Market Rumours

2010/04/16 19:30DJ ECOFIN: ECB Nowotny: Greek Aid Has to Be Updated As We Go
MADRID -It remains unclear for the time being whether the European Union has to make provisions for Greece beyond this year, a member of the European Central Bank's governing council told Dow Jones Newswires Friday. 'We will see. Look, such programs have to be updated continuously,' said Ewald Nowotny, who represents the Austrian Central Bank at the ECB. 'It can't be determined,' he said, when asked whether arrangements would be made to help Greece beyond this year. 'In Hungary, one put such a program in place. That had started in spring [and] the second half wasn't even needed,' Nowotny said. Nowotny was in Madrid for an informal meeting of European Union finance ministers and central bankers Friday and Saturday. Thursday, Greece took another step toward the first sovereign debt bailout in the history of the euro zone. In a letter to European and International Monetary Fund officials, Finance Minister George Papaconstantinou asked for formal discussions on an aid package to begin.

2010/04/16 18:16DJ Japan Keeps April View Of Economy Unchanged, Raises Business Sentiment View
TOKYO -The Japanese government kept its view of the economy unchanged in April but sounded cautiously optimistic about the future as stimulus steps will likely lead to an improvement in business and consumer sentiment. 'The economy has been picking up,' though it 'remains in a difficult situation,' the Cabinet Office's monthly economic report released Friday said, using the same assessment wording as in the March report. Still, the government upgraded its view of business sentiment to 'improving' from 'picking up' a month ago after the latest Bank of Japan tankan survey released two weeks ago showed that sentiment at large companies recovered for the fourth straight quarter. Consumers' economic outlook is also likely to keep getting brighter ahead, a government official said. The cautiously optimistic tone of the report suggests the government will refrain from compiling a full-fledged fresh stimulus package for now but instead will use a reserve, totalling Y1 trillion, already set aside in the main budget to bolster the economy. 'At this point I'd like to make efforts to rejuvenate the economy using the reserve for projects such as making schools more earthquake resistant,' Kan said earlier this month, effectively turning down a call for a multi-trillion stimulus package by one of the parties in the ruling coalition. Keisuke Tsumura, Cabinet Office parliamentary secretary, also sounded a little more optimistic about the overall economic outlook, saying 'We've been getting many positive responses from households and firms' about the economic steps the government has taken so far. But the government remained cautious about price falls in April, saying that the country is in 'mild deflation' and it remains one of the 'downside risks' to the overall economy. 'We are not even half way through our fight against deflation. There is still a long way to go ahead,' Tsumua said during a briefing on the report. The core consumer price index declined 1.2% from a year ago in February, dropping for the 12th straight month. Tsumura's remarks suggested that the possibility still remains that the government in the near future may step up pressure on the BOJ to ease monetary policy further.

2010/04/16 18:14DJ German Fin Min: Greece Will Probably Not Need Euro-zone Aid - Radio
BERLIN -Greece will probably not have to tap the aid program promised by the euro-zone countries, German Finance Minister Wolfgang Schaeuble said German radio Suedwestrundfunk Friday. 'We still believe that the Greek are on the right track and that they might not have to assume the aid in the end,' Schaeuble was quoted as saying. He insisted that if Greece wanted to tap the up to EUR30 billion in loans promised from the other euro-zone countries, it 'must pay the market interest rate. We cannot give any interest subsidy, this would cease the validity of the European Stability Pact.' Schaeuble said the government would let state-owned KfW Banking Group provide any loan to Greece and the government would guarantee this loan, for which a legal empowerment is needed but no budget money will be used. Asked about the proposal by the European Commissioner for Economic and Monetary Affairs to give the European Commission a say on finance ministers' national budgets before lawmakers look at it, Schaeuble said there is a need to talk about the details of the proposal. Radio Web site: www.swr.de/swr2/programm/sendungen/tagesgespraech/-/id=6095346/property=download/nid=660264/fwsp4e/swr2-tagesgespraech-20100416.pdf

2010/04/16 18:05=DJ Forex Focus: Risk Taking Is Not What It Used To Be
LONDON -Taking risks in currencies today is not the same as taking risks yesterday.Conditions for risk-taking now are the best they have been since the credit crunch escalated back in late 2008.As economic data from the U.S. and Asia have shown this week, the global economic recovery continues apace with global inflation pressures remaining subdued.Not only did China report that its inflation rate is lower than expected but Fed Chairman Ben Bernanke made it clear that monetary tightening isn't on his agenda.In other words, there is little need for an early hike in interest rates and the global economy has hit the so-called "sweet spot" that is ideal for risk takers.This improvement in general investor confidence is evident in stocks with most equity markets headed higher, aided by a particularly strong start to the U.S. earnings season. The unexpectedly high profits from both Intel and JPMorgan Chase bode well as company reporting accelerates next week.As Gareth Berry, a Singapore-based currency strategist for UBS, put it: "The first quarter U.S. earnings season will become increasingly important in evaluating risk sentiment."However, investors are unlikely to make the blanket investment decisions they may have made of old--heading back into high-yielders at the cost of low-yielders in a general shift towards the carry trade.Sure, commodity currencies remain attractive and the highly resilient economies in Asia remain a target.But several more major currencies--the euro, the pound and even the Australian dollar --may well miss out.The euro is the most obvious loser, mired as it is by Greece's ongoing debt problems. Evidence this week that the country can only raise funds at a cost that will complicate its efforts to reduce its budget deficit suggests that the single currency will remain under selling pressure for some time to come.The risk of contagion not only to other euro-zone debtors but also to other emerging markets remains an issue that will continue to dog the single currency as well as riskier markets as a whole.In the case of the pound, any wholesale interest in the currency may be held in abeyance until the market has more convincing evidence that the May 6 general election doesn't end in a hung parliament.Until then, any gains in sterling will be limited, with investors assuming that any new government will have difficulty implementing the fiscal discipline needed to reduce the country's deficit.So, along with Asian currencies, where long positions aren't already too high, the Australian, the Canadian, the New Zealand dollars as well as Nordic currencies all stand to benefit.There are those, though, who caution against counting on an Australian dollar bounce given its close association with China.See the Australian dollar's recent rise against its U.S. counterpart:http://www.dowjoneswebservices.com/chart/view/3831Although data Thursday may have showed strong growth and subdued inflation, Michael Hart, a currency strategist with Citigroup, warn of the risks that the policymakers may not engineer a soft landing."With valuation metrics stretched on all fronts, this indicates that significant downside risks are building for the Australian dollar," Hart said..Early Friday in Europe, there was some set back in sentiment as disappointing earnings from Google, speculation over a Chinese rate hike, worries about how Greece's debt bailout will work and more dovish comments from San Francisco Fed President Janet Yellen all encouraged investors back into safe havens such as the dollar and the yen at the expense of the euro and high-yielders.At 0745 GMT, the euro was down at $1.3526 from $1.3577 late Thursday in New York, according to EBS. It was also down at Y125.21 from Y126.31, while the dollar fell to Y92.56 from Y93.04.Bloomberg TNI FRX POV Reuters USD/DJ Thomson P/1066 or P/1074

2010/04/16 17:23=DJ DATA SNAP: Euro-Zone Inflation Lower Than First Estimated
LONDON -Consumer prices in the 16 countries that use the euro rose at a slightly slower rate over the 12 months to March than first estimated, and the annual rate of inflation remained well below the European Central bank's target. The European Union statistics agency Eurostat Friday said consumer prices rose by 0.9% from February, and were up 1.4% from March 2009. The year-on-year increase was smaller than Eurostat's first estimate of 1.5% published at the end of March. Even at that lower level, the inflation rate in March picked up sharply from February, when it stood at 0.9%. However, that's unlikely to prompt a response from the European Central Bank. Its goal is to ensure prices stability, a state it defines as an inflation rate close to, but below 2% over the medium term. The inflation rate was pushed higher by clothing prices, which jumped by 7.6% from February, and energy prices, which rose by 2.6% on the month. Over the year, prices for alcohol and tobacco and energy have been significant sources of inflation. But there are few signs that inflationary pressures are building outside of those volatile items. The core rate of inflation--which excludes alcohol, tobacco, energy and food--rose to 1.0% from 0.9% in February, but was down from the 1.1% recorded at the end of 2009. With consumer spending is likely to remain weak as unemployment remains high and wage growth subdued, the ECB is unlikely to raise its key interest rate soon.

2010/04/16 15:03DJ Forex Options: Dollar/Yen Options Up As Downside Hedges In Demand
TOKYO -Dollar/yen currencies options rose slightly in Tokyo Friday as a fall in the underlying exchange rate due to lower U.S. Treasury yields bolstered demand for downside protection. The U.S. unit stood at Y92.72 as of 0400 GMT, down from its New York level of Y93.04 Thursday. Benchmark one-month at-the-money implied volatilities edged higher to 9.70%/10.40% from 9.65%/10.35%. On growing speculation that the dollar will be dragged lower by falling Treasury yields, as the Federal Reserve is unlikely to hike its policy rate in the near future, one player bought one-year at-the-money straddles at 12.65% with unknown face values, an options trader at a Tokyo bank said. Such contracts make money for the holder when exchange rates swing sharply. The 10-year U.S. Treasury yield stood at 3.836% in New York late Thursday, down from its Wednesday close of 3.861%. Meanwhile, volatilities implied by one-month at-the-money euro/yen options rose to 9.50%/9.90% from 9.35%/9.75% in New York overnight as weak Tokyo shares and lingering Greek debt worries weighed on the spot market. The Nikkei 225 Stock Average was down 1.4% in Tokyo afternoon trading, while the euro was at Y125.54 as of 0400 GMT. But dealers said any sharp gains in options prices will likely be limited down the road. 'There's a feeling that market reaction to the euro's fall stemming from (Greek) debt worries is becoming less volatile as players have largely grown accustomed to' such problems, an options dealer at a major Tokyo bank said. The euro found some relief overnight on an announcement that Greece would meet with the International Monetary Fund on Monday to discuss its financing plan. But investors are still hungry for details of how the plan might work, and without those details, the euro will remain under pressure, dealers said.

2010/04/16 11:29DJ UK Extends Ash Flight Ban For Six More Hours - Air Authority
LONDON (AFP)--The U.K. extended a ban on most non-emergency flights in its airspace by six hours to 1800 GMT Friday due to ash from a volcanic eruption in Iceland, air traffic authorities said.The National Air Traffic Services, or NATS, which manages the U.K.'s airspace, said "restrictions will remain in place in U.K.-controlled airspace until 1900 (U.K. time) today, Friday 16 April, at the earliest."NATS grounded flights over Britain at 1100 GMT Thursday.Flights in Northern Ireland and the Western Isles of Scotland to and from western Scotland might be allowed up to 1200 GMT Friday, the air traffic control service said.-0

2010/04/16 10:27DJ Morgan Stanley Warns Of Euro-Zone 'Chain Of Events' -Report
Morgan Stanley (MS) has warned that the Greek debt crisis is setting off a chain of events that may prompt German withdrawal from the euro zone, with grim implications for investors caught off-guard, according The Daily Telegraph on Friday. 'The backstop package for Greece and the ECB's climb-down on its collateral rules set a bad precedent for other euro area states and make it more likely that the euro area degenerates into a zone of fiscal profligacy, currency weakness, and higher inflationary pressures over time,' said Joachim Fels, head of research, in a note to clients, according to The Telegraph. The U.S. bank said a bail-out for Greece may be necessary to avoid a crisis for Europe's financial system, but warned that it also 'sows the seeds for potentially even bigger problems further down the road,' according to The Telegraph. Newspaper Web site: http://telegraph.co.uk

2010/04/16 10:14*DJ Yellen: US Deficit-GDP Ratio Likely To Fall To 2%-3% From 10%
2010/04/16 10:13*DJ Yellen: Fed Would Allow Interest Rates To Rise To Manage Inflation

2010/04/16 09:59=DJ UPDATE:China Sells $11.5B Of U.S. Treasurys, Remains Top Holder
WASHINGTON -China continued selling U.S. Treasurys for the fourth straight month in February, though it remained the largest foreign holder, the Treasury Department said Thursday. Overall, foreigners were net buyers of long-term U.S. financial assets in February, according to the monthly Treasury International Capital report, known as TIC. China remained a net seller of Treasurys, with its holdings falling $11.5 billion to $877.5 billion, following net sales of $5.8 billion in January. Heavy Treasury sales by China at the end of last year initially set off fears that the largest creditor nation to the U.S. might be shifting out of U.S. assets. But major upward revisions to the data in late February showed that China hadn't ceded its position as top Treasury holder to Japan, as initially thought. China has sold a net $60.8 billion since October, including $34.2 billion in December. Some of the recent selling by China also reflects a rebalancing into longer-term Treasurys, while allowing some short-term bills to expire. China bought a net $4.4 billion in longer-term Treasurys in February. Analysts have stressed not to read too much into the volatile monthly flow data. 'We haven't seen anything that would indicate that there has been a sharp turn away from dollar assets per se, it may be an allocation away from Treasurys to other U.S. dollar-denominated assets,' said UBS currency strategist Brian Kim. Win Thin, senior currency strategist at Brown Brothers Harriman & Co., said data for March could show a pickup in Chinese purchases, given the rebuilding of the country's reserves that month. 'We remain unwilling to claim that big global reserve managers are dumping USD assets on a sustained basis,' he said in a note, with the overall report suggesting that 'foreigners continue to find U.S. assets attractive.' Among all foreign investors, net purchases of U.S. Treasury notes and bonds totaled $48.1 billion in February, compared with net buying of $61.4 billion in January. Japan, the second largest holder of Treasurys, was a net buyer, increasing its portfolio to $768.5 billion from $765.4 billion in January. More broadly, net purchases of long-term U.S. securities totaled $34.1 billion, following net sales of $3.1 billion the month before. Initially, $900 million in net purchases were reported for January. The monthly Treasury report highlights cross-border acquisitions of securities with maturities of more than one year including nonmarket transactions such as stock swaps and principal repayment on asset-backed securities. The closely watched figure excluding transactions that don't occur on an open market recorded net buying of $47.1 billion in long-term U.S. securities in February, after revised purchases of $15.0 billion the month before. The report's most comprehensive category, 'monthly net TIC flows,' includes nonmarket flows, short-term securities and changes in banks' dollar holdings. This measure of net foreign capital inflow was $9.0 billion, compared with an outflow of $10.2 billion in January. Financial market analysts consider the monthly data from the Treasury Department to be a significant but imprecise gauge of how easily the U.S. can finance its trade deficit. U.S. data released Tuesday showed the trade gap widened more than expected in February, to $39.7 billion from $37.0 billion the month before. Breaking down holdings of long-term Treasurys, private foreign investors bought a net $47.0 billion in notes and bonds, after buying $60.7 billion the previous month. Foreign official institutions such as central banks bought a net $1.1 billion of these Treasurys in February, compared with net purchases of $558 million the month before. Net foreign purchases of debt issued by U.S. government-sponsored agencies like Fannie Mae and Freddie Mac totaled $2.4 billion, compared with $5.0 billion in sales in January. For U.S. equities, net foreign purchases totaled $12.9 billion, compared with purchases of $4.5 billion the previous month. For corporate bonds, net foreign sales were $12.0 billion, versus sales of $24.6 billion the previous month. The TIC's data can be found on the Treasury's Web site at: http://www.treas.gov/tic. With each monthly release, Treasury revises the previous month's data as well.
2010/04/16 09:44=DJ BIG PICTURE: Manufacturing Is Still Recovery's Top Dog
NEW YORK -Manufacturing led the U.S. economy out of recession, and the sector is still setting the pace at the start of the second quarter. Even more heartening is that the increase in orders, especially from abroad, and the need to restock inventories mean factories have the momentum to keep growing for the rest of this year. According to the Federal Reserve, manufacturing output jumped 0.9% in March. (A drop in utility use held total industrial production to just a 0.1% increase). Reports from regional Federal Reserve banks show the expansion continued into April. The New York Fed's Empire State manufacturing index rose to 31.86, from 22.86 in March, and the Philadelphia Fed's business conditions index increased to 20.2 from 18.9. Both April readings were above expectations and were led by increases in orders. Production and payrolls are still well below their prerecession readings, but the factory sector has managed to boost output for three consecutive quarters. Payrolls began to rise in January. What's behind the pick-up? The return of U.S. consumers has helped. Retail sales grew strongly in the first quarter, and production of consumer goods grew at a 4.9% annual rate. Business spending and exports are lending bigger support, however, and should help future growth. That's because companies and developing nations emerged from the global recession with better finances than the U.S. consumer sector did. Makers of business equipment increased production at a 13.2% pace last quarter. Orders for capital goods have been rising, which means further production gains. U.S. businesses are also restocking their shelves and warehouses. Economists at Barclays Capital estimate that inventory rebuilding may have contributed almost two percentage points to first-quarter real gross domestic product growth. Certainly, imports are satisfying part of the restocking, but U.S manufacturers also are benefiting. Production of business materials and construction supplies rose strongly last quarter. Michael Trebing, the senior economist who oversees the Philly Fed survey, said some Philadelphia manufacturers commented that part of the increase in orders reflected their customers rebuilding inventories. As for manufacturers themselves, the inventory indexes compiled by both the New York and Philly Fed banks improved sharply in April, indicating that factories in the two regions are restocking. Meanwhile, U.S. exporters are benefiting from the global rebound. The Fed's beige book, released Wednesday, reported that within the Chicago district, export activity 'remained strong with developing countries providing a boost to demand.' Also in the book, the Richmond Fed said port activity had picked up, with exports outperforming import gains. 'While the dollar was seen as a contributing factor, most contacts attributed gains in exports primarily to improvements in overseas markets,' the report said. Recovery isn't raising any inflationary red flags either. Manufacturers have little ability to raise prices, according to the New York and Philly Fed surveys. Meanwhile, excess slack in capacity--manufacturers used only 70.0% of their facilities in March--means the rebound in the factory sector shouldn't cause any worries at the Fed about production bottlenecks or shortages that could lead to price pressures. That will allow interest rates to stay low--another plus for capital spending. Then there is the upbeat global outlook. The International Monetary Fund projects emerging nations will grow by about 6% this year and next; emerging Asia alone is expected to expand by above 8%. Cheap financing at home and rising demand abroad will keep U.S. factories busy.
2010/04/16 08:24DJ UK Economy To Grow Faster On Global Demand, Weak Sterling-CEBR
LONDON -The U.K. economy should expand faster in 2011 and 2012 than was previously expected, thanks to stronger global output and greater support from the weak pound, a leading independent consultancy said Friday. U.K. gross domestic product will probably grow 1.3% in 2011, up from a previous estimate of 0.8%, and 1.4% in 2012, up from 1.1%, the Centre for Economics and Business Research said. It maintained its forecast for GDP to grow 1.2% this year. The 2010 forecast is broadly in line with the U.K. treasury's expectations of growth of between 1% and 1.5% in 2010, but the later estimates are significantly weaker than the treasury's, which project growth of 3% to 3.5% in 2011, and 3.25% to 3.75% in 2012. 'The upward revision to growth should not be taken to imply that the pressure is off as far as public finances are concerned,' said Charles Davis, senior economist at the CEBR. 'Whoever wins power will have to take tough decisions--in our view at least GBP35 billion more fiscal action than was assumed in the March Budget.' The CEBR said its forecasts assumed a victory for the opposition Conservative Party in the general election on May 6, based on opinion poll results, which give the party a narrow lead. It noted that although its estimates incorporate the key elements from party manifestos, they assume that pressure from investors to cut the budget deficit will force the next government to slash spending and raise taxes by a greater degree than is currently specified. The U.K. fiscal deficit is estimated to have peaked at 11.8% of gross domestic product in the financial year ending April 5. The Conservative Party has pledged to cut spending this year and to eliminate most of the structural deficit over the next parliament, which can stand until no later than 2015. The ruling Labour Party says it would wait until 2011 when the recovery is firmly established to begin cutting expenditure, and promises to reduce the deficit by two-thirds by 2015. But neither has detailed exactly how they will achieve these targets 'Whoever wins the election, we will be in for a tough couple of years of sluggish growth at best as the budget deficit issue is addressed,' said CEBR Chief Executive Douglas Williams.

2010/04/16 06:19*DJ US Senate Votes 59-38 To Approve Extension Of Jobless Benefits

2010/04/16 06:12=DJ Fed's Lacker: 'Comfortable With Where Interest Rates Are Now'
CHARLOTTE -Federal Reserve Bank of Richmond President Jeffrey M. Lacker said Thursday he is comfortable with where interest rates are now, adding the timing of any increase will depend largely on the progression of U.S. economic growth through the year.Decelerating inflation by itself might argue for keeping rates low, Lacker said in response to reporters' questions during the Fed's Credit Markets Symposium in Charlotte. 'But we look at a wide range of things,' he said. 'We've had a couple of months of lower inflation than we had through most of last year, no doubt about that. But how much of a trend it is, it's not clear.''I'm comfortable with interest rates where they are now,' he said. 'The timing's going to depend, in my mind, a lot on how growth comes in over the course of this year.'Earlier this week, Lacker projected moderate economic growth throughout the remainder of the year. He said consumer spending will gradually pick up and businesses will continue to expand outlays on equipment and software, overcoming any drag from commercial real estate or state and local government spending.Growth is 'really helped by the improvement in consumers' confidence, in their job prospects,' Lacker said Thursday. 'That seems to have been improving, and that seems to be driving consumer spending increases.'Based on the most recent labor market reports, Lacker said, 'I fully expect that trend to continue.' News earlier in the day of a surprise jump in the number of workers filing new claims for jobless benefits 'is just a hiccup,' he noted.'It's too soon to say whether that's a trend or not,' he said.But he acknowledged a risk to the recovery would be if something undermined consumers' confidence in finding or keeping jobs.'On the other hand, it's often difficult to predict how rapidly that confidence improves, and it could improve more rapidly than we expect, so I think there's risks on both side of the outlook,' he said.Lacker said that while mortgage markets still have 'a huge problem to digest,' the dimensions of the foreclosure problem in housing are clear, and housing prices have stabilized.'We have a huge backlog of delinquent mortgage borrowers to deal with,' he said. 'It's going to take some time to work through those, but I think the housing market will muddle along fine.'Lacker isn't a voting member this year of the interest rate-setting Federal Open Market Committee, but he has influence on the board's decisions.Lacker has previously expressed his support for the FOMC's decision to keep interest rates near zero for an extended period of time as inflation is expected to stay low well into the future. However, he said earlier this week that recent data have led to him to potentially drop sooner rather than later the use of the low-rate language.Also earlier this week, Lacker said as the Fed works to tame inflation, it must be careful about how and when it withdraws the monetary policy stimulus in place.Lacker's comments came a day after Fed Chairman Ben Bernanke told Congress he expects the economy to recover slowly, in testimony that appeared to suggest the Fed leader's appetite to raise interest rates hasn't grown. Most private forecasters reckon it won't be until late this year, if not next year, before the central bank begins to raise rates.

2010/04/16 05:55=DJ WORLD FOREX: Euro Falls Broadly As Greece Debt Looms Again
NEW YORK -The euro fell broadly Thursday as sovereign debt woes in fiscally strapped Greece again rattled investors.The common currency found some relief on an announcement that Greece would meet with the International Monetary Fund on Monday to discuss the financing plan the IMF has offered in conjunction with the European Union.The discussions represent a step toward the first sovereign bailout in the history of the euro zone, amid growing doubts that Greece can continue raising money on the financial markets.Investors are still hungry for details of how the plan might work, and without those details, the euro will remain under pressure, said Stuart Bennett, senior currency strategist at Credit Agricole CIB in London. The euro lost nearly 0.6% against the dollar by late trading.Late Thursday, the euro was at $1.3577 from $1.3657 late Wednesday, according to EBS via CQG. The dollar was at Y93.04 from Y93.18, while the euro was at Y126.31 from Y127.28. The U.K. pound was at $1.5498 from $1.5469. The dollar was at CHF1.0563 from CHF1.0517.The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 80.475 from 80.186.'It's a drawn-out soap opera,' said Brian Dolan, chief currency strategist at Forex.com in Bedminster, N.J. 'It's not just Greece' but other euro-zone peripheral nations that struggle with issues of sovereign debt that are keeping investors worried, he said. Analysts have worried that Portugal, Spain and perhaps Italy could face similar problems as Greece.A euro-zone backstop package for Greek debt announced over the weekend had propped the common currency to a small degree, and the issuance earlier this week of short-term Greek debt, which had strong demand, lifted some pressure off the euro; but investors worry whether Greece can finance its long-term needs.Pressuring the euro overnight were comments by a Greek official, who said the government now expected to raise 'between $1 billion and $4 billion' from a dollar-denominated bond, compared with $5 billion to $10 billion previously announced.'Fact is, there is no strong interest in the U.S. for Greek debt,' a second official said, adding Athens could cancel the issuance if 'the minimum necessary amount can't be collected.'The Greek government denied anything had changed, saying it would continue with a plan to take the dollar bond on a U.S. road show.Greece may ask for financial assistance from the European Union and the IMF fund as early as this month, a government official told Dow Jones Newswires.'It's increasingly apparent that it's becoming difficult to borrow from the markets,' the official said on condition of anonymity. 'Greece may officially ask for financial help this month or in early May,' said the official, adding that no final decision has been made yet.Continued concerns over Greece should keep the euro under pressure, according to Brown Brothers Harriman analysts in New York. A drop below the psychologically key $1.35 level could see the common currency drop all the way to below $1.33, the analysts said.To see the euro's move against the dollar, please see:http://dowjoneswebservices.com/chart/view/3830Meanwhile, U.S. data released Thursday painted a mixed picture of the economy, with weekly jobless claims and industrial production figures coming in worse than expected, while regional Fed surveys from Philadelphia and New York came in better than expected, lending some support to risk-taking and helping the euro slightly recoup some of its losses against the greenback, Dolan said.Separately, the Canadian dollar ended modestly lower Thursday, slipping below parity with its U.S. counterpart as investors' appetite for risk ebbed and commodities retreated.Late Thursday, the U.S. dollar was at C$1.0022 from C$0.9991 late Wednesday.With the ICE Dollar Index higher, Deutsche Bank's PowerShares U.S. Dollar Index Bearish exchange-traded fund was down 0.37% from late Wednesday, while its PowerShares U.S. Dollar Index Bullish was up 0.38%. The two exchange-traded funds are based on Deutsche Bank currency futures indexes, whose composition mirrors that of the ICE's Dollar Index.


2010/04/16 05:36DJ Treasury Prices Move Higher On Greece Woes, Fed Remarks
NEW YORK -Most Treasury prices rose Thursday as investors continued to monitor developments on helping debt-laden Greece and took to heart U.S. Federal Reserve reassurances that interest rates will remain low for a while. Federal Reserve Chairman Ben Bernanke's remarks Wednesday that rates will stay low for an 'extended period' given the challenges the economy still faces encouraged investors to buy shorter-term Treasurys especially. They are the most sensitive to changes in monetary policy. Bernanke painted a hopeful picture of the economic recovery, but stressed that time is needed for the labor market to truly improve. He also noted that concerns still remain about weak residential and nonresidential construction and fiscally challenged state and local governments. Fed officials Thursday reinforced that stance, contributing to the government bond market's gains. Atlanta Federal Reserve Bank President Dennis Lockhart said he will continue to support low interest rates to help the economy heal. In afternoon trade, the three- and five-year notes outperformed. The three-year note price was up by 4/32 to yield 1.621%, the five-year was up by 7/32 to yield 2.551%. The two-year was up 2/32 to yield 1.020%, the 10-year was up 5/32 to yield 3.836%, and the 30-year was up 5/32 to yield 4.714%. Meantime, concerns over Greece continued to push the market around as investors fret that a proposed aid package for the country won't be enough to solve its long-term fiscal problems and stave off problems in other nations. Greece worries should continue to affect trading until a clear resolution emerges. 'The uncertainty around Greece and the potential for contagion into other European peripherals is certainly putting a flight-to-quality bid in the Treasury market,' said Ian Lyngen, senior government bond strategist at CRT Capital Group. Moves in the Treasury market, however, were small as investors digested a mixed bag of data and waited for a catalyst to push them to trade with more conviction. 'The real story in the market is that it's been really stable and volatility continues to fall,' said Chris Ahrens, a rates strategist at UBS Securities. 'The data is better,' he said, 'but it's not improving at a rapid-enough rate to drive people to have a lot of conviction.' Data released Thursday showed that New York and Philadelphia-area manufacturers saw business conditions improve in April by more than expected. Weekly jobless claims, however, surged last week, and U.S. industrial production was held back by a sharp drop in utilities output in March. A report Thursday morning on overseas investors' interest in Treasurys confirmed that U.S. government debt remains popular as investors remain wary about the pace of the economic recovery. While there was a small moderation in Treasury buying, the overall level remains healthy, with China, the U.K. and Japan continuing to buy coupons versus bills. The monthly Treasury International Capital report showed China continued selling Treasurys in February, though it remained the largest foreign holder. China's Treasury holdings fell $11.5 billion to $877.5 billion, after net sales of $5.8 billion in January. Some of China's recent selling also reflects a rebalancing into longer-term Treasurys, while allowing some short-term bills to expire. Agency MBS Improve Agency mortgages improved Thursday afternoon after widening out quite a bit in the morning. Modest flows and good selling put pressure on the market. The expected boost from Asian buyers overnight never came, giving the market a weak start. Things deteriorated a bit after that, with risk premiums reaching 130 basis points again, only to retract a bit to 128 basis points over comparable Treasury yields.

2010/04/16 05:34DJ US Stocks Climb To Nearly 19-Month Highs, Led by Industrials-2-
NEW YORK -U.S. stocks climbed to nearly 19-month highs, led by industrial companies including Caterpillar and 3M following reports of improving manufacturing conditions in addition to strong earnings from United Parcel Service.The Dow Jones Industrial Average rose 21.46 points, or 0.19%, to 11144.57, its highest close since Sept. 19, 2008. Intel (Nasdaq) was the measure's best performer, up 70 cents, or 3%, to 24.22, extending the stock's gains after the chip giant posted strong first-quarter earnings Tuesday afternoon.Caterpillar was also particularly strong, up 94 cents, or 1.4%, to 68.22, while 3M climbed 61 cents, or 0.7%, to 85. The industrial giants were boosted by data that showed manufacturing in the New York and mid-Atlantic areas is improving.Hewlett-Packard was among the Dow's worst performers with a drop of 29 cents, or 0.5%, to 54.23. German and Russian authorities are investigating whether Hewlett-Packard executives paid millions of dollars in bribes to win a contract in Russia, according to a Wall Street Journal report citing people familiar with the matter.Wal-Mart also weighed with a drop of 51 cents, or 0.9%, to 54.13, after the chief executive of its U.K.-based supermarket chain, Asda, set out plans for a big expansion of its stores but said the company is cautious about the economic outlook.The Nasdaq Composite climbed 10.83, or 0.43%, to 2515.69, its highest close since June 5, 2008.The Standard & Poor's 500 index advanced 1.02, or 0.08%, to 1211.67, its highest close since Sept. 26, 2008. The industrial sector led the S&P 500's gains, boosted by UPS. The package-delivery company's first-quarter adjusted earnings rose 37% on improved operating margins across all its segments. The company also boosted its earnings guidance for the full year. UPS jumped 3.44, or 5.3%, to 68.89, and competitor FedEx advanced 1.61, or 1.7%, to 95.62.Thursday marked the sixth straight day of gains across the broad market measures."The slow and steady run continues," said Andrew Fitzpatrick, director of investments at Hinsdale Associates. "In general the positive sentiment continues and people are slowly starting to move back into stocks and are less fearful as they see more signs of the recovery and a rising stock market."

2010/04/16 05:24DJ Fed's Lockhart:Won't Seek 'Substantial Changes' To FOMC Language
PENSACOLA, FLA. -Atlanta Federal Reserve President Dennis Lockhart said he won't be pushing for 'substantial changes' to the language in the Fed's policy statement at this month's meeting.Lockhart, who is currently a non-voting member of the rate-setting Federal Open Market Committee, affirmed his support to the Fed's commitment to keep interest rates near 0% for an 'extended period,' although he also said that the language will have to be tweaked 'at some point in the future.'Market participants have been closely monitoring statements by Fed officials for any signs as to when the central bank's highly accommodative monetary policy stance may be reversed. As it stands now, rates are likely to remain unchanged at least for another several months.What mix of mechanisms the Fed will use to adjust monetary policy is still up for debate, Lockhart said, but he added that 'asset sales would lag' other tools.In a wide-ranging discussion with members of the Pensacola West Suburban Rotary Club, Lockhart also addressed concerns of small-business owners who continue to worry about their sources of revenue as well as long-term credit.He said that their troubles are also the result of a slowly recovering U.S. consumer and can't be attributed solely to banks' reluctance to lend as freely as they did before the crisis.Damping the economic outlook Thursday, the U.S. Labor Department said weekly initial jobless claims rose 24,000 to 484,000 in the week ended April 10, marking the second-straight week of increases in initial claims, when economists had been expecting a decline.But while the labor market continues to look bleak, there has been a recent pick up in retail sales. Lockhart said he wasn't concerned that the data are showing over-consumption.'Over the longer term we need a rebalancing of savings and investment in the country....that transition may be ahead of us,' he said.


2010/04/16 04:48DJ US M1 Fell $12.9B In April 5 Week; M2 Rose $12B
NEW YORK -The Federal Reserve's latest weekly money supply report Thursday shows seasonally adjusted M1 fell by $12.9 billion to $1.707 trillion, while M2 rose $12 billion to $8.503 trillion.The figures are preliminary estimates for the week extending through April 5 and are subject to revisions.More details on the report, along with weekly information on the Fed's custody holdings, repurchase agreements, Treasury portfolio and free reserves, can be found on the Internet at http://www.federalreserve.gov/releases/.

2010/04/16 01:33*DJ Fed's Lockhart: Recovery Requires Continued Loose Monetary Policy
2010/04/16 01:32*DJ Lockhart: 'Strong Medicine' Of 'Low Rates' Should Remain
2010/04/16 01:31*DJ Lockhart: Economy 'Well Into Recovery'