it seems like the hawkish turn from the ECB will be far down the line. Yet, with the market being told that the benchmark will be held well into next year, we have the makings for speculation to gauge the likelihood that we will in fact see a move sooner. Overnight index swaps measured by Credit Suisse price in no chance of a rate hike on Thursday – not a surprise. At the same time, there is a total of 82.8 basis points of firming priced in over the coming year. With the central bank already announcing it was culling its unlimited fund auctions, we already have the first steps towards hikes. This is a policy body that won’t be able to telegraph its intentions to hike with a preceding trimming of abnormal monetary stimulus (like the UK cutting its bond fund); but they will try to be as transparent as possible. And, that is why we will have to absorb everything said after this week’s rate decision. – JK

US versus Euro

2009-10-04T19:48:00.000-07:00

The US Dollar finished the week higher against the Euro and other key counterparts, but a sharply disappointing Nonfarm Payrolls report nearly derailed the nascent Greenback recovery through Friday’s close. The trade-weighted US Dollar Index hit fresh monthly highs near 77.50 just ahead of the release. Immediate declines in the US S&P 500 initially sent the dollar higher, but markets clearly expressed their displeasure with the worse-than-expected payrolls release and sold USD through in subsequent trading. Sudden USD losses complicate our otherwise bullish near-term Dollar forecast, but we continue to forecast further Greenback recovery through near-term trade. Comparatively limited event risk in the days ahead has left volatility expectations lower, but flare-ups in financial market tensions could nonetheless force major moves across USD currency pairs. Earlier in the week we argued that the US Dollar set an important bottom against the Euro on fairly clear sentiment extremes. US CFTC Commitment of Traders data shows that Non-Commercial traders—a group mostly comprised of hedge funds and other large speculators—remained the most net-long the Euro/US Dollar since it traded near 1.6000 in early 2008. Though sentiment can and does remain extreme for extended periods of time, early signs of EURUSD reversal support our calls for a broader US Dollar reversal. Strong correlations between the US Dollar and key risky asset classes nonetheless leave the currency at the throes of the recent upheaval in the S&P 500. It will subsequently be critical to watch for any signs that the recent equity market tumble is the start of a larger decline. US Dollar traders should almost certainly keep an eye out for abrupt shifts in risk sentiment, but a relatively empty US economic calendar leaves limited scope for major day-to-day shifts. The notable exception is Monday’s US ISM Non-Manufacturing report, which will shed further light on the state of the domestic services industry. According to 2008 estimates, the Services industry accounts for nearly 80 percent of US GDP. Suffice it to say, any noteworthy surprises in the highly-anticipated report could force major moves in the US Dollar and broader financial markets. Indeed, the ISM Non-Manufacturing survey tends to be one of the most market-moving events on release. Outside of the ISM report, forex traders should keep a look out for a number of important global central bank interest rate decisions. Uncertainty surrounding Australian, British, and European central bank announcements may make for an interesting run of days across key forex pairs. It is near-impossible to predict how markets to react to any of these important announcements, and as such traders should be sure to control risk on open US Dollar positions. We have seen early signs of a sustained US Dollar reversal. Yet very recent price action has shown markets were not yet willing to push the Greenback materially higher versus key counterparts. The coming week may prove especially important to overall trends in major US Dollar pairs. – DR

What is Forex Trader News??

2009-10-04T19:45:00.000-07:00

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Rise in Prices of Housing

2009-10-04T19:40:00.001-07:00

Paolo Pellegrini has a nose for trouble. He saw it in rising housing prices in early 2006, when he cranked through decades of home price data and concluded the bubble was poised to burst. Pellegrini then helped engineer a massive bet against subprime mortgages that catapulted Paulson & Co. hedge funds to 2007 gains of as much as 590 percent -- and firmwide profits of more than $3.5 billion. Pellegrini, 52, pocketed tens of millions of dollars, allowing him to buy a couple of what he laughingly calls “entry- level supercars”: a silver Ferrari F430 with a base price of $168,000 and a black $109,000 Audi R8. By April 2008, the Rome native smelled danger again. Nearly six months before the collapse of Lehman Brothers Holdings Inc. and the bailout of American International Group Inc., he and his colleagues saw that the unfolding crisis would trigger U.S. government intervention: bank rescues, a stimulus plan and yawning deficits. That move would eventually undercut the dollar and U.S. stocks, unleashing market havoc, Pellegrini reasoned. “The losses would be massive,” he says. “I knew the policy response would be commensurate.” So, after wowing the investment world with Paulson & Co.’s subprime bet, Pellegrini is proving he is no one-hit wonder. While still working for Paulson, Pellegrini plowed a chunk of his personal winnings from the subprime bet into PSQR LLC, a private fund he created to protect his newfound riches. He began shorting exchange-traded funds that held financial stocks and, later, those that track the Standard & Poor’s 500 Index. 52% Gain Then, at the end of 2008, as panicked investors stampeded into Treasuries, sending the yield on the 30-year bond down 184 basis points to 2.52 percent, Pellegrini covered his ETF shorts and began betting against U.S. Treasury futures with underlying maturities of 15 to 30 years. (A basis point is 0.01 percentage point.) PSQR’s gain from April 15, 2008, through December was 52.4 percent, according to a fund document. In December 2008, Pellegrini quit Paulson & Co. to start his own firm, PSQR Management LLC, taking his new fund’s white- hot record with him. His firm is staked with $100 million of his personal money. He plans to market it to outsiders in 2010. “There will be a tremendous amount of interest in his new fund,” says Sol Waksman, founder of BarclayHedge Ltd., a Fairfield, Iowa-based firm that tracks and invests in hedge funds. Pellegrini, a former member of Italy’s Radical Party with an engineering degree and a Harvard Business School MBA, is pursuing a global macro strategy, wagering on fundamental world economic trends. Macro Fund Like such storied macro investors as Julian Robertson and George Soros before him, he’s buying and shorting futures on government bonds, stock indexes and commodities like oil, as well as spot and forward foreign exchange contracts. At Paulson & Co., his brief was narrower; he co-managed two funds that bought credit protection on mortgage-backed bonds. Since Pellegrini quit Paulson, his career has continued to sizzle. In January, Treasury prices plunged, with 30-year yields rising 92 basis points. PSQR’s short position generated a return of more than 65 percent that month, resulting in a year-to-date gain through July of 80 percent, according to fund documents. Friends, as well as former colleagues and investors, say Pellegrini has a rare ability to apply rigorous analysis to specific financial markets, as he did with the subprime trade. “Paolo is a deep thinker,” says William Michaelcheck, founder and chairman of Mariner Investment Group, a New York hedge fund firm where Pellegrini worked as an analyst in 2003 and 2004. “He was able to synthesize the situation into a hedge fund position. It’s the iconoclast’s ability to see things other people can’t see.” Sober Prognosis Today, Pellegrini’s economic outlook for the next 5 to 10 years is a sobering one. He says the U.S. economy will groan under the weight of budget deficits, increased regulation and household debt. Europe will perform only slightly better, and Asian economic growth will outstrip that of the developed world. “There are going to be huge shifts in wealth around the globe,” he says. “I want to invest in that.” Pellegrini says the U.S. stock market is likely to generate negative returns when adjusted for inflation. And the U.S. dollar will flag as an unrestrained Federal Reserve dispenses more money. “In the U.S., there is limited interest among those in power in the stability of the dollar,” he says. Buying Oil Futures Meanwhile, the price of scarce commodities such as oil will surge as global competition for them heats up, Pellegrini says. Accordingly, he expects U.S. Treasuries to fall in price in the long term, and he’s buying oil futures. In September, he owned Norwegian kroner and said he believed the Australian dollar would benefit from that resource-rich country’s geographic proximity to Asia. When asked why he left Paulson & Co., Pellegrini takes a swig from a bottle of Volvic-brand spring water before answering that Paulson wasn’t interested in having him manage a macro fund. Beyond that, he says, he wanted to run his own show. “I’m an engineer,” he says. “As interested as I am in making investment decisions, I’m equally interested in designing and building an organization.” Pellegrini, who is 6 feet 2 inches (188 centimeters) tall and weighs 190 pounds (86 kilograms), is a former jazz disc jockey with some unconventional views on how to fix global finance. He says, for instance, that the U.S. government put bank interests ahead of the common good in the bailout. He sees no reason why Americans should deposit their savings in private banks, since the government already guarantees those deposits. Banks and Risk The public’s cash, he says, can be held at accounts at the Federal Reserve. Loans can be made by nonbank lending institutions. At a minimum, he says, there should be limits on bank profits -- perhaps a 10 percent return on equity -- to keep them from taking the kinds of risks that led to the housing bubble. “You need a system where people won’t be incentivized to take risks,” Pellegrini says. “We don’t need bankers to take risks with our money.” Pellegrini, who lives on the Upper West Side of Manhattan with his third wife, Henrietta, and her daughter, has a predilection for long, freewheeling conversations in which he tosses out incendiary snippets. How has the U.S. central bank handled the crisis? “The Fed is printing money, as instructed by the financial services industry, so that they can stick all of us with the bill,” Pellegrini says, slouching in a conference room chair in his offices in the former IBM Building in Manhattan. ‘Zero Confidence’ And Federal Reserve Chairman Ben S. Bernanke? “I have zero confidence in what the Fed is doing.” Pellegrini has offered some of his solutions to the financial crisis in opinion pieces on financial Web sites and blogs and in correspondence to legislators and senior officials in the Obama administration. Academics have taken note of Pellegrini’s ideas to drastically reduce the footprint of banks, known as “narrow banking” in academic argot. “They are very crisp and different and provocative,” says Kenneth Rogoff, an economics and public policy professor at Harvard University. “As an academic, I find that refreshing.” The hedge fund manager’s charitable work is informed by his global outlook. Pellegrini is chairman of the U.S. board of the Tony Blair Africa Governance Initiative. The group, founded by the former U.K. prime minister, provides political and business advice to African governments trying to reduce poverty. Paolo Squared Pellegrini says his fund’s name, PSQR, is a play on his own: Paolo or Pellegrini Squared. It’s also an anagram of SPQR, the initials of the ancient Roman Republic that stand for Senatus Populusque Romanus, or the Senate and the People of Rome. The four letters are still emblazoned on monuments and signs around the city, where Pellegrini was born and spent his first five years amid the cobblestoned alleys of the Trastevere district. As PSQR’s assets grow, Pellegrini plans to assemble an investment team of 5 to 10 professionals. In May, he hired Alex Patelis, 38, chief international economist at Merrill Lynch & Co. in London, as PSQR’s chief economist. He joins, among others, two Ph.D.-toting senior analysts, JunTian Xu, 29, and Evan Borenstein, 28. Pellegrini’s Paulson & Co. pedigree and PSQR track record will generate a lot of interest in his fund, Waksman says. Whether pension funds and other institutional investors will sign on is a question -- though Pellegrini says his firm is self-sufficient and doesn’t need outside investors. Institutions are sometimes restricted in their ability to buy into smaller funds, says Daniel Celeghin, a director at Casey, Quirk & Associates LLC, a consulting firm in Darien, Connecticut. ‘I Love Your Story’ “It may be: ‘I love your story. I love your track record. Call me when you hit $600 million,’” he says. Plus, Pellegrini earned his Paulson & Co. stripes with credit-default swaps. His tenure in the futures and currencies markets has been brief. “Can his skills be transferred to new venues?” Waksman says. “It’s a fair question to ask.” Institutional investors are particularly wary of macro funds. At the end of June, they represented just 18.8 percent of industry assets, according to Chicago-based Hedge Fund Research Inc. “Macro often comes down to one or two people looking at all this analysis and making a call,” Celeghin says. “That’s a leap of faith for institutional investors.” Macro in a Rut In 2008, macro was one of the few categories in which hedge funds made money, with an average return of 4.83 percent, according to HFR. This year, macro managers are in a rut, returning just 2.68 percent through August, versus a 14.1 percent gain for the average fund. That makes PSQR’s gain of 80 percent through July all the more impressive. Pellegrini’s quantitative disposition traces back to his early years. The oldest of three children, Paolo Marco Pellegrini was born in 1957 to a household steeped in science. His father, Umberto, was a physics professor, and his mother, Anna, worked as a biology researcher. The Pellegrinis moved north from Rome in 1962 when Umberto was appointed a professor at the University of Milan. There, Paolo took up classical piano and attended a liceo classico, studying Latin and ancient Greek. In Italy’s left-leaning north, dinner table conversations were often political. While a teenager, Paolo joined the Partito Radicale, a pacifist, anti- establishment party that advocated a ban on nuclear weapons, marijuana legalization and divorce rights. Electrical Engineer In 1975, he was admitted to the Politecnico di Milano, where he pursued a degree in electrical engineering. Many nights, he volunteered as a disc jockey at Milan’s Radio Radicale, spinning vinyl by bebop greats Dizzy Gillespie and Charlie Parker. While a student, Pellegrini remembers circulating Radical Party petitions, including one calling for the strengthening of civil liberties. He stayed clear of demonstrations and student groups advocating violence. The 1970s and early 1980s were Italy’s Years of Lead, during which hundreds were killed or wounded in bombings and assassinations by both left- and right- wing extremists. In 1978, Red Brigade terrorists kidnapped and murdered former Christian Democratic Prime Minister Aldo Moro. Pellegrini focused on school and graduated cum laude in 1980. Amid the strikes and demonstrations, the Italian economy was a shambles. “There were few opportunities in terms of a real career track,” Pellegrini says. He looked abroad. “Business school seemed like a good investment,” he says. ‘He Was Into Data’ Pellegrini was accepted to Harvard Business School in Boston, where professors stoked his interest in finance, economics and markets. Pellegrini’s field study adviser was Professor Andre Perold. “He was into data and patterns,” Perold says. “He was intrigued by the potential of math-based systems to trade stocks.” Michaelcheck, a partner in the fixed-income division of Bear Stearns & Co., recalls recruiting the Italian youth as a summer associate in 1984. Pellegrini wrote pitch books on possible mergers and acquisitions for the firm’s clients. He shared an office with an M&A vice president named John Paulson, who was also a Harvard Business School graduate. He and Pellegrini soon became friends. “I found him to be extremely smart and capable,” Paulson, 53, says. After Harvard, Pellegrini landed an associate’s position in corporate finance at Dillon Read & Co. It was 1985, and swashbuckling raiders had American business on the run. “I must have worked on a dozen deals,” Pellegrini says. Insurance Expert Dillon Read itself was bought by Travelers Corp. in 1986, and Pellegrini moved to Lazard Freres & Co. He specialized in insurance, and advised Munich-based Allianz AG on its 1990 acquisition of Fireman’s Fund Insurance Co., a unit of Fund American Cos. At Lazard, the pace was brutal. Pellegrini often worked 14- hour days, turning off the overhead lights in the office at night and blasting Mozart and Beethoven on his stereo. Yet Pellegrini was not a natural investment banker. “It involved a lot of salesmanship,” he says. “That’s not my forte.” In 1994, the fees he was generating dropped as he failed to rope in clients. The next year, Pellegrini says, Lazard fired him. In 1996, Mariner’s Michaelcheck teamed up with Pellegrini to start a Bermuda-based firm called Select Reinsurance Ltd. After two years, the two, together with the firm’s board, decided an executive with more sales experience should replace Pellegrini. “I was fired from that too,” he says. No Traction In 1999, he started a consulting firm named Global Risk Advisors LLC to counsel companies on reinsurance and other risk- related matters. The venture didn’t gain traction, and Pellegrini closed it in 2002. “Trying to reinvent myself was tricky,” he says. Pellegrini compares these wilderness years to his treks as a youth in the Italian Alps. “There are times when you are hiking that you are really exhausted; you just put one foot in front of the other,” he says. “When you sit down, that’s when things just fall apart.” Michaelcheck, back at Mariner, hired Pellegrini as an analyst in early 2003. At the time, a Mariner hedge fund was trading collateralized debt obligations -- bundles of housing loans and other debt -- and Pellegrini developed a fascination with CDOs, credit-default swaps and other derivatives. Michaelcheck assigned him to the fund. Joining Paulson Eager for a chance to run his own portfolio, Pellegrini, then 47, approached Paulson in the summer of 2004, asking for a job. “He said, ‘My analysts are more junior than you,’” Pellegrini recalls. “I said I didn’t care.” Paulson had founded his firm in 1994 and built up two specialties. First was merger arbitrage, a strategy in which traders typically buy the stock of a possible takeover target and short that of the acquirer. The other was event arbitrage -- wagering on corporate developments such as earnings surprises and stock buybacks. Still, he was also looking for a way to make money from what he saw as a growing credit bubble. Paulson, who makes all investment decisions at the firm, orchestrated the research and assigned Pellegrini to look into housing -- something he was familiar with from his time at Mariner. The surest bet against the housing market would be to buy credit-default swaps on subprime mortgage-backed securities. CDSs are insurance-like contracts used, in this case, to speculate on the default of a bond. A Nervous Time Pellegrini says the critical question was whether adjustable-rate mortgages would default as they reset at higher interest rates. Pellegrini believed they would, so in April 2005 Paulson & Co. began buying CDSs in small amounts for its existing funds. The first year the trade was in effect was a nervous time. “From early 2005 to early 2006, it wasn’t clear the trade was going to work,” Pellegrini says. “People thought we were throwing money down the drain. We asked, Are we missing something?” Pellegrini says he would wake up in the night pondering the trade. Before he increased his bet, Paulson wanted proof of a housing bubble, and he thought Pellegrini could produce it. “The mortgage market lends itself to deep quantitative analysis and modeling,” Paulson says. “Paolo excelled in this area.” Finding the Bubble Pellegrini and his colleagues zeroed in on numbers from the Office of Federal Housing Enterprise Oversight’s home price index from 1975 to 2000. He drew a regression line through the data points that showed prices would have to fall 30 percent to 35 percent just to get back to the historical trend. “After hearing a lot of arguments for and against the presence of the bubble, we had a simple and clear insight of our own to go by,” Pellegrini says. He recalls that Paulson broke into a smile when he showed him the proof that houses were overpriced. “John doesn’t smile,” Pellegrini says. “It felt great.” The next step was to determine the relationship between home prices and defaults. Pellegrini hired a New York firm called 1010Data Inc. to help him integrate two databases: One, compiled by Santa Ana, California-based First American Corp. and called LoanPerformance, tracked 6 million securitized subprime mortgages. The other was based on an S&P/Case-Shiller home price index, sorted by postal code. The combined database showed that even if home prices merely flattened, defaults would surge. “There was a very strong relationship between mortgage losses and home prices,” Pellegrini says. A Tough Sell Paulson & Co. began drumming up money for two new funds -- called Paulson Credit Opportunities and Credit Opportunities II -- that would be dedicated to the subprime bet. It was a tough sell. With the housing market still galloping upward, investors wanted details of both Paulson & Co.’s research and how the trade would work. “I remember Paolo stopping by the office at 5 p.m. and staying to 9 p.m. explaining his research,” says Jack O’Connor, chief investment officer of AI International Corp., a family investment office. “We were impressed.” Over nine months, the firm raised $1.1 billion. As home prices continued to rise, Paulson & Co. took advantage, paying as little as 1 cent for every dollar of credit protection. Former investors still marvel at the payoff. “It was technically a beautiful trade,” one money manager says. “The asymmetry was incredible.” Market Collapse The housing market peaked in mid-2006. “Once the year-over- year change in home price appreciation went negative in June 2006, we thought the collapse of the market was almost inevitable,” Paulson says. For the last half of 2006, Credit Opportunities gained 19.4 percent, according to investors. In 2007, it showed a 590 percent return. In 2008, a year when the average hedge fund lost 19 percent, Credit Opportunities posted an 18.3 percent return. Firm assets rose to $30 billion at the end of 2008 from $7 billion two years earlier. Pellegrini’s lucrative Paulson & Co. trade -- he won’t discuss the fund returns or how much he made from them -- was based on numbers. It was also based on an assessment of American society. Pellegrini says the credit bubble in the U.S. fed existing income inequalities. “People were pretending they were earning a living, and they were not,” he says. “Banks lent them the money so they could live beyond their means.” A Debtor Nation There is a corollary to that imbalance in the global economy, Pellegrini says. Massive consumption has turned the U.S. into a debtor nation, which will ultimately lead to the devaluation of the dollar, a scenario PSQR is betting on through its long-term short position on Treasury futures and its long position on commodities. The massive stimulus programs and the resulting deficits will only make matters worse, Pellegrini says. It’s not a bright outlook for the U.S. Yet Pellegrini’s meteoric rise is proof that bad news can produce a lucrative bounty for those with the foresight to predict it.

US Economic Indicator:Part 2

2009-10-03T18:41:00.001-07:00

Forecasts based on the projections from 10 economists as of Monday, Oct 4. NA = not available. E = estimate. R = revised. **** = tentative. Time --Forecast-- Date EDT Indicators Median Low High Prev Actual 10/07 :0830: Aug Trade Balance : 33.0 31.0 34.0: -32.0 : 10/07 :0830: Goods Total : NA NA NA : -43.0 : 10/07 :1500: Aug Consumr Crdt (bln$) : -8.5 -10.0 2.5: -21.5 : 10/08 :0830: Unemploy Clms p/e Oct 3 : 540 535 545: 551 : 10/13 :1400: Sep Treasury Budget Stmt : NA NA NA : -111.4 : 10/14 :0830: Sep Retail Sales (% chg) : NA NA NA : 2.7 : 10/14 :0830: Ex-Auto (% chg) : NA NA NA : 1.1 : 10/14 :1000: Aug Busin Invty (% chg) : NA NA NA : -1.0 : 10/15 :0830: Sep CPI (% chg) : NA NA NA : 0.4 : 10/15 :0830: CPI Core (% chg) : NA NA NA : 0.1 : 10/16 :0915: Sep Industl Prod (% chg) : NA NA NA : 0.8 : 10/16 :0915: Capacty Util : NA NA NA : 69.6 : 10/20 :0830: Sep Housing Starts : NA NA NA : 0.598 : 10/20 0830: % change 1.5 10/20 :0830: Housing Permits : NA NA NA : 0.579 : 10/20 :0830: % change : : 2.7 : 10/20 :0830: Sep PPI (% chg) : NA NA NA : 1.7 : 10/20 :0830: PPI Core (% chg) : NA NA NA : 0.2 : 10/22 :1000: Sep LEI (% chg) : NA NA NA : 0.6 : 10/23 :1000: Sep Existing Home Sales : NA NA NA : 5.10 : 10/23 :1000: % change : : -2.7% : 10/27 :1000: Oct Consumer Confidence : NA NA NA : 53.1 : 10/27 :1000: Sep Preliminary Steel Impo: : -13.2 : 10/28 :0830: Sep Durable Goods (% chg) : NA NA NA : -2.4 : 10/28 :1000: Sep S/F Home Sales : NA NA NA : 429 : 10/29 :0830: Q3 Adv GDP : NA NA NA : -0.7 : 10/29 :0830: Final Sales Dom Prchsr : NA NA NA : -0.9 : 10/29 :0830: PCE Defltr : NA NA NA : -0.9 : 10/29 :0830: Price Defltr : NA NA NA : 0.0 : 10/30 :0830: Q3 09 ECI : NA NA NA : 0.4 : 10/30 :0830: ECI Annual : NA NA NA : 1.8 : 10/30 :0830: Sep Personal Inc (% chg) : NA NA NA : 0.2 : 10/30 :0830: PCE (% chg) : NA NA NA : 1.3 : 11/02 :1000: Sep Constrcn Spdg(% chg) : NA NA NA : 0.8 : 11/02 :1000: Oct ISM : NA NA NA : 52.6 : 11/02 :1000: Employment : : 46.2 : 11/02 :1000: Prices : : 63.5 : 11/03 :1000: Sep Factory Ord (% chg) : NA NA NA : -0.8 : 11/05 :0830: Q3 Pre Productivity : NA NA NA : 6.5 : 11/05 :0830: Unit Labor Costs : NA NA NA : -6.0 : 11/06 :0830: Oct Jobless Rate : NA NA NA : 9.8 : 11/06 :0830: Jobs (chg) : : -263 : 11/06 :0830: Private (chg) : : -210 : 11/06 :0830: Manufac (chg) : : -51 : 11/06 :0830: Avg Hourly (% chg) : NA NA NA : 0.1 : 11/24 :0830: Q3 Pre Corp Profits : : 0.9 :

US Economic Indicator:Part 1

2009-10-03T18:39:00.000-07:00

Forecasts based on the projections from 10 economists as of Monday, Oct 4. NA = not available. E = estimate. R = revised. **** = tentative. --Forecast-- Date Indicators :Median : Sep Aug Jul Jun May Apr 10/07 Trade Balnce : 33.0: -32.0 -27.5R -26.4R -28.8 10/07 Goods Balnce: NA : -43.0 -38.3R -37.2R -39.9R 10/07 Imports : : 159.6 152.4R 148.7R 149.7R 10/07 Exports : : 127.6 124.9R 122.3R 120.6R 10/07 Consumr Crdt : : 2472.1 2493.6R 2509.2R 2518.4 10/07 change : -8.5: -21.5 -15.6R -9.2R -21.0 10/08 Unemply Clms : 540:[9/26 551 [9/19 534R ] [9/12 550] 10/08 Wholesale Inv: : 387.2 392.5R 400.8 405.6 10/08 % change : -1.1: -1.4 -2.1R -1.2 -1.3 10/08 Invty-Sales: : 1.23 1.25R 1.28R 1.31 10/13 Trsy Budget : NA : -111.4 -180.7 -94.3 -189.7 -20.9 10/14 Retail Sales : : 351.4 342.3 342.7R 339.9 338.3 10/14 % change : NA : 2.7 -0.1 0.8 0.5 -0.3 10/14 Ex-Auto : : 287.2 284.2 285.7R 283.7 283.0 10/14 % change : NA : 1.1 -0.5 0.7R 0.2 -0.3 10/14 Busin Invty : : 1,333 1,346R 1,365 1,382 10/14 % change : NA : -1.0 -1.4R -1.2 -1.3 10/14 % mfg chg : : -0.7 -1.1R -0.8 -1.2 10/15 CPI : : 215.8 215.4 215.7 213.9 213.2R 10/15 % change : NA : 0.4 0.0 0.7 0.1 0.0R 10/15 % 12-mo chg: : -1.5 -2.1 -1.4 -1.3 -0.7 10/15 CPI Core : : 219.6 219.4 219.3 219.1 219.1 10/15 % change : NA : 0.1 0.1 0.2 0.1 0.3 10/15 Real Earnings: : -0.2 0.5 -1.2 0.0 0.0 10/16 Industl Prod : : 97.4 96.7 95.8R 96.1R 97.2R 10/16 % change : NA : 0.8 1.0 -0.4 -1.1 -0.6R 10/16 Capacty Util: NA : 69.6 69.0 68.3R 68.5R 69.2R 10/20 Hsg Starts : NA : 0.598 0.589 0.590R 0.551 0.479 10/20 % change : : 1.5 -0.2 7.1R 15.0 -8.1 10/20 Permits : NA : 0.579 0.564 0.570 0.518 0.498 10/20 % change : : 2.7 -1.1 10.0 4.0 -2.5 10/20 PPI : : 174.3 172.6 174.1 170.8 169.9 10/20 % change : NA : 1.7 -0.9 1.8 0.2 0.3 10/20 % 12-mo chg: : -4.3 -6.8 -4.6 -5.0 -3.7 10/20 PPI Core : : 171.2 171.0 171.5R 171.1 171.3 10/20 % change : NA : 0.2 -0.1 0.5R -0.1 0.1 10/22 LEI : : 102.5 101.9 101.0 100.2 99.0 10/22 % change : NA : 0.6 0.9 0.8 1.2 1.1 10/23 Exist Hm Sls : NA : 5.10 5.24 4.89 4.72 4.66 10/23 % change : : -2.7% 7.2% 3.6% 1.3% 2.4% 10/27 Cnsmr Confid : NA : 53.1 54.5 47.4 49.3 54.8 40.8 10/27 Pre Stl Imp : : -13.2 15.9 -16.7 -16.0 -19.3 10/28 Durable Gds : 615.0: 164.4 168.5 160.6 162.7 160.5 10/28 % change : NA : -2.4 4.9 -1.3 1.3 1.4 10/28 NonDef Captl: : 52.7 56.7 53.0R 53.1 48.6 10/28 % change : : -7.1 7.0 -0.2R 9.1 -3.5 10/28 S/F Home Sls : NA : 429 426 400R 371R 345 10/28 % change : : 0.7% 6.5% 7.8%R 7.5%R 3.9% 10/29 GDP Annual % : NA :[Q2 09 -0.7R [Q1 09 -6.4 ][Q4 08 0.4] 10/29 Final Sales%: NA :[Q2 09 0.9R [Q1 09 -6.4 ][Q4 08 4.9 ] 10/29 PCE Defltr % NA :[Q2 09 -0.9R [Q1 09 0.6][Q4 08 -3.1 ] 10/29 Prc Defltr %: NA :[Q2 09 0.0 [Q1 09 1.9][Q4 08 0.0] 10/29 Chnd Wt Prc%: :[Q2 09 0.0 [Q1 09 1.9][Q4 08 0.1] 10/30 ECI : NA :[Q2 09 0.4 [Q1 09 0.3][Q4 08 0.6] 10/30 ECI Annual : NA :[Q2 09 1.8 [Q1 09 2.1][Q4 08 2.6] 10/30 Personal Inc : : 11,973 11,954 11,934R 12,070R 11,912R 10/30 % change : NA : 0.2 0.2 -1.1 1.3R 0.2R 10/30 PCE : : 10,205 10,076 10,051R 9,979R 9,968R 10/30 % change : NA : 1.3 0.3 0.6R 0.1 -0.1 11/02 Constrcn Spd : : 941.9 934.6 945.1R 958.3 971.4 11/02 % change : NA : 0.8 -1.1 -1.4R -1.3 0.5 11/02 ISM : NA : 52.6 52.9 48.9 44.8 42.8 40.1 11/02 Employment : : 46.2 46.4 45.6 40.7 34.3 34.4 11/02 Prices : : 63.5 65.0 55.0 50.0 43.5 32.0 11/03 Factory Ords : : 352.9 355.7 350.9 347.6 343.8 11/03 % change : NA : -0.8 1.4 0.9 1.1 0.5 11/03 Unfill Order: : 736.8 739.9 740.7 746.7 749.1 11/03 % change : : -0.4 -0.1 -0.8 -0.3 -1.1 11/05 Prod & Costs%: NA :[Q2 08 6.5R [Q1 08 0.2][Q4 08 0.8] 11/05 Unit Labor%: NA :[Q2 08 -6.0R [Q1 08 -4.9R ][Q4 08 1.8] 11/06 Jobless Rate : NA : 9.8 9.7 9.4 9.5 9.4 8.9 11/06 Jobs (chg) : : -263 -201 -304 -463 -303 -519 11/06 Pvt (chg) : : -210 -182 -246 -391 -292 -592 11/06 Manuf(chg): : -51 -66 -41 -123 -146 -150 11/06 Factory hrs : : 2.8 2.9 2.9 2.9 2.8 2.7 11/06 Avg Hr % chg: NA : 0.1 0.4 0.3 0.1 0.2 0.0R 11/24 Corp Profit%: :[Q2 09 0.9R [Q1 09 1.3][Q4 08 -2.0 ] 12/16 Current Acct : :[Q2 09 -$98.8 [Q1 09 -104.5R ][Q4 08 -$154.9]

US Dollar against Swiss Franc

2009-10-03T18:36:00.000-07:00

FXstreet.com (Córdoba) – Dollar closed the week with gains against the Swiss Franc for the first time after three with losses.

USD/CHF moved away from intra-week highs. The pair peaked at 1.0452, posting a fresh 3-week high on Thursday but then pulled back ending Friday around 1.0350.

USD/CHF is moving with an upside trend in four hour chat but still faces a downside pressure in bigger timeframe charts.

The Swiss also lost ground against Cable. GBP/CHF pulled back strongly after falling to a 7-month low at 1.6219.

The pair managed to finish the week above 1.6500.EUR/CHF plunged Thursday and Friday, losing completely the gains of Wednesday: the pair rallied surprisingly jumping from 1.5070 to 1.5240 bringing the attention to the Swiss National Bank.

Monitoring Forex

2009-10-03T08:45:00.001-07:00

G7 Communique: No Room For Complacency, Monitoring Forex ISTANBUL -(Dow Jones)- Finance ministers and central bank governors from the Group of Seven advanced economies said Saturday there was no room for complacency in contrasting the deepest recession in decades and promised to "keep in place our support measures until recovery is assured." Noting that "prospects for growth remain fragile and labor market conditions are not yet improving," the officials said in an official communique that they would bolster international financial organizations such as the International Monetary Fund. They said they would "continue to monitor (foreign) exchange markets closely," repeating language used when they last met in April. They also noted they "welcome China's continued commitment to move to a more flexible exchange rate, which should lead to continued appreciation of the Renminbi in effective terms." Such a trend would help promote more balanced growth in both China and the world economy, the communique said.

Rate Descision for Currency Market

2009-10-02T14:23:00.001-07:00

With the Reserve Bank of Australia, Bank of England, and European Central Bank all scheduled to announce rate decisions next week, the FX markets will have no shortage of market-moving indicators on hand.
Clearly, this leaves the Australian dollar, British pound, and euro as the top three currencies at risk, but traders should also watch for the impact of US ISM non-manufacturing on the US dollar and the Canadian net employment change on the Canadian dollar.

• US ISM Non-Manufacturing Index (SEP) – October 5, 10:00 ET On Monday, the ISM non-manufacturing index is projected to rise for the sixth straight month in September to 50 from 48.4, which would be the highest reading since September 2008. With 50 being the point of neutrality, anything even slightly better than expected (50.1 or higher) would signal an expansion in business activity for the first time since August 2008. That said, a sharp improvement seems unlikely in light of the fact that the Conference Board’s measure of consumer confidence slipped to 53.1 in September from 54.5, while the latest US NFP report showed that the services sector lost 147,000 jobs during the same period. Overall, it would likely take an index reading above 50 to elicit a strong reaction from the US dollar, though a surprise decline would provide equally choppy price action for the currency.

• Reserve Bank of Australia Rate Decision – October 6, 23:30 ET The Reserve Bank of Australia (RBA) is anticipated to leave their cash rate target unchanged on Tuesday for the sixth straight month at 3.00 percent, and the Australian dollar may only respond to a change in the bias of RBA Governor Glenn Stevens’ monetary policy statement. As it stands, Credit Suisse Overnight Index Swaps (OIS) are pricing in a 22 percent chance of a 25 basis point rate hike during this upcoming meeting, and 175 basis points worth of hikes over the next 12 months, which is generally in line with what we’ve seen since early August. It was actually in early July when the RBA’s bias shifted from dovish to neutral, as Stevens removed a line from his statement noting that “scope remains for some further easing of monetary policy.” As long as we see these RBA statements continue to provide progressively optimistic outlooks, the markets are likely to remain in favor of large rate increases over the next year. However, if the RBA starts to signal a more cautious tone, this sentiment could shift very quickly and lead the Australian dollar lower.

• Bank of England Rate Decision – October 8, 07:00 ET The Bank of England (BOE) is anticipated to leave rates unchanged at 0.50 percent on Thursday at 7:00 ET, but this won’t even be the market-moving part of the announcement. Instead, traders will be looking toward the BOE’s policy statement. This has consistently been the prime “news event” of recent rate decisions. Last month, the BOE indicated a neutral stance as they stated they would continue their £175 billion quantitative easing program, and this ultimately led the British pound to rally against the US dollar and euro immediately. A repeat of this statement is likely to trigger a similar reaction from the British pound, but on the other hand, any indication that the program may need to be expanded down the line would weigh very heavily on the currency. That said, such a scenario is highly unlikely.

• European Central Bank Rate Decision – October 8, 07:45 ET The European Central Bank is anticipated to leave rates unchanged at 1.00 percent at 7:45 ET. Where the currency ends the day, though, may have more to do with what ECB President Jean-Claude Trichet says during his post-meeting press conference at 08:30 ET. Traders will likely focus on any comments regarding the future of interest rates in the region, including whether 1 percent should be considered the “floor,” as well as statements on exit strategies for the central bank’s liquidity programs.

• Canadian Net Employment Change (SEP) – October 9, 07:00 ET At 7:00 ET, the Canadian net employment change may show a decline of 7,500 during September following a surprise jump of 27,100 in August. Furthermore, the unemployment rate is anticipated to have risen to match the January 1998 high of 8.8 percent from 8.7 percent. Since the employment change tends to be a very volatile release, this should have the greater impact on the Canadian dollar, with a sharper than expected drop likely to weigh on the currency and an unexpected positive result likely to push it higher.

GBP/USD daily Variation Declining

2009-10-02T14:15:00.000-07:00

The disappointing NFP payroll report sparked a bout of volatility across all markets making it difficult to execute scalping strategies. The GBPUSD reaction was relatively subdued and with a solid support level below and declining daily variation it may offer the best opportunity in the current market environment.

The 38.2% Fibo extension of the 1.3657- 1.7052 rally is a solid support line which may limit downside risks. The level may also present a exit and entry level for traders to target. The GBP/USD isn’t an ideal scalping pair as it has been volatile, but recent price action has held for the most part in the 1.5760-1.600 range. The pair was also relatively quiet following the U.S. NFP report which may lead to an ideal period of low volatility that high frequency traders can exploit.

The GBP/USD has seen its ATR start to contract again in recent days which could be a sign that the pair is about to settle into a longer term range. However, the widening Bollinger band is a concern and underlines the recent volatility that we have seen from Sterling crosses.

Euemployment Increases in U.S.

2009-10-02T14:12:00.000-07:00

The U.S. economy lost more jobs than anticipated in September sending the unemployment rate to a 26-year high of 9.8%. Employers let go 263,000 workers, which was an increase from 201,000 in August and surpassed economists estimates for 175,000. The service sector led the decline by more than doubling last month’s total of 69,000 with a loss of 147,000.
The U.S. economy lost more jobs than anticipated in September sending the unemployment rate to a 26-year high of 9.8%. Employers let go 263,000 workers, which was an increase from 201,000 in August and surpassed economists estimates for 175,000. The service sector led the decline by more than doubling last month’s total of 69,000 with a loss of 147,000. The sector which accounts for over 70% of U.S. GDP continues to feel the impact of the worst recession since WWII. An unexpected drop in government jobs by 53,000 may be evidence that the impact from the fiscal stimulus plan is dissipating. State and local agencies saw the biggest losses as they have been surviving on the help from Washington D.C. with tax receipts disappearing. Fed Chairman Ben Bernanke stated yesterday in his testimony before the House financial services committee that the current expansion may not be enough to “substantially” lower unemployment. We initially saw dollar strength following the dour report on safe haven flows. However, the greenback has given back those gains as fundamental influences are growing in importance. Fears of another global collapse have dwindled and traders may look outside the U.S. for better investment opportunities which could lead to more dollar weakness.

Canadian Dollar Rebounding

2009-10-02T14:08:00.000-07:00

The Canadian currency, which was losing earlier versus the U.S. dollar on pessimism before the G-7 meeting, managed to revert a losing trend as the crude oil rates surged beyond $70 a barrel, raising attractiveness for the loonie.
The loonie has managed to end another week gaining versus its U.S. counterpart, since it erased early losses today backed by a rally in the crude oil rates, which are one of the main raw materials produced in Canada with a final destination the U.S. The Canadian dollar ranked among the top 3 best performing currencies among the 16 majors together with the South Korean won.
USD/CAD traded at 1.0806 as of 17:54 GMT after touching 1.0959 hours earlier.

Stock Market of Asia

2009-10-01T21:00:00.000-07:00

Asian stocks markets were sharply lower Friday, dragged by heavy losses on Wall Street. Japanese automakers were hit by weak U.S. sales data and the strong yen. "It's not looking pretty," said IG Markets institutional dealer, Chris Weston. "I think this is the breather people were looking for." Japan's Nikkei 225 was down 2.6%, Australia's S&P/ASX 200 was down 1.9% and Hong Kong's Hang Seng Index lost 2.7%. DJIA futures were 24 points lower in screen trade. South Korean, Indian and Chinese markets were closed. Investors' risk appetite shriveled after the Dow Jones Industrial Average lost 2.1% and suffered its worst decline in about three months, in the wake of a weaker-than-expected manufacturing report. "Nothing has changed to make me feel that this (recent) rally is anything but a bear market rally and bear rallies are to be rented not owned. Since I went positive in early March, the biggest threat would be increased complacency," said Keith Springer, president of Capital Financial Advisory Services. "We can't expect global stock markets to pick up again any time soon," said Tachibana Securities analyst Kenichi Hirano in Tokyo. "This correction may continue at least through the end of this month," with players paying close attention to U.S. corporate earnings, he added. Japanese automakers were hit after data Thursday showed September U.S. auto sales returned to depressed levels, as the jolt from the government-run "Cash for Clunkers" subsidy program proved to be "just a flash in the pan," said Nikko Cordial senior strategist Tsuyoshi Kawata. "The market had been too optimistic about economic recovery prospects," he added. The yen's continued strength against the dollar also added pressure. Industry consultant Autodata's closely watched measure of annualized selling rate fell to 9.22 million in September from the previous month's 14.1 million rate. Toyota was down 3.1% and Honda fell 2.7%. Insurance stocks were 3.9% lower as a group, with Tokio Marine Holdings down 3.9% and Mitsui Sumitomo Insurance Group down 3.8%. The iron and steel sector was down 4.2% with Nippon Steel losing 5.6% and JFE Holdings 3.5% weaker. In Australia, resource stocks were suffering the biggest falls, with BHP Billiton down 2.5%. Banks were lower, with ANZ down 2.0%. "It was a very weak lead from the U.S. and commodity price falls have compounded the impact on our miners...I think this could be the start of our market rolling over a bit," said CityIndex dealer James Persson. All 42 stocks in the Hang Seng Index were falling in Hong Kong. HKEx tumbled 4.8% to HK$133.80 given its high-beta status, Wharf dropped 3.0% to HK$39.90, and Li & Fung lost 4.6% to HK$29.80, succumbing to profit-taking after setting 52-week highs Wednesday. Profit-taking was taking a toll on financial stocks in Taiwan with the that subindex down 1.6% after a 2.3% gain yesterday. Cathay Financial fell 1.5% while Shin Kong Financial lost 1.1%. In New Zealand, the NZX-50 fell 0.9% with selling concentrated in stocks held by large institutional investors. Heavyweights Telecom was off 1.9% and Fletcher Building down 1.4%. Singapore shares were 1.7% lower with StarHub down 3.9% as the loss of English Premier League and sports channel rights continued to weigh. Malaysian shares fell 0.2%, Indonesian shares were 1.2% lower and Thai shares lost 0.9%. The Philippine stock market traded down 0.8%. In foreign exchange markets, the majors were trading in relatively tight ranges. The euro was at $1.4542 from $1.4526 in late New York trade Thursday, and at Y129.81 from Y130.09. The dollar was at Y89.24 from Y89.77. The yen was supported by comments from Japanese Finance Minister Hirohisa Fujii, reported by Kyodo News, that he would not discuss the yen's recent rise against the dollar at this weekend's meeting of finance chiefs from the Group of Seven industrialized countries in Turkey. Analysts at Brown Brothers Harriman believe the dollar will start to strengthen against the yen heading into the fourth quarter. "Repatriation flows tied to the fiscal half year end have now ended and Japanese investors will return to this year's strategy of buying higher-yielding foreign bonds with the Japanese yen returning to its role as a funding currency," they said in a note. Japanese government bonds were higher, helped by falling equities and stronger U.S. Treasurys Thursday. Bonds were also pressured by worries of weak U.S. jobs data due later in the global day. The 10-year JGB cash bond yield fell to its lowest level since March, down 3.5 basis points at 1.255% as of 0300 GMT, while the lead futures contract was up 0.28 at 139.59 points. The London Metals Exchange three-month copper futures contract was at $5,973 per ton, down $12 from the London afternoon kerb. Three-month aluminum was also lower, at $1,843, down $15. A mixed bag of U.S. economic data was weighing on sentiment in the base metals market, said ANZ senior commodity strategist Mark Pervan. "The catalyst downward will likely be China trade data for September. Copper imports will be slower due to seasonal factors, as well as coming off the exceptionally high levels from earlier in the year," he said. Spot gold was at $1,001.25 per troy ounce, up 35 cents from the New York close. The November Nymex crude oil futures contract was down 61 cents at $70.21 per barrel after picking up 21 cents on Thursday.

Fall in Business Barometer

2009-09-30T08:45:00.000-07:00

Economic activity slowed in September, according to a closely watched index that showed signs of improvement only a month earlier. The Institute for Supply Management-Chicago said Wednesday that its business barometer fell to 46.1 in September from a neutral 50.0 in August. The August barometer reading marked the fist time in almost a year that the data didn't reflect economic contraction. The September barometer was far weaker than economists expected. The Dow Jones Newswires survey predicted a 52.5 reading, which would have signaled economic expansion. ISM-Chicago gathers the monthly data by surveying Chicago-area purchasing professionals for their views on the economy. Stock market prices fell Wednesday in reaction to the disappointing data, causing Treasury yields to fall as well. It isn't unusual for the barometer to stumble during and after a recession, an ISM-Chicago news release stated. The barometer softened in the month after the 2001 recession ended, and did the same after reaching the neutral 50.0 reading after the conclusion of the recession lasting from November 1973 to March 1975. The September stumble still kept in place what appears to be a bottom established for this recession when the barometer sunk to 31.4 in March. As has been the case with other economic data, the employment sector appears to be among the weakest links on the road to recovery. ISM-Chicago's employment index was at 38.8 in September, from 38.7 in August. ISM-Chicago said the index revealed that for every three companies that reduced staff in September, only one firm was hiring employees. Significant declines in new orders and order backlogs helped drag down production, ISM-Chicago reported. The new orders index fell to 46.3 in September, from 52.5 in August. Order backlogs plunged to 36.7 in September, from 45.8 in August. The production index stood at 47.2 in September, down from 52.9 in August. Wednesday's data came on the same day that the Commerce Department said second-quarter gross domestic product - a measure of all goods and services produced in the U.S. - decreased at a 0.7% annual rate, smaller than the previous estimate of a 1% slide, and substantially better than a 6.4% drop in the first quarter. In recent days, some members of the Federal Reserve indicated they might have to implement a series of aggressive increases in the federal-funds rate if the recovery from a severe recession generates an inflation threat. Investors monitor the ISM-Chicago report for indications how purchasing managers nationwide feel about the economy. The Institute for Supply Management's manufacturing index is due Thursday at 10 a.m. EDT. Economists forecast the national ISM index will rise to 54.0 in September, from 52.9 in August. The Chicago Business Barometer is compiled for ISM-Chicago by Kingsbury International.

Buying Government Bonds

2009-09-30T08:35:00.000-07:00

The Bank of England says that a sharp increase in bond offerings by U.K. companies this year has been driven by its policy of quantitative easing, but it's far from clear that its claims are justified. The BOE embarked on quantitative easing - buying government bonds, or gilts, with freshly created money - in March. Its aim was to boost nominal spending in the economy through a variety of channels, although it has left many confused about exactly how the program was supposed to achieve its goal. On Wednesday a member of the central bank's Monetary Policy Committee argued in a speech its impact on the corporate bond market has been a key element of the program's success. David Miles, formerly an economist at Morgan Stanley, argued that by buying GBP151.775 billion of government bonds to date, the BOE had freed up cash that has since been invested in corporate bonds, allowing companies to reduce their reliance on scarce bank credit and maintain their spending at levels that otherwise wouldn't have been possible. But while participants in the corporate bond markets don't necessarily disagree, they say Miles' argument is hard to prove conclusively. After all, demand for corporate credit has also soared in the rest of Europe without central banks there using fresh money to buy bonds. And the pickup in corporate bond sales began in February, before the BOE began its quantitative easing. One fact isn't in dispute - issuance of sterling-denominated, high-grade corporate bonds has soared this year. Other than in the summer holiday months of July and August, issuance has exceeded GBP4 billion every month this year, and topped GBP6 billion twice and GBP7 billion once, according to Dealogic. The highest monthly figure in 2008 was GBP2.819 billion. The relative cost of borrowing has also fallen sharply. Spreads over the benchmark mid-swap rate on the Markit iBoxx Non-Financial Corporate index are 230 basis points tighter than at the beginning of the year. "In the U.K., corporate bond spreads have come down, and issuance has increased," said Gary Jenkins, head of fixed-income research at Evolution Securities in London. "But if you are trying to measure the impact of QE, the same thing has happened in the U.S. and Europe. Unfortunately, this isn't a scientific experiment with a control group." According to Dealogic, bond issuance by non-financial companies in Europe as a whole already exceeds $2 trillion this year, while syndicated loan volumes have dropped to their lowest level since 1994, meaning that it isn't just U.K. borrowers who are selling bonds rather than relying on battered banks to lend them money. Investors have been happy to buy U.K. corporate bond offerings. "There has been huge demand for corporate debt," said Jenkins. "We're still seeing new issues oversubscribed and spreads tighten. As long as we have indications that the economy is stabilizing and interest rates remain low, that will continue." But bankers who find buyers for the bonds aren't convinced QE has made the difference claimed by Miles. "Demand on the new issuance hasn't been affected by quantitative easing," said one syndicate banker. Indeed, the heaviest month for supply of sterling high-grade corporate bonds this year was February, before the QE program began. Issuers sold GBP7.712 billion worth that month. The movement of money into corporate bond funds is still strong. Data from the U.K.'s Investment Management Association this week showed that sterling corporate bond funds were the most popular funds for retail investors for the 10th consecutive month, accounting for 14% of net retail sales by U.K. domiciled-funds, for example. "We've seen tremendous inflows into credit funds, so end investors must have moved out of an asset class to redeploy their money, although that is just as likely to have been equities," said Ben Bennett, credit strategist at Legal & General Investment Management in London. "I don't think anyone was explicitly able to sell gilts to buy corporate bonds in a way that wouldn't have happened without quantitative easing," he said. "One of the points of investing in gilts is that they are liquid and you can sell them when you want to, although investors probably got a better price thanks to the Bank of England buying." That's not to say that QE hasn't helped corporate borrowers. In assessing the impact of the program, credit spreads - the premium that corporate issuers pay over government bonds - are only part of the equation. "Quantitative easing has made a meaningful difference to corporate issuers in keeping government bond yields low," said Allegra Berman, vice chairman and global head of sovereign, supranational and agency debt capital markets at UBS in London. "It would have been prohibitively expensive for corporates to fund themselves if we had seen a combination of high gilt yields and wide credit spreads. QE has kept their all-in funding costs palatable," Berman said. Quantitative easing also helped reassure credit markets that the authorities were tackling the financial crisis, and in particular the collapse of liquidity in the corporate bond market that followed the collapse of Lehman Brothers.

Property Insurances to be Made for Empty and Unoccupied House

2009-09-29T03:25:00.000-07:00

If you own a property that is currently empty and no one has lived at the premises for thirty or more days then you will most likely require an unoccupied property insurance as most home insurance providers do provide cover for premises that have been vacant for 30 or more days. Always check with your current house insurance company to see if they still will provide cover as some insurers offer full cover for up to 90 days on unoccupied properties.
Due to the nature of this type of risk the insurers level of cover, terms and conditions will vary considerably on a vacant property insurance as opposed to that of a standard home insurance policy. The risk of theft, malicious damage and vandalism increases considerably on properties that are empty. Also if the property catches fire or there is an internal water leak, this may not be picked up by the property owner for some time and as such can result in thousands of pounds worth of damage.
The level of cover available on unoccupied property varies from insurer to insurer but in general most specialist empty house insurance brokers will provide the minimum cover of what is commonly known as the ‘FLEEA’ cover. The ‘FLEEA’ cover provides protection for an unoccupied property for the following perils, Fire, Lightening, Earth, Explosion and Aircraft, hence the acronym FLEEA.
Some vacant buildings insurance companies will also provide full perils including cover for theft, malicious damage, escape of water, flood, subsidence and property owners’ liability. Usually the excess on the policy tends to be higher than that of a standard home insurance policy.
Most property owners will not want to part with any money on a property that’s vacant. However it is still an asset that should not be left unprotected. By going online and shopping around for unoccupied property insurance quotes you still should be able to find a deal that will provide adequate cover for your empty building. Also if the property has a mortgage then the mortgage provider will insist on some form of insurance cover to protect their interest.

Your Property Is Secured

2009-09-29T03:23:00.000-07:00

With no signs of the financial crisis subsiding or the property market picking up, home sellers are finding it difficult to sell their property and in some cases having trouble even letting it out. This leaves the property unoccupied and in many cases their current insurers are unable to provide buildings insurance cover in these circumstances.

In this scenario most standard home insurance policies will not provide cover for properties that are vacant or unoccupied for more than usually thirty days. The property being one of your biggest assets, you can not afford the risk of your property being uninsured.

Properties become vacant for many reasons, some of these could include; property is to be sold, property has recently been purchased and is under renovation before the owner moves in. Other examples include; the property could possibly be the subject of a will or a probate process, you could be buy to let landlord and are finding it difficult to rent the property in the current market.
When a property has been left unoccupied over a long period of time, maintenance issues often occur. Many people are not aware of the correct temperature to leave the property in, which may cause pipes to burst due to freezing causing considerable a considerable damage to your property; rotting floor boards, damp walls, ruining carpets and furniture. Another cause of damage is caused by the lack of maintenance on the property roof where a tile may have become dislodged and as a result creating a water leak into the vacant property.
To minimise maintenance risks to your unoccupied property it is advisable that the property is visited at the minimum on a weekly rota. This can be either yourself, a neighbour or you can authorise your estate or letting agent to carry out the checks. There may be a charge levied by the letting or estate agent for this service. During the summer seasons you could drain the central heating and water systems and for the colder seasons setting the thermostats at a low temperature to avoid the pipes from freezing which could result in burst pipes and may hundreds if not thousands of pounds worth of damage and inconvenience to say the least.
Securing an unoccupied house is crucial. There are measures that you can implement to limit or avoid your property being vandalised or from squatters taking over. By investing in good standard locks for all external doors and accessible windows is paramount in securing your buildings. Most insurers that offer unoccupied buildings insurance cover will usually insist on a minimum of 5 lever mortise locks to be fitted on all external doors and that all accessible windows to have locks. Another prevention option is to have some form of an alarm system in place if budget allows it. If there is any post, ensure that this is removed on a regular basis otherwise this can alert an opportunist burglar that the property is empty and has not been visited for some time. Making the property seem like if there is someone living there will also deter any unwanted attention. You could place some curtains and have some lights going on and off using a timer switch. If you are on friendly terms with your neighbours, then perhaps you could ask them to park their vehicle on the driveway of your unoccupied property.

House Price Fell

2009-09-28T08:28:00.000-07:00

DUBLIN (Dow Jones)--Irish house prices fell 13% on the year in August, from a drop of 12.5% in July, according to research from independent think-tank Economic & Social Research Institute and Permanent TSB bank Monday. On a monthly basis, the average house price in August was down 1.5%, versus falls of 1.1% in July, 1.5% in June and 1.3% in May, according to the monthly survey. The average price paid for a house nationally in August was EUR235,260, down from EUR261,573 at the start of the year, and down 24% from a peak of EUR311,078 in February 2007. Economists expect house prices to slip further. "The rate of decline has been more dramatic during the summer due to low activity in the market and no confidence in any recovery this side of 2010," said Permanent TSB General Manager of Business Strategy Niall O'Grady. He added that prices have started to fall faster recently in the Dublin region due to the high level of surplus stock available. The government has said it will scrap stamp duty on residential purchases in December's budget. Permanent TSB's Index of House Prices, developed in conjunction with the ESRI, is based on monthly mortgage sales in the Republic of Ireland, and is one of the most closely watched indexes of its kind. -By Quentin Fottrell, Dow Jones Newswires; +353-1-676-2189; quentin.fottrell@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=T8ZKY07wPDWtrJ1DMHaoMw%3D%3D. You can use this link on the day this article is published and the following day.

Falling Back to Trade

2009-09-28T08:23:00.000-07:00

FXstreet.com (Barcelona) – After rising 115 pips during the European session from 2-week low at 1.4560, to test 55MA 55 level in hourly chart at 1.4675, EUR/USD has falling back to trade below 1.4650. Currently the pair is trading around 1.4635/45, 0.45% below today's opening price action at 1.4704.Valeria Bednarik, FXstreet.com collaborator, comments: “Pair remains under pressure, following lower stocks yet range bound; as expected on previous update, 1.4550 area seems strong enough to keep capping the downside and only clear confirmations under that level could trigger a more interesting downside corrective movement. Hourly indicators are slightly bullish, even 20 SMA yet with no clear signals at this point. Bigger time frames show the same picture; watch for technical levels and stocks, the main Euro driver today.

Pair remains under pressure, following lower stocks yet range bound; as expected on previous update, 1.4550 area seems strong enough to keep capping the downside and only clear confirmations under that level could trigger a more interesting downside corrective movement. Hourly indicators are slightly bullish, even 20 SMA yet with no clear signals at this point. Bigger time frames show the same picture; watch for technical levels and stocks, the main euro driver today.

Not much change also since previous update, Pound remains under strong selling pressure, and already corrected to the 1.5900 area, from where the pair retreat to current zone. Capped by 20 SMA in the hourly and with 4 hours indicators suggesting further falls, watch for the pair to break under key 1.5754 low to extend the downside rally.

Pair remains holding above 89.00 area, as Asian session low has been more a fundamental reaction than a technical movement. Hourly charts seem slightly bullish as well as 4 hours ones, pointing for an upside correction ahead. General trend remain strongly bearish as long as under 90.00.

Companies Cautiously Realistic About Their Prospects

2009-09-27T04:59:00.000-07:00

LONDON -(Dow Jones)- Bank of England Chief Economist Spencer Dale says the U.K. economy has stabilized, but it'll be a "long haul" to full recovery.
In an interview with regional newspaper the Express and Echo, Dale said companies seemed to be cautiously realistic about their prospects, but he noted many were still facing difficulties accessing funding.
He also said employment could remain low or fall further and that the future pickup in the level of jobs would likely be relatively "slow and gradual."
"Things look like they've stabilized, and we have turned a corner, but it looks like we are in for a long haul," Dale said.
"There's still a long way to go before things are bouncing back to where they were, and it's going to take us a while to get there, but things feel quite a bit better than they did six or nine months ago," he said.
Dale noted that measures of business confidence had stopped falling.
"Many businesses, even if they haven't seen the recovery have seen the bottom, but there's still a sense of quite realistic caution," he said.
"The sense of fear that was in many businesses in the first half of this year has subsided. The risk that things could get really bad has gone away, but now it's a question of how quickly we may see a return to normality," Dale said.
One factor slowing a return to business as usual, is the continuing lack of credit availability, although there have been some signs of improvement, he said.
"We still hear stories that people are finding it hard to access funds in the way that they used to and to undertake new investment projects and expansion. I think that remains a significant issue affecting local businesses," he said.
On jobs, Dale said that because the decline in employment hasn't been so large, companies will need to use up existing slack before they take on any additional workers.
"Going forward we may well see employment levels continue to remain low, or fall further, before we start to see a pick up, so I do think the pick up in employment may well be relatively slow and gradual," he said.

Depositors:not Shareholders

2009-09-27T04:57:00.000-07:00

LONDON -(Dow Jones)- A group of U.K. lenders that are owned by their depositors rather than shareholders Sunday urged the government not to sell Northern Rock to a bank, but to return it to its mutual roots. Until 1997, Northern Rock was a building society, a type of U.K. lender that is owned by its depositors. Like many building societies during the 1990s, in that year it chose to become a bank. But in September 2007 it became the first U.K. deposit taker to experience a run in 150 years, and was finally nationalized in February 2008. The government went on to acquire a 70% stake in the Royal Bank of Scotland Group (RBS) and a 43% stake in Lloyds Banking Group PLC (LYG) after the collapse of Lehman Brothers led to an intensification of the financial crisis later that year. Leading U.K. policy makers have acknowledged there were weaknesses in the structure of the nation's banking system ahead of the financial crisis, conceding it had become dominated by a small number of large institutions, and was lacking in competition and a diversity of business plans. The Building Societies Association said returning Northern Rock to the mutual sector would help make the financial system more diverse, increase competition, and lower its risk appetite. However, it would not bring the government an immediate payment that it could use to reduce the national debt, as a sale to an existing bank would. The BSA said the benefits in terms of strengthening the financial system outweighed that negative, although a government desperate for revenue may not see it that way. "Given that remutualization would strengthen competition and create a more diversified financial sector, it could be expected to generate an advantage to the taxpayer over the long run in excess of the immediate benefit of any capital proceeds in the short run," said Adrian Coles, director-general of the Building Societies Association. The BSA's call was supported by John McFall, an influential Labour Party lawmaker who chairs the House of Commons' Treasury Committee. "If ever there was a time for an expanded mutual sector, it's now," McFall said. "We desperately need to restore faith in financial services in this country." Increased mutualization of the financial system may also find support at the Bank of England, which is responsible for ensuring the stability of the financial system as a whole, as well as setting interesting rates. In a speech earlier this month, the central bank's executive director for financial stability said shareholder ownership may not be the best governance model for deposit takers since shareholders can only lose what they have invested. "That provides a natural incentive for owners to gamble, pursuing high risk/high return strategies from which they import the return upside but export the risk downside to depositors or the public sector," Andrew Haldane said. Instead, he said the model of mutual ownership traditionally employed by the U.K.'s building societies may be better.

G-20 as Permanent Part of the Global Governance System

2009-09-25T20:02:00.000-07:00

PITTSBURGH -(Dow Jones)- Group of 20 leaders hammered out compromises Friday on the difficult issues facing them as they emerge from crisis, including implementing exit strategies and restructuring the world economic and financial system. A little over a year after vowing a joint effort to restore growth and calm financial markets, the G-20 left its two-day Pittsburgh summit with a post-crisis plan.

While claiming that their extraordinary monetary, fiscal and financial measures had "worked," they vowed not to become complacent or prematurely withdraw. "We can't wait for a crisis to cooperate," said U.S. President Barack Obama at the close of the summit. "That's why our new framework will allow each of us to assess the others' policies, to build consensus on reform, and to ensure that global demand supports growth for all." With unemployment set to lag the return to growth, the leaders laid down job creation as a key requisite for undoing crisis measures. "We cannot rest until the global economy is restored to full health, and hard-working families the world over can find decent jobs," the communique said. Dominique Strauss-Kahn, managing director of the International Monetary Fund, urged the G-20 to keep monetary and fiscal stimulus in place, with unemployment expected to continue to rise next year. "This is a fragile recovery, even if risks appear to be receding," he said.

The leaders were also able to overcome divisions to embrace a new global economic order that envisions achieving more balanced growth and greater power for developing countries. Recognizing the increasing importance of countries such as China, India and Brazil, the G-20 supplanted the Group of Eight as the preeminent forum for international economic cooperation. "Now, with the passing of time, there are global challenges that the advanced countries cannot resolve alone," said South Korean President Lee Myung-bak, whose country is co-hosting the next G-20 leaders summit in June with Canada. Developing countries also moved closer to achieving another long-held goal - equal say at the IMF. The G-20 agreed to shift at least 5% of voting power in favor of under-represented members, mostly developing and emerging countries that currently hold about 43% of voting shares. Russian President Dmitry Medvedev called the decision "a very weighty contribution to the creation of a new international financial system," which shows a "responsible attitude" by leaders. Russia had proposed a 7% redistribution, but he acknowledged that under the agreement Western Europe will still cede power at the fund. Dutch Prime Minister Jan Peter Balkenende told Dow Jones Newswires in a phone interview that he was happy with the results of the summit, even though his country's own influence at the fund will shrink. "I think we can work with this situation. We have a better balance and that is very important," Balkenende said, adding that the Netherlands itself had argued for the IMF's role to be bolstered to help combat the financial and economic crisis.

An agreement to remove fossil fuel subsidies and combat global warming left many people dissatisfied, with environmentalists saying that the plan was too weak and oil companies saying that the plan would damage the economy. The G-20 stopped short of setting a deadline for eliminating subsidies amid opposition from the largest subsidizers, such as Russia. It also failed to be specific about how member countries would encourage investment in clean energy and renewables and provide financial support for such projects in developing countries. "It's an important step toward reducing global emissions but it's not enough," said Jennifer Haverkamp, the international climate policy manager at Environmental Defense Fund. The announcement could foreshadow difficult international talks in Copenhagen in December, when countries will meet to negotiate an international climate treaty to succeed the Kyoto Protocol, which expires in 2012. The U.S. never ratified the treaty, saying it would harm its economy. Oil companies repeated that message, saying that cutting back on subsidies would raise fuel costs and make it less attractive to drill for oil in places like the U.S., which gives tax breaks for domestic drilling.

New Experiment in Global Macroeconomic Coordination

2009-09-25T19:55:00.000-07:00

PITTSBURGH (Dow Jones)--The Group of 20 developed and developing nations has embarked on a new experiment in global macroeconomic coordination but all the tough work still lies ahead, Australian Prime Minister Kevin Rudd said Friday. The summit represents "another important chapter in the response to the global recession...but it would be an absolute mistake to believe that our work finishes here," Rudd said. "In fact our work just begins here." Rudd said he believed the commitments made at the G-20 could pave the way for a sustained global recovery but said the journey there "will be tough, it will be bumpy, it will be long." Rudd said the G20's commitment to a framework for balanced and sustained growth would present challenges for Chinese and Japanese policy makers in particular. China and Japan have long generated large trade and current account surpluses, in part by purchasing dollars to keep their currencies weaker. Rudd said the Asian nations would need to look at "new possibilities" for generating growth in future - relying less on the debt-burdened U.S. consumer. He said that, so far, the G-20 had not explicitly discussed foreign exchange matters but hinted that may need to happen as the G-20 works to contain global imbalances. "It means that you have to resort to other strategies (for growth) including increasing your own domestic consumption," he said. Rudd welcomed the establishment of the G-20 as a "permanent part of the global governance system for the future" and said it represents a big gain for Australia. "It's important for Australia that our voice is heard in the councils of the world," he said. "This is the first time that our country has had a place at the top economic table." Rudd said the establishment of a peer review system for G20 countries to monitor each others' policies will produce real results. But he warned the containment of large imbalances won't happen quickly. "This will not occur overnight," he said. He also noted that peer review - and the possibility of criticism of some countries' economic policies - would be a "new experience" for China. Rudd said that despite some progress in Pittsburgh, achieving a climate deal at December's Copenhagen summit will be "very hard to do." He also said that completing the Doha trade round over the next year will be "critical" for restoring strong growth.

24-hours Strike in October

2009-09-25T07:16:00.005-07:00

The Rail, Maritime and Transport union (RMT) has announced today (25 September) that workers on London Underground’s Victoria Line are to hold a 24-hour strike in October.
RMT union members will go on strike from 9.30pm on 5 October in a dispute over new rosters and increased workloads. The union voted overwhelmingly for the strike action.
The main disagreement between management and Tube staff is the sudden enforcement of more return journeys to be undertaken per day.
According to the RMT, an agreement to reduce the number of return journeys has been in place since 2003 due to the lack of air cooling in the tunnels. Upon the opening of the new Brixton Depot, the agreement had been rescinded with management arguing that the air cooling system in place was now adequate.
Workers on the Victoria Line have now been instructed to perform five rostered return journeys on weekdays.
The union members also plan to refuse to drive more than four round trips on the Victoria Line from one minute past midnight on Wednesday 30 September.
Bob Crow, RMT General Secretary, said: “The underhand attempt to extract an extra 20% from the working day out of our members has provoked this action on the Victoria Line and we would urge the management side to re-open serious negotiations to resolve this issue.”

New Vodafone:Unite Customer Contacts

2009-09-25T07:08:00.000-07:00

Vodafone has launched its new suite of services – Vodafone 360 – which it says will give customers a “truly integrated mobile internet experience”.
Vodafone 360 will replace Vodafone Live! and will unite customer contacts with information from social networks and address books. It will work across a range of mobile phones – including those specially commissioned by Samsung – and synchs automatically with a PC.
The address book, Vodafone People, will automatically synch all contacts from a customer’s phone, Facebook, Windows Live Messenger and Google Talk, and will soon also include Twitter, Hyves and studiVZ.
The hotly-anticipated suite of internet services will aim to raise the bar in mobile technology and hope to provide a solid competitor to Apple’s iPhone. A wide range of apps, games, music and mapping services will be accessible.
However, the services will be launched in just eight European countries initially, in time for Christmas, including Germany, Greece, Spain and the UK. Vodafone will then expand the offering in 2010 to a number of other countries including France, New Zealand and South Africa.
Pieter Knook, Director of Internet Services at Vodafone Group, commented on the ease of its latest innovation: “The beauty of Vodafone 360 is that all the services work together and they are easy to use. Vodafone 360 enables customers’ digital lives.
“Customers can stay in touch and share experiences through social networks, instant messaging, email, apps, maps, music and buying digital content on their mobile bill, with the personalised address book at its heart.”
Ian Fogg of Forrester Research, blogging on The Forrester Blog, commented that this latest move for Vodafone is part of a major strategic play. He said: “This is such a major initiative with wide ranging scope.”
At the end of June 2009, Vodafone estimated a customer base of more than 315 million people.

Economic Growth

2009-09-24T05:28:00.000-07:00

FRANKFURT (Dow Jones)--The German Ifo institute's business confidence data improved in September, confirming a pick-up in economic growth in the third quarter, but economists warned against over-optimism as potential headwinds remain for Europe's largest economy. Though the index rose to 91.3 in September from 90.5 in August, the sixth straight improvement, it missed expectations for a rise to 92.0, and there are many reasons to think the German economy will struggle in the months ahead, said IHS Global Insight senior analyst Timo Klein. "Still-difficult credit conditions, anticipated further labor market deterioration and the wearing off of some of the fiscal and monetary policy stimulus measures - all of which will dampen private consumption - argue for a setback in early 2010," said Klein. A sustained and more broad-based economic recovery should only be expected after mid-2010, he added. "This is a reminder not to get too carried away about the strength of the recovery," said Jennifer McKeown, an economist at Capital Economics. However, the figures were strong enough to raise further hopes of reasonable economic growth in the current quarter. Commerzbank AG analyst Simon Junker anticipates GDP growth of 0.8% in the third quarter over the second, while BNP Paribas SA's Dominic Bryant expects a 1.0% quarterly increase. The euro weakened slightly after the release of the data, to $1.4736 from $1.4759 beforehand. German government bonds moved higher amid signs the domestic recovery will be slow and bumpy. "There's now nearly a balance between pessimists and optimists" with regard to the six-month business outlook, said Hans-Werner Sinn, president of the Ifo institute. In light of the "catastrophic developments" of the past 12 months, "this is good news," he said. However, while the business situation and outlook have improved, by far the greater number of firms still assess the business situation as being poor, Sinn added. All recent indicators point to a further pick-up in economic activity in Germany, but caution is still warranted, analysts said. "Next year, when all exogenous stimulus is gone, the economy could easily be left with its export sector as the sole growth driver," said Carsten Brzeski, analyst at ING Bank.

Time to Repair Banks....How Long???

2009-09-24T05:25:00.000-07:00

LONDON (Dow Jones)--Bank of England Governor Mervyn King said in a newspaper interview that U.K. output has stabilized, but that it is important not to get carried away by signs of growth. In the interview with regional newspaper the Newcastle Journal, published Thursday, King reiterated that it will take a long time to repair banks' balance sheets, adding that "radical" change is needed in that sector. He also said the weakening in sterling will support a necessary rebalancing of the U.K. economy. "Output has stabilized. There are some signs that growth may be beginning to pick up. But we shouldn't get too carried away by this. This is clearly very small growth after a very large fall, and unemployment has risen, so it's a difficult challenge ahead," King is quoted as saying. He added that the most important thing is that policymakers have managed to stem sharp declines in output. "I think the U.K. is pretty well set for a recovery, but the banking sector is not in good shape and it will take a long time before the balance sheets of the banks are fully repaired and the ability to provide credit to the economy to finance expansion will be returned to normal," he is quoted as saying. King said there needs to be radical change in the banking sector, but that it is more important to consider why people felt able to take such large risks leading up to the crisis, rather than whether the activities they engage in are socially useful. In a speech Tuesday, Financial Services Authority Chairman Adair Turner said the watchdog will increasingly question whether financial services firms are delivering their vital services in an efficient and risk-controlled fashion. "The fundamental question we have to ask is why is it that taxpayer- guaranteed funding to banks is being used to finance risky transactions?" King said. "You don't have to make judgments about whether something is useful or not, you can recognize that it doesn't make sense to provide guarantees for people to take big risks." King said global imbalances have been one of the underlying causes of the financial crisis, and stressed the need for China and other Asian countries to reduce their surpluses and the U.K. to reduce its deficits. "That rebalancing of the U.K. economy that I have been talking about for about 10 years, is very necessary. I think the fall in the exchange rate that we have seen will be helpful to that process, but there's no doubt that what we need to see now is a shift of resources into net exports, whether directly or in producing things that compete with imports that help to reduce the trade deficit," he is quoted as saying. A separate article in the Northern Echo newspaper reported King as reiterating that the government needs a credible plan to return the U.K. to fiscal sustainability, but that the timing will depend on the pace at which the economy recovers. "What we need is a credible plan for how the budget deficit will be reduced," King was quoted as saying in response to audience questions during his visit to the north of England.

Rise and Fall in Forex

2009-09-24T05:22:00.000-07:00

FXstreet.com (Buenos Aires) – Pair fell again to the 90.40 area, where buyers halt the downside rally; back above 90.60 resistance zone, pair is attempting to recover the 91.00 level, as hourly indicators seem to have bottomed and turned slightly bullish at this point. Above mentioned 91.00, next resistance come at 91.35 and 91.60 area, while back under 90.50 will send the pair to retest the lows between 90.20/40. EUR/JPY turned to the downside, hovering now around the daily 100 SMA around 134.00; daily close under this level will put the pair under pressure, as also daily indicators are turning down. Immediate resistance comes at the strong 134.40 area, ahead of 135.00, daily descendant trend line.

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Forex News All Around

2009-09-24T05:10:00.000-07:00

The U.S. dollar was lower versus most rivals Thursday, maintaining a weak tone a day after the Federal Reserve upgraded its assessment for the economy but indicated that interest rates were unlikely to rise any time soon. Strategists at Brown Brothers Harriman said the dollar saw added pressure versus the Japanese yen in Asian trading on talk of potential yen repatriation following the Japanese holiday. The dollar fell to 90.70 yen versus the Japanese unit, down from 91.13 yen in North American trade late Wednesday. The dollar index (DXY), which measures the U.S. unit against a basket of six major currencies, recently stood at 76.251, down from 76.377 in late New York trade Wednesday. The euro rose to $1.4770, up from $1.4734. The euro posted little reaction to a continued but weaker-than-expected rise in the Ifo Institute's German business climate index. The index rose to 91.3 in September from 90.5 in August, coming in below forecasts for a stronger jump to 92.0. Economists said the data still pointed to third quarter growth for the German economy. The British pound, meanwhile, tumbled on a combination of news reports focused on the currency's ongoing weakness. Sterling traded at $1.6196 versus the dollar, down from $1.6343 late Wednesday. The euro jumped 1.3% to 91.15 pence. Remarks by Bank of England Governor Mervyn King to a regional newspaper published Thursday underscored the central bank's lack of concern about weakness in the pound, strategists said. King, in an interview with the Newcastle Journal, said the pound's tumble had aided a rebalancing of the U.K. economy. The pound had regained some ground Wednesday after minutes of the BOE's September policy meeting showed policy makers were content for now with the size of the bank's quantitative easing program. "But the bounce only lasted 24 hours as Mr. King once again demonstrated to the market that the BOE is perfectly content with a lower currency exchange rate and is unlikely to initiate any type of tightening into its monetary policy for the foreseeable future," said Boris Schlossberg, head of currency research at GFT. Also, the Daily Telegraph reported that the Bank of England was set to meet with London-based economists in what the newspaper termed a "crisis" meeting designed to stem alarm and confusion over the quantitative-easing program and the weakness of the pound. Some analysts downplayed the significance of the meeting, but noted that overall sentiment toward the pound remains bearish. "Indeed, although there is nothing unusual in the BOE calling a meeting with economists to clarify policy, as looks to be the case, the sterling-negative sentiment continues to build, especially as the BOE appears unconcerned by the currency weakness at this stage," wrote strategists at BNP Paribas. In a statement after its widely expected decision on rates Wednesday, the Fed said that economic activity has "picked up" and noted improved conditions in financial markets. It also extended through March the timeframe for its $1.25-trillion program to buy mortgage-backed securities and its $200 billion program to buy agency debt. The programs, aimed at keeping rates low to support the U.S. housing market, were originally set to expire in December. The dollar will likely remain under pressure ahead of the two-day meeting of Group of 20 leaders in Pittsburgh on Thursday. At the G20 meeting, the U.S. is widely expected to make a call for the global economy to be rebalanced via increased spending from countries, such as China, that sport a trade surplus.

Majors Sets to Gain Against Greenback

2009-09-23T00:23:00.000-07:00

Early Asia, majors are set to extend gains against greenback, despite markets in Japan, Indonesia, and Pakistan remain closed; local share markets likely to rise following positive day in Wall Street. Data published less than an hour ago show a much better than expected GDP for NZD sending the currency to a fresh yearly high against dollar, dragging again the American currency down across the board. Majors gains however, will likely remain limited ahead of FOMC meeting result to be release tomorrow in the American afternoon. Despite FED is widely expect to keep rates unchanged, statement will be closely study searching for any possible policy change or economic outlook. EUR/USD quotes around 1.4800, with immediate resistances at 1.4822, yesterday’s high, and 1.4866, past September 2008 high; GBP/USD needs to move above 1.6400, 61.8% retracement of the 1.6567/1.6135 rally to extend gains to 1.6460 area, and stronger 1.6520; however, pair likely to remain quiet in Asia, waiting for the Minutes of last BOE’s meeting to be release early in Europe.

Released Economic Data

2009-09-23T00:20:00.000-07:00

With little economic data released at the start of the week, the focus in the currency market has shifted to Central Bank rhetoric, with the key highlights attributed to commentary from Fed Chairman Ben Bernanke and ECB President Jean-Claude Trichet. Speaking from the Fed’s annual symposium in Jackson Hole, Wyoming, Bernanke offered an optimistic assessment over the economic outlook saying, “economic activity appears to be leveling out, both in the US and abroad, and the prospects for a return to growth in the near-term appear good”. His upbeat outlook spurred on gains in the equity and commodities markets, while pushing the dollar slightly lower against the majors.Meanwhile, ECB President Trichet sounded a cautious tone over the economic outlook for the Eurozone, suggesting that interest rates will likely remain low for a protracted length of time. He said, “We see signs confirming that the real economy is starting to get out of the period of freefall”, yet it “does not mean at all that we do not have a very bump road ahead of us”. Nonetheless, the major currency pairs continue to drift in a lackluster manner as the summer doldrums have confined foreign exchange to rangebound trading. We remain biased for further dollar weakness in the coming weeks as economic data from the US continue to gradually improve and support the equity markets.

Is Pounds Sterling KING?

2009-09-23T00:13:00.000-07:00

The greenback was higher against the pound, rising to 1.64-figure and pushing the euro back towards the 1.46-level. Several key US economic reports were released this morning, including retail sales, producer price index and the New York Fed manufacturing survey. Retail sales in August were sharply higher than expected, with the headline figure jumping by 2.7% versus a revised 0.2% decline in July and the excluding automobiles retail sales report increasing by 1.1% compared with a revised 0.5% decline in the previous month. The September NY Fed manufacturing survey was also sharply better than forecast, rising to 18.88, beating calls for an improvement to 14.0 from 12.08 a month prior.
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The British pound plunged by over 200-pips in early Tuesday trading, slammed by commentary from Bank of England Governor Mervyn King. In King’s Parliamentary testimony, he hinted at further cutting the bank deposit rate, suggesting that the BoE was mulling over “reducing the remuneration” of bank reserves and that it would be a “useful supplement” to stimulate the ailing UK economy. While King expressed optimism that the sharp deterioration in economic fundamentals may have passed, he also added, “the strength and sustainability of the recovery is highly uncertain and the balance of risks to inflation around the 2% target remains on the downside”. Economic data released from the UK overnight reaffirmed BoE Governor King’s outlook on inflation, with August CPI relatively tame, up 0.4% on a monthly basis and up 1.6% on an annualized basis. Meanwhile, the retail price index for August increased by 0.5% versus a flat reading in the previous month and posting a 1.3% decline versus a 1.4% drop a year earlier.

The Dollar Edged Higher

2009-09-22T23:59:00.000-07:00

The dollar edged higher against the majors at the start of the week, pushing the euro to 1.4612 and the British pound to 1.6136. With the FOMC meeting this week, traders will closely scrutinize the Fed’s assessment of the economy in the accompanying policy statement. While interest rates are widely expected to remain on hold at 0.0%-0.25%, it will be interesting to note whether the Fed will provide clues on when markets can expect quantitative tightening to commence. The Fed will announce the results of its policy deliberation on Wednesday at 2:15 PM.The economic calendar for Monday was light, with only the August leading economic indictors released. The figure fell short of expectations for an improvement to 0.7% and held steady from the previous month at 0.6%. The Tuesday session will see the September Richmond Fed survey and July home prices.The US equity market was mixed with the Dow Jones and S&P 500 both drifting slightly lower, down by 0.4% and 0.3%, respectively, while the Nasdaq was up by 0.2%. Meanwhile, crude oil eased beneath the $70 per barrel level to $69.70 and spot gold held steady just above $1,000 per ounce.

New Zealand Dollar Rallied

2009-09-21T06:36:00.000-07:00

The New Zealand dollar rallied against the greenback for the tenth consecutive week, with the NZD/USD advancing to a fresh yearly high of 0.7161 however, the higher-yielding currency looks to be losing its footing as the economic docket for the following week is anticipated to show a 0.2% contraction in 2Q GDP. However, as investors ramp up long-term expectations for higher borrowing costs and speculate the Reserve Bank of New Zealand to tighten policy in the following year, the rise in the interest rate outlook may continue to support the rally from March as market sentiment improves. Credit Suisse overnight index swaps are up 126bp in September, which is the highest reading for the year, and investors may increase bets for a rate hike over the next 12 months as the RBNZ maintains a neutral policy stance. The NZD/USD bounced back after slipping to a low of 0.6964 earlier in the week, and continued to trade above the 10-Day moving average (0.7037) as market participants moved into higher risk/reward investments. However, as the relative strength index remains elevated and holds above 60 for the second consecutive week, we may see the pair fall back in the coming week as the RSI approaches overbought territory. At the same time, the economic docket is anticipated to show a drop in the growth rate, with economists forecasting 2Q GDP to fall 0.2% from the first three-months of the year, while the annualized rate is projected to contract 2.6% after falling 2.7% in the first quarter, and the data could stoke increased selling pressures on the New Zealand dollar as investors weigh the prospects for a sustainable recovery. Moreover, the current account deficit is expected to widen in the second quarter as trade conditions remain weak, while the trade deficit is projected to increase to NZ$329M in August from NZ$163M in the previous month as foreign demands falter. As the outlook for global trade remains weak, the data could weigh on the growth forecast for the $128B economy as the appreciation in the exchange rate hampers the competitiveness of New Zealand exports, and the central bank may see an increased risk for a slower recovery over the coming months as the rise in risk appetite continues to support the rally in the kiwi-dollar higher. - DS

The Australian Dollar:Yearly High

2009-09-21T06:26:00.000-07:00

The Australian dollar set a fresh yearly high of 0.8778 against the greenback during the past week before the release of the RBA minutes tempered interest rate expectations. Policy makers stated that “members were conscious of the need to balance the task of controlling inflation over the medium term with that of supporting economic recovery.” The central bank is widely expected to be the first of the major economies to begin tightening making the already high yielder more attractive in the current environment of risk appetite. Indeed, the Australian economy emerged from the recent downturn with the least amount of scars and is poised to take advantage of global growth and the ensuing demand for raw materials. The Westpac leading index which is a gauge that attempts to forecast the economy’s performance over the next three to nine months rose by 1.1% to its highest level in seven months. Looking at the breakdown we see the bullish outlook is derived from expected positive contributions from real money supply and dwelling approvals which would suffer if the central bank started to cut rates. Furthermore, the second quarter dwelling starts report showed an unexpected decline of 3.7% against economists forecast of a 2.0% gain. It would mark the fourth straight quarterly decline and a clear signal that higher interest rates could start to increase downside risks. Nevertheless, the central bank stated that the Australian financial system remains strong and that the country is benefitting from exposure to China and the global economy on a sustained growth path. However, Governor Stevens recognized that there are still some warnings signs such as weak business credit conditions. Therefore, we may see policy makers reluctant to take any actions that may deter lending following the recent credit crisis until inflation risks become obvious. Markets are still pricing in 174 bps of rate hikes over the next twelve months which should keep the Aussie well supported. Yet, we have seen it slip from a high of 199 bps on September 7th, which may signal some near-term weakness for the currency. The DEWR skilled vacancies report is due for release and softness in the labor market could give traders an excuse to take profits, but another sign of growth could add to bullish momentum. The RBA financial stability review and quarterly wage agreements are also on the horizon and could potentially impact price action. However, traders should take their cues from commodity markets and risk trends as they continue to be the dominant drivers of price action for the pair. The next level of resistance may be found at 0.8816-the 8/22/08 high where we could see the current rally stall. Conversely, we could see the pair retrace back to the 20-Day SMA at 0.8513 before another push higher. - JR

Canadian Dollar against US namesake

2009-09-20T04:36:00.000-07:00

The Canadian Dollar finished the week modestly higher against its US namesake, but the currency’s inability to close near year-to-date highs leaves short-term momentum to the downside leading into the coming weeks’ trade. The USDCAD currency pair dropped for three consecutive trading days and briefly breached the psychologically significant C$1.0600 mark. Yet it serves to note that oil prices likewise failed to hold near fresh highs, and there is clear risk for near-term pullback. Domestic economic data proved largely better than expected but had relatively little influence on price. Instead, the USDCAD continues to track Crude Oil prices and broader risk market sentiment. Continued strength in financial market risk barometers would bode well for the Canadian Dollar, but the threat of near-term reversal looms large for the recently high-flying currency. The Canadian Dollar has ridden the wave of renewed optimism across financial markets, rising in tandem with similarly buoyant Crude Oil prices. Yet Crude Oil itself remains stuck in a consolidative range, and its inability to break higher on several successive attempts leaves clear risk of near-term pullback. A relatively quiet week of Canadian economic event risk suggests that the domestic currency will trade almost-solely on developments in other markets. Potential exceptions include early-week International Securities Transactions and Canadian Retail Sales reports. The former is expected to show that foreigners invested a net C$9.5 Billion into Canadian Securities in July. Said number would represent a modest pullback from impressive May and June results, but an at-consensus print would nonetheless underline solid foreign demand for Canadian securities. The subsequent Retail Sales release is likewise expected to show robust consumer demand, but a recently impressive Wholesale Sales result means that only the most surprising of outcomes will elicit strong reactions out of the USDCAD. Canadian Dollar traders should keep a close eye on developments in global financial markets—especially commodity prices and Crude Oil futures. If any of these key asset classes break their recent price ranges, the Canadian Dollar may follow suit. - DR

Swiss Franc in Recent Month

2009-09-20T04:33:00.000-07:00

The standby counter-question to anyone seeking to forecast the direction of the Swiss Franc in recent months has been “against what?” In trade-weighted terms, the currency has been confined to a narrow range since March, when the Swiss National Bank intervened into the markets to drive down the exchange rate and pledged to keep a lid on further appreciation as a bulwark against deflation (a stronger currency boosts purchasing power, effectively reducing prices). Markets in the Euro Zone account for close to 60% of Swiss export demand, so in practical terms, reining in the Franc in trade-weighted terms has essentially meant controlling the EURCHF rate (which the SNB has openly discussed). Elsewhere, the Swissie has slipped against the commodity currencies and the Pound but has managed to advance against the US Dollar and the Yen. This is a reflection of the interest rate environment. The Australian and New Zealand Dollars, where 3-month Libor rates have stayed steadily above those of the Franc, have outperformed. The Pound and the Canadian Dollar have seen fewer gains because, while still in their favor, the yield gap has narrowed considerably since the beginning of the year. Finally, the Yen sold off as a rapidly shrinking rate spread erased any advantage the otherwise markedly cheaper Japanese unit had over the Franc, while the US Dollar fared worst of all as its 3-month Libor tumbled to sink below that which is paid on the Swiss currency.
What does this mean for the week ahead? If carry flows are the primary catalyst behind recent price action, currency traders ought to have their eye on the trajectory of risk sentiment, meaning global stock and commodity prices. We have long argued that the markets have done too, much too fast since risky assets began to rally in March with global equities trading at levels unseen since 2003 relative to earnings. The world economy grew nearly 3% in real terms that year, whereas virtually every credible forecast calls for the first post-WWII contraction in real growth in 2009, pointing to lackluster revenues and overextended asset prices. Further, trading volumes have steadily declined for the bulk of the equity rally (the past 5 out of 6 months). While some of this may be chalked up to a seasonal slowdown that is typical for the summer, it may also be hinting at waning conviction behind the up move and a forthcoming reversal as traders return from holiday and volumes pick up into the Fall. While timing this reversal has proven elusive, we can say that when it does occur, the accompanying liquidation in carry trade positions will likely push the Franc higher against the Antipodeans and (to a lesser extent) the Pound and the Canadian Dollar. Meanwhile, a surge in demand for safety will likely boost the US Dollar as well as the Japanese Yen, eroding the Franc’s recent gains against those currencies.
Turning to the economic calendar, the August trade balance report will be of interest: exports look set to decline considering last week’s dismal industrial production data, but the appetite for imported goods is proving difficult to gauge. Indeed, domestic demand may have recovered a bit considering the recent moderation in retail sales figures, but the trend in receipts is undeniably pointing lower while unemployment rises and consumer confidence continues to set record lows. The release of updated economic forecasts from the government’s State Secretariat for Economic Affairs (SECO) will be notable in terms of how it compares to last week’s upward revisions to the growth and inflation outlook of the SNB.

Fall In British Pound

2009-09-20T04:31:00.000-07:00

The British pound was easily the weakest of the majors last week as the currency fell more than 3 percent against the euro, Swiss franc, and Canadian dollar. Likewise, the British pound slumped 2.4 percent against the US dollar and 1.7 percent versus the Japanese yen. While some indicators from the nation have shown signs of improvement, such as the RICS house price index, fiscal data has done nothing but deteriorate, adding pressure on the British pound. In fact, public sector net borrowing in the UK jumped a whopping 16.1 billion pounds during August as income tax receipts fell 13 percent from a year ago. Even worse, the deficit reached 127 billion pounds in August from a year ago, and the steady rise suggests that the shortfall may breach Chancellor of the Exchequer Alistair Darling’s full-year forecasts for a deficit of 175 billion pounds.
According to the Financial Times, the corrosion of the UK’s fiscal state has “been a result more of a collapse in revenues - total tax receipts have fallen by 11.4 percent so far this financial year compared with a year earlier - than of a jump in spending” of just 5.3 percent this year. Going forward, the further the UK’s fiscal state deteriorates, the greater the risk will grow that ratings agencies will question if the nation deserves the golden AAA credit rating, especially after Standard & Poor’s downgraded the UK’s credit outlook to “negative” from “stable” because of their budget woes back in May. Nevertheless, Standard & Poor’s has also said that they would reserve any judgment on potential downgrades until the next general election, which may be held in May or early-June 2010. On the downside, this leaves a long period of time open for speculation on the prospects for the UK’s credit rating to reign supreme, which may make the already-volatile British pound even choppier.
In more immediate event risk, the minutes from the BOE’s September meeting will be released on Wednesday at 8:30 ET. However, they may not expose new information as the BOE’s Quarterly Inflation Report has already revealed dour outlooks by the Monetary Policy Committee. That said, following the latest UK CPI results, which were stronger than anticipated, Credit Suisse overnight index swaps have shifted to price in 78 basis points worth of hikes by the BOE over the next 12 months, up from 66.7 basis points on Tuesday. As a result, if the minutes highlight a clearly dovish bias by the BOE, the market's focus may shift back toward the central bank's liberal stance on quantitative easing, and the British pound could fall sharply. – TB

Japanese Yen Growing Up

2009-09-20T04:27:00.000-07:00

The Japanese Yen finished the week lower against all but the British Pound and the US Dollar, as impressive rallies in the US S&P 500 and broader financial market risk sentiment pushed the safe-haven currency sharply lower against major counterparts. A mediocre week of economic data hardly helped matters, and hawkish rhetoric from the Ministry of Finance pushed the Yen even lower. Vice Finance Minister Yasutake Tango stated that the administration was watching currency moves closely—implying that forex market intervention was a distinct possibility. Indeed, the Japanese Ministry of Finance has historically been an active participant in the Japanese Yen exchange rate and has repeatedly intervened in instances of excessive Yen strength. The very fact that the US Dollar/Japanese Yen exchange rate reached the psychologically significant 90 mark was enough reason to fear MoF intervention, and Tango’s comments were enough to fuel a rapid USDJPY pullback. Later commentary from newly-appointed Finance Minister Hirohisa Fujii quickly dispelled the short-term threat to JPY stability, but the damage had been done and the Japanese Yen remained on offer through the week’s close.
The legitimate threat of MoF FX intervention served as a clear warning to JPY bulls, but recent rhetoric suggests that there will be little in the way of further Yen strength. This leaves the currency to trade purely off of financial market risk sentiment. The fact that the S&P 500 recently registered fresh 2009 highs hardly bodes well for the risk-linked currency, but no market can rally indefinitely. Given the overwhelmingly bearish trend in the USDJPY (bullish trend for the JPY), it seems momentum is plainly in the Yen’s favor. Yet it remains critical to watch any and all moves in key financial market risk barometers.
We previously claimed that the “September Effect” could lead the S&P 500 lower and the Japanese Yen higher. Recent weeks have produced impressive equity market strength yet the JPY has remained relatively stable. We believe that the Yen stands to gain on any subsequent pullbacks in stocks, and recent experience shows that it can hold its own despite major S&P strength. Thus we would argue that risks remain fairly bullish for the Yen. If stocks continue their seemingly interminable rally, the JPY could pull back slightly. If stocks fall, the Yen will in all likelihood continue its previous ascent. Things are never quite this simple in currency markets, but we believe JPY risks favor near-term rallies.
The wild card will come on Wednesday’s Trade Balance report. The export-dependent Japanese economy has taken a massive hit on the sharp drop in foreign demand for its own production. Any signs of continued exporter duress will once again raise political pressure on the Ministry of Finance to counteract Japanese Yen strength. Though we clearly believe that risks of intervention are remote, a truly shocking trade balance result could rekindle market speculation on MoF intervention.
The coming week may prove significant in determining more medium-term direction in the Yen. If nothing else, markets will definitely watch for signs that the USDJPY may finally break below the psychologically significant 90 mark. – DR

Power House of EURUSD.

2009-09-20T04:24:00.000-07:00

Is the euro the fundamental powerhouse that the EURUSD would suggest or is the euro merely playing the compliment to the rest of the market. If we were to look at the world’s most liquid currency pair alone, we see a six month trend, recent rally and the highest overall level for the exchange rate in nearly a year. However, the easy read on the major is clouded when we look at the crosses. Against the pound, the euro was set in its biggest rally since March (a move that was mirrored in most of those pairs denominated in sterling). Elsewhere, EURJPY was stuck in a contracting range; EURCHF was virtually unchanged in its 100-point range; and the commodity group consolidated within bigger trends. It seems the case that the market is influencing the euro rather than the euro influencing the market. And, while there are fundamental concerns building beneath the surface, this relationship isn’t likely to change much in the coming week.Few would argue that risk appetite (and its influence in currencies through carry interest) is a primary driver for the market at large; but what does that mean for the euro? To gauge any currency or asset’s response to sentiment, you need to determine where it stands in the scale of risk. High interest rates, strong growth prospects and progressive policy are a few factors that build a positive correlation to a rising demand for yield. Naturally, the opposite considerations count as traits for a safe haven or funding currency. On either side of this spectrum, we have an asset that is sensitive to the underlying fundamental currency. However, the euro fits comfortably in the middle of the range. The benchmark lending rate in the Euro Zone is relatively high; but the outlook for hawkish progress is reserved. Growth is colored not only by the positive turn from Germany and France; but there have also been downgrades for Italy and Spain. Overall, despite the confidence of politicians and some policy officials, the economy is on the same playing field as the US, Japan and many others. Until the ECB turns up the heat on the target rate or financial troubles (like the ability for some Eastern European economies to repay their debt), this will remain the case.Outside the vagaries of sentiment, there are a few notable economic events on the docket to supply short-term volatility and perhaps a moderate shift on the bearing for growth forecasts. Top event risk is the series of service and manufacturing sector PMI data. While this series covers specifically the business sector of growth, it is inclusive and timely enough to act as a meaningful leader for growth speculation. Being the September round of data (the ‘Advanced’ or first measure), this will round out the forecast for third quarter activity. All of the regional, German and French numbers are expected to produce month-over-month improvement and most are seen offering ‘expansionary’ readings. This would support the central banks and government’s outlook for growth; but it still does not paint a clear picture for a return to a true expansionary trend. Other indicators like the Euro Zone industrial new orders and German factory inflation gauge threaten little more than a meager shift; but the IFO business sentiment gauge could generate some fundamental interest. Sensitive to economic health, consumer spending, access to credit, export demand, optimism among German firms acts as its own unique report on the general health of the economy. The headline and expectations readings have been most prized recently; but a closer eye should be kept on the difference between expectations and current conditions. The outlook after a financial crisis and steep recession will certainly improve quickly; but actual health in the economy and markets will be more measured. One will have to give way to the other sooner or later. – JKWritten by: John Kicklighter, Currency Strategist for DailyFX.comQuestions? Comments? Send them to John at jkicklighter@dailyfx.com.

The Dollar

2009-09-20T04:17:00.000-07:00

The dollar was able to relieve the pressure of suffering its worst trend on recent record by clawing out the first bullish close in eleven consecutive trading days; but that does not mean the burdened currency is necessarily primed for a true reversal. While this currency is arguably oversold on a fundamental basis; the same drivers that ushered it to its yearly low last week are still in play. The pace of the economic recovery, growing financial concerns and a Fed struggling to keep pace are all prominent concerns when gauging the long-term health of the dollar; but all of that is overshadowed by the immediate and market-wide preoccupation of risk appetite.Last week, a Bloomberg survey of investors found the market was the most bearish on the dollar in 18 months. Where does this speculative grade come from? The economy is still dealing with an economic recovery and government deficits are a genuine concern; but most of the world’s largest economies are suffering with the same dilemma. The real weight on the dollar is the steady revival of risk appetite over the past six months. Following the necessary period of consolidation after the worst of the financial crisis, capital started to slowly work its way back into the speculative arena. Initially, interest was from early adopters; but the draw of capital gains was strong enough to start the flow from deeper pools of wealth in “risk free” areas. Where do these funds go? It certainly finds its way to US equities and other relatively-risky assets; but when it comes to the yield bearing instruments, the American products can’t compete. The benchmark, 3-month Libor rate dropped to a new record low (0.28948 percent) this past week and subsequently was depreciated to a discount against its Japanese (0.34875 percent) and Swiss (0.29667 percent) counterparts. Does the dollar realistically make the ideal funding currency? No. The Fed will certainly turn to a hawkish policy stance well before the other two, it has the potential to take a more consistent hawkish path, deficits are a problem amongst all three and the foundation for a true recovery is most stable in the US. As soon as US rates recover, risk-seeking capital will once again flow into the world’s financial center.In the meantime, we may see a shift in sentiment that could benefit the dollar’s safe haven status. The broader markets have rallied consistently for months – despite a fundamental picture that has changed pace little since the initial reversal. Naturally, a wave of profit taking is highly probable. And, considering the advance to this point has been heavily dependent on steady capital gains, a correction could be sharp and aggressive. There are many different potential catalysts for such a turn; but in the end, the shift in optimism will likely develop naturally. Nonetheless, we should keep an eye on a few specific developments. Reports suggest that lending to consumers has dropped at its fastest pace since the Great Depression; yet leverage has returned to levels last seen since before the 2007 meltdown. This is an imbalance that will lead to problems later down the line if not corrected. Also, the Federal Reserve and White House have both voiced concern over the commercial real estate debt market. The former is looking into major banks’ exposure to this asset class; but the term ‘stress test’ is not being used.Though it is vital to keep abreast of the health of risk appetite; we shouldn’t ignore the influences of data and growth forecasts. The economic docket is light next week; but durable goods orders and housing data (existing sales, new home sales) can supply short-term volatility. It is the FOMC that tops the list – not with a possible change in the benchmark, but commentary that can move up the time table for a hike. Data aside, the US/China trade spat hints at a growing concern with protectionism which may come under scrutiny at the September 24/25 G20 Meeting. Exit strategies, financial regulation, banking compensation are all on the topic list; but not currencies. – JK

Are You Unemployed???

2009-09-17T17:58:00.001-07:00

According to the latest figures, the number of jobless people in the UK has risen to 2.47 million in the three months to July, taking the rate of unemployment to 7.9%.
Recent data from the Office for National Statistics (ONS) shows that during the last quarter, 210,000 people nationwide fell into unemployment. The level of unemployment is at its highest level since May 1995.
The number of people in employment at the end of the July 2009 was 28.89 million, a drop of 600,000 over the year.
Most sectors showed a fall in the number of positions with the largest drops occurring in the business, finance and construction industries.
At 7.9%, the unemployment rate has not been greater since November 1996 and is 2.3% higher than last year.
Claims for Jobseeker’s Allowance have also risen significantly in recent months with the number of claimants reaching 1.61 million in August 2009.
The number of job vacancies in the UK has also fallen to 434,000 in the three months to August, down 12,000 over the previous quarter and down 174,000 over the year.
Despite the consistent drops in unemployment, average earnings increased by 1.7% in the three months to July. The increase is however smaller than the previous month.

Entertainment Weekly

2009-09-17T17:53:00.000-07:00

US magazine Entertainment Weekly has launched the first video advert embedded into print, under the direction of the broadcaster CBS and drinks maker Pepsi.
In this week’s issue of the popular magazine, readers in Los Angeles and New York will discover characters from US television programmes speaking to them from a wafer-thin video screen built into the page.
It is in fact a marketing experiment from CBS and Pepsi and is suggestive of the fantasy newspaper “The Daily Prophet” in Harry Potter, working much like a singing greetings card, with the video starting once a reader turns the appropriate page.
President of CBS’s marketing group, George Schweitzer, said: “This is the first way we can get video samples into the hands of entertainment enthusiasts off the television screen.”
The video advert plays on a screen similar to that of mobile telephones, and is built into a cardboard insert which also features in-built speakers, so the viewer can hear the advert too.
Chip technology is used to store the video, and has been developed by Americhip, a company which specialises in multi-sensory marketing. With rechargeable batteries, the chips are technically re-usable, with each one able to hold up to 40 minutes of video.
CBS and Pepsi won’t say how much this limited commercial trial is costing, but Americhip told BBC News that a multi-thousand print run with built-in screens would cost in the region of US $20 (around £13) for each magazine.
It is not quite the first time that this sort of technology has been used in printed publications. Last year Esquire, the men’s lifestyle magazine, used e-ink technology to create a changing cover for its 75th anniversary issue.
Whether video embedded in print is just another expensive advertising gimmick or here to stay will only emerge in time. Some readers may find the automatic playing of video intrusive, yet others are likely to delight in such a seemingly advanced piece of technology. Let us know what you think.

Budget Management of The University of Memphis

2009-09-16T12:33:00.000-07:00

The University of Memphis is adjusting its budget to accommodate for an expected $6 million loss in state appropriations, said President Shirley Raines.

“It will be a difficult time for us,” Raines told faculty during their Tuesday senate meeting. “But thankfully we did have an enrollment increase, and we did have revenue increases that came from student tuition, and we will be dealing with the American Recovery and Reinvestment Act funds.”
Administrators estimate this fall’s enrollment has jumped 7 percent to 21,700 students.
Tennessee Board of Regents Vice Chancellor for Business and Finance Dale Sims sent an e-mail Friday to higher education officials notifying them to anticipate a 6 percent recurring budget reduction next fiscal year for state universities, community colleges and technical centers under the Board of Regents.
The Tennessee Higher Education Commission has not yet determined how the potential cut in state funds would be distributed among institutions.
“This e-mail was to give notice that it is coming and (administrators) should have it in their minds as they plan for the future,” said Board of Regents spokeswoman Mary Morgan.
The U of M submits a tentative budget to the Board of Regents in July and a revised budget in October based on revenue and fall semester enrollment.

Plans about Bank

2009-09-16T11:59:00.001-07:00

New legislation is planned that will require banks to draw up ‘living wills’, which detail the company’s structure so it can be more easily dismantled in a financial crisis.
Within the plan, banks would have to detail which parts of their business they could sell to raise emergency funds, and how they would close down all trading operations within 60 days, according to the Financial Times.
The Financial Services Authority (FSA) would have statutory responsibility for future financial stability.
UK Chancellor Alistair Darling told the Financial Times on Monday (14 September): “Whilst the FSA has got the power to [introduce living wills], we are considering whether or not we need to make that more explicit, and in particular, I think we need a timetable.
“This is something you can’t just allow to drag on, because you can see [the potential] situation where people say, ‘Yes, yes, we must do something about it, but not yet’.”
However, the plan that banks should simplify their banking structures has not been welcomed by some within the industry. Michael Wainwright, a partner at Eversheds law firm, described the move as a “smokescreen”: “The living wills concept is being seen in some quarters as a back door way to compel banks to separate out their retail and wholesale business.
“This is misguided wishful thinking. The only way to achieve this would be through international agreement leading to a co-ordinated legislative programme across all major financial centres.”
The plans will be progressed in the Autumn.

Merge Mobile,Cut Costs

2009-09-15T18:32:00.000-07:00

Japanese electronics companies – NEC, Hitachi and Casio – have announced plans to merge their mobile operations to cut costs and increase market size.
In 2004, Casio and Hitachi jointly established Casio Hitachi Mobile Communications (CHMC) in order to capitalise on the technologies from both companies. CHMC currently provides mainly CDMA-focused mobile handsets for a number of Japan-based companies, as well as Verizon Wireless in the US and LG Telecom in Korea.
The new company, NEC CASIO Mobile Communications Ltd, will “strengthen both domestic and international business while increasing competitive strength and capitalising on each company’s brand recognition.”
The trio anticipate cost savings will be a major by-product of the venture as it achieves synergies across sales, customer service and procurement. The new company is also anticipating an advancement in technology as it pools resources and know-how.
engadget.com revealed in August that rumours were circulating from Japan of a possible venture between the three companies . The merger will give the combined company a market share of around 15% according to market research company BCN, ranking third behind Sharp and Panasonic.
It is anticipated that the new company will be approved by April 2010, at which point NEC will own 71% of the business, with Casio owning 20% and Hitachi holding a 9% share.

Closure of Second Largest Global Defence Company

2009-09-15T18:26:00.000-07:00

BAE Systems has announced plans to close its Woodford site in Cheshire and to axe a total of 1,116 jobs from four of its sites: Woodford (630 losses), Samlesbury in Lancashire (205), Warton in Lancashire (170), and Farnborough in Hampshire (111).
It is the second largest global defence company and the closure of its Woodford site will coincide with the completion of its Nimrod MRA4 production contract.
Employees at the site have been aware of the potential job losses since 2003 – more than 130 jobs were axed at the site in 2008 – and it is expected that these losses will phase out in line with the production plan.
The reason for job losses at the other sites vary, but include the end of Airbus work, Harrier work curtailment and Nimrod, Tornado and Hawk programme declines.
Kevin Taylor, Managing Director of Military Air Solutions, said: “Whilst we regret having to make this announcement we have to ensure we are the right size and shape to remain competitive and meet our customers’ requirements in the future.
“We will work with our employees and their representatives to explore ways of mitigating these potential job losses and we will do everything necessary to deal with the potential job losses and closure of Woodford in a professional way and support our people throughout this process.”
BAE Systems has already this year announced job losses. In May, it closed sites in Guildford, Leeds and Telford, and also cut jobs at its Newcastle and Leicester sites resulting in the loss of around 500 jobs. Previously, in November 2008, 200 positions were also cut.
The Woodford plant is expected to close completely in 2012.

Phoenix,1st Major UK Gas Supplier

2009-09-15T07:32:00.000-07:00

Phoenix Supply – based in Northern Ireland – has confirmed a 19% reduction in its gas tariffs, effective from 1 October 2009 – committing to a promise it made earlier this year.
The latest price cut is the second in nine months and is unprecedented in Northern Ireland. It brings the total drop this year to 36.9% or a reduction of £258 from the average annual domestic bill.
Announcing the price cuts, David Strahan, General Manager of Phoenix Supply, commented: “We made a commitment to our customers in January that should the wholesale cost of gas continue to fall we would, once again, reduce prices accordingly.
“This is a promise we have kept, and we are delighted that Phoenix is the first major UK gas supplier to be able to announce two substantial price reductions this year.”
Independent energy supplier first:utility also announced this week that it has launched a new dual fuel iSave deal, which it claims undercuts every other UK energy tariff and offers customer savings of up to 14.5%, compared to competitors such as British Gas.
Mark Daeche, Chief Executive of first:utility, said: “Our goal is to provide consumers with a real alternative to the ‘Big Six’ energy players today.”
Will Marples, Energy Expert at uSwitch.com, commented on the deal: “This is the first time that a ‘challenger’ energy provider has gone head-to-head with major suppliers on price and beaten them. It’s good news for those consumers who have been looking for a viable alternative to the ‘Big Six’, but who are concerned about paying more for their energy as a result.”
The iSave tariff is only available online however, and customers are encouraged to register for the deal through one of the online switching websites.

UK jobs,know what it is?

2009-09-15T07:27:00.000-07:00

British workers will be first in line for UK jobs due to a Home Office initiative, which will ensure jobs are advertised in the UK for longer, before being offered overseas.
From 2010, all jobs must now be advertised in local branches of Jobcentre Plus for one month instead of two weeks before they can be advertised outside of Europe.
Another change within the initiative is that overseas workers who want to work at their company’s UK office will have to have worked for the organisation for one year, rather than the current six months.
In addition, the minimum salary of an overseas worker needed to apply for skilled work in the UK will rise from £17,000 to £20,000.
Alan Johnson, UK Home Secretary, said: “The introduction of the points-based system has radically improved our ability to respond quickly to changing economic circumstances.
“These changes will ensure that businesses can recruit the skilled workers that the economy needs, but not at the expense of British workers, nor as a cheaper alternative to investing in the skills of the existing workforce.”
In February 2008, a new points-based system was introduced in the UK in an effort to ensure only highly-skilled people could study or work in the country. The points recognise factors such as age, aptitude and experience, and the system has been designed to minimise the number of failed applications from overseas workers.

Liverpool FC and Standard Chartered

2009-09-14T06:40:00.000-07:00

Liverpool FC and Standard Chartered Bank PLC have announced a four-year deal for the bank to become the club’s main sponsor – including the shirt sponsorship – creating the largest commercial agreement in Liverpool’s history.
The deal which will run from July 2010 to the 2013/14 season will allow Standard Chartered – among the top 25 companies in the FTSE-100 by market capitalisation – to use its major rights package to significantly increase its brand awareness across its core markets in Asia, Africa, and the Middle East.
Standard Chartered has been one of the few financial institutions which has managed to weather the financial storm. Over the last five years it has more than doubled its revenue and profits and performed consistently well.
Peter Sands, Group Chief Executive of Standard Chartered PLC, said: “This is a great partnership. We are excited to be working with such a famous global brand as Liverpool Football Club for the next four years. This is an outstanding opportunity for Standard Chartered, our customers and shareholders, and for Liverpool, its players and fans.”
Christian Purslow, Managing Director of the Premiership club told Liverpoolfc.tv: “I am tremendously excited. It’s a hugely important day in the history of Liverpool Football Club.
“This is the largest commercial agreement we have ever entered into. To have attracted a partner of the calibre of Standard Chartered Bank says everything about where we are trying to take this football club.”
Carlsberg, who has been the principle sponsor of the club since 1992, confirmed that it will not be renewing its contract of the club’s shirt sponsorship, but said a relationship would continue through different partnerships.
Mr Purslow said he was grateful of the support Carlsberg has given the club over the past 17 years and looks forward to continuing the relationship through different avenues.
Keld Strudahl, Carlsberg International Marketing Director, said: “Carlsberg has an excellent relationship with the club. We wish them the best of luck with their new shirt sponsor and we look forward to maintaining a relationship with them in the future.”

Introducing a range of authentic Asian clothing

2009-09-14T06:32:00.000-07:00

Supermarket chain Asda is introducing a range of authentic Asian clothing in 21 of its stores from this week.
Responding to demand from customers for affordable Asian clothing, the retailer has created a new range as part of the George at Asda line, designed in conjunction with a team in India, and made with authentic Indian materials.
The range consists of a 13-piece collection including sequinned embellished Salwaar Kameez (traditional suits), Khurtas (tunics), Dapata (scarves) and Churidar (slim leg trousers).
George Brand Director Fiona Lambert said: “We are extremely proud to be launching the UK’s first mainstream range of traditional Asian clothing.
“We have the broadest socio demographic group of all the supermarkets and we wanted to offer affordable clothing suitable for all our customers.”
Prices for the clothes start at £7, with a complete suit for £26. According to Asda, independent retailers would typically charge up to £60 for similar suits. The range is available at the Bradford Living and Dewsbury stores and on George.com.
The clothing is not aimed solely at Asian shoppers and Asda says the styles are suitable for all cultures. The company is expecting to see a high demand from customers in anticipation of the Eid Islamic holiday on 20 September this year.
Ms Lambert continued: “Our ethnic food ranges in Asda have seen a 46% year on year increase during Ramadan and we’re expecting huge demand in the build up to Eid and Diwali celebrations.”
Asda’s parent company Wal-Mart, launched a Bollywood inspired collection in Canada earlier this year with a positive response from customers.
Wal-Mart Canada Corporate Affairs Director Kevin Groh said: “We were blown away by the attention brought on by the launch of our range of South Asian influenced clothing – from industry watchers, to media, to our ethnic customers.
“Strong sales aside, the buzz and goodwill that continues to surround the line has been remarkable.”

After Continuing Rumor,guess what?

2009-09-13T08:23:00.000-07:00

After continuing rumors about the federal investigation of Colonial Bank, it was closed down by federal regulators Aug. 14. The good news is that Colonial's customers will suffer no losses, as the banking business and much of its loan portfolio has been acquired by BB&T - a healthy bank that will provide continuing service without skipping a beat. This news comes on the heels of the Riverside Bank failure that suffered a similar fate earlier this year, when it was acquired by TIB Bank. The bad news is that there are likely to be more bank failures on the horizon, especially here in Southwest Florida, where our economy continues to struggle.

Did you pick up on the phrase "much of its loan portfolio"? In these cases, the FDIC actually takes over non-performing loans for which the acquiring bank does not want to assume liability. The new bank will then perform additional reviews of its acquired loans for possible follow-up action with the borrowers. There are a couple of reasons why this process may be important to you.
First, the real estate assets that secure those loans now held by the FDIC will likely show up in the marketplace for purchase at some point in the future, often at attractive prices. A competent commercial real estate agent can guide you through that process, if you are looking for an opportunity, either as an investor or as an owner/user. Second, if your current commercial loan has been acquired by the new bank, you may be required to seek replacement financing with another lender, should they call in your loan.
Irrespective of a takeover, you may already be under similar scrutiny from your own bank, as they conduct continuing internal reviews of their loans and seek ways to improve their capital positions.
You might be asking, are there any lenders left out there? What if I want to exploit the current low real estate prices, so I will be well-positioned for the eventual recovery? The short answer is, yes, there are lenders who are actually lending on properties that can be supported with adequate income and cash flow. As you might expect, lending guidelines have tightened up considerably while the number of lenders in the market has dwindled.
You are going to need to do your homework to find those banks or "non-bank" lenders who are actively looking for business, as no local bank is going to put up a window sign that says "yes, we have no bananas today"!
As I shared with you in April, the Small Business Administration (SBA) has temporarily eliminated major fees and raised guarantees on some 7(a) loans up to 90 percent, as part of the Federal Recovery Act. For owner/users whose businesses are weathering the economic downturn, those benefits are major incentives to act now, as these special programs are scheduled to expire by year's end. On a national basis, there are SBA lenders who specialize in different classes of property (retail, professional office, industrial, automotive etc.) and offer loan programs that may not be generally available from local banks. Those lenders who are designated as PLPs (Preferred Lender Program) are carefully selected by the SBA and given significant authority to make final credit decisions in-house. Be sure to check with your prospective lender, as that designation can greatly speed up the process and increase the likelihood that your loan will be approved, once it has passed a preliminary review. SBA loans can be highly leveraged, with LTV's (loan-to-value ratio) as high as 90 percent, and may also include build-out, equipment and working capital, for example. Don't miss this opportunity, if your business can support it.
Not surprisingly, conventional loans for businesses and investment properties have far more conservative guidelines for qualification nowadays. Strong income must be present, and may also be considered from another source. Underlying real estate assets may also include cross-collateralized properties. Creative financing might include cash proceeds from stocks and bonds that are pledged against a low-interest "securities" loan for those who are fortunate enough to own a portfolio that still has substantial value. That program avoids the need to cash in securities and incur capital gains or losses.
There are equipment financing and credit card factoring programs - tools to improve cash flow and fund business operations. There is even an SBA America's Recovery Capital (ARC) loan program (an interest-free loan) that provides up to $35,000 in short-term relief for business owners, as a tool to help weather the economy. The word on the street is that most banks are only offering the ARC program to their existing customers, so check with the SBA office in Miami for guidance - www.sba.gov.
Navigating today's commercial lending landscape will require diligence and determination. I suggest that you align yourself with a trusted adviser (banker or broker) who has knowledge of and access to a broad set of lenders and programs, well beyond the local market, to maximize your chances for success.
-Gary King, MBA (and affiliate board member of the SW Florida District CCIM), is a commercial

Comments on Business

2009-09-13T06:07:00.000-07:00

It's important that products and services have some distinctive characteristics. In Headland’s case, it clearly has something distinctive and a track record of having enabled its customers to achieve beneﬁts. But Headland seems to be struggling to articulate this distinctiveness.

My suggestion would be simply to ask its existing customers: why did they buy from Headland and what distinctive beneﬁts did they achieve? In a market such as this, a demonstrable track record of delivering what you say you will deliver, supported by customer testimonials, is going to be important.
And referrals are likely to be one of the most successful ways of ﬁnding new prospects. These conversations would also be great opportunities to ask for testimonials.
It sounds like Headland’s uniqueness may not lie with the core of the service itself (archaeology) but rather with other things which are “wrapped around” it, such as project management and commercial insight. So, Headland probably needs to focus on the “wrapper”.

Battling against an image as a pastime for enthusiastic hobbyists and competing for business against charities creates a business challenge that needs a communications solution.
Headland has got to talk in the same terms as the businesses it is approaching: it must be all about return on investment, cost avoidance and helping builders and developers to deliver projects on time and within budget.
Case studies and testimonials of successful excavations of different sizes and complexity have a role to play, possibly contrasting with the delays that can occur if projects are not being tightly and professionally controlled.
Headland has to demonstrate that it is worth investing up front to save money in the lifecycle of the project, which in turn means demonstrating an understanding of the economics of the construction industry.
In this way, Headland can put clear water between itself – as professional services consulting engineers – and archaeological enthusiasts digging in the ground for treasures.

Leading Businesses in the Commercial Moving

2009-09-12T09:31:00.000-07:00

Anthony Parziale, VP Sales and Marketing for The Advance Group (www.theadvancegrp.com), announced today that seasoned sales professional Vivian R. Aronica has joined the company in the newly created position of Director of Business Development. "Vivian brings exceptional energy and selling skills to every assignment. She is a perfect fit with our core values," said Mr. Parziale, to whom Vivian reports.
The Advance Group recently unveiled its new brand identity as part of its evolution into the largest and most experienced moving and relocation company in the New York metropolitan area. The Advance Group is formed from leading businesses in the commercial moving, office furniture installation, distribution, storage, document management, and employee relocation fields.
"We've been looking for someone with Vivian's credentials for quite some time. She's the latest strategic building block to fall into place, and we're delighted to have her with us," added The Advance Group's CEO, T. James (Jim) Molloy. "Together with our entire sales team, we'll now be able to use our newly developed marketing materials to their fullest potential."
Vivian first served in the banking industry for 12 years, then left to raise her family. Upon returning to the business world, she became a real estate sales agent where she earned a strong reputation for professionalism, industry knowledge, and integrity. She prides herself in delivering what she promises and more than is expected. "I am thrilled to be part of The Advance Group," she says. "Jim Molloy has developed an incredible team, and has invested in the finest marketing materials and customer service programs in the industry. I am as enthusiastic about the future as he is."
Vivian has successfully managed and completed many projects in the legal and medical industries. She serves on several committees and participates in numerous business networking groups, such as the Education and Assistance Corp. (EAC) golf outing, American Heart Association "Go Red for Women" luncheon, Long Island Network Exchange for which she has served on the Board of Directors as Vice President, the Gotham Network, and Long Island Business Associates.
The Advance Group is formed from leading businesses in the commercial moving, office furniture installation, distribution, storage, document management, and employee relocation fields. The Advance Group has over 40 years of broad-based experience, national and international connections for complex moves, the largest talent pool and most experienced management-level team in the industry, and a centralized management operation. Its brands include FITCO, Advance Commercial Movers, and Molloy Bros. Moving and Storage, Agent for Mayflower Transit. Together, these services provide a seamless, cost-effective, and highly coordinated response to the most challenging move and relocation projects.

CB&S Bank and More

2009-09-12T09:29:00.000-07:00

The Board of Directors of CB&S Bank recently announced that the following people have been appointed to the Murfreesboro local board: Brian Kidd – Kidd received a bachelor's degree in business administration in accounting from MTSU in 1998 and is a certified public accountant. He is employed by the National Healthcare Corp. and has 10 years of experience with two different public accounting firms. Kidd is a member of the American Institute of Certified Public Accountants, Tennessee Society of Certified Public Accountants, Murfreesboro Kiwanis Club, Blue Raider Athletic Association, The One Hundred Club of Rutherford County, Candle Wishes Foundation, and a member of various other committees with not-for-profit organizations. Adam J. Callis – Callis has 19 years of experience as a manufacturing representative for Marsh Furniture Company, including eight years of owning Marsh Direct Sales, Inc. Callis is a member of Rutherford County Homebuilders Association and Middle Tennessee Homebuilders Association. He is also a member of the National Federation of Independent Business (NFIB) and actively volunteers with both St. Jude’s and YMCA. Mary Esther Reed – Reed received a bachelor's degree, master's in education and education specialist degree from MTSU. She currently owns and runs The Learning Circle, an educational supply store in Murfreesboro. Reed was previously a Rutherford County teacher for eight years. She serves on the boards of many organizations, including the Rutherford County Boys and Girls Club, Smyrna Parks and Recreation, Stonecrest Hospital, Motlow College Foundation, Middle Tennessee State University Foundation, and serves as vice mayor for the town of Smyrna. Bert W. McCarter – McCarter completed his undergraduate studies at the University of Tennessee, cum laude, in 1992, after previously attending the University of Tennessee at Martin and Acquinas College, where he played basketball until 1994. After his graduation, McCarter attended law school at the University of Dayton from 1997 – 1999, where he was on the Prestigious Walter Rice Moot Court team. From 1999 – 2000, he completed his law school education at Vanderbilt University. He served as a law clerk with the Honorable Judge Don R. Ash of the Circuit Court for Rutherford County. McCarter is a founding partner of McCarter, Catron & East, PLLC, established in July 2009. McCarter is an active member of the Tennessee and Rutherford/Cannon County Bar Associations. He has assisted youth as a soccer coach and as a local businessman offering services for the development of gross motor skills. McCarter also founded the 100 Club of Rutherford County. Tom Swett – Swett currently serves as president of the Tennessee Pest Control Association and is on the advisory board for the Better Business Bureau Central Tennessee Region. He is also a member of the Rutherford County Chamber of Commerce, Middle Tennessee Association of Realtors, Homebuilders Association, and Women’s Council of Realtors. Swett attended Middle Tennessee State University and has over twenty-five years of business experience.In commenting on the announcement, Dennis Upchurch, President and CEO of CB&S Bank, stated “As our bank continues to grow, the insight and guidance of a talented local board becomes more important.” Additionally, Murfreesboro City President Mike Weber stated, “We are very excited to have this group of folks as part of our team and helping us tell the story of CB&S Bank in the community. Each one brings their own unique talent and enthusiasm to our organization that will help us grow the bank as well as serve the community of Murfreesboro.” CB&S Bank is a $1.4 billion community bank, headquartered in Russellville, Alabama, operating 44 offices in the Alabama, Mississippi, and Tennessee markets. The company offers a complete line of full-service banking products and other related financial services to retail and commercial customers through its subsidiaries.

MG bosses and opposition plans

2009-09-11T11:01:00.001-07:00

The £16 million, 850 page report into the collapse of MG Rover has been published today, with the government planning to stop the four former bosses ever running a company again.
The history of MG Rover is a gloomy one for the UK manufacturing industry, which finally led to the demise of mass production of cars by a UK company. The so-called ‘Phoenix Four’ – John Towers, Nick Stephenson, Peter Beale and John Edwards – bought the car company from BMW for just £10 in 2000 and over four years made a total loss of more than £611m, forcing them to look for a new buyer or face administration.
When the inevitable happened in 2005, 6,500 workers were made redundant and new buyers were found – Nanjing Automobile – which moved major production to China.
The report, led by accountancy firm BDO Stoy Hayward and government-appointed inspectors Guy Newey QC and Gervase MacGregor has taken over four years to complete and reportedly cost £16m.
In announcing the findings of the report Business Secretary Lord Mandelson said that lawyers are already compiling the evidence to bring court proceedings against the former directors for their part in the downfall.
Inspectors handling the report investigated a number of anomalies which could have led to the collapse: restructuring of the company which led to the creation of 33 separate companies; the scale of financial rewards made to the directors; the role of professional advisors; and the purchase, installation and operation of computer software by Peter Beale the day after the inquiry was announced, which eliminated crucial evidence.
The report says that between them, the four directors received nearly £40m in financial rewards.
Lord Mandelson commented: “It was important to get all the facts into the open so that workers who lost their jobs and creditors who were not paid know the truth.
“Action is being taken. Based on this report, work has been commissioned to start legal proceedings to seek to declare relevant directors unfit to hold office and to disqualify them from management of any company in the future.”
Lord Mandelson also went on to say he will be asking the Financial Reporting Council to review the report to see if any changes to audit or accounting standards or guidance should be considered.
MG Rover continues to have a facility in the UK at Longbridge, which was reopened in August 2008 to restart assembly of the MG TF Roadster for the European market.

To see the full report, visit www.bis.gov.uk/mgrover-report.

Green House Gas Emissions

2009-09-11T10:48:00.000-07:00

Japan’s new leader, Yukio Matoyama, has announced he is aiming for a 25% cut in greenhouse gas emissions. His predecessor, Taro Aso had only pledged a cut of 8%. This percentage is far greater than other industrialised nations; the United Nations had recommended a cut of 25-40% in developed countries by 2020. Japan is the fifth-largest emitter of greenhouse gases and it is thought many industrial business groups will oppose the new plan.

Japan's next leader has promised a big cut in greenhouse gas emissions, saying he will aim for a 25% reduction by 2020 compared with 1990 levels. Democratic Party leader Yukio Hatoyama is due to take over as prime minister on 16 September, after a resounding election victory in August. His predecessor, Taro Aso, had pledged cuts of only 8%. Mr Hatoyama said the plan was dependent on other nations agreeing targets at December's climate talks in Copenhagen.

Analysts say the targets - announced by Mr Hatoyama at a climate change symposium in Tokyo on Monday - are more ambitious than those of many other industrialised nations. They won praise from the climate change chief of the UN, which is recommending developed countries commit to a 25-40% reduction by 2020. "With such a target, Japan will take on the leadership role that industrialised countries have agreed to take in climate change abatement," Yvo de Boer, head of the UN Climate Change Secretariat, told the conference. Japan is the world's second-largest economy and fifth-largest emitter of greenhouse gases, which are a major contributor to climate change. Correspondents say some Japanese business groups, including parts of the automotive industry, are expected to lobby against the plans. The head of business lobby Keizai Doyukai (Japan Association of Corporate Executives) told the climate symposium the new government needed to spell out the policies in more detail.

"We basically welcome [the target], but we want to ask what policies and steps will be taken to achieve this 25% target," Masamitsu Sakurai told the forum, according to Reuters news agency. Japan's new government envisages the plans will be achieved by bringing in emissions trading, renovating housing, subsidising solar panels and introducing low-energy technologies in cars. Without mentioning China or India by name, Mr Hatoyama said: "We think developing countries are also required to make an effort to reduce greenhouse gases, as a global effort is needed on the issue of climate change," reports AFP news agency. December's UN-backed climate talks in Copenhagen in Denmark will try to work out a deal on reducing emissions to succeed the current Kyoto Protocol, the first phase of which ends in 2012. Japan has been under pressure to introduce tougher policies on climate change after its emissions rose last year to 16% above the Kyoto target, which it played a leading role in agreeing in 1997.

The FTSE 100 has gains

2009-09-10T07:06:00.000-07:00

The FTSE 100 has gained 52.77 points or 1% at 15.37 as signs across the trading floor look positive.
At midday the index was up 0.5% and reached 5000 for the first time since the height of the banking crisis in October 2008.
It still has a fair way to go to reach the 52-week high of 5416.7, but recent acquisitions, and prospective mergers have given some confidence back to the stock market.
Tim Whitehead, Stockbroker at Redmayne Bentley, told Reuters: “We see the markets treading water in the short term. We would not be surprised to see a bit of profit taking coming in.”
However, he remained cautious and said he would not be surprised to see the market hover at this point for the next three months or so.
Yesterday (8 September), economists at the National Institute of Economic and Social Research said that the UK recession ended in May.
News that British exports had risen at their fastest monthly pace since 2008 in July have also given reason for optimism and hopes for a recovery in the UK economy. ICM also reported today (9 September) on news from Nationwide that its Consumer Confidence Index was on a slow rise.

Rule the world with Monopoly City Streets

2009-09-10T07:03:00.000-07:00

A version of the much-loved board game Monopoly has been launched online today (9 September) allowing players to play a virtual global game with the help of Google Maps.
The limited-time online free version of the world’s most popular board game allows players to ‘buy’ streets based on Google Maps, competing against participants all over the world.
Competitors can play with the actual streets that are special to them including those within their own neighbourhood, town or city – or across the other side of the world. Players simply create a profile and begin to acquire properties each day through purchases and trades.
New players are given three million Monopoly dollars to build their virtual empire, earning rent based on streets and properties owned at the time competitors log into the game.
Each street in the world is available for purchase by only one player, increasing the opportunity for trading and interaction among players. Players can instantly set up houses, hotels, skyscrapers and other buildings quickly after acquiring streets to increase their value.
Already the subject of much internet buzz, Monopoly City Streets is actually part of the marketing campaign dreamed up by Hasbro’s advertising agency, Tribal DDB, to promote the release of the new version of the physical game – Monopoly City – where players build a 3-D city in the center of the game board.
In addition to providing map data, Google also made available its development team behind SketchUp, a 3-D modelling tool, to work on a contest allowing players to design their own buildings for use in the game.
For the first time since Monopoly was invented in 1935, game play has changed, removing the need to collect an entire property group before players can build structures on their properties, so a city can be built from the ground up from the first roll of the dice.
Additionally, just like in real life, the value of property and players’ incomes can rise and fall. Players can build structures to increase property values, such as schools or eco-friendly wind farms, or they can sabotage opponents by building sewage plants or prisons on the competition’s property.
Sarah Hoskin, Senior Marketing Manager for US Marketing at Hasbro Games, said: “The online experience for Monopoly City Streets emphasises the exciting dealing and negotiating elements of Monopoly.
“Both Monopoly City Streets and Monopoly City bring new creativity to Monopoly that goes beyond the traditional property streets, green houses and red hotels.”
Since 1935, more than 250 million copies of Monopoly have been sold in 106 countries and 40 languages, with more than 200 different editions of the game.

New Mini models will boost jobs at BMW

2009-09-10T06:58:00.000-07:00

The production of the new Mini Coupe Concept and Crossover models will create up to 1,000 jobs at BMW’s plant in Oxfordshire.
The first concept car will be unveiled at the Frankfurt Motor Show between 17-27 September and will be produced at the company’s factory in Cowley, near Oxford.
The Cowley plant currently employs around 4,000 workers, building three versions of the Mini – the Hatch, Convertible and Clubman.
Earlier this year in February, 850 jobs were cut at the site, but a surge in global demand for small cars, along with the UK’s scrappage scheme, has resulted in many of the redundant workers being re-employed in addition to the extra 1,000 posts that are expected to be announced.
BMW’s Chief Executive Norbert Reithofer confirmed the plans to the Financial Times.
“I am pleased to announce the Mini Coupe concept car and another new mini model will both be built at Oxford,” he told the newspaper on Thursday 3 September.
The first classic Mini was presented to the public on 26 August 1959. Exactly fifty years on and nearly a decade into the life of new Mini, images of the new Mini Coupe Concept were released in late August.
It is designed to be the most dynamic and agile Mini ever built – a two-seater, with low roof line, compact dimensions, perfect axle load distribution and lightweight construction – and will receive the 211hp, 1.6-litre twin scroll turbocharged power unit found in the current John Cooper Works models.

UK’s top ten tourist attractions

2009-09-10T06:56:00.000-07:00

Trafalgar Square has topped a poll of the ten most popular tourist attractions in the UK, according to international visitors.
The report, by travel money solutions provider First Rate Exchange Services, surveyed tourists from the USA, Ireland, France, Germany and Spain.
The majority (72%) stated that London was the main city attraction, with only the French stating other areas and attractions, such as Edinburgh Castle and Oxford.
Americans were most likely to visit Buckingham Palace, while the Irish were most likely to visit Oxford Street’s shops. Interestingly, in contrast to UK citizens holidaying abroad, most inbound visitors to the UK used travellers’ cheques or a travel money card, rather than credit or debit cards.
Gordon Gourlay, Managing Director First Rate Exchange Services, commented on the value that inbound tourism gives to the country: “The inbound tourist market is potentially big business for UK FX [foreign exchange] retailers. Each year, inbound tourists spend around £17 billion in the UK, almost £6bn of this is in sterling purchased either at ATMs or over the counter FX retailers.”
The top 10 destinations for inbound tourists were revealed to be:
1. Trafalgar Square2. Tower Bridge3. London museums4. Buckingham Palace5. Oxford Street6. The London Eye7. Windsor Castle8. Edinburgh Castle9. Stonehenge10. Globe Theatre, London
However, inbound tourism for 2009 remains a “challenging period” for the UK, according to VisitBritain, the national tourist authority. It predicts that tourist volumes will decline throughout the year and that the industry value is likely to remain “static”.
Its mid-year update, published in June 2009, reported that total inbound tourism spend would equate to £16.8bn, while visitor numbers would decline by 5% to 30.3 million.

About 4 million evacuees remember WWII anniversary

2009-09-10T06:52:00.000-07:00

Two thousand people have gathered today (1 September 2009) at St Paul’s Cathedral in London to commemorate the 70th anniversary of the start of the World War II Great Evacuation of 1939.
More than three million children were evacuated ahead of the Second World War, out of London and all the big cities to safer refuge in England’s countryside.
Families all over the country were split up as children were given their rations and marched “crocodile-style” to railway stations to get trains to safety.
The anniversary will be marked with a fly-past by a Lancaster bomber, followed by a service in St Paul’s organised by the Evacuees Reunion Association (ERA).
The ERA is a non-profit making registered charity and has its origin in the 50th anniversary of the end of the Second World War in 1995 when a few evacuees, wearing what has become their distinctive emblem, a tied-on luggage label, took part in the ‘Great Parade’ in London.
The first wave of evacuations, known as Operation Pied Piper, involved 1.5 million people and took place over four days from 1 September 1939, the day the war started.
Some 3.5 million people in total, mainly children, were removed from cities and towns to safer areas from 1939 to 1945.
It was also announced last week that records of more than 100,000 British prisoners of war captured during World War II are being published online also. Accessible for a fee, the records were compiled by the German military authorities under the 1929 Geneva Convention, and contain details of British and Commonwealth personnel held in Germany, Austria and Poland in WWII.
The website is also publishing the UK Army Roll of Honour for 1939 to 1945, which includes the records of all British Army personnel killed in action during World War II, including those who died of natural causes, wounds and diseases.

Heathrow noise ad “misleading”

2009-09-10T06:49:00.000-07:00

A complaint has been upheld by the Advertising Standards Authority (ASA) regarding a regional advertisement by BAA and Future Heathrow, which stated a third runway at Heathrow would not make it any dirtier or noisier.
Only one complaint was received by the ASA regarding the ad, from an MP who challenged the ad’s claim that “a third runway won’t make Heathrow any noisier or dirtier” and “… it won’t get the green light unless local air quality meets stringent EU standards on concentrations of nitrogen dioxide”.
Both points were investigated by the ASA, which concluded that the two points could be misleading to public. For example, the first claim could be taken as being ‘absolute fact’ while the second point was not clear enough and again, could be misleading.
BAA officially responded to the ASA’s conclusion regarding Future Heathrow’s ad. However, a spokesman for Future Heathrow told the BBC that a third runway would not be allowed if it made the airport noisier or dirtier: “Over the last six years, the government has repeatedly stated that a third runway would have to meet specific environmental conditions.
“In particular, it would have to result in a Heathrow noise footprint no larger than with two runways in 2002, and that concentrations of nitrogen dioxide around Heathrow would have to be within the future EU limit.”
Jamie, a blogger on Greenpeace’s website, commented on the ASA’s decision: “They’ve been told not to run the ad again. While this is immensely satisfying, I do feel that it’s akin to a horse/stable door timing problem. More people will have seen the advert than will become aware of the ASA’s ruling. Even so, after other previous slapped wrists over misleading adverts, the aviation industry will have to mind its language more carefully.”
The ad was printed in regional newspapers before the third runway at Heathrow airport was approved by the UK Government in January this year. The development is expected to create around 8,000 new jobs by 2030, while its construction will create 60,000 jobs alone.

Mentoring in the workplace

2009-09-10T06:45:00.000-07:00

To be a mentor, you need to possess a variety of qualities, including good communication skills, patience, the ability to be non-judgmental and the knack of creating a strong rapport with someone – in addition to offering impeccable business expertise. You should also have total confidence in your own abilities if you wish to inspire confidence in others.
Usually unpaid, many mentors view the prospect as a chance to ‘give something back to society’, however, most people become a mentor because it creates a mutually beneficial relationship. Although the offer of guidance should not be made for personal gain, some mentors do find that the process furthers their own skills and that their superiors often view it extremely favourably.
Paid professional advisers
It is important not to confuse mentors with professional advisers. The majority of businesses need specialised help from qualified practitioners, particularly in fields such as law, tax and accounting. On occasion, business managers may find it better to employ a paid professional adviser for such areas and find general business advice and support from elsewhere.
Once you’ve found each other
Aristotle, the Greek philosopher, mentored the ancient Greek king, Alexander the Great, one of the most successful military commanders of all time. Aristotle himself was a student of Plato, who in turn was taught by Socrates.
The hard work and effort doesn’t stop once a mentor and apprentice have found each other. While some mentor meetings may simply be a one-off occurrence in which advice and wisdom is imparted, the majority of meetings indicate the start of a committed long-term relationship, often of six months or more, in which the two of you will dedicate time and effort to ensure the best results. Remember, you can always change your mentor depending on your situation at the time, or stop meetings if you feel it isn’t working out.
Once the relationship has started, important things to consider include determining how often and for how long the two of you will meet, what the best way to contact each other is – by email, phone or face-to-face – and how often contact can be made between mentor meetings. By establishing points such as these early on, you are less likely to bother your mentor at the wrong times and a mentee is less likely to feel smothered or, conversely, neglected.
How to get involved in mentoring:
So follow in the footsteps of the iconic figures of past and present and join in this heroic practice – take a look at the suggestions below for inspiration and advice on how to get started: