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Strong comeback for Malaysia’s housing market

by admin on February 17, 2011

sustained economic recovery in Malaysia coupled with political stability last year contributed to the strongest house price increases since 2000

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Strong comeback for Malaysia’s housing market

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Buy the Strongest, Sell the Weakest.

by on January 14, 2011

Buy the Strongest, Sell the Weakest.

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Buy the Strongest, Sell the Weakest.

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UK Manufacturing Posts Record December Gain

January 5, 2011

Manufacturing activity in the UK closed 2010 with a bang posting the strongest growth in 16 years offering hope that the economic recovery is gaining strength according to The Daily Telegraph

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8 Ways To Bootstrap A Business Without Going To A Bank

November 4, 2010

For startups, credit is like “experience” for job applicants — you can’t get it if you don’t already have it. Despite a recent push by banks to give more loans to small companies, only the strongest small firms, with cash and collateral, are receiving loans and lines of credit, reports the Wall Street Journal . Fledgling small businesses looking to land a loan from a bank confront a Catch-22: banks refuse to cut a check until they see evidence of positive cash flow, but startups can’t boost sales until they secure capital to launch their products or services. In the current economic climate, entrepreneurs have to do what they do best: get creative. Now, more than ever, small business owners are looking to non-profits, professional investors, to the government and even to ordinary folks in their families and communities to bootstrap their businesses. Thankfully, an array of organizations and online tools can make this search easier. Here are 8 ways to fund your business without going to a bank:

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The Best Real Estate Markets In America: Local Market Monitor (PHOTOS)

August 29, 2010

It should come as no surprise that much of the national real estate market has been marred by waves of foreclosures, falling prices and high unemployment. Which isn’t to say that America’s real estate landscape is uniformly risky. Believe it or not, there are cities where income is rising, where the job market is comparatively stable and where homes may serve as a solid investment. Analyzing 315 real estate markets across the country, Cary, North Carolina-based Local Market Monitor recently devised its first “Investment Suitability Ratings” based on factors like long-term population growth, local income, relative job growth and the concentration of jobs in comparatively volatile industries like construction and finance. The riskiest markets ranked by Local Market Monitor , like Las Vegas, Nevada and Phoenix, Arizona, remain tied to the housing boom. But the top-ranked markets, dubbed “Suitable For Conservative Investors,” are all smaller cities, with local job creation engines either provided by universities or regional industry centers like Raleigh-Durham, North Carolina’s Research Triangle area. Which local market is the strongest? Check out a snapshot of Local Market Monitor’s projections below — and visit their website for more information:

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Video: Osborne Says BOJ Yen Intervention Not Guaranteed to Work: Video

August 24, 2010

Aug. 24 (Bloomberg) — Shaun Osborne, chief currency strategist at TD Securities Inc., talks with Bloomberg’s Julie Hyman about the outlook for Japan’s yen. The yen advanced to the strongest in 15 years versus the dollar and to its highest level against the euro since 2001 even after Prime Minister Naoto Kan told reporters “steep currency gains are undesirable.” (Source: Bloomberg)

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Video: Evercore’s Roger Altman Discusses Financial Rules Bill: Video

July 21, 2010

July 21 (Bloomberg) — Roger Altman, co-chairman of Evercore Partners Inc., discusses the potential impact of the financial regulation overhaul bill on the relationship between business leaders and the Obama Administration. ¶ President Obama signs into law today the biggest overhaul of the U.S. financial-regulatory system since the Great Depression, calling it “the strongest consumer financial protections in history.” Altman speaks with Erik Schatzker and Julianna Goldman on Bloomberg Television’s “InsideTrack.” (This is an excerpt of the full interview Source: Bloomberg)¶

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M.B.A. Job Market Looking Up, Experts Say

June 18, 2010

Career counselors and business experts are encouraging M.B.A. holders to be optimistic: the 2010 job market may be better for them than it has been in years. U.S. News and World Report has more: The most accurate insights into the current hiring market are likely anecdotal. While the Graduate Management Admission Council’s 2010 Global Management Hiring Survey indicates that hiring of full-time M.B.A.s is down 10 percent from last year, GMAC chief executive Dave Wilson notes that the 2009 data was based on hiring decisions made in 2008, before the economy reached bottom. Despite the survey results, he expects 2010 to be better than 2009. Career center officials agree. Positions are turning up in fields like marketing and supply chain management. Another sign of the business world’s thaw: more firms are planning on giving their new employees bonuses. GMAC boss Wilson said that companies are “signaling already that they’re ready to hire.” BusinessWeek has more stats: Full-time job postings are on the upswing, with 60 percent of schools reporting an increase in listings over last year. Internship recruiting remains the strongest sector of the job market for MBA programs, with 74 percent of schools reporting on-campus opportunities to be flat or up; that’s a sharp change from last year when 68 percent of schools reported a drop in on-campus internship recruiting. Are you in the business world? Do you feel more optimistic about your job prospects? Discuss below.

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M.B.A. Job Market Looking Up, Experts Say

June 18, 2010

Career counselors and business experts are encouraging M.B.A. holders to be optimistic: the 2010 job market may be better for them than it has been in years. U.S. News and World Report has more: The most accurate insights into the current hiring market are likely anecdotal. While the Graduate Management Admission Council’s 2010 Global Management Hiring Survey indicates that hiring of full-time M.B.A.s is down 10 percent from last year, GMAC chief executive Dave Wilson notes that the 2009 data was based on hiring decisions made in 2008, before the economy reached bottom. Despite the survey results, he expects 2010 to be better than 2009. Career center officials agree. Positions are turning up in fields like marketing and supply chain management. Another sign of the business world’s thaw: more firms are planning on giving their new employees bonuses. GMAC boss Wilson said that companies are “signaling already that they’re ready to hire.” BusinessWeek has more stats: Full-time job postings are on the upswing, with 60 percent of schools reporting an increase in listings over last year. Internship recruiting remains the strongest sector of the job market for MBA programs, with 74 percent of schools reporting on-campus opportunities to be flat or up; that’s a sharp change from last year when 68 percent of schools reported a drop in on-campus internship recruiting. Are you in the business world? Do you feel more optimistic about your job prospects? Discuss below.

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M.B.A. Job Market Looking Up, Experts Say

June 18, 2010

Career counselors and business experts are encouraging M.B.A. holders to be optimistic: the 2010 job market may be better for them than it has been in years. U.S. News and World Report has more: The most accurate insights into the current hiring market are likely anecdotal. While the Graduate Management Admission Council’s 2010 Global Management Hiring Survey indicates that hiring of full-time M.B.A.s is down 10 percent from last year, GMAC chief executive Dave Wilson notes that the 2009 data was based on hiring decisions made in 2008, before the economy reached bottom. Despite the survey results, he expects 2010 to be better than 2009. Career center officials agree. Positions are turning up in fields like marketing and supply chain management. Another sign of the business world’s thaw: more firms are planning on giving their new employees bonuses. GMAC boss Wilson said that companies are “signaling already that they’re ready to hire.” BusinessWeek has more stats: Full-time job postings are on the upswing, with 60 percent of schools reporting an increase in listings over last year. Internship recruiting remains the strongest sector of the job market for MBA programs, with 74 percent of schools reporting on-campus opportunities to be flat or up; that’s a sharp change from last year when 68 percent of schools reported a drop in on-campus internship recruiting. Are you in the business world? Do you feel more optimistic about your job prospects? Discuss below.

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New Home Sales Surge 27% In March

April 23, 2010

WASHINGTON — Sales of new homes surged 27 percent last month, bouncing off the previous month’s record low and blowing past expectations as government incentives and better weather boosted sales. The Commerce Department said Friday that new home sales rose in March to a seasonally adjusted annual sales pace of 411,000. It was the strongest month since last July and the biggest monthly increase in 47 years. Economists surveyed by Thomson Reuters had expected a sales pace of 330,000. February’s results were revised upward to 324,000, but remained an all-time low. Sales had been especially weak over the winter, partly due to bad weather in much of the country. The median sales price was $214,000, up more than 4 percent from a year earlier but down more than 3 percent from February. The new home sales report reflects signed contracts to purchase homes rather than completed sales and thus gives economists a feel for how many buyers were out shopping for new homes in a given month. It is likely capturing consumers who are trying to qualify for federal tax credits that will expire at the end of this month. The government is offering an $8,000 credit for first-time buyers and $6,500 for current homeowners who buy and move into another property. To qualify, buyers must have a signed contract complete by the end of next week and must complete the transaction by the end of June. “Everyone’s just trying to sign on the dotted line,” said Jennifer Lee, an economist with BMO Capital Markets. Nearly 1.8 million households have used the credit at a cost of $12.6 billion, according to the Internal Revenue Service. “These robust numbers say the credit is working,” said David Crowe, chief economist at the National Association of Home Builders. He forecasts sales will rise through April, weaken modestly, and then remain stable through the rest of the year. The rise in new home sales was seen nationwide. Sales grew a whopping 44 percent in the South and 36 percent in the Northeast. They also rose about 6 percent in the West and 3 percent in the Midwest. The number of new homes up for sale in March fell 2 percent to 228,000. At the current sales pace, it would take nearly 7 months to exhaust that supply. Still, new home sales are down 70 percent from their peak in July 2005, and some analysts predict they will sink back to the winter’s dismal levels after the tax credit runs out. “I expect we’ll see a very sharp drop back,” possibly to new record lows, said Paul Ashworth, senior U.S economist with Capital Economics.

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Dollar On Its Strongest Run in Four Months as FX Traders Seek Shelter

April 22, 2010

Dollar On Its Strongest Run in Four Months as FX Traders Seek Shelter

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Obama Will Likely Press China on `Market-Based’ Currency During Hu Meeting

April 6, 2010

By Roger Runningen and Kate Andersen Brower April 6 (Bloomberg) — President Barack Obama will keep pressing China to allow a more “market-based” valuation for its currency and likely will bring up the topic when he meets with Chinese President Hu Jintao next week, spokesman Robert Gibbs said. The value of the yuan is “of great concern to a number of economies around the world,” Gibbs said today at a White House briefing. Obama already has raised U.S. concerns about the yuan’s peg to the dollar in previous meetings, he said. Obama is scheduled to have direct talks with Hu April 12 when the Chinese leader is in Washington for a summit on nuclear security. Currency will be on the agenda along with nuclear proliferation and the global economic recovery. The administration is under pressure from Congress to label China a currency manipulator for keeping the value of the yuan little changed from about 6.83 to the dollar for almost two years, Some U.S. lawmakers say that gives Chinese exporters an unfair advantage. Treasury Secretary Timothy F. Geithner has announced the postponement an annual report on global foreign-exchange rates that is due April 15. He said a series of meetings over the next three months will be “critical” to bringing policy changes that lead to a stronger, “more balanced” global economy. Meetings Ahead There are three crucial meetings coming up where the currency issue is likely to be raised, Gibbs said, including a meeting of finance ministers with the G-20 developing nations and the annual U.S.-China talks on currency values. The administration wants to let Geithner and others “work through this process” at those meetings “and evaluate where we are,” Gibbs said. Yuan forwards traded near the strongest level in 11 weeks on speculation the delay will make China more willing to let the currency resume appreciation. China has pushed back against U.S. pressure on exchange rates. Jiang Yu , a spokeswoman for the Chinese foreign ministry, said at a briefing in Beijing today that the yuan’s value isn’t the cause of China’s trade imbalance with the U.S. Geithner said China needs to make its own decision on when to revalue the yuan. “This is China’s choice, it’s their judgment to make,” Geithner, who is on a two-day visit to India, said in an interview with NDTV network in New Delhi today. “I am confident that China will decide it’s in their interest to resume the move to a more flexible exchange rate.” He declined to say when the U.S. planned to publish its foreign-exchange report to Congress. Twelve-month non-deliverable forwards advanced 0.2 percent to 6.6346 per dollar as of 5:30 p.m. in Hong Kong, reflecting bets the currency will climb 2.9 percent from the spot rate of 6.8258, according to data compiled by Bloomberg. The contracts touched 6.6145 today, the strongest since Jan. 20. To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net ; Kate Andersen Brower in Washington at kandersen7@bloomberg.net

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Euro Declines Amid Speculation EU Plan for Greece May Falter

April 6, 2010

By Lukanyo Mnyanda and Candice Zachariahs April 6 (Bloomberg) — The euro declined for a third day against the dollar amid speculation that a plan for Greece to obtain European Union and International Monetary Fund help in cutting its budget deficit may falter. Europe’s common currency also dropped versus the yen as Market News International reported that Greece wants to bypass IMF involvement should it require assistance because the conditions would be too stringent. The Australian dollar advanced after the central bank raised interest rates for the fifth time in six meetings. The report that Greece “isn’t keen on the IMF being involved in any bailout would seem to throw the whole plan into question,” said Simon Derrick , chief currency strategist at Bank of New York Mellon Corp. in London. “As an investor, do you really want to hang around and see what’s happening next? The Greece story is definitely a negative for the euro.” Europe’s common currency weakened to $1.3415 as of 8:44 a.m. in London, from $1.3484 in New York yesterday. The euro slid to 125.82 yen, from 127.25. The yen strengthened to 93.79 per dollar, from 94.37 yesterday, when it traded at 94.79, the weakest level since Aug. 24. Greece has been receiving information from the IMF about the conditions it would impose in return for aid and government officials found them to be “tough,” and are concerned that they could result in civil unrest, Market News said, citing officials it did not identify. Any package would “be an IMF program decided by the IMF as it happens with each and every country,” IMF Managing Director Dominique Strauss-Kahn said last week. Dollar Bonds The euro has weakened 5.5 percent against the yen and 6.4 percent versus the dollar this year on concern Greece will struggle to redress its fiscal shortfall. Greece needs to borrow 32 billion euros ($43 billion) this year, Petros Christodoulou , director general of the Public Debt Management Agency, said March 31 in a Bloomberg Television interview. The nation may issue between $5 billion and $10 billion in dollar bonds, the Wall Street Journal reported then, citing a Greek government official it didn’t identify. The yen gained for a second day against the dollar on speculation exporters took advantage of the Japanese currency’s slide to bring back overseas earnings. Japan’s large manufacturers expect the yen to average 91 per dollar this fiscal year, according to the Bank of Japan’s most recent Tankan survey. A weaker yen increases the competitiveness of Japanese goods overseas and boosts the value of revenue earned abroad. ‘Hawkish’ RBA “Japanese exporters are likely buying the yen,” said Lee Wai Tuck , a currency strategist at Forecast Pte in Singapore, “They should be quite happy with the current level.” The Australian currency rose to the highest since March 17 against the dollar after the central bank raised the main interest rate to 4.25 percent and said borrowing costs need to be “closer to average,” amid an expanding domestic economy and growth in Asia. The currency traded at 92.44 U.S. cents, from 91.85 cents before the decision and 92.14 cents yesterday. “The statement is still somewhat hawkish as it’s talking about continuing to move rates to average,” said Amy Auster , head of foreign-exchange and international economics research at Australia & New Zealand Banking Group Ltd. in Melbourne. “They’re now fairly confident that growth in Australia at least is going to be trend or potentially above trend.” Relative Strength Gains in Japan’s currency were limited as Pacific Investment Management Co. , which runs the world’s biggest mutual fund, said investors should hold fewer euros, British pounds and yen. Pimco favors currencies in China, Brazil, Canada and Australia, which deliver attractive returns amid uneven global economic growth. “We continue to expect a ‘desynchronized’ recovery, with less leveraged emerging economies likely to grow more robustly than the developed economies,” fund manager Paul McCulley , based at the company’s main office in Newport Beach, California, wrote on the company’s Web site. Malaysia’s ringgit and the Philippine peso led gains in Asia on mounting speculation China will let the yuan appreciate, making goods imported from regional peers cheaper. The Bloomberg-JPMorgan Asia Dollar Index rose to a 19-month high. Yuan Forwards Chinese yuan forwards rose to the strongest level in more than 10 weeks on speculation the U.S. decision to delay a report on global foreign-exchange policies will make China more willing to let the currency resume appreciation. Treasury Secretary Timothy F. Geithner three days ago announced the postponement of the April 15 deadline for the annual review, which may have resulted in China being labeled a currency manipulator. Twelve-month non-deliverable forwards advanced to as much as 6.6145, the strongest level since Jan. 20. “Clearly the market is seeing this as giving China a window of opportunity to move its currency,” said Thomas Harr , a senior foreign-exchange strategist at Standard Chartered Plc in Singapore. “We will likely see more volatility in the central parity rate in May or June, and then you will see more clear depegging in the late second quarter or the beginning of the third quarter.”

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Hyundai Motor Rises to Record in Seoul After China, U.S. Sales Increase

April 2, 2010

By Seonjin Cha April 2 (Bloomberg) — Hyundai Motor Co. , South Korea’s largest automaker, rose to a record in Seoul trading after sales increased in the U.S. and China, fueling speculation that first-quarter earnings may beat expectations. Hyundai jumped 5.8 percent to close at 128,000 won on the Korea Exchange, while the key Kospi index rose 0.3 percent. Sales at the Seoul-based automaker’s Chinese venture last month jumped 47 percent from a year earlier, while the company boosted U.S. deliveries 15 percent to 47,002 vehicles. The U.S. gains trailed a 24 percent industrywide increase as sales incentives and rising consumer confidence created the strongest automobile demand in seven months. Hyundai also trailed a 41 percent U.S. jump for Japan’s Toyota Motor Corp. , which offered no-interest loans and discount leases to rekindle demand after record vehicle recalls. “Given the tough incentive and promotion competition by stronger rivals in the U.S., I think Hyundai’s U.S. March sales were superb,” said Kang Sang Min , an analyst at Hanwha Securities Co. in Seoul. “With strong sales at home, in China and the U.S., first-quarter earnings will likely beat the market’s expectations.” Hyundai’s global sales in the first quarter gained 36 percent to 840,258 units, while affiliate Kia Motors Corp. increased January-through-March sales 69 percent to 475,144, the companies said yesterday. Chung’s Target The increases suggest Hyundai Chairman Chung Mong Koo may meet his goal of lifting global sales 17 percent to 5.4 million vehicles this year, Hanwha’s Kang said. Kia , South Korea’s second-biggest carmaker, dropped 1.1 percent to 26,050 won. The stock climbed 30 percent this year after more than tripling in 2009. Hyundai’s first-quarter net income may rise to 751.1 billion won ($667 million) in the three months ended March 31, according to the median of 21 analyst estimates compiled by Bloomberg. That compares with a 225 billion won profit a year earlier, when a global recession reduced auto demand. To contact the reporter on this story: Seonjin Cha in Seoul at scha2@bloomberg.net

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Yen Weakens, Japan Stocks Gain on Central Bank Speculation; Ringgit Rises

March 12, 2010

By Darren Boey and Masaki Kondo March 12 (Bloomberg) — Japanese stocks gained and the yen weakened on speculation the central bank will add more funds to its financial system. Emerging-market currencies strengthened as rising confidence in Greece’s ability to pay its debt shored up demand for riskier assets. The Nikkei 225 Stock Average climbed 0.7 percent to 10,741.85 as of 1:45 p.m. in Tokyo. The MSCI Asia Pacific Index rose 0.2 percent. The yen weakened against 15 of 16 major counterparts. It dropped to 124.14 per euro in Tokyo from 123.82 in New York yesterday, the weakest since Feb. 23. Malaysia’s ringgit advanced 0.2 percent to the strongest in 19 months. The Bank of Japan may seek to expand a 10 trillion-yen ($110 billion) fund that provides loans to banks in a March 16- 17 policy meeting, according to two central bank officials who spoke on condition of anonymity. Finance Minister Naoto Kan said in parliament today foreign-exchange intervention is an option. Emerging-market and high-yield bond funds each took in more than $1 billion in the week to March 10, EPFR Global said yesterday. “I would think highly of any additional easing by the BOJ to preempt the yen’s appreciation,” said Hiroshi Morikawa , a senior strategist at MU Investments Co., which manages the equivalent of $14 billion in Tokyo. “The economy is improving, so investors aren’t bearish.” Japan’s Topix advanced 0.5 percent. Hong Kong’s Hang Seng Index lost 0.1 percent. The Philippine Stock Exchange Index sank 1.7 percent after the central bank pared a lending program for banks yesterday and said it will consider doing more to reduce cash in the economy. Shares of automakers in Japan gained on speculation government policies will weaken the yen, boosting the value of overseas income converted into the country’s currency. Nissan Motor Co. , which gets 57 percent of its revenue in North America and Europe, climbed 2.4 percent to 764 yen. Honda Motor Co. advanced 0.9 percent to 3,300 yen. Foreign Investors The yen traded at 90.66 per dollar from 90.51 in New York yesterday. It fell to 90.82 on March 10, the lowest level since Feb. 23. Finance Minister Kan told the Diet he’s “aware” that currency intervention is an option if markets move too abruptly. “Expectations remain strong especially among foreign investors that the BOJ will do more easing,” said Daisaku Ueno , president in Tokyo at Gaitame.Com Research Institute Ltd., a unit of Japan’s largest currency margin company. “Some foreign investors seem to be using the expectations in order to make yen-sell positions.” Health-care companies rose the most among the MSCI Asia Pacific Index’s 10 industry groups on speculation proposed changes to the U.S. health system will be harder to pass. Takeda Pharmaceutical Co. , Asia’s biggest drugmaker, increased 1.6 percent to 4,140 in Tokyo, the second-biggest boost to the MSCI index. North America accounts for 34 percent of the company’s sales. Growing Confidence Speculation over the passage of the health-care system changes helped the Standard & Poor’s 500 Index rise 0.4 percent yesterday. Futures on the S&P 500 fell less than 0.1 percent. Emerging-market currencies gained as improved confidence in Greece’s ability to pay its debt shored up demand for riskier assets. Emerging-market and high-yield bond funds each took in more than $1 billion in the week to March 10, EPFR Global said yesterday, the strongest net inflows since the company started publishing weekly data on the sectors a decade ago. Malaysia’s ringgit advanced 0.4 percent to 3.307 per dollar, reaching the strongest level in 19 months. The Taiwan dollar strengthened 0.2 percent to NT$31.77 per dollar. Overseas investors bought $711 million more Korean shares than they sold in the last four days, taking net purchases for the month to $1.4 billion. The risk premium investors demand to buy Greece’s debt over comparable German bonds has narrowed from an 11-year high on Jan. 28. Riskier Assets “It’s a global story with the improvement in European sovereigns translating into stronger demand for emerging-market assets,” said Sebastien Barbe , head of emerging-markets research at Credit Agricole CIB in Hong Kong. The yield on the 10-year German bund touched 3.2 percent yesterday, the highest level since Feb. 23, after reaching 3.11 percent two days ago, a signal investors are seeking riskier assets as Greece tackles its debt woes. Greece has a budget shortfall that, at 12.7 percent of gross domestic product, was the European Union’s largest in 2009. The cost of protecting corporate bonds from default fell in Australia and Japan today. The Markit iTraxx Japan index fell 1.5 basis points to 120.5 basis points, according to Morgan Stanley prices. That’s the lowest since Jan. 12. The Markit iTraxx Australia index fell 1 basis point to 81 basis points, according to Australia & New Zealand Banking Group Ltd. Oil, Copper Crude oil traded above $82 a barrel in New York after the Organization of Petroleum Exporting Countries said it’s set to increase shipments at the end of the month on strong demand from China, the world’s second-biggest energy user. Oil for April delivery gained 0.1 percent to $82.22 a barrel in electronic trading on the New York Mercantile Exchange at 9:52 a.m. Sydney time. Yesterday, the contract rose 2 cents to $82.11. Futures have risen 0.9 percent this week, after last week’s 2.3 percent increase. Copper for three-month delivery dropped 0.5 percent to $7,429 a metric ton. Chile’s state-owned company Codelco, the world’s biggest producer, said output was normal after a series of tremors shook central Chile yesterday. To contact the reporter for this story: Darren Boey at dboey@bloomberg.net ; Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Asian Stocks, Euro Advance; Bond Risk Falls as Economic Outlook Improves

March 7, 2010

By Linus Chua and Saeromi Shin March 8 (Bloomberg) — Asian stocks rose to a six-week high, the euro strengthened and concerns about defaults receded as French President Nicolas Sarkozy pledged support for Greece and government reports showed economic growth accelerating. The MSCI Asia Pacific Index climbed 1.6 percent to 122.20 as of 12:50 p.m. in Tokyo with seven stocks rising for every one that fell. The cost of protecting Asian bonds from default dropped to the lowest in seven weeks and the euro advanced to a two-week high against the yen. Standard & Poor’s 500 Index futures added 0.2 percent. Markets rallied after Sarkozy said yesterday the euro region is ready to rescue Greece should the government struggle to fund its budget deficit, and a March 5 U.S. report showed fewer job losses than economists forecast. New Zealand manufacturing sales increased the most in more than seven years during the fourth quarter and Japan posted a current-account surplus in January as exports climbed for a second month. “Investors are starting to see what they really wanted to see and the negatives are in the process of being priced in as the Euro zone will promise support,” said Chu Moon Sung , a fund manager at Shinhan BNP Paribas Asset Management Co. in Seoul, which manages $26 billion. “The better-than-expected U.S. jobs report also boosted overall investors’ optimism.” Hang Seng Leads Hong Kong’s Hang Seng Index rose 1.9 percent. Japan’s Nikkei 225 Stock Average increased 1.7 percent, South Korea’s Kospi Index climbed 1.2 percent. Sony Corp. , which gets almost a quarter of its sales in the U.S., jumped 3.6 percent. Nissan Motor Co. , which gets more than a third of its revenue in North America, advanced 4 percent. BHP Billiton Ltd. , the world’s largest mining company, rose 2.5 percent after winning a 55 percent price increase in coking coal from JFE Holdings Inc.’s steel unit. Arrow Energy Ltd. soared 47 percent after the Australian coal-seam gas producer said it received a takeover offer worth more than A$3.3 billion ($3 billion) from an entity formed by Royal Dutch Shell Plc and PetroChina Co. S&P 500 futures for delivery this month rose to 1,137.60. Last week’s 3.1 percent rally in the U.S. benchmark erased this year’s loss. The measure is up 2.1 percent in 2010. Nonfarm payrolls declined by 36,000 in February compared to 68,000, the average estimate of 82 economists surveyed by Bloomberg. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 4 basis points to 98 basis points, Royal Bank of Scotland Group Plc prices show. That’s the lowest since Jan. 19, according to CMA DataVision. The Markit CDX North America Investment-Grade Index, linked to credit-default swaps on 125 companies, dropped 6 basis points last week to 85.4 basis points, the lowest since Jan. 20, CMA DataVision prices show. ‘Positive Sentiment’ “The overall positive sentiment is being driven by concrete evidence that the U.S. economic recovery has traction,” said Geoffrey Ng , who manages $1 billion as chief executive officer at HLG Asset Management Sdn. in Kuala Lumpur. “This further supports the view that Asia’s growth is sustainable, both from the domestic and export fronts.” The 16-nation euro rose to as high as 123.72 yen, the strongest level since Feb. 23, from 123.00 yen in New York on March 5. The euro rose to $1.3666 from $1.3626. Sarkozy ’s pledge is among the strongest by a European Union leader to signal the bloc would bail out Greece. Treasury yields were at the highest level in a week. “We are seeing a classic reversal of the yen, having been the preeminent safe-haven currency in recent weeks,” said Ray Attrill , global research director at Forecast Ltd. in Sydney. Emerging Markets The Malaysian ringgit rose 0.5 percent to 3.3470 per dollar, reaching its strongest level in almost seven weeks, after January exports rose the most in 11 years. South Korea’s won climbed 0.6 percent to 1,133.7. Copper for three-month delivery gained 0.4 percent to $7,575 a metric ton, extending its 2 percent increase on Friday. The Baltic Dry Index , a measure of shipping costs for commodities, jumped 3.9 percent on Friday to 3,242, the highest level since Jan. 18. Crude oil rose for a second day on speculation improving world demand and OPEC supply restrictions will help slow growth in stockpiles. Oil rose 0.6 percent to $81.96 a barrel in New York ahead of a report tomorrow in the U.S., the world’s largest oil consumer, that will probably show consumer confidence is at its highest in a month, according to a Bloomberg News survey of economists. To contact the reporters for this story: Linus Chua at lchua@bloomberg.net ; Saeromi Shin in Seoul at sshin15@bloomberg.net .

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Yen Weakens Against Euro on Speculation Global Recovery Gaining Momentum

March 7, 2010

By Yoshiaki Nohara March 8 (Bloomberg) — The yen fell to a two-week low against the euro as signs the global economic recovery remains on track boosted demand for higher-yielding assets. The yen weakened against 15 of its 16 major counterparts after Japanese exports grew in January for a second month and before data today that economists said will show German industrial output rose. Australia’s dollar touched the strongest in six weeks against the U.S. currency as risk sentiment improved after French President Nicolas Sarkozy said yesterday the euro region is ready to rescue Greece. “We are seeing a classic reversal of the yen, having been the preeminent safe-haven currency in recent weeks,” said Ray Attrill , global research director at Forecast Ltd. in Sydney. “The U.S. dollar is generally being sold off because of an improvement in risk appetite. The yen is being sold off even more.” Japan’s currency fell to 123.60 per euro as of 9:29 a.m. in Tokyo from 123.00 in New York on March 5. It earlier touched 123.69, the weakest since Feb. 23. The yen dropped to 90.48 per dollar from 90.28 after reaching 90.68, the lowest since Feb. 23. The euro rose to $1.3665 from $1.3626. Australia’s currency was at 90.94 U.S. cents from 90.77 cents after climbing to 91.06, the most since Jan. 21. The yen dropped against the dollar for a third day as Japan’s current-account surplus was 899.8 billion yen ($9.9 billion) from a year earlier, when it was in deficit, the Ministry of Finance said in Tokyo today. Exports surged 41 percent on an annual basis. ‘We Are Ready’ German industrial production rose 1 percent in January after falling 2.6 percent the previous month, according to a Bloomberg News survey before the Economy Ministry report today. The euro advanced against the dollar for a second day after Sarkozy voiced his support for Greece. “I want to be very clear: if it were necessary, the states of the euro zone would fulfill their commitments,” he said in Paris after a meeting with Greek Prime Minister George Papandreou . “There can be no doubt in this regard.” While Greece doesn’t need assistance right now, “we have measures, we are ready, we are determined,” he said. Sarkozy’s comments are among the strongest by a European Union leader to signal the bloc would bail out Greece if necessary as officials strive to warn investors against making further bets against the euro and Greek bonds. Papandreou’s government last week passed a further round of austerity measures and sold 5 billion euros ($6.8 billion) in government debt. Futures traders decreased bets the euro will decline against the dollar, figures from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain — so-called net shorts — was 66,770 on March 2, compared with net shorts of 71,623 a week earlier. To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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U.S. Manufacturing Grows for Seventh Month in Sign of Factory-Led Recovery

March 1, 2010

By Bob Willis March 1 (Bloomberg) — Manufacturing expanded in February for a seventh consecutive month, indicating factories are leading the U.S. economic recovery. The Institute for Supply Management’s factory index fell to 56.5, lower than anticipated, from January’s 58.4, which was the highest since August 2004, figures from the Tempe, Arizona-based group showed. Readings greater than 50 signal expansion. Measures of new orders and production declined, while a gauge of employment grew at the fastest pace in five years. Factories boosted production to replenish depleted inventories and invested in new equipment last year as global demand picked up following the worst recession in seven decades. The manufacturing revival may help lead to the job growth needed to propel consumer spending and the economy. “Manufacturing is the strongest sector of the economy,” Michael Moran , chief economist at Daiwa Securities America Inc. in New York, said before the report. “It’s being influenced a lot by the inventory adjustment. We need to see other areas strengthen” for the recovery to become self-sustaining, he said. The factory index compared with a median forecast of 57.9, according to 66 projections in a Bloomberg News survey. Estimates ranged from 55 to 60.7. Manufacturing accounts for about 12 percent of the economy. Figures from the Commerce Department earlier today showed personal spending rose 0.5 percent in January after a 0.3 percent gain the prior month. Incomes increased 0.1 percent. The ISM’s production index fell to 58.4 from 66.2 and the new orders index decreased to 59.5 from 65.9. The employment index increased to 56.1, the highest since January 2005, from 53.3. Export Orders A gauge of export orders decreased to 56.5 from 58.5. China’s manufacturing grew at a slower pace in February, according to HSBC Holdings Plc and Markit Economics. Their factory index fell to 55.8 from a January reading of 57.4. European manufacturing expanded for a fifth month in February. A factory index for the 16-nation euro region increased to 54.2, the highest since August 2007, from 52.4 in January, London-based Markit Economics said. The supplier delivery gauge, a measure of the time it takes to receive goods, rose to 61.1 from 60.1 the prior month. The measure of orders waiting to be filled increased to 61 from 56. The inventory index rose to 47.3 from 46.5. The index of prices paid fell to 67 from 70. Government stimulus efforts last year helped spark rebounds in the housing and automobile industries, two of the most depressed areas during the recession. After car sales surged mid-year on sales incentives, automakers are now boosting output to rebuild inventories. Automakers and Inventory Among carmakers rebuilding inventory, Chrysler Group LLC, the third largest U.S. automaker, produced 88,623 vehicles in January, compared with 39,315 a year earlier, according to company data. Factory orders have been increasing after companies pared inventories last year by a record $120 billion. Efforts to rebuild depleted stockpiles contributed 3.88 percentage points to a fourth-quarter growth rate of 5.9 percent that was the strongest in more than six years, the Commerce Department said last week. U.S. companies are also benefiting from the rebound in the global economy. General Electric Co ., the world’s biggest maker of jet engines and locomotives, is expanding operations in China. Investment in equipment and software increased at an 18 percent annual rate in the fourth quarter, the most since 2000, the Commerce Department said last week. Applied Materials Santa Clara, California-based Applied Materials Inc ., the world’s largest producer of chipmaking equipment, forecast sales and profit that topped analysts’ estimates as semiconductor companies begin to increase orders. “What we have to see in the second half of the year is an expansion of capacity additions to a broader group of customers,” Chief Financial Officer George Davis said in an interview Feb. 17. “We’ve built some conservatism for our outlook. It won’t take much expansion for us to meet that outlook.” The economy still requires job growth to spur consumer spending, which is forecast to average 2 percent this year, according to economists surveyed by Bloomberg last month. Consumer spending accounts for about 70 percent of the economy. Employers in February probably reduced payrolls by 50,000 workers after 20,000 job cuts the prior month, economists surveyed by Bloomberg forecast the government’s monthly payroll report will show March 5. Unemployment probably rose to 9.8 percent from 9.7 percent in January, according to the survey. Manufacturing employment increased 11,000 in January, the Labor Department said last month. To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

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Yen Rises to 9-Month High Versus Euro as Obama Seeks to Limit Risk-Taking

January 21, 2010

By Yasuhiko Seki and Ron Harui Jan. 22 (Bloomberg) — The yen traded near the highest level in almost nine months against the euro amid concerns that a U.S. proposal to restrict risk trading at financial institutions will discourage demand for higher-yielding assets. The Japanese currency was set for a second-straight weekly gain versus the euro and a three-week advance against the dollar as Asian stocks joined a global equity slump. Canada’s dollar touched a three-week low as oil slid and investors speculated China will curb its economic expansion. “Trading restrictions at banks will enhance risk aversion,” said Soichiro Mori , a Tokyo-based strategist at FXOnline Japan Co., a margin-trading company. “This will trigger a flight to safety assets” such as the yen. The yen advanced to 127.01 per euro at 10:43 a.m. in Tokyo from 127.37 in New York yesterday. The Japanese currency earlier reached 126.56, the strongest level since April 28. It gained to 89.95 per dollar from 90.43 yesterday after reaching 89.81, the highest level since Dec. 18. The U.S. currency traded at $1.4129 per euro from $1.4084 yesterday, when it rose to $1.4029, the strongest since July 30. Canada’s currency, the loonie, touched C$1.0525, the weakest this year, before trading at C$1.0508. Crude oil slid 2.3 percent yesterday and the MSCI World Index fell 1.5 percent. The loonie tends to track commodities and equities. The 30- day correlation between the MSCI World Index and the Canadian currency is 0.75. A reading of one would indicate they move in lockstep. White House Proposals The dollar slid yesterday against the yen for the first time in four days as U.S. President Barack Obama called for limiting the size and trading activities of financial institutions as a way to reduce risk taking and prevent another financial crisis. The proposals will be part of an overhaul of regulations and would prohibit banks from running proprietary trading operations or investing in hedge funds and private equity funds. A global quarterly poll of investors and analysts who are Bloomberg subscribers finds that 77 percent of U.S. respondents believe Obama is too anti-business and four-out-of-five are only somewhat confident or not confident of his ability to handle a financial emergency. Japan’s Nikkei 225 Stock Average sank 2.6 percent and the MSCI Asia Pacific Index of regional shares dropped 1.2 percent after the Standard & Poor’s 500 Index lost 1.9 percent yesterday. “Weakness across global equity markets is suppressing risk appetite,” said Mike Jones , a currency strategist at Bank of New Zealand Ltd. in Wellington. “Against this backdrop, investors will continue to sell ‘growth-sensitive’ currencies in favor of safe-haven currencies like the dollar and the yen.” Kan’s Threshold The gross domestic product in China, the world’s largest consumer of many of the raw materials, grew 10.7 percent last quarter from the year before, the nation’s statistics bureau said yesterday. That was faster than the 10.5 percent median forecast of economists in a Bloomberg News survey, sparking speculation that China will step up monetary tightening to curve inflationary pressure. Gains in the yen were tempered on prospects the government will try to talk down the currency’s value. Japanese Finance Minister Naoto Kan has said that a range of 90 to the mid-90s per dollar is appropriate for the nation’s manufacturers. To contact the reporters on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net ; Ron Harui in Singapore at rharui@bloomberg.net .

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Citigroup’s Crystal Ball Too Fogged Up to Work: Jonathan Weil

December 24, 2009

Commentary by Jonathan Weil Dec. 24 (Bloomberg) — When the Treasury Department shelved its plans to sell $5 billion of Citigroup Inc. common stock in a public offering last week, the news came only two days after the bank had said the sale was a go. The delay was a reminder that predicting the future can be a tough exercise. So imagine how difficult it must be for Citigroup to predict the amount of taxable income it will generate during the next 20 years . If you think its executives can do that, then you just might believe the $38 billion net value for an item on Citigroup’s balance sheet called deferred-tax assets , which represent 27 percent of the company’s shareholder equity . Keep in mind, this is the same Citigroup that didn’t see the credit crunch coming until it was too late, and wouldn’t have survived without a government rescue. Deferred-tax assets generally consist of tax-deductible losses and expenses carried forward from prior periods, which companies can use to reduce future tax bills. The catch is they are valuable only to companies that are making money and paying income taxes. Citigroup probably will record its second straight annual net loss , according to the average estimate of analysts surveyed by Bloomberg. It reported a $27.7 billion loss for 2008, which eclipsed its previous two years of earnings. The way it’s been able to keep those assets on its books is by assuming it will earn enough taxable income in the future so it can use them all. Otherwise, it would have to write them down by recording an offsetting reserve called a valuation allowance . This is where Citigroup’s recent assumptions look awfully bold. Always a Zero Citigroup’s allowance was zero as of Sept. 30, the same level it’s been at since 2006, when Citigroup was posting near- record profits and its net deferred-tax assets were just $4.7 billion. None of the other three U.S. commercial lenders with more than $1 trillion of assets has adopted such an extreme stance. Their tax assets also are much smaller than Citigroup’s. Even the strongest of those too-big-to-fail banks, JPMorgan Chase & Co. , had included a $1.3 billion valuation allowance in its $13 billion net deferred-tax asset as of last Dec. 31, which was the last time it disclosed a complete tax footnote in its financial filings. Wells Fargo & Co. and Bank of America Corp. also had set up at least some allowance against theirs. How could it be that Citigroup didn’t need an allowance, while those other banks did? A Citigroup spokesman, Jon Diat , declined to answer that question. This result might make sense to me if Citigroup were the healthiest, most profitable bank of them all. It’s anything but that. Looking Fishy Another reason Citigroup’s lack of allowance looks fishy is that the bank has reported a cumulative loss for the past three years. Under the Financial Accounting Standards Board’s rules on the subject, “forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years.” In its financial filings , Citigroup has said it overcame that presumption by concluding it “more likely than not” will generate at least $85 billion of taxable income over the next two decades. It also has said it has “sufficient tax-planning strategies” to fully realize the asset. That Citigroup was able to raise $20.5 billion last week, including $17 billion from sales of common stock, could help the company’s case, too. Still, the notion that Citigroup can credibly make far- ranging forecasts cries out for skepticism. Making News “It’s a mystery to me,” says Robert Willens , a tax and accounting specialist who teaches at Columbia Business School in New York. “They have the strongest possible negative evidence and the weakest source of taxable income, and somehow when you put those together they don’t need a valuation allowance.” Citigroup’s deferred-tax assets were in the news again this month, after the Internal Revenue Service granted the company an exemption so that it wouldn’t lose any of them as a result of the Treasury’s planned stock sales. Normally, such sales would be deemed an ownership change under the tax code, in which case Citigroup would have lost its right to use much of the assets. Even with the IRS exemption, though, Citigroup still must demonstrate it can use them all, to avoid writing them down for financial-reporting purposes. It wasn’t until 1992 that the FASB began letting companies record deferred-tax assets that depend on future taxable income. Banking regulators limit the amounts lenders can count toward their capital measures, because such assets can’t be used to absorb future losses. At Citigroup, $21.9 billion of its deferred-tax assets were disallowed for purposes of calculating its regulatory capital as of Sept. 30. Rich History There’s also a rich history of companies with large deferred-tax assets waiting until they’re on the verge of collapse to write them off. Among them: Fannie Mae, Freddie Mac, General Motors Corp., Bethlehem Steel Corp. and Nortel Networks Corp. Citigroup’s tax assets would have been rendered worthless last year had the government not bailed the company out. Other assets at Citigroup may need major writedowns, too. The company now has a $93 billion stock-market value , including the government’s 27 percent stake. That’s $47.5 billion less than the common shareholder equity it reported as of Sept. 30, which tells you investors still don’t trust its balance sheet. Maybe they know something Citigroup doesn’t. ( Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Jonathan Weil in New York at jweil6@bloomberg.net

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Dollar Drops Versus Euro on Weaker Prospects for U.S. Interest Rate Rise

December 23, 2009

By Yasuhiko Seki Dec. 24 (Bloomberg) — The dollar fell against the euro, extending a downturn from the strongest level since September, on speculation the Federal Reserve won’t seek an early exit from stimulus measures. The greenback dropped for a second day against the 16- nation euro as an unexpected decline in new home sales and a report forecast to show a decline in business activity underscored the fragility of the U.S. recovery. The yen traded near its weakest in eight weeks on prospects the Bank of Japan may prolong credit easing to fight deflation. “The market has gone too fast and too far pricing in prospects for an increase in U.S. rates,” said Akio Yoshino , chief economist in Tokyo at Societe Generale Asset Management (Japan) Co., a unit of France’s third-largest bank. “The dollar may succumb to selling pressure as the excessive optimism about interest rates in the U.S. weakens.” The dollar traded at $1.4345 per euro at 12:41 p.m. in Tokyo from $1.4337 yesterday in New York. It rose to $1.4218 on Dec. 22, the strongest level since Sept. 4. The dollar was at 91.47 yen from 91.64 yen yesterday. The greenback traded at intraday highs of 91.87 yen in the past two days, the strongest since Oct. 27. The euro declined to 131.22 yen from 131.38 yen in New York. The dollar had rallied more than 5 percent versus the euro this month and traded within a quarter-cent of its 200-day moving average of $1.4198 before yesterday’s decline. The dollar is down 2.5 percent for 2009. Housing Decline Sales of new homes in the U.S. fell 11 percent in November to an annual pace of 355,000 from a revised 400,000, the Commerce Department reported yesterday. Economists had forecast an increase. The Institute for Supply Management-Chicago Inc. will report on Dec. 30 its barometer of U.S. business activity fell to 55.1 in December from 56.1 in the previous month, according to a Bloomberg News survey of economists. Readings above 50 signal expansion. “The big picture hasn’t changed, and the Federal Reserve has been pretty clear about its intentions to keep rates low, so we expect the dollar to come under pressure again,” said Simon Derrick , the London-based chief currency strategist at Bank of New York Mellon Corp., the world’s largest custodian of assets. Dollar Reserves Futures trading in Chicago indicated a 48 percent chance that policy makers will increase the zero to 0.25 percent target rate for overnight lending between banks by at least a quarter- percentage point by the June meeting, down from a 52 percent likelihood a week ago. The U.S. dollar’s gains may end in the middle of 2010 as central banks shy away from adding greenbacks to their reserves and the Federal Reserve raises rates at a slower pace than investors expect, Barclays Plc said in a note to clients. “We see the dollar strengthening in the first six to nine months of 2010 when the focus is on liquidity withdrawal and tightening of rates,” said Steven Englander , chief U.S. currency strategist at Barclays in New York, in a telephone interview. “Once the market gets past this initial fear of tightening, the reality will be that the Fed isn’t going to be tightening very fast and we’ll see dollar selling again.” The U.S. currency has appreciated 5.7 percent versus the euro from this year’s weakest level of $1.5144 reached on Nov. 25. Before a Dec. 4 payrolls report showed an unexpected drop in the unemployment rate, the Dollar Index had fallen 17 percent from the 2009 peak reached in March as investors bought higher- yielding assets with borrowed dollars. Durable Goods Orders Orders for goods meant to last several years increased 0.5 percent in November, after falling 0.6 percent in the previous month, according to the median estimate of 72 economists in a Bloomberg survey. The Commerce Department report is due today. “The dollar may rebound if there are positive surprises in today’s data,” said Masafumi Yamamoto , chief strategist at Barclays Bank Plc in Tokyo. “A transition to yen-carry trades from dollar-carry trades is at work.” To contact the reporter on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net .

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Dollar Falls as Oil Helps S&P 500 Recoup Almost Half of Bear-Market Rout

December 23, 2009

By Nick Baker and Nikolaj Gammeltoft Dec. 23 (Bloomberg) — The U.S. dollar weakened after sales of new American homes unexpectedly fell last month, spurring concern about the durability of the economic recovery. Oil surged the most in a month following a bigger-than-forecast drop in inventories, driving the Standard & Poor’s 500 Index higher. The dollar lost as much as 0.8 percent to $1.4366 per euro, retreating from the strongest level since September. Oil rose 3.1 percent to $76.67 a barrel in New York. The fuel’s gain helped send the S&P 500 up 0.2 percent to 1,120.59, just below the 1,120.84 level that would mark a recovery of half of the index’s 57 percent plunge between October 2007 and March 2009. The MSCI Emerging Markets Index of equities in developing nations added 1.3 percent on predictions for faster growth in China and India. The U.S. Commerce Department said home sales decreased 11 percent to an annual pace of 355,000, lower than the lowest estimate of economists surveyed by Bloomberg News. The prospect that a government tax incentive would expire, combined with a 10 percent jobless rate and competition from foreclosed properties may have hurt builders such as Beazer Homes USA Inc. “We’re seeing some softness in the economy now with housing as an example,” said Michael Vogelzang , who helps manage $1.8 billion as chief investment officer at Boston Advisors in Boston. “It starts to feel to us like we’re getting a pullback in the economy after the bounce off the bottom in housing.” China, India Growth Stocks rose around the world after Citic Securities Co. said China’s gross domestic product may expand 12 percent next year. Shares also rallied as Pranab Mukherjee , India’s finance minister, said his nation’s growth may accelerate as industrial production rebounds. Consumer confidence in Italy unexpectedly rose to the highest in more than seven years. The S&P 500’s so-called 50 percent retracement of its 17- month plunge through March 9 would be a bullish sign to some analysts who make forecasts using price charts. Some technical analysts use Fibonacci ratios, based on proportions found in nature, to predict stock market levels. To adherents, the performance of an asset when it gains back 50 percent of a retreat can be used to forecast whether the advance will continue. “The path of least resistance will continue to be to the upside,” Robert Doll , who helps oversee about $3.2 trillion as chief investment officer for global equities at New York-based BlackRock Inc., said in a Bloomberg Television interview. The economic recovery “means earnings should be somewhat better and liquidity should still be plentiful. That’s a recipe for equities moving higher,” Doll said. Metals, Oil Raw-materials and energy producers had the biggest and third-largest gains in the S&P 500 among 10 industries, rising 1.5 percent and 0.5 percent, respectively. The Dollar Index, which gauges the currency against six major trading partners, lost 0.4 percent to 77.913 as it retreated from the strongest level since September. Oil futures surged after U.S. stockpiles fell 4.84 million barrels, triple the average analyst estimate in a Bloomberg survey. Anadarko Petroleum Corp., an oil explorer, added 2.5 percent to $64.23. Copper futures climbed 2.1 percent, the most in five weeks. Freeport-McMoRan Copper & Gold Ltd., the world’s largest publicly traded producer of the metal, advanced 3.2 percent to $80.93. Newmont Mining Corp., the largest U.S. gold producer, advanced 2.8 percent to $48.04 as the precious metal rallied 0.7 percent. Schlumberger Ltd. added 2 percent to $65.23. The shares were raised to “overweight” from “equal weight” at Barclays, which cited the company’s “financial strength, deep management and a product line that benefits more than most from increased exploration activity.” To contact the reporters on this story: Nick Baker in New York at nbaker7@bloomberg.net ; Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net .

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Euro Advances Versus Yen as Economic Recovery Signs Boost Demand for Risk

November 15, 2009

By Yoshiaki Nohara and Ron Harui Nov. 16 (Bloomberg) — The euro rose for a second day against the dollar as signs the worldwide economy is recovering boosted demand for higher-yielding assets. The euro gained against 13 of its 16 most-active counterparts as Japan’s gross domestic product expanded for a second-consecutive quarter. The Australian dollar traded near the strongest in 15 months against the greenback after gains in U.S. stocks added to signs the economic recovery is gathering momentum, backing the case for the Reserve Bank of Australia to raise rates again next month. “The GDP data were much stronger than expected, boosting risk appetite,” said Yuji Saito , head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “The bias is for the yen and the dollar to be sold to buy higher-yielding currencies.” The euro rose to $1.4948 at 10:12 a.m. in Tokyo from $1.4903 in New York on Nov. 13. Europe’s currency traded at 133.76 yen from 133.63 yen, after earlier rising to 134.12 yen. The dollar fetched 89.48 yen from 89.66 yen. Australia’s dollar was at 93.27 U.S. cents from 93.30 cents. It touched 93.70 cents on Nov. 12, the strongest since Aug. 1, 2008. Japan’s gross domestic product expanded at an annual 4.8 percent pace in the third quarter, the Cabinet Office reported today in Tokyo, compared with the median economist estimate for 2.9 percent growth. That was up from a revised 2.7 percent expansion in the three months ended June 30. The 21-member Asia-Pacific Economic Cooperation group, representing 54 percent of the global economy, pledged in a statement over the weekend to “refrain from raising new barriers” to investment and trade. They didn’t mention currency distortions, which U.S. companies say give China unfair trade advantages. Losses in the yen were tempered as the Nikkei 225 Stock Average fell 0.3 percent after rising as much as 0.3 percent. The euro-yen had a correlation of 0.82 with the Nikkei 225 in the past year, according to data compiled by Bloomberg. A reading of 1 would mean the two moved in lockstep. To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net ; Ron Harui in Singapore at rharui@bloomberg.net

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Yen Rises to 3-Week Highs Against Dollar, Euro on CIT, Global Stocks Rout

November 1, 2009

By Yasuhiko Seki and Ron Harui Nov. 2 (Bloomberg) — The yen rose to the most in almost three weeks against the dollar and the euro after New York-based CIT Group Inc. filed for bankruptcy, boosting demand for Japan’s currency as a shelter from financial turmoil. The yen climbed after the 101-year-old commercial lender listed $71 billion in assets and $65 billion in debt in its bankruptcy protection. The Australian dollar pared earlier losses against the yen and the greenback after Treasurer Wayne Swan said economic growth will be faster than expected and a government report showed house price increases accelerated. “The collapse of the CIT Group revived credit fears, triggering sell-offs of riskier-assets and higher-yielding assets,” said Masakazu Sato , a foreign-exchange adviser at foreign exchange margin company Gaitameonline Co. “The atmosphere is beginning to resemble the way things were back in autumn last year before Lehman Brothers Holdings Inc. failed.” The yen was at 90.01 against the dollar as of 10:14 a.m. in Tokyo from 90.09 yen in New York on Oct. 30, after earlier touching 89.20 yen, the strongest since Oct. 14. It was at 131.01 against the euro, the strongest since Oct. 9, before trading at 132.51, from 132.61 in New York. Japan’s currency was at 81 against the Australian dollar from 81.05 on Oct. 30, after earlier touching 79.47, the most since Oct. 8. Australia’s currency bought 89.95 U.S. cents from 89.97 cents in New York on Oct. 30. New Zealand’s dollar was at 71.58 U.S. cents from 71.81 cents in New York last week. U.S. stocks fell the most since May last week, with the Standard & Poor’s 500 index dropping 4 percent. The MSCI Asia Pacific Index of regional shares slid 1.4 percent today and the Nikkei 225 Stock Average declined 2.6 percent. U.S. System Weak U.S. taxpayers probably won’t recoup much, if any, of the $2.3 billion in government funds that went to CIT Group , Treasury Department spokesman Andrew Williams said in an e- mailed statement after the 101-year-old commercial lender filed for bankruptcy protection. “The U.S. financial system is far from a perfect health,” said Mitsuru Saito , chief economist in Tokyo at Tokai Tokyo Securities Co. in Tokyo. Employers in the U.S. cut fewer jobs this month than in September while the unemployment rate rose to 9.9 percent in October, according to the median forecast in a survey of economists. The Labor Department’s report is due Nov. 6. Nobel Prize-winning economist Joseph E. Stiglitz said the U.S. recession is “nowhere near” an end and the economy’s third-quarter growth rate of 3.5 percent, the first expansion in more than a year, won’t carry into 2010. Limited Gains “When we look at if workers can get jobs, if they can work full time, if businesses are able to sell goods they produce, in those terms, we are nowhere near the end of recession” in the U.S., Stiglitz, 66, the former chief economist at the World Bank said on Oct. 31. The U.S. job market is still “in very bad shape.” Gains in the yen and the dollar were curbed after China’s manufacturing expanded at the fastest pace in 18 months and Australia’s home prices rose in the third quarter, adding to signs the global economy is recovering. China’s Purchasing Managers’ Index rose to a seasonally adjusted 55.2 in October from 54.3 in September the Federation of Logistics and Purchasing said yesterday in Beijing. An Australian index measuring the weighted average of prices for established houses in the eight capital cities climbed 4.2 percent in the third quarter from the second quarter, the Australian Bureau of Statistics said in Sydney today. “There is bright news about economies worldwide, as China’s PMI suggests the recovery in the nation’s economy is picking up,” said Tsutomu Soma , a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo. “It’s mildly positive for risk appetite and a negative for the dollar and the yen.” Australian Economy Australia’s government also said today the nation’s economy will grow faster than previously expected and the budget deficit will be in line with a previous forecast. Australia will have a cash deficit in the 12 months ending June 30, 2010, of A$57.7 billion ($51.8 billion), compared with A$57.6 billion forecast in May, Treasurer Wayne Swan told reporters today in Canberra. The economy will grow 1.5 percent compared with a May forecast of a 0.5 percent contraction. Futures traders decreased their bets that the euro will gain against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission showed. The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop — so-called net longs — was 32,869 on Oct. 27, compared with net longs of 36,033 a week earlier. Futures are agreements to buy or sell assets at a set price and date. The figures reflect holdings in currency-futures contracts at the Chicago Mercantile Exchange as of Tuesday. To contact the reporter on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net ; Ron Harui in Singapore at rharui@bloomberg.net

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Dollar Rises Most Since April on Reduced Risk Demand Before Fed Statement

October 30, 2009

By Matt Townsend Oct. 31 (Bloomberg) — The dollar gained the most against the euro in six months on concern the global recovery may stall as economic stimulus winds down, reducing demand for higher- yielding assets funded by the greenback. The pound touched the strongest level against the euro this week since September after gains in consumer confidence and mortgage approvals added to signs an economic recovery is taking hold in the U.K. The advance in the dollar before next’s week Federal Reserve announcement pared a fourth consecutive monthly loss, part of the longest losing streak since 2004. “There’s this increasing recognition that much of the recovery we’ve seen so far was due to the temporary boost from various government programs,” said Michael Hart , a currency strategist at Citigroup Global Markets in London. “The optimism is kind of guarded at this point.” The dollar advanced 2 percent to $1.4719 per euro yesterday, from $1.5008 on Oct. 23. It was the biggest gain since a 2.3 percent rise in the five days ended April 10. The dollar rallied from a 14-month low of $1.5063 on Oct. 26. New Zealand’s dollar was the biggest loser against the greenback this week as the Reserve Bank signaled the target rate will stay at a record low of 2.5 percent until the second half of 2010. The kiwi tumbled 4.8 percent to 71.81 U.S. cents, from 75.45 a week earlier, the largest five-day drop since January. The greenback gained 4.5 percent to 7.815 South African rand and 2.5 percent to 1.7612 Brazilian reais on speculation investors reduced carry trades, in which they sell the currency of a nation with low borrowing costs and buy assets where returns are higher. Borrowing Costs The Fed’s target lending rate of zero to 0.25 percent in the U.S. makes the dollar a favored target for investors seeking to fund such trades. The benchmark rates are 7 percent in South Africa, 8.75 percent in Brazil. The euro decreased 4.2 percent to 132.61 yen, from 138.15, in the biggest drop since May. The dollar fell 2.1 percent to 90.09 yen, from 89.64. It touched a level lower than 90 yesterday for the first time since Oct. 15. The Bank of Japan decided this week to end purchases of commercial paper and corporate bonds from lenders as scheduled, while extending unlimited collateral-backed lending through March 31. Policy makers kept the benchmark interest rate unchanged at 0.1 percent. European Central Bank council member Axel Weber said that policy makers may scale back the bank’s “very long-term” loans to banks. The ECB will leave benchmark lending rates at a record low of 1 percent at its meeting on Nov. 5, according to all 34 economists in a Bloomberg survey. Norwegian Rate Norway’s central bank lifted its target lending rate by a quarter-percentage point to 1.5 percent this week, becoming the first in Europe to increase borrowing costs this year. “Central banks are slowly withdrawing emergency stimulus,” Toronto-based strategists Shaun Osborne and Jacqui Douglas at TD Securities Inc. wrote in a research note to clients yesterday. That “perhaps accounts for the modest risk- averse undertone.” The Dollar Index , which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, gained 1.2 percent to 76.39. It was the biggest increase since June. Investors remained skeptical that the Federal Reserve will increase borrowing costs early next year. Fed funds futures indicated a 29 percent chance that the central bank will lift its target lending rate from a range of zero to 0.25 percent at its March meeting, compared with a 41 percent chance last week. Fed’s Statement The Fed completed its $300 billion Treasury purchase program, ending the seven-month buying spree that helped stabilize the housing market and capped increases in borrowing costs. It will release its monetary policy statement on Nov. 4. Sterling rallied 2.8 percent to 89.44 pence per euro as reports showed U.K. mortgage approvals climbed in September to the highest level in 18 months and consumer confidence rose. The pound touched 89.12 on Oct. 29, the strongest level since Sept. 17. Britain’s currency gained 0.9 percent to $1.6452. The Bank of England will probably decide next week to increase its bond-purchase program as the U.K. lags behind other industrialized countries in shaking off its longest recession on record. Policy makers may expand the plan to 225 billion pounds ($372 billion) on Nov. 5 after this week reaching the current 175 billion pound limit for buying bonds with newly created money, the median estimate of 48 economists in a Bloomberg News survey showed. Bank of England The central bank will leave the benchmark rate at a record low of 0.5 percent, according to all 60 economists in a separate Bloomberg survey. Employers in the U.S. cut fewer jobs this month than in September while the unemployment rate rose to 9.9 percent in October, according to the median forecast in a survey of economists. The Labor Department’s report is due Nov. 6. The U.S. currency slid 0.5 percent versus the euro in October in its fourth monthly decline, the longest losing streak since December 2004, as investors piled onto carry trades. The yen weakened 0.4 percent this month versus the dollar. The yen slid 1 percent versus the euro in October. “Everyone is thinking about the exit strategy,” said Hidetoshi Yanagihara , senior currency trader at Mizuho Corporate Bank in New York. “Once they stop these stimulus measures, we are not going to see excessive money awash in the market. Carry trade may be arrested in the near future.” To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

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U.S. Stocks Drop as Payroll, Factory Order Reports Raise Recovery Concern

October 2, 2009

By Matt Townsend Oct. 2 (Bloomberg) — U.S. stocks fell for a fourth day and the dollar slumped as employers cut more jobs than economists forecast, increasing speculation the Federal Reserve will postpone the withdrawal of monetary stimulus as the economy struggles to recover. The dollar fell against the euro as the economy shed 263,000 positions in September, more than the 175,000 median estimate of economists in a Bloomberg survey. Gold rallied as an alternative to the falling greenback. Treasuries declined as yields near the lowest in more than four months hurt demand before next week’s $78 billion in auctions. Oil fell after two days of gains. “Reality is beginning to set in that this recovery is going to be very slow in developing and erratic as it goes on,” said Bruce Bittles , chief investment strategist at Robert W. Baird & Co. in Nashville, Tennessee, which manages $18 billion. “The market was up for seven straight months. It’s due for a correction.” The Standard & Poor’s 500 Index retreated 0.5 percent to 1,025.21 at 5:13 p.m. in New York. The Dow Jones Industrial Average lost 21.61 points, 0.2 percent, to 9,487.67. The S&P 500 declined 1.8 percent this week on concern the seven-month rally in equities has outpaced prospects for an economic recovery. The benchmark index jumped almost 15 percent in the July-to-September period to give it a two-quarter advance of 34 percent, the biggest since a 42 percent surge in the first half of 1975. Most Since 1983 September’s job losses increased the unemployment rate from 9.7 percent in August to 9.8 percent, the highest since 1983. Since the recession began in December 2007, 7.2 million positions have been eliminated, the biggest decline since the Great Depression. “The number shows this is going to be a slow and painful recovery process,” said Jay Mueller, who manages about $3 billion of bonds at Wells Fargo Capital Management in Milwaukee. “We will have sub-trend growth for an extended period. There is still too much debt in the system and if we keep losing jobs like this we will not get income growth.” Industrial companies in the S&P 500 fell 1.2 percent, the biggest decline among the index’s 10 industry groups. Orders placed with U.S. factories fell 0.8 percent after a revised 1.4 percent increase in July that was larger than previously estimated, the Commerce Department said. Excluding transportation equipment, orders rose 0.4 percent. Dollar Decline General Electric Co., the world’s biggest maker of power- plant turbines, fell 3.8 percent to $15.36. Honeywell, the world’s largest maker of airplane controls, lost 2.2 percent to $35.60. The dollar touched the strongest level versus the euro in almost a month before erasing its gain as concern rising unemployment will push back the timeline for an interest rate increase by the Fed. Interest-rate futures contracts on the Chicago Board of Trade showed a 38 percent chance the central bank would increase the fed funds target from the range of zero to 0.25 percent through March, compared with 45 percent odds yesterday. The dollar declined 0.2 percent to $1.4576 per euro, from $1.4545 yesterday. It earlier climbed as much as 0.4 percent to $1.4481, the strongest since Sept. 9. The yen fell 0.2 percent to at 89.79 versus the dollar, compared with 89.60. Over the past few months, the dollar tended to appreciate on negative U.S. economic reports as investors sought safety in the world’s main reserve currency. Treasuries Slump That pattern may be changing as bad news cements expectations for the Fed to keep its interest rates low while other central banks may start to increase theirs, according to Laurent Desbois , president in Montreal of Fjord Capital Inc., a currency fund manager with $750 million under management. Treasuries declined as the yield on the 10-year note rose four basis points, or 0.04 percentage point, to 3.22 percent in New York, according to BGCantor Market Data. The 3.625 percent security fell 13/32, or $4.06 cents per $1,000 face amount, to 103 10/32. The yield touched 3.1 percent, the lowest level since May 18. “We rallied so much yesterday and throughout the week that this is a good point to stop and start to build a concession for next week’s supply,” said Martin Mitchell, head of government- bond trading at the Baltimore unit of Stifel Nicolaus & Co. “Pullbacks are an opportunity to buy.” The U.S. will next week auction $39 billion of three-year notes , $20 billion in 10-year securities , $12 billion in 30- year bonds and $7 billion of 10-year Treasury Inflation Protected Securities over four consecutive days. ‘About The Buck’ Oil for November delivery fell 99 cents, or 1.4 percent, to $69.83 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Earlier, it touched $68.32. “The economy is faltering, and today’s economic numbers point it out very clearly,” said James Cordier , portfolio manager at OptionSellers.com in Tampa, Florida. “Main Street is not getting better, and that is where the rubber hits the road as far as demand goes.” Gold futures for December delivery climbed $3.60, or 0.4 percent, to $1,004.30 an ounce on the Comex division of the New York Mercantile Exchange. This week, the metal gained 1.3 percent. “It’s about the buck,” said Frank Lesh , an analyst at FuturePath Trading LLC in Chicago. “The dollar is, has been and will be the main driver for gold.” To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

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Dollar Reverses Gain Against the Yen on Speculation Fed to Keep Rates Low

September 29, 2009

By Yoshiaki Nohara and Ron Harui Sept. 30 (Bloomberg) — The dollar fell against the yen, paring earlier gains, on speculation the Federal Reserve will keep record-low interest rates unchanged for an extended period. The U.S. currency retreated from near a two-week high against the euro as Asian stocks rose and before a report this week forecast to show employers cut fewer jobs in September, damping demand safe-haven currencies. “Fed policy makers will probably keep low borrowing costs unchanged until next summer, weighing on the dollar,” said Akira Hoshino , chief manager of the foreign-exchange trading department in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s largest lender. The dollar dropped to 89.89 yen as of 10:45 a.m. in Tokyo from 90.02 yen in New York yesterday. It fell to as low as 88.24 yen on Sept. 28, the weakest level since Jan. 23. For the quarter, the dollar has declined 6.7 percent against the yen. The U.S. currency fell to $1.4614 per euro from $1.4587. Yesterday, it touched $1.4527, the strongest level since Sept. 14. The dollar has weakened 4 percent against the euro this quarter. Japan’s currency fetched 131.34 per euro from 131.40 in New York yesterday. The yen has gained 2.9 percent against the euro this quarter. The MSCI Asia Pacific Index of regional shares gained 0.5 percent. To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net ; Ron Harui in Singapore at rharui@bloomberg.net .

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Dollar Declines the Most Since May as Its Borrowing Costs Become Cheapest

September 12, 2009

By Matt Townsend and Oliver Biggadike Sept. 12 (Bloomberg) — The dollar declined the most since May versus six major counterparts as the greenback became the cheapest funding currency, prompting investors to sell the dollar and buy riskier assets. Sterling rose this week to a one-month high versus the dollar as the central bank refrained from expanding its asset- purchase program. The yen appreciated to near 90 versus the dollar before next week’s Bank of Japan meeting on speculation China’s recovery will boost the growth of its Asian neighbors and Japan’s exporters will repatriate earnings. “The use of the dollar as a funding currency is understandable given how liquid the dollar is in terms of its ability to trade across foreign-exchange markets,” said Nick Bennenbroek , head of foreign-exchange strategy at Wells Fargo & Co. in New York. “That’s probably why it’s being taken advantage of right now.” The Dollar Index , which IntercontinentalExchange Inc. uses to track the greenback against the currencies of U.S. trading partners including the euro, yen, pound, Swiss franc, Canadian dollar and Swedish krona, dropped 2 percent to 76.608 yesterday, from 78.136 on Sept. 4. The decline was the biggest since a 3.7 percent reduction in the five days ended May 22. The gauge touched 76.457, the lowest since Sept. 25, 2008. The U.S. currency’s decline didn’t discourage investors from buying Treasuries this week. Thirty-year U.S. bonds advanced, pushing the yield down 0.1 percentage point to 4.17 percent, after the $12 billion of the securities offered Sept. 10 drew the strongest demand in almost two years. Stronger Yen The yen advanced to a seven-month high versus the dollar as China’s output increased 12.3 percent in August from a year earlier and on speculation Japanese companies are bringing back money earned abroad to take advantage of a tax break that went into effect this fiscal year. The Japanese currency gained against most of its major counterparts as it surpassed a support level at 92 yen per dollar, said Boris Schlossberg , director of currency research at online currency trader GFT Forex, in New York. Support is a technical-chart area where orders may be clustered. “It’s a momentum move,” Schlossberg said. “We broke the 92 handle, which was a pretty critical support area. There was a tremendous amount of stops below there, and once that gave way it was like a waterfall cascade and pushed everything lower.” The Bank of Japan is forecast by all of the eight economists surveyed by Bloomberg News to hold the target lending rate next week at 0.1 percent. Weaker Dollar The yen advanced 2.5 percent to 90.71 versus the dollar and reached 90.21, the strongest level since Feb. 12. Japan’s currency gained 0.6 percent to 132.17 yen per euro. The euro increased 1.9 percent to $1.4571 after reaching $1.4634, the strongest level since Dec. 18. The three-month London interbank offered rate, or Libor, for dollars dropped below that of the Swiss franc on Sept. 8 for the first time since November, making the greenback the cheapest currency to fund purchases of higher-yielding assets. The dollar rate ended the week at a record low of 0.299 percent, compared with 0.359 for the yen and 0.307 for the franc. The franc gained 2.3 percent to 1.0373 versus the dollar and touched 1.0340, the strongest level since July 29, 2008. The pound advanced to $1.6742, the highest since Aug. 7, as the Bank of England left unchanged its asset-purchase program of buying up to 175 billion pounds ($290 billion) in bonds in a sign policy makers believe the economy is recovering. The BOE kept the main rate at a record low of 0.5 percent. Bollard on Currency New Zealand’s dollar rose for a ninth week in the longest stretch of gains in a decade even as Reserve Bank Governor Alan Bollard said in a Radio New Zealand interview yesterday that its “undesirable” gains won’t encourage exports. Bollard left New Zealand’s benchmark interest rate unchanged at a record low of 2.5 percent this week and said cutting borrowing costs was unlikely to curb demand for the currency. The kiwi, as the currency is known, reached 70.88 cents, the highest level since August 2008. The New Zealand dollar surged 38 percent against the U.S. currency in the past six months in the best performance among the 16 most-traded currencies tracked by Bloomberg as optimism the global economy will recover encouraged traders to bet Bollard won’t be able to hold down interest rates. The U.S. currency may pare its decline next week on speculation its drop is too big to sustain, according to some strategists. Relative Strength The 14-day relative strength index on the euro-dollar exchange rate rose to 67.8 on Sept. 10, the highest since June 2. A reading of 70 tends to indicate the rise approaches the extreme and a reversal may be imminent. When the RSI reached 69.6 on June 1, the euro dropped 1.3 percent in a week. “The thing about the currency market is it tends to go farther and longer than any point of rationality that makes sense,” GFT’s Schlossberg said. “It’s very possible that the turn in the dollar won’t happen until we break 90 in the yen, $1.47 in the euro and $1.70 in the pound. Once you hear people talking about $2 a pound and $1.50 in the euro, you are going to see a correction in the dollar.” The U.S. will report inflation data and advanced retail sales on Sept. 15, giving investors more insight into a recovery from the worst recession since the Great Depression. The producer price index in August rose 0.8 percent after a 0.9 decline in the previous month, according to the median forecast of 61 economists surveyed by Bloomberg News. Advance retail sales climbed 1.9 percent in August after a 0.1 percent drop in July, 60 economists said in a separate survey. To contact the reporters on this story: Matt Townsend in New York at mtownsend9@bloomberg.net ; Oliver Biggadike in New York at obiggadike@bloomberg.net

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Magnitude-7 Earthquake Strikes Near Java, Indonesia; No Injuries Reported

September 2, 2009

By Aaron Sheldrick Sept. 2 (Bloomberg) — A magnitude-7 earthquake struck near Java in Indonesia at 2:55 p.m., the U.S. Geological Survey said on its Web site. The quake hit 195 kilometers (120 miles) south-southeast of Jakarta at a depth of 50 kilometers, prompting evacuations of buildings in the capital. It’s the strongest since a 7.5- magnitude earthquake in India’s Andaman Islands on Aug. 10, according to USGS. The Pacific Tsunami Warning Center canceled an alert for the coast of southern Java. It said no significant tsunami was generated by the quake. Officials haven’t been able to contact Tasikmalaya, a city about 125 kilometers from the quake, said Harce Winerungan, a spokesman at the national emergency agency. “We haven’t received any reports of death or injuries in Jakarta. We only know the windows of some buildings and hotels were broken.” The quake struck close the epicenter of a 7.7-magnitude temblor that hit in July 2006, leaving 730 people dead and generating a tsunami, according to the USGS. Employees at the energy ministry in Jakarta evacuated the building and other office buildings were emptied in the capital. To contact the reporter on this story: Aaron Sheldrick at asheldrick@bloomberg.net .

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Dollar, Yen Decline Versus Euro as Recovering Economy Damps Refuge Demand

August 23, 2009

By Yasuhiko Seki Aug. 24 (Bloomberg) — The yen and dollar fell against the euro on growing optimism the global economy is recovering from the deepest recession since the 1930s, easing demand for the currencies as a refuge. The euro traded near the strongest level in more than two weeks against the greenback before a report forecast to show European industrial orders declined at a slower pace in June. The Australian dollar advanced for a fifth session, the longest winning streak since June, as Asian stocks extended a global equity rally, boosting demand for higher-yielding assets. “Improving economic fundamentals and gains in stocks make it easier for investors to take on more risk,” said Yuji Kameoka , a strategist in Tokyo at Daiwa Institute of Research Ltd., a unit of Japan’s second-largest brokerage. “As a result, typically lower-yielding currencies like the yen and dollar will retreat against higher-yielding assets.” The yen fell to 135.79 per euro as of 10:59 a.m. in Tokyo from 135.21 in New York on Aug. 21. It earlier touched 135.99 per euro, the weakest since Aug. 14. The greenback slumped to $1.4344 per euro from $1.4326 in New York. The dollar rose to 94.68 yen from 94.38 yen. Australia’s currency rose to 84.04 U.S. cents from 83.48 cents in New York last week. The currency advanced to 79.56 yen from 78.79 yen. The MSCI Asia Pacific Index of regional shares rose 2.3 percent today, and the Nikkei 225 Stock Average rallied 3.1 percent. The Standard & Poor’s 500 Index gained 2.2 percent in New York last week, touching a 10-month high, as sales of existing U.S. homes climbed 7.2 percent to a 5.24 million annual rate, the most since August 2007. Benchmark interest rates are 3 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits. Industrial Orders The euro climbed toward the strongest level in a week against the Japanese currency as a Bloomberg News survey of economists showed orders at industrial companies in the euro region fell 28.3 percent from a year earlier in June following a 30.1 percent drop in the previous month. The European Union’s statistics office will announce the data in Luxembourg today. The Ifo institute in Munich will release its business climate survey on Aug. 26. German business confidence will rise for a fifth month in August, according to the median of 41 forecasts in a Bloomberg survey. “An expected rise in the Ifo index will lend some support for the euro, especially against the dollar,” said Masashi Nakamura , a Tokyo-based economist at Mizuho Research Institute Ltd., a unit of Japan’s second-largest banking group. The euro may advance to as high as $1.441 this week, he said. ‘Beginning to Emerge’ The dollar fell against 12 out of the 16 most-active currencies tracked by Bloomberg before reports this week expected to show durable goods orders rose and housing prices shrank at a slower pace. Orders for durable goods , those meant to last several years, probably jumped 3 percent in July, reversing the previous month’s 2.5 percent decline, economists projected an Aug. 26 report from the Commerce Department will show. The S&P/Case-Shiller index of property values in 20 U.S. metropolitan areas probably fell 16.5 percent in June from a year earlier, the smallest decline in almost a year, a separate survey showed. The report is due tomorrow. The global economy is “beginning to emerge” from a recession after aggressive action by central banks and governments, Federal Reserve Chairman Ben S. Bernanke said Aug. 21 at a symposium in Jackson Hole, Wyoming. Aussie Dollar The Australian dollar pared gains after the nation’s Bureau of Statistics said today new vehicle registration fell 6.9 percent in July, snapping a three-month gain. This, combined with “lingering uncertainty about Australia’s relationship with China may weigh on the Australian currency,” said Toshiya Yamauchi , manager of the foreign- exchange margin trading department in Tokyo at Ueda Harlow Ltd. The Baltic Dry Index , a measure of shipping costs for commodities, dropped this month to the lowest since May as Chinese demand for shipments of coal and iron ore slowed. That gauge and Australia’s dollar have moved in tandem 86 percent of the time on a weekly basis over the past 10 years, according to data compiled by Bloomberg. Futures traders decreased their bets that the Australian dollar will gain against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on an advance in the Australian dollar compared with those on a drop — so-called net longs — was 44,120 on Aug. 18, compared with net longs of 48,846 a week earlier. To contact the reporter on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net .

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Dollar, Yen Slump Versus Euro as U.S. Economy Shrinks Less Than Forecast

July 31, 2009

By Ye Xie and Sapna Maheshwari July 31 (Bloomberg) — The dollar and the yen declined versus the euro after a government report showed the U.S. economy shrank less than economists forecast, reducing the demand for the currencies as a refuge

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