Market Rumours

2010/04/22 22:19=DJ US Mar Existing Home Sales Rise 6.8% To 5.35 Mln Rate
WASHINGTON -Existing-home sales rose in March as the percentage of first-time home buyers continued to climb ahead of the expiration of a government tax credit program. Home resales were up slightly more than expected, climbing 6.8%, to a 5.35 million annual rate from a downwardly revised 5.01 million annual rate in February, the National Association of Realtors said Thursday. Analysts surveyed by Dow Jones Newswires had expected sales to rise to an annual rate of 5.25 million. Housing inventory in March rose 1.5% to 3.58 million, representing an 8.0 month supply. That's down from an 8.5 month supply in February, the Realtors said. First time home buyers purchased 44% of all homes in March, up from 42% in February. The level of all cash sales was steady at 27%. NAR Chief Economist Lawrence Yun credited the government's tax credit program with driving sales higher, but said it would take months for the full effects of the program to be reflected in the data.

2010/04/22 22:14=DJ DATA SNAP: Euro-Zone Consumer Confidence Revives Despite Greece
LONDON -Consumers in the 16 countries that share the euro became more upbeat about their prospects in April, despite the financial crisis in Greece that threatens to spread to other parts of the currency area. The European Commission Thursday said its flash--or preliminary--measure of consumer confidence rose to -15.2 from -17.3 in March. The measure for the European Union as a whole also rose, to -12.5 from -13.9. The pickup in confidence will come as a relief to euro-zone policy makers, since it suggests that consumer spending may pick up in the months head, providing fresh momentum to a recovery that has thus far been weak and dependent on exports. With the euro tumbling on concerns about a possible debt default by the Greek government, euro-zone governments have agreed to provide financial support for the country at a time when their own finances are stretched. In most euro-zone members, that support is unpopular with voters, who could end up paying higher taxes if the bailout is needed. But euro-zone consumers appear to have focused instead on indications that the recovery is taking root. A survey of purchasing managers released earlier Thursday showed that private-sector output increased at the fastest pace in 32 months in April.


2010/04/22 21:52=DJ Obama To Urge Wall Street To Support Financial Reform
WASHINGTON -President Barack Obama on Thursday will remind bankers and others that the financial sector needs to be reformed and will urge Wall Street to support legislation aimed at revamping the system, according to excerpts taken from a speech provided by a White House official. 'One of the most significant contributors to this recession was a financial crisis as dire as any we've known in generations,' Obama will say in a highly-anticipated speech at the Coopers Union, a college in New York. He will tell the expected crowd of 700 that America must learn from the mistakes of the economic crises and enact legislation to help prevent it from happening again. Obama's push for financial reform has intensified in recent weeks and he has lashed out at Republicans for meeting with Wall Street lobbyists. In his speech he is expected to say that legislative proposals in Congress would help restructure the rules that allowed Wall Street to take risky bets that Americans ended up paying for. He will state that he won't accept compromises that would weaken the bill, particularly in the area of derivatives, complex financial instruments that played a role in the economic crisis. He will also say that financial reforms must set limits on the size of risks that banks can take, and include provisions that would make it easier for a failing institution to unwind before taxpayers would be affected. He will also say he believes in a free market. 'But a free market was never meant to be a free license to take whatever you can get, however you can get it,' he said. He will add, 'That is what happened too often in the years leading up to the crisis.'

2010/04/22 20:56=DJ DATA SNAP:US Jobless Claims -24K To 456K In April 17 Week -2-
WASHINGTON -The number of U.S. workers filing new claims for jobless benefits decreased last week, but the levels still aren't low enough to be consistent with an improving job market. The Labor Department said in its weekly report Thursday that initial claims for jobless benefits fell by 24,000 to 456,000 in the week ended April 17. The drop was right in line with the expectations of economists surveyed by Dow Jones Newswires. The previous week's level was revised downward to 480,000 from 484,000. The decline in jobless claims comes after two prior weeks of unexpected surges in the figures which the U.S. Labor Department blamed on the Easter holiday and other seasonal factors. The department had said rising layoffs weren't likely to blame for the increases, but nevertheless the elevated numbers still raised some concerns among outside experts. The four-week moving average, which aims to smooth volatility in the data to help paint a better picture of the underlying trend, rose for the week ended April 17. The Labor Department said the four-week moving average went up by 2,750 to 460,250 from the previous week's revised average of 457,500. Total claims lasting more than one week, meanwhile, fell. Jobless claims continue to remain stubbornly high even though the U.S. economy is growing and the Labor Department's March report showed jobs were being created. That report found that nonfarm payrolls rose by 162,000, although some of that was due to temporary hiring for the 2010 Census. Overall, unemployment still remains at 9.7%. Economists have generally agreed that it will still take time to see an improved labor market. That view was reiterated again on Monday by Federal Reserve Governor Elizabeth Duke, who said it will take 'sustained, robust job growth for some time' to help repair the damage from the 8 million jobs that were lost in the past three years. In the Labor Department's Thursday report, the number of continuing claims--those drawn by workers for more than one week in the week ended April 10--declined by 40,000 to 4,646,000 from the preceding week's revised level of 4,686,000. The unemployment rate for workers with unemployment insurance for the week ended April 10 was 3.6%, a 0.1 percentage point decline from the prior week's revised rate of 3.7%. The largest increase in initial claims for the week ended April 10 occurred in New York due to layoffs in the transportation and service industries. California, Florida, Indiana, and Texas also saw increases in claims. The largest decreases occurred in Kentucky, Iowa, New Jersey, Nevada and Puerto Rico. The Labor Department report on jobless claims can be accessed at: http://www.dol.gov/opa/media/press/eta/ui/current.htm

2010/04/22 20:51=DJ WORLD FOREX: Euro Falls On Renewed Concern Over Greek Finances -3-
NEW YORK -The euro fell Thursday after the European Union said Greece's budget deficit last year was higher than Greece reported, and could still be revised higher, again shining a spotlight on the stressed finances of the euro-zone periphery. The euro had earlier managed a gain on better-than-expected euro-zone economic data, but the upward revision to Greece's deficit raises doubts over the figures that Greece based a belt-tightening plan on to get its finances into order. '[The euro] crumbled on news that the E.U. was revising up its estimate of the 2009 Greek fiscal deficit,' said Sacha Tihanyi, currency strategist at Scotia Capital in Toronto. The euro had ticked as high as $1.3422 before ceding its gains as worries over Greek debt again flared. Although the upward revision by Eurostat had been rumored in the markets for several weeks, the yield difference between the 10-year Greek government bond and its benchmark German counterpart--a measure of credit risk--jumped after the announcement, peaking at a record 5.50 percentage points. Early Thursday, the euro was at $1.3349 from $1.3393 late Wednesday, according to EBS via CQG. The dollar was at Y92.89 from Y93.19, while the euro was at Y124.02 from Y124.82. The U.K. pound was at $1.5391 from $1.5408. The dollar was at CHF1.0733 from CHF1.0702. The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 81.378 from 81.212. After its recent slip, the euro now threatens to drop toward $1.32, below its lowest level of the year, Tihanyi said. The E.U.'s statistical arm, Eurostat, showed that Greece's budget deficit last year reached 13.6% of gross domestic product and could be revised higher still. That is sharply higher than the 12.7% estimated by the Greek government late last year, but which the government has pledged to cut under its three-year stability and growth program. For 2010, the government is aiming for a deficit equal to 8.7% of GDP. 'The [Eurostat] announcement does not alter the target for reducing the deficit by at least 4 percentage points of GDP in 2010,' the Greek Finance Ministry said in a statement. 'The government has already adopted all the necessary measures--in excess of 6% of GDP--to ensure the achievement of this objective.' The E.U., International Monetary Fund and Greece continued their second day of meetings Thursday on a debt-backstop plan for the cash-strapped country.

2010/04/22 10:46=DJ FOREX VIEW: G20 Meeting To Focus On Growth, Regulation
NEW YORK -Keeping global recovery on track will be the focus of this weekend's meeting of finance ministers and central bankers, with financial regulation the hottest topic. Top officials of the Group of 20 industrialized and developed nations will gather in Washington Friday to discuss the next steps in leading the world economy out of crisis, including a proposal from the International Monetary Fund to create a fund to pay for future bank failures. Rebalancing the world economy, which is a recurring theme the G20 has inherited from the Group of Seven nations, will remain on the table. That's where discussions of currencies, such as a revaluation of the Chinese yuan, could enter in, but aren't likely to play a big role, at least not publicly. Instead, the IMF proposal to finance a bailout fund through two types of taxes on banks is likely to get the most time and attention. The IMF had been tasked by the G20 to draw up initial options for an international bank levy, but the proposal isn't binding on any nation. Currency movements in response to the G20 meeting will be restrained, said Lena Komileva, head of G7 market economics at Tullett Prebon in London, as few specifics directly related to policy will emerge from the meeting. 'The reality is there is little international agreement about how governments should proceed, and at what speed,' when it comes to the unwinding of emergency monetary policy, Komileva said. 'It's quite unlikely we're going to get any detail out of the G-20 meeting,' which leaves investors examining the growth of individual economies, she said. Discussion of the yuan will happen behind the curtain, analysts said, with little to show at the Sunday conclusion of the G-20 meeting. 'The U.S. in particular will want to tread pretty lightly on this,' Maher said, as signals from China have indicated recently the authorities could allow yuan appreciation sometime in the near future. 'But obviously, they want to be able to portray this internationally as very much a domestic decision, rather than one that is reflective of external pressures,' he said. So while finance ministers might talk about yuan revaluation behind closed doors, or on the sidelines of the conference--where, analysts said, a lot of the real work gets done--there will be no final pronouncement on the Chinese currency by meeting's end. With both emerging and developed economies at the table, the meeting will shine a spotlight on the increasing growth differential between countries, analysts said. In the thick of the global financial crisis, global central banks instituted ultra-loose monetary policy to flood markets with money to stimulate flagging economies. Now, as recoveries begin to entrench, that lock-step loose policy will start to diverge, said John Hazelton, chief foreign exchange trader for PNC Bank in Pittsburgh. At the moment, 'everybody's sort of looking at each other to see when that's going to start,' he said. 'It's a very sticky situation we're coming into where each individual country is going to do what's best for its own good.' Because of the divergent rates of growth, the G20 is not likely to issue a communique committing to further loose monetary policy, but a recommitment to doing what needs to be done--whether keeping policy loose, or tightening, depending on the economy--could give investor sentiment a shot in the arm, said Jessica Hoversen, fixed income and foreign exchange analyst at MF Global in Chicago.

2010/04/22 08:53DJ BOJ May Upgrade Growth, Price Forecasts - Report
TOKYO -The Bank of Japan may upgrade its forecasts for economic growth and prices at its next monetary policy meeting on April 30, the Asahi Shimbun reported in its Thursday morning edition. The BOJ is almost certain to upgrade its forecast for the country's consumer price index in fiscal 2011 to 0% from -0.2%, the report said. This may prompt the central bank to delay monetary easing as the nation's economy continues to recover, the newspaper said.

2010/04/22 05:26=DJ WORLD FOREX: Euro Succumbs Again To Greek Debt Fears
NEW YORK -The euro fell Wednesday as worries persisted over debt-laden Greece, even as the International Monetary Fund and European Union began meeting with the cash-strapped country to hammer out details on a possible bailout plan.The common currency fell to a near-two-week low as the yield on 10-year Greek government bonds reached a record level compared with German bunds, the euro-zone standard bearer. The euro's slide was driven more by doubts about long-term financing of Greek debt and investor reluctance to embrace risk rather than any new developments."The moves appear exaggerated," said Todd Elmer, currency strategist with CitiFX in New York. "The risks are building for a bounce in the euro if the assistance comes through."One factor that contributed to the common currency's losses on the day is the struggle euro-zone officials face in convincing investors that an eventual bailout plan is feasible."It will be fairly difficult for policy makers to impress markets at this point," said Vassili Serebriakov, foreign exchange strategist at Wells Fargo in New York. "We've had this succession of commitments, announcements and even announcements of specific sums of money of potential aid, and it really failed to have a long-lasting impact on the market," he said.Meanwhile, currencies closely tied to global growth, such as the Canadian and Australian dollars, slipped after U.S. stocks wavered and oil prices ticked lower. Any time uncertainty clouds markets and demand for riskier assets subsides, the yen and dollar tend to benefit as temporary safe harbors.Late Wednesday, the euro was at $1.3393, down from $1.3445 late Tuesday, according to EBS via CQG. The dollar was at Y93.19, up marginally from Y93.15, while the euro was at Y124.82, down from Y125.23. The U.K. pound was at $1.5408, above $1.5372. The dollar was at CHF1.0702, up from CHF1.0682.The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 81.212, up from 81.208.The latest troubles for the euro and Greek bonds reflect concerns that European authorities will be unable to act quickly on an aid accord reached earlier this month. The E.U. and the IMF have pledged a total of EUR45 billion to Greece, but the structure and conditions of any bailout remain unclear. Greece is due to repay EUR8.5 billion in bonds that mature on May 19, and the government is weighing how to present a decision to the public that the country will seek financial aid from the E.U. and the IMF.So far, Greece hasn't requested activation of any relief measures, but the current discussions in Athens involving the E.U., IMF and Greek government are seen as a first step in that direction."The euro is likely to trade with a downward bias until the debt talks are over," said Jessica Hoversen, fixed-income and foreign-exchange analyst at MF Global in Chicago.To see the euro's moves against the dollar, please see:http://dowjoneswebservices.com/chart/view/3863Meanwhile, the pound gained after the number of U.K. jobless benefit claimants fell more than the market had anticipated. The news added to positive comments from the latest Bank of England minutes, released at the same time, suggesting that some monetary policy committee members are concerned about a recent rise in inflation, which could lead to policy tightening sooner than investors had expected.The Canadian dollar slipped slightly on falling oil prices, but held near parity with the U.S. dollar, one day after the Bank of Canada hinted at the possibility of a June interest-rate increase. The U.S. dollar was at C$1.0009, up from C$0.9993 late Tuesday.Elsewhere, the Russian ruble hit a 16-month high against a basket of dollars and euros, buoyed by oil prices and the possibility that the country's year-long monetary easing cycle may soon end. The ruble traded at 33.56 against the basket, rising 0.2%. This translated into the euro slipping to a fresh 16-month low at 39.05 rubles.With the ICE Dollar Index slightly higher, Deutsche Bank's PowerShares U.S. Dollar Index Bearish exchange-traded fund was down 0.23% from late Tuesday, while its PowerShares U.S. Dollar Index Bullish was up 0.21%. The two exchange-traded funds are based on Deutsche Bank currency futures indexes, whose composition mirrors that of the ICE's Dollar Index.

2010/04/22 00:12=DJ US Treasury Confirms GM $6.7B TARP Repayment Ahead Of Schedule
WASHINGTON -The U.S. Treasury confirmed Wednesday, as expected, that General Motors Co. repaid a $6.7 billion taxpayer bailout loan, five years ahead of its due date.After the repayment, Treasury's stake in the company consists of $2.1 billion in preferred stock and 60.8% of common equity.Under terms of the total $50 billion bailout GM received from the Treasury starting last December, GM agreed to repay the government in the form of a $6.7 billion direct repayment and a 60% equity stake. The Treasury plans to start selling its equity stake after GM launches an initial public offering of stock.The repayment confirmation comes ahead of an afternoon meeting between Treasury Secretary Timothy Geithner and White House National Economic Council Director Lawrence Summers is to have with GM Chairman and Chief Executive Edward Whitacre on Wednesday at the Treasury Department."We are encouraged that GM has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability," Geithner said in a statement. "This continued progress is a positive sign for our auto investment - not only more funds recovered for the taxpayer, but also countless jobs saved and the successful stabilization of a vital industry for our country."This will be Whitacre's first trip to Washington as the head of GM. He's slated to also provide congressional leaders with an update on GM's restructuring.Despite GM's 2009 loss, the company has said its restructuring plan is on track. Executives have stopped short of saying GM will be profitable in its first quarter, while pointing toward strong results.