2010/10/20 17:42*DJ Portuguese 12-Month Treasury Bill Bid-To-Cover Ratio 2.4
2010/10/20 17:42*DJ Portuguese 12-Month Treasury Bill Average Yield Set At 2.886%
2010/10/20 17:41*DJ Portugal Sells EUR760M 12-Month Treasury Bills
2010/10/20 17:28=DJ DATA SNAP: UK Sept PSNB Tops Forecast Ahead Of Spending Review
2010/10/20 17:19=DJ BOE Minutes: Posen Voted To Increase Bond Buys To GBP250B
2010/10/20 17:11*DJ 3-Month Euribor Rises To 1.016% Vs 1.008% Tuesday
2010/10/20 17:04DJ IMF: EU Must Strengthen 'Center' To Fix Economy, Budget Problems
2010/10/20 16:53DJ IMF: Emerging Europe Governments Must Cut Budget Deficits
LONDON -Governments in emerging Europe must act quickly to cut their budget deficits, or else risk fiscal crises similar to that experienced by Greece that would inflict severe damage on already weakened banking systems, the International Monetary Fund said Wednesday. The IMF said economies in eastern Europe will grow by 3.9% in 2010 and 3.8% in 2011, having contracted by 6.0% last year. But in its twice-yearly Regional Economic Outlook for Europe, the IMF warned that many economies face major challenges if they are to maintain the recovery. And it said much will depend on developments in the euro zone, which is eastern Europe's main export market. 'The main downside risk for emerging Europe is the revival of sovereign stress in advanced Europe, which could depress growth in the euro area and lead to adverse spillovers for the region,' the IMF said. And even without an intensification of the euro zone's fiscal crisis, investors may become concerned about the ability of some eastern European governments to repay their debts, and become extremely reluctant to lend, as they did to Greece. To protect themselves against that possibility, the IMF said many eastern European governments need to take urgent action to cut their budget deficits. 'To prevent the emergence of market concerns, countries with high fiscal vulnerabilities may need to proceed with fiscal consolidation at a faster rate,' the IMF said. The Fund said it expects Poland's budget deficit to rise to 7.4% of gross domestic product in 2010, up from 7.1% last year, before falling to 6.7% of GDP in 2011. In emerging Europe as a whole, it expects budget deficits to fall to 5.2% of GDP this year and 4.2% of GDP next year from 6.0% in 2009. The Fund said a sharp rise in government bond yields, and a fall in the market value of government bonds, could have a negative impact on local banking systems. 'Financial sectors would be particularly affected, especially in those countries where banks hold a large portion of their assets in the form of government securities--Albania, Hungary, Poland, and Turkey,' the Fund said. 'In such countries, bank capitalization could be significantly impacted if the value of government securities declined. This in turn could curtail the supply of bank credit.' The Fund said that many economies in emerging Europe will need to find new sources of growth, relying more on exports than domestic demand. Prior to the onset of the financial crisis in 2007, eastern Europe experienced a surge in economic growth. But that was largely driven by a surge in capital inflows that funded strong growth in domestic demand, something that is not likely to happen again, the IMF said. 'Capital inflows are unlikely to return to pre-crisis levels, and domestic demand is likely to remain depressed,' the Fund said. 'Future growth must rely more on the tradable sector and less on the non-tradable sector--especially in countries that had built up large imbalances during the boom.' -Paul Hannon, , +44 20 7842 9491; paul.hannon@dowjones.com
2010/10/20 16:52=DJ FOREX VIEW: US Dollar Gets A Reprieve - For Now
2010/10/20 16:42=DJ INTERVIEW: Rio Tinto Scrambling To Meet Rising Iron Ore Demand
PERTH -Rio Tinto Ltd. Iron Ore Chief Executive Sam Walsh said China's interest rate hike won't affect its expansion plans and it will be a challenge to meet demand from Asia next year. 'In terms of seaborne iron ore demand, that's continued to be strong,' Walsh told in an interview Wednesday. 'Customers in China, Japan and Korea are seeking additional ore next year.' The volumes requested are 'significant enough that it is going to be a challenge to meet the demand,' he said. Turning to domestic political issues, Walsh said that he expects the Australian government to stand by its July agreement in relation to the minerals resource rent tax, despite media speculation that a key government minister wants to change the way royalties are handled.
2010/10/20 16:39*DJ Gilts Slightly Lower After 3-Way BOE MPC Split Vote
2010/10/20 16:38*DJ 10Y Gilt/Bund Yield Spread Steady At 56Bps After MPC
2010/10/20 16:37*DJ BOE: Govt Spending Cuts May Slow Recovery In Consumer Spending
2010/10/20 16:36*DJ BOE: Rising Asset Prices May Reflect Expectation Of More QE
2010/10/20 16:36*DJ BOE: Inflation In Short-Term May be Higher Than Expected
2010/10/20 16:35*DJ BOE Oct Minutes: MPC Voted 8-1 For BOE Rate Action
2010/10/20 16:35*DJ Sterling Falls Sharply After BOE MPC 3-Way Split Vote
2010/10/20 16:35*DJ BOE: MPC Voted 8-1 To Keep Bond Purchases At GBP200 Bln
2010/10/20 16:33*DJ BOE Oct Minutes: MPC Voted 8-1 For BOE Rate Action
2010/10/20 16:31*DJ UK Sep PSNCR +GBP20.7B Vs +GBP19.2B Year Ago
2010/10/20 16:30*DJ UK Sep PSNB +GBP16.2B Vs +GBP15.5B Year Ago
2010/10/20 16:30*DJ UK Sep PSNB Was Expected At +GBP15.7B
2010/10/20 16:28=DJ DATA SNAP: Italy Aug Indus Orders Rise 7.3% From Month Earlier
ROME -Italian industrial orders rose in August compared with a month earlier, climbing 7.3%, as both domestic and foreign demand posted gains, national statistics office Istat said Wednesday. Industrial orders in August jumped 32.4%, the highest percentage since records began in 2001, from the corresponding month a year earlier, after rising 0.7% in July on the year, Istat said. The annual figures are unadjusted for seasonal factors. The monthly drop in July narrowed to 2.6% from a previously reported 3.0%. The yearly figure for July was unchanged. Foreign orders increased 11.5% in August compared with July, while domestic orders rose 4.7%, according to Istat. Industrial sales advanced 2.8% in August from July, registering a 1.1% monthly gain in domestic sales, with foreign sales higher 6.4%. On the year, industrial sales rose a workday adjusted 13.5%, after climbing 9.0% in July. Istat website: www.istat.it
2010/10/20 16:21*DJ ECB Constancio: Too Big To Fail Issue May Be Insoluble
2010/10/20 16:05*DJ IMF: ECB Should Be Prepared To Redeploy Extraordinary Measures
2010/10/20 16:04*DJ IMF: Emerging Europe Must Rely More On Export Growth
2010/10/20 16:03*DJ IMF: EU's Central Budget Should Be Boosted To Back Reforms
2010/10/20 16:03*DJ IMF: Emerging Europe Govts Must Cut Budget Deficits
2010/10/20 16:03*DJ IMF: Emerging Europe Vulnerable To Euro-Zone Crisis
2010/10/20 16:01*DJ Italy Aug Industrial Sales +2.8% On Mo; +13.5% On Yr
2010/10/20 16:00*DJ Italy Aug Industrial Orders +7.3% On Mo; +32.4% On Yr
2010/10/20 15:59DJ ECB Stark: Euro Pact Needs Quasi-Automatic Sanctions-Report
ROME -The new euro-zone pact being hammered out to monitor fiscal and macroeconomic balances in the currency union 'should be based on the application of quasi-automatic sanctions on countries with excessive deficits,' Juergen Stark, a member of the European Central Bank's executive council, said in an interview published Wednesday by Il Sole 24 Ore. The decision to make permanent a European resolution fund to help countries in distress 'will turn out to be useless' if 'credible' public-finance rules and a workable macroeconomic supervision scheme are set up, Stark told the Italian newspaper. Stark said the ECB's current monetary policy is 'appropriate' but said it 'has in recent times become more accommodating.' The ECB will decide whether or not to continue unlimited three-month liquidity tenders at its meeting in December, Stark added. Newspaper website: www.ilsole24ore.com
2010/10/20 15:43DJ PRECIOUS METALS: Gold, Silver Rise As Euro Bounces Off Lows
SINGAPORE -Gold and silver rose in Asia Wednesday, as bargain hunters emerged after the euro jumped off its early lows against the dollar.Gold had dropped 2.5% and silver 4.1% Tuesday in the aftermath of the surprise rate hike in China, but there was no follow-up selling in Asia, with industrial commodities fairly stable and only regional equities following Wall Street lower.'There is some bargain hunting. Not everyone is convinced this is anything more than a temporary jump in the dollar,' a Singapore-based trader said.At 0630 GMT the euro was trading at $1.3776, well off its early low of $1.3698 giving precious metals a boost.Spot gold was at $1,338.80 a troy ounce, up $3.50 since Tuesday's New York close, with Tocom August 2011 gold at Y3,509/gram, down Y76, undermined by a combination of a strong yen and international gold's overnight dip.Spot silver was at $23.68/oz, up 31 cents.ScotiaMocatta said silver was still a fair way clear of levels that may prompt a more serious bout of long liquidation.'Due to the very strong price action last week, we do not see major selling enter the market until $22.94,' it said in a note.Platinum and palladium were also making small gains, with spot platinum at $1,668/oz, up $7, and palladium at $572/oz, up $2.
2010/10/20 15:23*DJ BOT: Uncertainty In Global Economy, Financial Markets Increasing
2010/10/20 15:02*DJ Stoxx Europe 600 Index Dn 0.1% After The Open
2010/10/20 15:01*DJ FTSE 100 Dn 0.1% After The Open
2010/10/20 15:01DJ Forex Options: Dollar/Yen Options Fall; Shift For Upside Hedges
TOKYO -Dollar/yen options fell in Asia Wednesday due to reduced demand for hedges against U.S. dollar decline, caused by the currency showing signs of shaking off some of its weakness.Hedge funds that previously showed strong interest in hedging against further falls in the greenback are now more interested in buying contracts that benefit from the dollar gaining against the yen, said an options dealer at a major Japanese bank.'At one time, they had strong interest in buying contracts with strike prices of Y80.00 and Y80.50; but such interest isn't seen that much at the moment,' the dealer said.Illustrating the shift in investor interest, the dealer said one market participant bought a three-week dollar-call/yen-put options contract with a strike price of Y84.80 and implied volatility of 12.75% for an undisclosed amount.The dealer also said some investors exited short-term hedges against both the dollar's falls and gains as the exchange rate stayed in a narrow band ahead of a meeting of the Group of Twenty industrialized countries' finance ministers and central bank governors later this week. Those sales contributed to the decline in volatilities.Also sold Wednesday was a five-day dollar-call/yen-put options contract with an Y82.00 strike and 9.5% implied volatility for an undisclosed amount; and a six-day dollar-call/yen-put contract at Y82.00, 11.45%, and a face value of $50 million.Benchmark volatilities implied by one-month at-the-money options fell to 11.30%/12.00% in Tokyo from 11.50%/12.20% Tuesday in New York.The dollar was quoted between Y81.32 and Y81.66 in Asian morning trade.Volatilities are likely to stay around 11.60% for the rest of the global day due to general inactivity ahead of the G-20 meeting, the dealer said.
2010/10/20 14:55*DJ Rio Tinto Iron Ore CEO: Chinese Iron Ore Demand Continues Strong
2010/10/20 14:30=DJ DATA SNAP: German Sept Producer Prices +0.3% MM, +3.9% YY
2010/10/20 14:27*DJ S&P Rates Hutchison Whampoa's Proposed Security 'BBB'
2010/10/20 14:26*DJ Fitch Assigns Expected 'BBB' Rating to Hutchison Whampoa's Hybrid Notes
2010/10/20 14:10=DJ HEARD ON THE STREET: All Clear In Euro-Zone Government Bonds?
2010/10/20 14:06=DJ FOREX VIEW: Liquidity Trap Isn't So Scary After All
2010/10/20 14:02*DJ Nikkei Stock Average Closes Down 1.7% At 9381.60
2010/10/20 14:01*DJ German Sep PPI Excl Energy +0.3% On Mo; +2.8% On Yr
2010/10/20 14:00*DJ German Sep PPI +0.3% On Month; +3.9% On Year
2010/10/20 14:00*DJ German Sep PPI Forecast +0.1% On Mo; +3.8% On Yr
2010/10/20 13:40=DJ FX ASIA: Infinity And Beyond; Yen Near Uncharted Territory
Mark Cranfield Of GAPORE -The yen may soon be in uncharted territory. Literally.If finance ministers of the Group of 20 industrial and emerging powers don't magically thrash out an updated Plaza Accord on managing exchange rates when they meet this week in South Korea, investors will likely revert to what they've mostly done since that 1985 agreement: sell dollars for yen.Japan's Ministry of Finance dumped an unprecedented Y2 trillion on the foreign-exchange market last month to weaken the Japanese currency from 15-year highs. But the dollar, now at Y81.54, has slid back to within 2% of its 1995 all-time low of Y79.75.If that low is broken, where might dollar/yen go?While there are no precedents to draw on for this exchange rate, there are techniques for extrapolating future moves based on historical data, such as the pair's past relationship to trade-weighted measures of the yen's broad value--which aren't yet at record levels.With the caveat that any such guesstimate is fraught with even more uncertainty than usual when currency forecasting, here are some possible targets for the dollar against the yen.The Bank of England, with one of the oldest databases for tracking major exchange rates, calculated the index for the yen's effective exchange rate at a record 172.3 in September, well above the 154.3 it measured in 1995 when dollar/yen was at its record low. By that gauge, the yen has a further 11% to strengthen, implying a dollar fall to Y70.50 in the next few months.The Bank for International Settlements' measure of effective exchange rates for major currencies, based on comparisons of consumer-inflation comparisons, pegs the yen at 27% below its value when the currency was at its high against the dollar. Extrapolating that suggests the dollar could slide all the way to Y58.80.Along the way between here and those depths, technical analysis provides some guideposts for the dollar's decline.A drop below the record low would initially open the way down toward Y75.00, a big psychological line that's near potential support at Y74.64--the measured target generated by the breach of support at the Nov. 27 low of Y84.81. This also roughly coincides with the base of the Y75.20-Y73.20 area defining a double-trendline descending channel off the June 22, 2007 high of Y124.16 and the Dec. 17, 2008 low of Y87.11 on the yen's logarithmic weekly chart.Below Y73.20 the dollar's downside would be exposed to the psychological 70.00 level.Another method of chart analysis, using a mixture of Fibonacci and Gann line projections, points to a long-term dollar objective of Y64.Since May, when dollar/yen resumed its long-term downtrend from around Y95, the pair has been falling about Y2 a month. If it maintains that trajectory, the dollar will be around Y76-Y77 by the end of the year.There are, to be sure, as many forecasts for dollar/yen as there are forecasters. The only thing they all agree on appears to be that the market will soon be plying uncharted waters--and will likely stay there.
2010/10/20 13:05*DJ BOJ Nishimura: To Carefully Watch Riskier-Asset Market Moves
2010/10/20 12:35*DJ Dollar Down At KRW1,126.3, Off Early KRW1,144 High, KRW1,130.5 Tue
2010/10/20 12:25DJ Hutchison Whampoa Plans Benchmark Dollar Bond - Source
SINGAPORE -Hong Kong-based conglomerate Hutchison Whampoa Ltd. (0013.HK) is planning to sell a benchmark-sized U.S. dollar bond as early as this week, a person familiar with the situation said Wednesday.The perpetual bond is callable after five years, the person said.Goldman Sachs is the sole lead manager for the issue.
2010/10/20 12:05*DJ Hutchison Whampoa Bond To Be Perpetual With Call Option - Source
2010/10/20 12:02*DJ Hutchison Whampoa Hires Goldman Sachs As Lead Manager For Bond - Source
2010/10/20 12:01*DJ Hutchison Whampoa Aims To Sell Dollar Bond This Week - Source
2010/10/20 12:00*DJ Hutchison Whampoa Plans Benchmark Dollar Bond - Source
2010/10/20 11:25DJ BOJ Nishimura: Should Focus On Price Outlook, Not Only Short-Term Movements
HIROSHIMA, Japan -Bank of Japan Deputy Gov. Kiyohiko Nishimura said Wednesday the central bank should focus on the outlook for prices, rather than just looking at short-term movements, to achieve price stability in the long-term." it is necessary to pay attention not only to the short-term inflation rate at the moment, but also to the forecast of how the future inflation rate will develop and to consider its consistency with" the central bank's understanding of medium- to long-term price stability, Nishimura told business leaders in Hiroshima, western Japan.The midpoints of most BOJ policy board members' judgment of price stability fall at around a 1% on-year rise in consumer prices.The central bank unveiled an ambitious easing package earlier this month. It cut its policy target rate to a range of 0.0%.1% from 0.1% previously, and said rates would remain at virtually zero until prices begin to overcome deflationary pressures.The BOJ also launched a Y5 trillion fund to buy various financial assets, including corporate and government debt.
2010/10/20 11:08*DJ Dollar At KRW1,130.1 Vs KRW1,144 High Earlier, KRW1,130.5 Tuesday
2010/10/20 11:04DJ Wellink: Concrete Figures On Too-Big-To-Fail Banks In Mid-2011
SEOUL -Chairman of the Basel Committee on Banking Supervision Nout Wellink said Tuesday that central bankers and regulators would finalize concrete rules on systemically important institutions by the middle of next year.At a press conference after a meeting in Seoul, Wellink said officials would discuss methodology in more detail at a meeting in late November, before presenting a list of too-big-to-fail banks to the Financial Stability Board, and beginning to discuss the calibration of the rules in March.Wellink also hailed the agreement by international officials on key details of the liquidity coverage ratio. The LCR and the net stable funding ratio will both be subject to an observation period and include a review clause to address any unintended consequences.'The finalization of the liquidity framework today should be seen as a landmark in the history of banking regulation,' said Wellink, who is also president of the Netherlands' central bank. 'What we did is completely new.'
2010/10/20 10:55*DJ Nymex November Crude Oil Contract Up 51 Cents At $80.00/Bbl
2010/10/20 10:44DJ UK Set To Unveil Spending Cuts To Tackle Huge Deficit
LONDON --The U.K. will unveil billions of pounds in public spending cuts Wednesday in a sweeping review of government expenditure expected to trigger half a million job losses as it tackles a huge deficit.Prime Minister David Cameron's Conservative-Liberal Democrat coalition wants to cut spending by GBP83 billion ($130 billion) by 2014-15, and the review will reveal exactly where the axe will fall.In its biggest challenge since taking power in May, the coalition wants to eliminate the U.K.'s GBP154.7-billion-pound deficit--a legacy of the previous Labor government and the recession--over the next five years.Finance minister George Osborne is expected to say his plans, which will see departmental spending reduced by an average of 25%, will map out 'a hard road to a better Britain,' according to reports.Osborne is set to brace the public sector for nearly 500,000 jobs to be culled over the next four years--a fact unwittingly revealed by a Cabinet minister who was photographed reading confidential briefing papers.Danny Alexander, the Liberal Democrat chief secretary to the Treasury, was snapped Tuesday with the documents on his lap as he was driven away from his office.The U.K.'s welfare and justice systems are expected to be hard hit, and the BBC is braced for a 16% cut to its budget in real terms over the next six years, the broadcaster's website reported.The coalition started the process Tuesday, announcing that it would shrink the country's armed forces and scrap key assets like its flagship aircraft carrier in a defense review that forms part of the wider program of cuts.Cameron said 17,000 service personnel would go from the British Army, Royal Air Force and Royal Navy by 2015--but vowed there would be 'no cut whatsoever' to the level of support for forces in Afghanistan.The harshness of the measures has worried some economists who fear they could plunge the U.K's economy back into recession, a concern shared by the opposition Labor party, which was ousted from power in the May election.The International Monetary Fund has enthusiastically endorsed Osborne's plans, and European governments are watching closely.Trade unions have reacted with anger and thousands of union members and protesters rallied in London Tuesday, waving placards that said 'Don't Break Britain' and 'No more cuts.'Labor's finance spokesman, Alan Johnson, has also warned that the cuts were being made 'too deeply and too quickly.'The scale of the cuts has provoked disquiet among some Liberal Democrats, the junior coalition partners, who fear they could cause lasting social damage.
2010/10/20 10:30=DJ FOREX VIEW: Short-Term Outlook For Canada Dollar Sours
2010/10/20 10:28DJ ESRI: Irish 2014 Deficit Target 'Worryingly Ambitious'
DUBLIN -Ireland's independent think-tank the Economic & Social Research Institute Wednesday said the government's target to reduce the budget deficit to 3% of gross domestic product was 'worryingly ambitious.'In its quarterly economic report, it said the budget deficit will soar to a 'truly dramatic' level of 31% of GDP this year, with a third due to the banking bailout, but expects it to fall to 10% of GDP for 2011.'While the 2014 date strikes us as worryingly ambitious, we are mindful that an extension is highly unlikely and so we must operate within the constraints as presented,' the ESRI said.The ESRI said Ireland should brace itself for bigger-than-expected cuts: 'Although we have based our forecasts on a budgetary package of EUR4 billion of savings, it could well be that a higher amount will be sought.'Finance Minister Brian Lenihan has flagged cuts of 'well over' EUR3 billion and originally forecast EUR7.5 billion in cuts over four years to meet its 2014 deficit target as agreed with the European Commission.The ESRI also said that the cuts needed will be across the board. 'Whatever it is, the scale of the task is such that there will be a need for adjustments in current and capital spending and in taxation,' the ESRI added.'Our calculations suggest that savings of up to EUR15 billion could be needed, that is, twice the sum that was under discussion at the time Ireland and the [European] Commission agreed to the 2014 deadline,' it said.The ESRI, one of the organizations consulted by the International Monetary Fund on its annual visit to Ireland, also said Ireland's unemployment rate will hit 13.25% in 2010 and 13.5% for 2011.It sees GDP falling 0.25% in 2010 and growing by 2.25% in 2011, and sees gross national product--which excludes multinationals based here--contracting by 1.5% this year and rising 2% in 2011.The ESRI expects the net outward migration in the year ending April 2011 to be 60,000 versus a Central Statistics Office estimate of 34,500 in the year to April 2010. The ESRI said the CSO's estimate seems conservative.
2010/10/20 10:13*DJ IMF's Lipsky: Rate Hike In Line With Chinese Govt's General Policies
2010/10/20 10:12*DJ IMF's Lipsky: Welcome Chinese Rate Hike
2010/10/20 10:10*DJ BOJ Nishimura: Watching Impact Of Yen Rises On Prices
2010/10/20 10:10*DJ BOJ Nishimura: Japan Econ Growth May Be Weaker Than July Forecast
2010/10/20 10:10*DJ BOJ Nishimura: Growth In Exports Significantly Slowing Down
2010/10/20 10:09*DJ BOJ Nishimura: To Take Appropriate Monetary Policy Action
2010/10/20 10:08*DJ BOJ Deputy Gov Nishimura: Focused More On Price Outlook Than Short-Term Moves
2010/10/20 10:01*DJ Hang Seng Index Opens Down 1.5% At 23,407
2010/10/20 09:51DJ BOE King: Must Smooth Rebalancing To Export Growth
LONDON -Bank of England Governor Mervyn King Tuesday said its Monetary Policy Committee must support domestic demand until the anticipated rise in exports is strong enough to generate economic growth.In a speech to business people in the West Midlands, King said that while his predecessors had for half a century struggled to prevent there being too much money in the economy, he was faced with a very different problem.'I find myself in the opposite situation having to explain that there is too little money in the economy,' King said. 'But in the wake of the financial crisis, and the sharp downturn that followed, the amount of money in the economy as a whole...is now barely growing at all. That is restraining activity and pushing down the outlook for inflation.'The central banker said the financial crisis and the recession that followed means output is 10% lower than it would otherwise have been.Over the longer term, he said Britons would have to save more and rely on exports to drive growth instead of domestic demand. But while he reaffirmed his belief that sterling's depreciation since the start of the crisis would help that rebalancing, he said exports have yet to pick up.'This highlights a key role for monetary policy: smoothing the adjustment process by providing temporary stimulus to demand while the rebalancing takes place, so reducing the risk of inflation falling below the target in the medium term,' King said.King said a pickup in exports would help create jobs to compensate for cuts in public sector employment that are due to be announced Wednesday.'To achieve a rebalancing we need to sell more to, and buy less from, economies overseas,' King said. 'To close the gap between exports and imports, more than half a million jobs will probably need to be created in businesses producing to sell overseas, compensating for fewer employment opportunities serving U.K. consumers or the public sector.'King's comments come ahead of the release Wednesday of the minutes of the MPC's October policy meeting. The MPC left its key interest rate at a record low of 0.5%, and its bond buying program unchanged at GBP200 billion.But economists believe the MPC is likely to have split into three camps, with one member voting for a rate increase, and at least one member voting to resume purchases of government bonds, a policy known as quantitative easing.King's comments suggest he may be leaning towards the latter option.He noted that the inflation rate remains well above the BOE's 2.0% target, and that 'poses the risk that inflation expectations may move up.'But he said there is an equally large risk that one the impact of sales tax rises and other temporary influences pas, spare capacity may push the inflation rate below the target.'So not only can monetary policy play a role in smoothing the rebalancing process, it needs to do so if the outlook for inflation is to remain in line with the 2% target in the medium term,' King said.-Paul Hannon, , +44 20 7842 9491, paul.hannon@dowjones.com
2010/10/20 09:38=DJ PBOC WATCH:PBOC Hikes Rate Unexpectedly To Keep An Close Eye On Inflation
2010/10/20 09:37DJ PBOC Adviser: Price Worries, Negative Real Rates Behind Rate Hike - Xinhua
BEIJING -The People's Bank of China raised its benchmark lending and deposit rates Tuesday because 'worries about soaring prices overwhelmed fears on economic growth,' PBOC adviser Li Daokui was cited as saying by Xinhua News Agency on Tuesday. Statistics show the economy is recovering while the prices of goods remain at high levels, the report cited Li as saying. Negative real interest rates--when the rate of inflation exceeds the nominal rate of return on bank deposits--were another reason for the rate hike, Li was cited as saying.
2010/10/20 09:34=DJ Fed's Lockhart:US Recovering From 'Severe Economic Dislocation'
2010/10/20 09:27*DJ Shenzhen Composite Index Opens Down 2.1% At 1206.50
2010/10/20 09:26*DJ Shanghai Composite Index Opens Down 1.8% At 2947.51
2010/10/20 09:21DJ BOJ Gov Shirakawa Hints At More Quantitative Easing -Report
TOKYO -The Bank of Japan could expand its newly introduced quantitative easing measures if the steps prove effective and economic conditions warrant, BOJ Gov. Masaaki Shirakawa said in an interview with the Asahi published Wednesday. The BOJ introduced a Y35 trillion monetary easing program on Oct. 5 and cut its key overnight call rate to a 0.0%.1% range from 0.1%. 'Expanding the fund would be a leading option' if the economy deteriorates, Shirakawa said, according to the Asahi. The remarks echo comments Shirakawa made last week in a parliamentary committee, and hint at his willingness to expand the easing measures, the Asahi reported. The central bank will 'carefully study the effects and the side effects, since it is a new policy,' Shirakawa said regarding the easing package. Enlarging the fund would be an option in staving off any worsening of the economy 'in the case that we judge the effects are prevailing,' he said, according to the Asahi. Shirakawa also said that the central bank would maintain its essentially zero interest rate policy 'until the stage at which price stability is in sight,' the Asahi reported. -Tokyo Bureau, ; +81-3-6269-2770
2010/10/20 09:16DJ NIESR Sees 20% Chance Of Decline In UK GDP In 2011
LONDON -Hours before the U.K. government was to present a nervous nation with the details of impending budget cuts, a respected economic research institute cautioned the center-right coalition Wednesday that its belt-tightening may push the economy back into recession.The National Institute of Economic and Social Research issued a study showing a one-in-five chance that the large-scale spending cuts will cause the economy to contract next year. If that happens, the government will have to put austerity on hold and provide some stimulus to growth, NIESR said."If the economic situation worsens noticeably, then the government should make it clear it stands ready to undertake a temporary fiscal stimulus," NIESR said. "This could be based on a temporary national insurance holiday or temporary tax rebates."Even if the economy continues to grow, the institute said, it will do so at a slower pace than forecast by the Office for Budget Responsibility. In that case, tax revenues will increase less rapidly than the OBR expects, putting the government's five-year timetable at risk.In its budget outlined in June, the government called for eliminating its structural deficit by the fiscal year ending March 2015. Having spent the months since then looking for ways to achieve that, it was expected to announce deep, across-the-board spending cuts later Wednesday.One of the U.K.'s oldest and most respected economic research bodies, the NIESR is aided by the Bank of England, the U.K. Treasury and the Office for National Statistics, among others. Its former director--Martin Weale--is the newest member on the BOE's Monetary Policy Committee.NIESR said the most likely outcome is that the economy will grow by 1.6% this year and next. In July, it forecast growth of 1.3% this year and 1.7% next."A double-dip recession is unlikely," NIESR said.Its forecast for growth in 2011 is much lower than that of the OBR, which said in June that it expected gross domestic product to increase by 2.3% next year."Persistently strong growth is unlikely in an economy where household balance sheets are still undergoing repair, funding channels to business remain impaired and the public sector is embarking on a significant program of fiscal consolidation," NIESR said.The research institute expects the economy to grow 2.0% in 2012, 2.5% in 2013, 2.4% in 2014 and 2.5% in 2015.The OBR has forecast 2.4% growth in the fiscal year ending March 2012, 2.9% in fiscal 2013, 2.8% in fiscal 2014 and 2.7% in fiscal 2015.With disappointing economic growth, the budget deficit will fall less rapidly, NIESR said, and will still be 3.6% of GDP in 2015, below the 2.1% of GDP targeted by the government.But NIESR said that based on past experience, it's unlikely the government will be able to cut spending as rapidly as it plans."We suspect that spending cuts will be delayed and their scale reduced as compared to the budget plans," it said.Indeed, if the spending cuts were halved, and direct taxes--such as income tax--were raised to compensate, the economy would grow more rapidly and the budget deficit would be only "marginally" larger than the government has targeted, NIESR said.The research institute said an early announcement of an increase in the age at which Britons retire and receive pensions would have been an attractive alternative to spending cuts on the scale proposed by the government."This would save transfers and increase revenues, and it is extremely hard to reverse, unlike spending cuts," NIESR said.NIESR said that U.K. households face the "dismal prospect" of two successive years of decline in real after-tax incomes, by 0.8% in 2010 and 0.6% in 2011.That is also bad news for U.K. retailers. "Consumer spending will stagnate in 2011," NIESR said.NIESR said that while the inflation rate will once again be well above the Bank of England's 2.0% target in 2011, that will be due to "temporary" factors, including higher import prices due the sterling's depreciation since the start of the financial crisis and increases in the sales tax."The strength of price inflation this year is not a strong sign of general underlying inflationary pressure," NIESR said.NIESR said the gap between what the U.K. economy can produce and what it will produce--the output gap--will continue to widen over the next two years.It forecast that the inflation rate will fall to 1.4% in 2012, and then rise to 1.8% in 2013, after which it will be "around" the BOE's target.The research institute said the BOE shouldn't add further stimulus to the economy by buying government bonds using freshly created money, a policy known as quantitative easing."Further QE would appear to be unjustified at present, especially as there is a risk that fiscal policy cannot be tightened as quickly as the government would wish," NIESR said. -Paul Hannon, , +44 20 7842 9491, paul.hannon@dowjones.com
2010/10/20 09:14DJ Fed's Duke: Don't Read Into Fed Speeches Too Close; Much Can Change Before FOMC
2010/10/20 09:12=DJ FX ASIA: Further Japan Intervention Risks Washington's Ire
2010/10/20 08:25=DJ Fed's Kocherlakota: Employment Recovery Has Been 'Quite Modest'
2010/10/20 08:17*DJ Nikkei Stock Average Falls To Two-Week Low
2010/10/20 08:07*DJ Nikkei Stock Average Down Over 2.0%
2010/10/20 08:06*DJ Dollar Breaches KRW1,140; Now At KRW1,141.4 Vs KRW1,130.5 Tue
2010/10/20 08:04*DJ Nikkei Stock Average Opens Down 1.5% At 9399.65
2010/10/20 08:03*DJ Lead 10-Year JGB Futures Open Up At 143.77 Vs 143.69 Tue
2010/10/20 08:00*DJ British Pound Falls Below Y127.65; Lowest Since May 20
2010/10/20 07:47*DJ Lead Nikkei Futures Open Down 80 Points At 9445 On SGX
2010/10/20 07:15*DJ NIESR Calls For Further Fiscal Stimulus If Economy Contracts
2010/10/20 07:11*DJ NIESR Sees 20% Chance Of Decline In UK GDP In 2011
2010/10/20 07:11*DJ NIESR: UK Economy To Grow 2% In 2012, 2.5% In 2013
2010/10/20 07:10*DJ NIESR Raises 2010 UK Growth Forecast, Cuts 2011 Forecast
2010/10/20 07:09*DJ ESRI: Irish GDP Seen -0.25% In 2010, +2.25% In 2011
2010/10/20 07:08*DJ UK Economy To Grow By 1.6% In Both 2010 And 2011 - NIESR
2010/10/20 06:54*DJ Rio Tinto: To Expand Iron Ore Capcity To 283M Tons/Year
2010/10/20 06:53*DJ Rio Tinto: To Invest US$3.1B To Expand Pilbara Iron Ore Capacity
2010/10/20 06:25=DJ WORLD FOREX: Dollar Gains Sharply Vs Rivals As Investors Seek Safety-2-
2010/10/20 06:10=DJ Consumer Confidence Slips In Latest Week - ABC News Survey
.S. consumer confidence slid in the week ended Sunday, according to an ABC News index, tying its average for the year.The overall reading ticked down one point to -46 on its scale of -100 to +100. The average reading this year is two points above 2009, which was the worst full year since ABC began polling in 1985.In a separate monthly survey, 23% of respondents said the economy is improving, while 34% said it is getting worse. Economic pessimists have outnumbered optimists in all but one month this year and all but three months since President Barack Obama was elected two years ago.Still, the numbers have improved since October 2008, when a record 82% said the economy was getting worse. That was in the darkest days of the recent financial crisis and credit crunch.In the latest survey, 92% rated the national economy negative, compared with 91% last week, and 74% said now is a bad time to spend money, compared with 72% last week. The portion saying their finances are hurting was flat at 55%.The index is based on a random survey of 1,000 respondents nationwide. It measures typical Americans' confidence in three areas: the national economy, their finances and their willingness to spend money, according to the report. The poll has a margin of error of plus or minus three percentage points.The index is derived by subtracting the negative response to each index question from the positive response to that question. The three resulting numbers are added and divided by three.
2010/10/20 06:09=DJ US Stocks Finish Lower As Mortgage Worries Ramp Up-2-
2010/10/20 05:47=DJ WORLD FOREX: Dollar Gains Sharply Vs Rivals As Investors Seek Safety
2010/10/20 05:24=DJ US Stocks Finish Lower As Mortgage Worries Ramp Up
2010/10/20 04:05*DJ DJIA Closes Down 166 (1.5%) At 10978; BofA, Alcoa Slide
2010/10/20 02:38*DJ OIL FUTURES: Crude Settles Down $3.59 At $79.49/Bbl
2010/10/20 02:36*DJ BOE King: Will Have To Save More In Coming Years
2010/10/20 02:34*DJ BOE King: Will Need To Create 500,000 Jobs In Export Sector
2010/10/20 02:33*DJ OIL FUTURES: Nymex Crude Closes Down $3.58 At $79.50/Bbl
2010/10/20 02:26*DJ OIL FUTURES: Crude Futures Drop Below $80/Bbl
2010/10/20 02:08*DJ Euro Hits Intraday Low Vs Dollar, At Lowest Level In 2 Weeks
2010/10/20 01:54DJ Cheung Kong Said To Drop Bid For UK Rail Project -Bloomberg
heung Kong Infrastructure Holdings Ltd. (1038.HK) has ended plans for a potential bid for the U.K.'s only high-speed rail link, High Speed 1, Bloomberg News reports Tuesday, citing two people familiar with the matter.High Speed 1 is valued at $2.4 billion by analysts. Cheung Kong had expressed initial interest in the project to connect London's St. Pancras station with the undersea Channel Tunnel to France, but it has since decided it probably won't make a formal bid, the sources said.A spokeswoman at Cheung Kong in Hong Kong couldn't immediately be reached to comment.A spokesman for London & Continental Railways, the rail line's owner, said the company couldn't comment on the bidding process. Full story at: www.bloomberg.com/news/2010-10-19/billionaire-li-ka-shing-said-to-drop-out-of-u-k-high-speed-rail-link-bid.html-; 212-416-2900
2010/10/20 01:28*DJ Fed's Fisher: Fed Can't Bear All The Burden Of Stimulus
2010/10/20 00:41*DJ ECB's Stark: Portugal Austerity Measures Are "Bold" -Report
2010/10/20 00:18*DJ Lockhart: Expects Recovery To Be Gradual; Cites 'Uncertainty'
2010/10/20 00:17*DJ Fed's Lockhart: US Recovering From 'Severe Economic Location'
