Nov 26, 2010 ~ Business

Friday, November 26, 2010

U.S. Chase Black Friday shoppers Offers Best Buy,

At 2 pm yesterday, with a steady rain falling, Andrés Sánchez was huddled in a tent outside Best Buy Co. 's Union Square store in New York.

The student, 23 years old, had ignored his friends when he said he was "crazy" to line up early.

After having declined in the past two years, Sanchez wanted to buy a laptop when Richfield, Minnesota-based Best Buy doors opened at 5 am today. Among his specialties doorbuster, the world's leading retailer of electronics offers a Sony Vaio laptop with a built-in Blu-ray disc Karate Kid and bag $ 500, a 32 percent savings.

"I have the best Christmas," said Sanchez, who plans to spend $ 2,000 this season at himself and his family, or about four times as much as last year.

Similar scenes play across the U.S. as "Black Friday, the biggest shopping day of the year, had its earliest start yet. Buyers are taking advantage of offers and they face a slower recovery than expected economy.

Retailers, Black Friday - so named because when many stores are profitable - as a benchmark for the entire holiday season.

"I think it will be the biggest Black Friday we had," Toys "R" Us Inc. CEO Jerry Storch said in a telephone interview on 24 November. "Everyone has focused on lowering prices and these prices can not be repeated."

U.S. Retail started hanging and Black Friday specials on Thanksgiving morning. Stores operated by Hoffman Estates, Illinois-based Sears Holdings Corp. opened at 7 am

'Economy Better

Twenty minutes after the Sears store in Whitehall, New York was opened yesterday, about the same number of buyers and sellers were mixed in the electronics department.

Wild Bill Jr., a retired auto mechanic near Allentown had just bought a 58 inch Panasonic plasma TV Corp. HD for $ 1044, 55% discount on list price of $ 2299. His son Brian said he was planning a major purchase for the holidays, Apple Inc. IPAD for his girlfriend.

"It feels as if the economy is beginning to improve," said Bill Savage.

Toys "R" Us Inc., the world's largest retailer of toys, opened at 10 am on Thanksgiving Day with over 200 doorbusters and free safe Crayola delivered as gifts with purchases. The chain of Wayne, New Jersey, moved its opening time from midnight onwards because customers said they wanted to go shopping after the Thanksgiving dinner, according to Storch.

Consumer rebound

analyst forecasts for holiday sales ranging from a few changes to increases of up to 4.5 percent. The Retail Federation predicts an increase of 2.3 percent to 447.1 billion U.S. dollars after rising 0.4 percent last year and a fall of 3.9 percent in 2008.

These forecasts are in line with a rebound in U.S. consumer spending this year when the economy began adding jobs. Consumer spending, which accounts for about 70 percent of the U.S. economy grew at a rate of 2.8 percent per year in the third quarter, the Commerce Department. That was the fastest since the last three months of 2006.

Same-store sales, a key indicator, and new closed areas are excluded, rose for 14 consecutive months through October. Same-store sales for November and December may advance as much as 3.5 percent, the biggest increase since 2006, according to the International Council of Shopping Centers.

"Many retailers are back in the black, even before Black Friday," said Adrianne Shapira, an analyst at Goldman Sachs in New York, on Television "InBusiness" show on 24 November. "Sales have been improving, even in early November, so that the momentum to continue into the weekend and during the holiday season."

Kohl's Corp. and Costco Wholesale Corp. is one of the highest-performing retailers, according to Shapira.

Black Friday was the biggest shopping day in 2009, with $ 18 billion in sales, according to MasterCard spending pulse, which is headquartered in Purchase, New York. That may increase this year from 31 percent of consumers plan to buy that day, up from 26 percent a year earlier, according to the group of shopping centers.

European Economic Recovery Strengthens for 2nd Month,

The economic recovery in the euro area was strengthened in November for the second consecutive month executives and business consumers became more optimistic about the prospects, the index showed EuroCoin.

The monthly index measuring economic expansion in the 16 nations sharing the single currency rose to 0.45 percent from 0.41 percent in October, the London-based Centre for Economic Policy Research and Bank of Italy , who co-produce the index, said in a faxed statement today.

"The increase was primarily due to improved business and consumer confidence," the statement said. This month's level indicates a growth rate of just under 2 percent. "

The index, which includes figures on prices and stock market performance, industrial production, business and the reading of consumer confidence, is to provide a real-time estimate of economic growth, the report said.

European Stocks, U.S. Futures Drop on Debt Concern

European stocks and U.S. futures index fell amid growing concern about the debt crisis in Europe and China's measures to cool inflation, while tensions between North and South Korea increased. Asian stocks also fell.

Banco Santander SA fell 4.3 percent, the rate of a sell-off in Spanish lenders. Rio Tinto Group fell 3.1 percent, stocks lower resource base. Actelion Ltd. lost 2.4 percent as UBS AG downgraded the shares of Swiss pharmaceutical company. Givaudan SA, Luxottica Group SpA and Puma AG each fell more than 1.5 percent of Morgan Stanley recommends that investors reduce their holdings of the three populations.

The benchmark Stoxx Europe 600 Index fell 1.1 percent to 264.85 at 12:35 pm in London. The meter is headed for a third week of declines as investors speculated that the region can not contain its sovereign debt crisis. 500 of Standard & Poor's Index lost 1 percent before reopening the U.S. market after the feast of Thanksgiving yesterday.

"There is a combination of negative news that is loaded to the market today," said Christian Falkner, an analyst at Alfa Wertpapierhandels AG in Frankfurt. "On one hand, the statements of Kim Jong Il on the possibility of war in Korea and speculation, moreover, that Portugal can be urged to take advantage of the Stability Fund. Investors are also worried about inflation in China. Financial stocks were especially hurt today. "

Rallies VStoxx

VStoxx Index, which measures the cost of protecting against a decline of contributions in the Euro Stoxx 50 rose 12 percent to 28.36. The indicator is aimed at an increase of 29 percent this week, the biggest gain since May.

The MSCI Asia Pacific Index fell 1.2 percent in North Korea warned that the military exercises in South Korea to the U.S. Peninsula will have the "brink of war," according to state news agency KCNA. North Korea threatened a "rain of fire terrible" that the U.S. and South Korea to violate its sovereignty.

explosive shots coming from the direction of North Korea, were heard in South Korea Yeonpyeong Island at about 15:10 today, a spokesman for South Korea's Joint Chiefs of Staff who requested anonymity, citing military policy. The Army is investigating, he said.

South Korea may appoint a new defense minister today after Kim Tae Young resigned following shelling of North Korea in the territory of the South for the first time in half a century this week.

China's inflation

Chinese stocks fell for the first time in three days, led by banks and developers after Shanghai Securities News said the government can reduce the rate of new loans next year.

Chinese policy makers have stepped up measures in recent weeks to curb inflation that reached 4.4 percent last month, the fastest pace in two years. The nine banks analysts surveyed by our reportes last week predicted the central bank will increase borrowing costs for the second time later this year.

The cost of insuring the debt of the Portuguese and Spanish government against default rose to record levels based on closing prices, according to data provider CMA. Swaps credit-default in Portugal increased 13 basis points to 489, and contracts in Spain rose 3.5 basis points to 303.

Portuguese Finance Minister Fernando Teixeira dos Santos said that EU governments can not impose a rescue plan in his country even when speculation mounted that Portugal will eventually have to request one.

Avoid rescue

By putting pressure on the Portuguese government, the European Central Bank and the countries monetary union in order to avoid a bailout of Spain, Financial Times Deutschland, citing unidentified people within the Ministry of Finance of Germany. Portugal faces a final vote in parliament today on its 2011 spending plan that includes measures to cut its deficit.

Nouriel Roubini, professor at New York University who predicted the global financial crisis, sees a 35 percent chance that Greece will leave the euro, with the possibility to increase over the next five years, Austria Format magazine, citing a interview.

National benchmarks fell in all 18 western European markets except Iceland. Britain's FTSE 100 Index lost 1.4 percent and Germany's DAX, the index fell 1.3 percent, while France's CAC 40 retreated 1.7 percent rate. IBEX 35, Spain fell 2.4 percent.

Banks decline

An indicator of banking shares fell 2.7 percent, the worst performance among 19 industry groups in the Stoxx 600. Santander, Spain's biggest bank, fell 4.3 percent to 7.48 euros. Banco Bilbao Vizcaya Argentaria SA lost 4.1 percent to 7.43 euros. BNP Paribas SA, France's biggest bank, fell 4.6 percent to € 47.54, extending the longest streak in nearly two months fall.

Lloyds Banking Group Plc, the largest UK mortgage lender, fell 4.9 percent to 61.56 pence, the biggest drop in the Stoxx 600. Royal Bank of Scotland Group Plc fell 4.8 percent to 38.89 pence.

Bank of Ireland, Ireland's largest bank, slid 3.1 percent to 24.8 cents, extending its weekly decline of 48 percent, the highest since January 2009.

Rio Tinto Group slid 3.1 percent to 4,138.5 pence, even after the world's third largest mining company said its iron ore unit will increase production by 50 percent over five years. One indicator of the basic industries of resources was one of the worst performers in the Stoxx 600, falling 2.1 percent. BHP Billiton Ltd., the world's largest mining company, retreated 2.6 percent to 2,292 pence, base metal prices fell in London.

Vedanta Resources Plc fell 4.3 percent to 2,051 pence. Standard & Poor's could lower your credit score from the mining company controlled by billionaire Anil Agarwal, if its proposed acquisition of a controlling stake in Cairn India Ltd. is approved.

Actelion, Daily Mail

Actelion, the manufacturer of drugs that may attract a takeover bid by Amgen Inc., lost 2.4 percent to 53.65 Swiss francs, UBS cut its rating on the shares to "neutral" from "buy." The stock has risen 36 percent since Sept. 30.

Daily Mail & General Trust Plc fell 1.1 percent to 538.5 pence. The stock, which plunged 3.5 percent yesterday after reporting sales that missed estimates, cut to "neutral" from "buy" at UBS.

Puma, the sporting goods maker controlled by PPR SA, fell 3 percent to 230 euros. Givaudan, the world's largest manufacturer of flavors and fragrances, fell 1.7 percent to 1,015 francs. Luxottica, which owns Ray-Ban and Oakley sunglasses, fell 1.6 percent to € 20.59. The three stocks were downgraded to "weight" by Morgan Stanley.

Inditex, Kingfisher

Inditex, owner of the Zara and Massimo Dutti, fell 3.2 percent to € 57.96 and Bank of America Merrill Lynch Global Research downgraded the stock to "neutral" from "buy."

Kingfisher, Europe's largest home improvement retailer, fell 2.3 percent to 243.8 pence after being cut to "underperform" from "neutral" by the brokerage.

Technip SA, Europe's second largest provider of oilfield services, fell 2.5 percent to € 61.28. The stock was reduced to "equal weight" from "overweight" by Morgan Stanley.

Porsche lost 4.4 percent to € 56.67, the biggest decline in more than two weeks. The automaker rose for seven consecutive days, adding 27 percent.

Sky Deutschland AG rose 4.2 percent to 1.57 euros at Morgan Stanley raised its rating on the stock to "overweight."

Falling the gold in New York.

Gold fell in New York, peel a weekly gain, as a stronger dollar curbed demand for the metal as an alternative investment. Other precious metals fell.

The dollar rose against the yen as North Korea's state Korean Central News Agency said planned naval exercises in South Korea and the U.S. moved from the peninsula closer to the brink of war. " The dollar rose to a two-month high against the euro amid concerns of European sovereign debt burdens are getting worse. Gold, which reached a record $ 1424.30 an ounce on 09 November, usually moves inversely to the U.S. currency.

"The bullion prices have been under pressure as a result of decreased sensitivity to risk," said James Moore, analyst at TheBullionDesk.com in London, in a report. However, gold may "continue to be supported by investment bargain hunting as investors seek to diversify the volatile macro-economic context and geopolitical."

Gold futures for February delivery lost 13.60 dollars, or 1 percent, to $ 1,361.40 an ounce at 8:01 am on the Comex in New York. Prices have risen 0.7 percent this week. Floor trading was closed yesterday for Thanksgiving in the U.S. and electronic commerce are booked today for settlement purposes. The metal for immediate delivery in London was 1.1 percent, to $ 1,360.60.

Bullion fell to $ 1,366.50 an ounce in the morning "fix" in London, used by some mining companies to sell production, from $ 1,373.25 in the afternoon yesterday fixing.

Ireland Rescue

The financial costs of the most indebted countries in the euro region are rising acceptance of Ireland as a rescue of its banking sector fuels speculation that other countries will have to seek help. The Financial Times Deutschland reported that those responsible for the euro area policy are pushing to Portugal to seek help from a 750 million euros (991 billion U.S. dollars) bailout fund. The country is not being pressured to use the facility, an official in the office of Prime Minister Jose Socrates said.

Irish Finance Minister Brian Lenihan said yesterday that while the size of a rescue of the European Union and the International Monetary Fund has not yet been determined, an amount of about 85 million euros "mentioned." The government said this week that will reduce spending by 20 percent and raise taxes in the next four years.

"We are following the euro, to some extent and the euro has become a weak point," said Darren Heathcote, head of trading at Investec Bank (Australia) Ltd. The Korean War "is still on the back of the head people. There is a possibility of new conflicts and is helping to support gold. "

"Confrontation Staggered"

President Barack Obama has sent an aircraft carrier to participate in military exercises in the Yellow Sea in a show of strength after North Korea this week bombed a South Korean island. North Korea warned that any "confrontation escalated" will lead to war, KCNA, said in an emailed statement.

explosive shots coming from the direction of North Korea, were heard in South Korea Yeonpyeong Island today, said a spokesman for South Korea's Joint Chiefs of Staff who declined to be identified, citing military policy. The Army is investigating, he said.

Eleven out of 15 traders, investors and analysts surveyed by us, or 73 percent, said the metal will rise next week. A forecast of lower prices and three were neutral.

Silver for March delivery in New York fell 3.1 percent to $ 26.75 an ounce. It peaked at $ 29.34 30 years on November 9 and 59 percent this year.

Platinum for January delivery was 0.9 percent, to $ 1643.20 an ounce. Palladium for March delivery fell 4.1 percent to $ 669.10 an ounce.

Less treasury bonds sold from May returns After Jump

Brazil is on sale this month the least amount of local bonds since May as a tax increase for foreign investors and speculation that the central bank will raise interest rates next year eroded demand for the securities.

The government has sold 19.5 billion reais ($ 11.3 billion) dollars in bonds in November, including 5.1 billion reais in the auction yesterday, after the issuance of 38.2 billion reais worth of securities in October. It sold 13.4 billion reais of debt in May, when the debt crisis of Europe increasingly pushing up yields in emerging markets.

Yields on benchmark bonds due in 2021 rose to a maximum of six months was 12.77 percent this week after President Luiz Inacio Lula da Silva tripled a tax on purchases of foreign debt to 6 percent last month to curb investment and the mother of a manifestation of foreign exchange. The yield has increased 54 basis points since the first of two increases in the IOF called on 4 October, nearly double the increase of 29 basis points in bond yields similar to the maturity of the Mexican peso during that time.

"All I've managed to do is that the cost of financing more expensive," Edwin Gutierrez, who helps manage $ 6 billion in emerging market debt at Aberdeen Management Plc in London, including Brazilian local debt. "The market is not happy now with the course of politics in Brazil and is expressed displeasure in the bond market."

The government sold bonds due in 2021 at an average yield of 12.36 percent and maturing in 2017 to 12.18 percent yesterday. He rejected all offers of securities maturing in 2015.

'Temporary'

Deputy Treasury Secretary Paulo Valle said the government has reduced its sales of fixed rate debt to avoid "put pressure on the market."

"This is temporary," Valle said in a telephone interview from Brasilia. "These values were well quoted volatility before collected."

Brazil will have to pass the sales of a backup to avoid cutting into their cash reserves, Vivienne said Taber, who helps manage $ 5 billion in emerging market debt at Investec Asset Management in Cape Town. Investec cut its "overweight" position in Brazil's bonds after the tax increase, he said.

"You can not have your cake and eat it," Taber said in a telephone interview. "No one can say that we want the flow to enter, but not too fast. I could probably wait a couple of months, but sooner or later must return to the market."

The government is not concerned about its cash position, equivalent to about six months worth of principal payments on debt, "said Fernando Garrido, head of the Public Debt Operations Department of the Treasury.

Overseas sales

"It makes no sense that this fall in the long run, sales of fixed rate bonds in November will make the lack of liquidity in the future," Garrido said in a telephone interview from Brasilia. "The Treasury has no liquidity problems."

He said the authorities may consider selling more real linked bonds abroad, where yields are lower than in the local market.

Last month the government issued one billion reais of bonds due in 2028 at its first foreign offer in the local currency debt in three years. The bonds yielded 8.85 percent, below the performance of yesterday's auction of bonds due in 2021, the longest maturity of fixed rate in the Brazilian market.

Local bonds also fell as traders bet Alexandre Tombini begin raising the benchmark interest rate to curb inflation in his first month as central bank president in January. The president-elect, Dilma Rousseff, nominated Tombini, a central bank director since 2005, Nov. 24 to replace Henrique Meirelles.

Inflation collection

The annual inflation rate rose to 5.2 percent in October, above the central bank's target of 4.5 percent as a jump of 27 percent in public spending in the first nine months of the year boosted demand consumers. Central banks have kept the benchmark rate at 10.75 percent in July after rising 200 basis points over a period of four months to cool the fastest expansion since the 1980s in Latin America's largest economy.

Yields rate futures overnight due in January 2012 have increased 35 basis points, or 0.35 percentage point from November 17 to 11.93 percent at 8:09 am New York time, traders expect the bank showing the rate increase to about 12.75 percent by the end of 2011. Tombini, 46, declined to comment on the outlook for rates at a press conference in Brasilia on November 24.

"At some point, the market is saying that inflation will begin to affect the performance requirement," said Enrique Alvarez, head of Latin America fixed income research at IDEAglobal in New York, in a telephone interview. "The rates at some point will have to move higher."

"Overheating" economy

The cost of protecting debt of the nation against non-payment for five years with credit default swaps, had climbed 3 basis points to 112 this week through yesterday, according to data compiled by CMA. Swaps credit-default pay the buyer face value in exchange for the underlying securities or the cash equivalent of a government or a company fail to adhere to its debt agreements.

The extra yield investors demand to own Brazilian dollar bonds instead of U.S. Treasuries rose 4 basis points this week to 181 today, according to JPMorgan.

The real fell 0.3 percent to 1.7274 per dollar today from 1.7265 yesterday. It has gained 1 percent this year after rising 33 percent in 2009, helping push the country's current account deficit of 12 months to a record $ 48 billion.

The economy will expand 7.6 percent this year after shrinking 0.2 percent in 2009, according to the median forecast in a central bank survey of economists released on November 22.

While Brazil's gross domestic product is growing, there is growing concern that global economic expansion falters after Ireland joined to Greece this month in the organization of an aid package to cover its financing needs. Ireland's long-term debt rating was reduced to two steps by Standard & Poor's Nov. 23 to AA-, undercutting demand for emerging market debt.

Brazil, the "economy is overheating now, to be honest," Gutierrez said of Aberdeen. "They have to be stricter policy is not what the market is signaling that disapproval. The environment of global risk aversion has also contributed to the problem."

Dollar Climbs to Seven-Week High

The dollar rose to a seven-week low against the yen as concern the conflict between North and South Korea will increase boosted demand for the safety of the U.S. currency.

The dollar rose for a third day against the yen as an agency of North Korea's state media said planned naval exercises in South Korea and the U.S. moved from the peninsula closer to the brink of war. " Dollar Index headed for its third weekly gain, the longest winning streak since May. The Korean won weakened further day by day in five months. The euro fell to a two-month low against the dollar amid concerns of Europe's sovereign debt loads are getting worse.

"The North Korean statement is added to the tensions and leading to the safe-haven demand for the dollar," said Simon Derrick, currency strategist at Bank of New York Mellon Corp. in London. "It's very much a day-off risk. If investor confidence continues to crumble, the euro could be between $ 1.27 and $ 1.30 for the end of the year."

The dollar rose to 83.83 yen from 83.60 yen after 7:01 am in New York, after earlier touching 83.97 yen, the strongest since Oct. 5. The U.S. currency reached $ 1.5686 per pound, the strongest since Oct. 25. The dollar edged up to 1.0040 francs, the strongest level since Sept. 21, before trading at 1.0026 to 1.0006.

The dollar index, which tracks the greenback against the currencies of six major U.S. trading partners, rose to as many as 80,485, the highest since Sept. 21.

Forint Drops

The Hungarian forint fell as plans to funnel the assets of private pension funds to the trust between investors and States eroded.

Hungary, the first European Union country to receive an International Monetary Fund's bailout plan for the credit crisis two years ago, plans to change three trillion forint ($ 14 billion) of assets of private funds pensions in the state budget to help reduce its deficit and public debt.

The forint slid to 3.6 percent against the euro, the eldest of nine weeks, and negotiated a 1 percent weaker at 280.313 per euro.

The euro fell 0.9 percent to $ 1.3238, after reaching $ 1.3201, the lowest since Sept. 21. The single currency has fallen 3.2 percent this week. It sank 0.6 percent to 110.99 yen from 111.69 yen.

The 16-nation single currency has dropped 2.5 percent last month to an extent of 10 pairs of developed countries, currency indexes weighted Correlation-show. The dollar is up 2.8 percent, while the yen has fallen 0.5 percent.

U.S. Carrier

The euro has created a weekly loss against 15 of its 16 partners over after the Financial Times Deutschland reported that those responsible for the euro area policy are pushing to Portugal to seek help from a rescue fund of 750 billion euros.

President Barack Obama has sent the USS George Washington to participate in military exercises scheduled for November 28 to December 1 in the Yellow Sea, off the west coast of the Korean peninsula.

U.S. sent the aircraft carrier in a show of strength after North Korea this week bombed a South Korean island. North Korea warned that any "confrontation escalated" will lead to war, KCNA, said in an emailed statement.

"It seems that there are tensions between the two Koreas, Japan and geographically close to them," said Masanobu Ishikawa, general manager of foreign exchange in Tokyo Forex and Ueda Harlow Ltd. "This may be the cause of some buying of the dollar and selling the yen. "

The pressure on Portugal

South Korean won fell 1.9 percent to 1,159.63 per dollar, the biggest daily drop since June 25. Front won fell to 1.9 percent, with the contract delivery month without 1,166.25 per dollar to weaken. The contract reached 1179.10 per dollar on 23 November, the lowest since Sept. 9.

By putting pressure on the Portuguese government, the European Central Bank and the countries monetary union in order to avoid a bailout of Spain, Financial Times Deutschland said. The newspaper sent an e-mail preview of a report published in today's edition citing unidentified people within the Ministry of Finance of Germany.

Portugal faces a final vote in parliament today on its 2011 spending plan that includes measures to cut its deficit.

The financial costs of the most indebted countries in the euro region are emerging as a capitulation of Ireland in the acceptance of a plan to rescue its banking sector fuels speculation that other countries also seek assistance. The average yield investors demand to hold debt to 10 years in Greece, Ireland, Portugal, Spain and Italy came to 7.52 percent yesterday, a record of the euro era.

"Finance trembling '

"The debt crisis in Europe also has to run," said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. "Portugal and Spain have unstable government finances, so their bond markets may go through a period of massive sale. In this environment, you can expect the euro to sell even more."

Irish Finance Minister Brian Lenihan said yesterday that while the size of a rescue of the European Union and the International Monetary Fund has not yet been determined, an amount of about 85 million euros "mentioned." The government said this week that will reduce spending by 20 percent and raise taxes in the next four years.

German Finance Minister, Wolfgang Schaeuble, said he hoped that talks between the Irish government, the European Central Bank, the European Commission and the IMF on aid for the most indebted country will be held next week.

Esparza Ireland

"I hope we will have the necessary decisions in Europe in place early next week to calm returns to markets and speculation ends completely exaggerated," said Schaeuble, in a radio interview with Bayern2.

"The budget and rescue Irish have not calmed the nerves of the market and the market has now turned his attention to Portugal," said David Forrester, currency economist at Barclays Capital in Singapore. The gains in bond yields in the euro area in relation to German bonds to put "downward pressure on the euro."

The extra yield investors demand to hold Irish 10-year bonds rather than their German counterparts went to a small percentage record was 6.55 euro today, while the spread of the debt to 10 years in Portugal on bonds Germans rose to 4.45 points. The spread of Spanish-German 10 years reached 2.64 percentage points, according to generic. That's the highest since the introduction of the euro in 1999.

A report today showed consumer spending in France fell 0.7 percent in October from September, when it rose a revised 1.6 percent. Economists polled by News had expected a decline of 0.5 percent. Europe's recovery will remain "provisional" for the next two years, with a risk of a setback if the crisis in the region of the debt is not resolved, a group of European research institutes said today.

Aussie weakens

Australia dollar weakened for a second day after Reserve Bank governor Glenn Stevens said his country's prospects adjustment of interest rates is appropriate for the early increases damping.

Stevens statement suggests "RBA is quite comfortable with the current level of policy and is unlikely to change," said Greg Gibbs, senior currency strategist at Royal Bank of Scotland Group Plc in Sydney. "The market has no price rise fully until July next year."

The Australian dollar fell 1.8 percent to 96.31 U.S. cents, and slid 1.5 percent to 80.80 yen.

Boat European prices of gasoline fell in reducing the cost of Brent crude

Boat European prices of gasoline fell in reducing the cost of Brent crude. Gasoil futures also fell.

Preem AB began maintaining a diesel production unit at its largest refinery in Sweden, about a month later than planned.

Light Products

gasoline barges for immediate loading in Amsterdam-Rotterdam-Antwerp quoted at U.S. $ 763 and $ 767 a metric ton, according to survey of traders and brokers to monitor the Bulletin Board Argus. That compares with rates of night from $ 766 to $ 773 a tonne.

Statoil ASA purchased 2,000 tons of 3,000 tons changed hands. Royal Dutch Shell Plc was the other buyer. Morgan Stanley was the top seller. The offices are for Eurobob degree to which ethanol is added to the ending of automotive fuel.

Gasoline crack opened up 10 cents to $ 5.30 per barrel, the highest since Oct. 18, according to data from PVM Oil Associates Ltd., an agent in London.

Port and refinery protests in France led to a deficit of 3 million barrels of gasoline and 8 million barrels of oil deficit, Christophe Barret, oil analyst with London-based Credit Agricole CIB, said today in a note.

Strikes in France, which lasted until October, closed November 10 refineries in the region and processing margins increased to the highest in two years.

crack gasoline rose to $ 2.50 from $ 1.80 a barrel yesterday, according to PVM. Naphtha is used in the production of gasoline and petrochemicals.

Middle distillates

Gas oil for December delivery fell 1.4 percent to $ 718.50 a tonne from 12:10 pm local time on London's ICE Futures exchange in Europe. The January contract also fell 1.4 percent to $ 722.75 per ton.

gasoil crack, a measure of earnings from refining, fell $ 11.97 to $ 12.32 per barrel yesterday, according to ICE.

Brent crude for January dropped 1.1 percent to $ 85.17 a barrel on the ICE.

Refinery News

Preem began repairs at its refinery in Lysekil on the west coast of Sweden on 10 November, according to a company statement today. The work, which includes the replacement of the catalyst and a isocracker regulatory inspections and the hydrogen plant is scheduled to last four or five weeks, he said. Maintenance was scheduled to begin on 19 October.

The termination of separate maintenance, which began on 2 September at 220,000 barrels per day, lasted a month longer than expected due to additional repairs, the statement said. Units, including a platform game, which makes components for gasoline, resumed operations from 04 November, Preem said. The work was scheduled to be completed in early October.

Global stocks fell and won the third week and commodities fell after North Korea threatened war and investors speculate that China will tighten monetary policy. The euro fell on concern Europe to the debt crisis may deepen.

The MSCI Asia Pacific Index fell 1.1 percent to 129.14 as of 4 pm in Tokyo, taking its weekly decline of 2 percent, while the Stoxx Europe 600 index fell 0.4 percent. The won slumped 1.9 percent while the euro weakened to a two-month low against the dollar. Zinc fell to 4.4 percent in London. 500 of Standard & Poor's Index dropped 0.6 percent in U.S. markets reopened after the Thanksgiving holiday.

South Korea said the North may be carried out artillery exercises today, after a neighbor alerted the reprisals of any invasion of their sovereignty. Chinese banks fell after the Shanghai Securities News said the government can reduce the target of new loans in 2011. The yields of the Portuguese, Spanish and Italian bonds jumped yesterday even if the European Central Bank, Axel Weber, said council member governments can increase the size of the bailout fund of the region if necessary.

"We both economic and geopolitical events have dented investor appetite for risk", said Murezani Wan Mohamad, Malaysia's Corp. analyst rankings in Kuala Lumpur. "The market tends to make safe-haven assets."

More than two stocks fell for each that gained on the MSCI Asia Pacific. The fall indicator three weeks, his longest streak of declines since the period ended on 05 February, finished with gains of this month. Kospi index in South Korea fell 1.3 percent, led by a decrease of at least 2.3 percent in Kia Motors Corp. and LG Display Co.

China banks

Shanghai, China Composite Index fell 0.9 percent, adding to its third consecutive weekly decline. Industrial & Commercial Bank of China Ltd. lost 1.6 percent after the Shanghai Securities News reported that new loans in the country next year will probably be about 7 billion yuan (1.1 billion dollars) less than the goal this year of 7.5 trillion yuan.

Zinc for delivery in three months fell to a low of $ 2,098 a ton on the London Metal Exchange before trading at $ 2,128. The copper contract fell to 2.2 percent to $ 8,161 a tonne. Futures also fell in China after the Shanghai Futures Exchange said Monday it would raise margins and daily price limits to curb speculation and cool inflation.

Crude oil for January delivery traded at $ 83.68 a barrel in New York, after settling at $ 83.86 on 24 November. Floor trading was closed yesterday for Thanksgiving in the U.S. and electronic commerce can be booked from today for settlement purposes.

Korea bombing

The won, which fell to a minimum of two months of 1172.50 per dollar, a day after the attack this week by North Korea, closed at 1,159.63 per dollar.

North Korea said today that it is "very angered by provocation" of the South and warned that any "confrontation escalated" will lead to war, according to state news agency KCNA. Artillery shells were fired in the Yeonpyeong Island in South Korea on 23 November, killing four and wounding 20. South Korea is preparing for joint military exercises with U.S.

"This is really a great risk for the entire region, resulting in a massive sale of cattle," said Minoru Shioiri, senior manager of forex trading at Mitsubishi Tokyo UFJ Morgan Stanley Securities Co. "People do not want to keep the cattle and other currencies in the region during the weekend when we do not know what would happen. "

Dollar, Euro

The dollar rose against 15 of its 16 major counterparts as speculation of climbing in the Korean War increased the demand for the safety of the greenback. The currency traded at 83.89 yen from 83.60 yen yesterday in New York, after earlier touching 83.89 yen, the strongest since Oct. 5.

The euro fell to $ 1.3263 in Tokyo from $ 1.3360 yesterday in New York and was trading at 111.21 yen from 111.69 yen. The 16 - nation currency declined this week against 15 of his 16 fellow seniors.

The bonds of the most indebted countries in the euro region fell yesterday after LCH Clearnet Ltd. increased its margin requirements, or the cost of operations in Irish government securities for the third time this month. The bond yields of Ireland 10 years rose 18 basis points to 9.04 percent, while the Spanish 10-year yield rose 11 basis points to 5.18 percent yesterday.

Portugal faces a final vote in parliament today on its 2011 spending plan that includes measures to cut the deficit. The government said in September that it would reduce wages, hiring freezes and increased value added tax.

Costs, charges

Elsewhere in the region, a report today may show French consumer spending fell by 0.5 percent in October from the previous month, when it rose 1.5 percent, according to the median estimate of economists surveyed. For a year, spending increased 0.4 percent last month, the survey showed.

Australia dollar fell compared with 15 of his 16 companions important as central bank governor Glenn Stevens said the nation to set interest rates appropriate for the "foreseeable future", damping speculation of rate increases. The so-called Australian appreciated 1.2 percent to 96.94 U.S. cents.

Stevens statement suggests that the Reserve Bank of Australia "is quite comfortable with the current level of policy and is unlikely to change," said Greg Gibbs, senior currency strategist at Royal Bank of Scotland Group Plc in Sydney. "The market has no price rise fully until July next year."

10 years of Japanese government bonds fell for the second straight day, pushing yields up 2.5 basis points to 1.18 percent, a 11 - week high. Consumer prices excluding fresh food fell 0.6 percent in October from a year earlier after falling 1.1 percent in September, the statistics bureau said today in Tokyo, coinciding with the median forecast of 28 economists surveyed by our reports. Overall consumer prices rose 0.2 percent from a year ago, the first increase since December 2008.

South Korea current account surplus widened to a maximum of three months in October

South Korea current account surplus widened to a maximum of three months in October, indicating that exports have so far resisted the appreciation of the won against the dollar.

The surplus was 5.37 billion U.S. dollars in October, down from a revised 3.95 billion in September, the Bank of Korea said in a statement today in Seoul. The current account is the broadest measure of international trade, tracking goods, services and investment income.

The nation is one of a number of emerging markets from Asia to Latin America trying to limit currency appreciation this year to support exports. North Korean bombing of a South Korean island three days ago sent the cattle to a minimum of two months after the investors against disturbing.

"Exports are likely to remain firm," Hwang In Seong, vice president of Samsung Economic Research Institute in Seoul, said before the launch. "The recent weakness of livestock due to the risks of North Korea and Europe will help you."

The currency fell 0.4 percent to 1,142.44 per dollar as of 10:08 am in Seoul. The cattle of 9.7 percent advance in the last six months is the highest increase in Asia. The Kospi stock index fell 0.6 percent to 1,916.31.

The government of President Lee Myung Bak-out limited economic impact of the incident with the North and is committed to providing sufficient liquidity to meet any crisis.

Capital controls

The government last week endorsed the revival of a tax on foreigners investing in bonds of the nation to stem the flow of funds to drive the cattle.

"The government may delay additional measures to control capital flows to international investors feel confident about the security situation," said Hwang.

Bank of Korea Governor Kim Choong Soo increased borrowing costs by 0.25 percentage points in November, the second increase this year, 2.5 percent. The current interest rate falls behind inflation, which climbed past the roof of the monetary authority of a 4 percent last month.

Exports account for about half of the economy and grew by 12 consecutive month in October. Overseas shipments have been boosted this year's earnings at companies such as Hyundai Motor Co., the largest automaker in South Korea.

The current account surplus is set to exceed 30 billion U.S. dollars this year, Lee Young Bog, an official of the Bank of Korea in Seoul, said today. November surplus is likely to be lower than the October figure, he said, without giving a specific forecast.

Accounting Change

The central bank also said it will change the way it calculates the South Korean balance of payments as recommended by the International Monetary Fund. The new method is applicable to the November data and the above figures are updated.

Setting "will reduce the enormous volatility in the nation's current account and external debt data due to export of vessels in size," said Lee.

Total exports a customs-cleared basis, excluding ships, rose 27.6 percent last month from a year earlier, compared with an increase of 16.2 percent in September revised. Imports advanced 21.3 percent.

The tradable surplus widened to 6.54 billion U.S. dollars in October from a revised 5.57 billion in September, the report showed today. The services deficit, which measures the flow of travel, transport costs and royalties, was $ 1.69 billion months passed, compared with a revised 1.96 billion in September.

The income account recorded a surplus of $ 756 million, from a revised 509 million U.S. dollars surplus in September.

South Korea's economy is expected to grow 6.2 percent this year and 4.3 percent in 2011, the Organization for Economic Cooperation and Development estimates that on 18 November.

consumer prices in Japan fell for a 20th month in October

consumer prices in Japan fell for a 20th month in October, with the decline of moderation after the government raised taxes on snuff.

Consumer prices excluding fresh food fell 0.6 percent from a year earlier after falling 1.1 percent in September, the statistics bureau said today in Tokyo. The government's October 1 tax increase, which boosted the price of cigarettes by a third, added 0.28 percentage points to the figure, the office said.

Entrenched deflation is weighing on the economy at risk for this quarter after a rise of the yen to a 15-year high export growth undermined. The currency's 11 percent advance against the dollar this year has also exacerbated the price declines by reducing import costs, adding that in the case of the Bank of Japan to provide more monetary stimulus.

"Deflationary pressures have eased slightly, but it is unclear whether this trend is sustainable," said Yoshimasa Maruyama, economist at Itochu Corp. in Tokyo. "The economy will probably contract this quarter and the strong yen is also going to start pushing down prices."

October fall in prices matched the median forecast of 28 economists surveyed. An increase in insurance rates also boosted the index by one percentage point to 0.15, the office said.

The yield on the government's benchmark 10-year note rose two basis points to 1.175 percent late morning in Tokyo, the highest since Sept. 7.

Persistent pressure

"There are still a lot of slack in the economy that is continuing to exercise downward pressure on prices," although the drops were smoothed Yoshiki Shinke, economist at Dai-Ichi Life Research Institute in Tokyo , said before the report. "It is difficult to predict when prices will be positive," he said, predicting that GDP will contract this quarter.

Pressure for the Bank of Japan to do more to fight deflation has grown, both lawmakers and the opposition calls for legislation that would give politicians more control over monetary policy.

A group of lawmakers from the ruling Democratic Party of Japan said this week that the bank should adopt an inflation target for the eradication of lower prices and help boost employment. Members also want to review a law guaranteeing the independence of the central bank. His party, an opposition group, last week introduced a bill to Parliament calling for a revision to incorporate a target.

Political pressure

"Despite the possibility of an effective review of the law is thin, the actions of politicians to discuss the question in itself have some influence on monetary policy," said Naomi Hasegawa, a fixed income strategist at Mitsubishi UFJ Securities Morgan Stanley Co. in Tokyo.

Bank of Japan policy makers last month expected core prices, which exclude fresh food, start to rise in the year from April 2011. The bank last month pledged to keep "virtually zero interest rates to a point of view arises from sustained price increase. Board members say they consider inflation stable in a positive range of up to 2 percent, with the median estimate of 1 percent.

falling prices undermine an economy by eroding corporate profits, putting pressure on wages, and making debts harder to repay. Deflation has affected Japan for more than a decade, helping you to be overtaken by China in the second quarter, the second largest economy in the world after the U.S.

A government report today showed Japan's separated values fell to the ground 87 of 150 prime locations across the country, or 58 percent of monitored sites, compared with 70 percent three months ago.

Yen Advance

Some board members said that falling prices could damp inflation expectations of long-term business and homes, bank records October 28 meeting this month showed. The yen's advance reduced prices, making imports cheaper and this dynamic "orders of caution," said Seiji Nakamura, a board member of the Bank of Japan, in a speech yesterday.

Seiyu Ltd., a supermarket operator owned by Wal-Mart Stores Inc. this week began to discount 3200 items, including food, clothing and household goods up to 60 percent. Daiei Inc., a supermarket operator, also reduced prices of household goods up to 25 percent.

A review of the base year for calculating consumer prices scheduled for August 2011 also likely that the Japanese lower prices. The review of the last government pushed down prices by about 0.5 percentage point.

"The consumer price data will likely be pressed for the review next year is more than the last time," wrote economists at BNP Paribas, Ryutaro Kono and Azusa Kato in a report. "The Bank of Japan out of its virtual zero rate policy seems quite far."

Ireland's Relief Proves Fleeting as `Day of Reckoning' Nears

The financial costs of the most indebted countries in Europe are at record levels as a capitulation of Ireland in the acceptance of a plan to rescue its banking sector, fueling concerns that other countries will also have to seek help.

The average yield investors demand to hold debt to 10 years in Greece, Ireland, Portugal, Spain and Italy came to 7.56 percent today, a record of the era of the euro. The average premium investors demand to hold the values instead of German bonds widened to 488 basis points, the highest level of 2010. The average cost of insurance against default by the five nations using credit default swaps hit a record 517 basis points on November 23.

"It's not taboo to talk about restructuring," said Johannes Jooste, a portfolio strategist at Bank of America Corp. 's Global Wealth Management at Merrill Lynch in London, which oversees about $ 1.4 trillion for customers. "The fact that bond yields keep rising and pushing countries to be funded from the market makes investors less and less safe, and forward the moment of truth."

The relief rally on November 22 after the Irish Prime Minister Brian Cowen admitted that the nation needed temporary financial support. Ireland yields 10-year bond fell 4 basis points before jumping 100 basis points from 11 am today, more than 9 percent for the first time since 1995. euro was more than fleeting, rescue inspired a gain of 0.8 percent before the currency fell to a minimum of two months. It fell 0.9 percent to $ 1.3238 today.

Market volatility

"When Ireland agreed to help the overall market sentiment is that it could restore some calm, which has not been the case," said Michiel de Bruin, who oversees about $ 35 million at the head of European government debt to fruit C and the Netherlands in Amsterdam. "The authorities must do everything possible to calm the situation."

Morgan Stanley analysts said in a Nov. 11 report that any move by Ireland to use the European Financial Stability Fund will boost the euro and be a "switch" to the crisis of European sovereign debt. While Ireland have enough money to pay their debts until the middle of next year, has applied for a recovery of the European Union and the International Monetary Fund amid concerns about the cost of bailing out their banks would outweigh the public finances.

Portuguese Finance Minister Fernando Teixeira dos Santos said in an interview published today that EU governments can not impose a rescue plan in his country.

Most officials in the euro area and the European Central Bank are urging Portugal to accept the help that helps stop the spread to Spain, the Financial Times Deutschland reported today. German government spokesman Steffen Seibert said the nation is not putting pressure on Portugal to seek help. An official from the office of Portuguese Prime Minister Jose Socrates, also denied the report.

Greek Kickoff

The last stage of the debt crisis that began last year in Greece was initiated after EU leaders agreed Oct. 29 to examine the demand for German Chancellor Angela Merkel, a crisis resolution mechanism to force bondholders to share the cost of the bailouts in the future. The Stoxx 600 Banks Index of European shares fell nearly 8.8 percent in the last month.

Adding to the pressure is pushing the ECB to reduce liquidity support to banks.

"This firm stance is to revive a debt crisis in euro," wrote Greg Gibbs, senior currency strategist based in Sydney at the Royal Bank of Scotland Group Plc, in a research report dated 23 November. "The recent problems in Europe may be related to the fear that weak banks in the periphery is lost access to cheap financing from the ECB, and the deterioration in turn put more pressure on the sovereign."

Fund

Greece agreed to 110 million euros (145 million) in the rescue program in April, before the creation of 750 million European Financial Stability Fund in May as a backup of the common currency. Cowen said this week had been a ransom of € 85000000000 discussed for Ireland.

Authorities must prevent "dissemination of disaster" in the euro region, said Mohamed El-Erian, chief executive of Newport Beach, California, Pacific Investment Management Co. "The reassuring statements issued by European ministers in recent days is urgent translated into action ", wrote this week in an article in the Financial Times.

Analysts also say that much remains to be done. Portugal should apply preventive measures to curb the expansion of credit spreads between the debt of countries with high deficits and German bonds, according to WestLB AG.

"Haircuts enormous'

Bondholders of European banks have to accept "massive cuts" of its assets, the company said foreign exchange FxPro. Germany may adopt the euro to allow the currency to devalue, wrote Graham Turner, chief economist at GFC Economics, a consulting firm based in London.

"Time is of the essence", led a team of London-based analyst at Nomura International Plc by Nick Firoozye wrote in a note to investors on 24 November. "The continuing confusing political rhetoric is leading investors from outside Europe. Once the cycle of problems in the euro zone started in 2011, less than many of the issues related to collective action clauses, resolution mechanisms crisis and times have been resolved, policy makers may lose the battle. "

Betting in Spain on budget cuts to stop the spread of debt

Spain has the budget cuts and the national appetite for their bonds to build a firewall against the spread as Prime Minister José Luis Rodríguez Zapatero, has warned investors that lost money betting against the nation's debt.

Spain, which has the euro region's third largest budget deficit, said that no further action to protect themselves from the debt crisis worsens Europe after cutting the gap from the central government budget by almost 50 percent and domestication of regional spending. Providing support is about half of the Spanish debt remains at home, rather than in Ireland or Portugal, which offers a line of defense against changes in the moods of foreign investors.

"I have to warn investors that short sales are going to Spain to be wrong and go against their own interests," Zapatero said in an interview with radio station RAC1 based in Barcelona today. The "completely" ruled that Spain needs a bailout.

Spain is trying to distance itself from other so-called peripheral countries after Ireland's request for a European rescue plan triggered a settlement bond market that pushed yields to the highest Spanish in eight years. The risk for Europe is that Spain's economy is twice as large as that of Greece, Ireland and Portugal combined, ie the euro zone of 750 million euros (994 billion) bailout fund may not be enough large.

Shrinking deficit

"I find it easier to argue in favor of Spain for six months because the data now shows the deficit is falling," said Gilles Moec, economist at Deutsche Bank AG in London. "Spain is in a very different" from Portugal and Ireland.

central government budget deficit was reduced by 47 percent in the first 10 months of last year. That compares with a decline of 30 percent in Greece and an increase of 1.8 percent in Portugal. Ireland's deficit is growing at an estimated 32 percent of gross domestic product this year in costs to shore up their banks, causing the ransom demand is fueling the spread.

In the case of Spain, about half of the debt remains in the country, limiting the impact of foreign investors avoid bonds of countries with high deficits. That compares with 17 percent in Portugal, according to estimates by the agency debt. The Irish Finance Ministry said on 24 November that about 85 percent of their bonds are held abroad.

The goodness of investors?

"The advantage is that Spain has a large base of domestic buyer for its bonds, ie the banks," said Joachim Fels, global economist at co-president of Morgan Stanley in a November 24 interview on Television. "Portugal's problem is that 80 percent of its debt is in foreign hands, so you have to rely on the kindness of foreign investors and there is much kindness to the left."

Spanish banks have a "very different" given the country's bonds to foreign investors and "more faith in the thinking of today is a buying opportunity for Spanish debt," said Banco de Sabadell SA President Josep Oliu a conference in Madrid yesterday afternoon.

Spain's Socialist government has put online for regional governments that have enjoyed increasing autonomy from Madrid since the return to democracy in 1978, announced Nov. 24 that it will publish quarterly reports, the harmonized budget for the first time. The regions are on track to meet budget goals this year, the finance minister, Elena Salgado, said.

Regional Transparency

"They're coming around to see the need for greater transparency, which is important," said Angel de la Fuente, an economist at the National Institute of Economic Analysis Council, who has written books on the regional economy.

Some regions have been frozen debt markets this year. You put a pause in spending, said Jose Carlos Diez, chief economist Intermoney SA in Madrid, Spain's largest bond dealer. "Not that I wanted to happen is that they could not," he said in an interview.

However, news of the region did little to tame the rising costs by Spanish interests. Spain 10-year bond yield rose to 5.243 percent today, pushing the spread over German debt equivalent to euro was a record of 258 points.

Spanish bonds extended declines after the Financial Times Deutschland reported that the European Central Bank and most of the states of the euro-region are calling on Portugal to tap the rescue fund to ensure that Spain also have to seek help. The comments followed Bundesbank President Axel Weber, the night of 24 November that if the rescue fund of 750 billion euros is not enough to calm markets, "will have to be increased."

Smaller Fund

Steven Major, global head of fixed income research at HSBC Holdings Plc in London, said in a report of 08 November that the fund, financed by the EU and the International Monetary Fund may not be enough.

In practice, the EU can only be able to deploy € 367 000 000 000 of its quota of 440 million euros of European Financial Stability Fund, said. That is because the increase EFSF ransom money for the bond issue and should set aside plenty of cash to ensure an AAA credit rating, said Mayor. A rescue would require three years of Portugal and Spain would need € 51500000000 € 351 000 000 000, of HSBC, said.

"The big elephant in the room of Spain, which is too big to fail and too big to be rescued," said Nouriel Roubini, professor at New York University who predicted the global financial crisis, in an interview Nov. 23. "In a sense, however, Spain is in a better place."

Too big to bail?

Asked if his size would prevent a rescue of the EU, the Bank of Spain, the chief economist Jose Luis Malo de Molina, said yesterday that "systemic importance" of a country like Spain "strengthens the incentives and encouragement for the rest of the countries to be prepared to help if necessary. "said market tensions can become a" self-fulfilling prophecy. "

The Spanish government has repeatedly stated in foreign aid, does not face the first of its 45 million euros in bond repayments until April next year. It has two bond auctions scheduled for December, and the deputy finance minister, José Manuel Campa, said in an interview Nov. 24 that the spending cuts and revenue higher than expected government funding "very comfortable."

Campa said that there is no need for additional measures to curb the spread and instead, Spain must demonstrate their commitment to the implementation of budget cuts and structural changes already announced to reduce the deficit to 6 percent of GDP next year 11 percent in 2009. The goal is "unconditional" he said.

Portugal Says EU Can't Force Governments to Accept Rescue Aid

Portuguese Finance Minister Fernando Teixeira dos Santos said that EU governments can not impose a rescue plan in his country even when speculation mounted that Portugal will eventually have to request one.

"Some people think that the best way to preserve the stability of the euro is to push and force countries that have now been in the spotlight for the help," said Teixeira dos Santos, Jornal de Noticias said in an interview. The comments, made yesterday, were confirmed by the Ministry of Finance. "But that's not the vision or the political choice of the countries involved."

Portuguese bonds have declined as the government strives to convince investors it can avoid the fate of Ireland and Greece, which has asked EU rescue this year. Most governments in the euro region and the European Central Bank are urging Portugal to accept a rescue plan to halt the contagion spread to Spain, the Financial Times Deutschland said today.

A Portuguese official in the office of Prime Minister Jose Socrates said the government does not face pressure. A spokesman for German Finance Ministry declined comment. The ECB declined comment.

The 10-year yield of Portugal, the government bond yield rose 10 basis points to 7.10 today, pushing the spread over German equivalent to 444 basis points. Spain spread widened to a record 258 basis points.

Ireland Pressure

Ireland was forced to ransom on November 21, eight days after officials pressed in a press conference the ECB to accept emergency aid. Minister of Finance of Portugal, said his country does not need a bailout by the U.S. position is not as serious as that of Ireland.

"It is clear that what we are betting on being able to guarantee to Portugal to continue funding itself in the market to ensure the functioning of public administration, and also to stabilize the funding mechanisms for the private sector, through financial sector, "said Teixeira dos Santos, paper.

Russian companies face higher borrowing costs ruble in 9 months

Russian companies face higher borrowing costs ruble in nine months, compared with dollar debt that the central bank drains cash from the banking system.

The gap between yields on the benchmark ruble debt maturing in 2012 OAO Gazprom and its 2013 dollar bonds rose to 287 basis points, or 2.87 percentage points today, the widest since March 1, 1929 points basis in May. Rossii bank has reduced cash from the sale of at least 3.8 billion U.S. dollars of foreign currency this month, matching the amount of all of October, which was the highest in almost two years, first deputy chairman Alexei Ulyukayev said In an interview in Moscow in November 1924.

While the Bank rossii maintains interest rates at a record low 7.75 percent, its efforts to stop further depreciation of the ruble since September, the local cost of debt to Gazprom, the country's biggest company, OAO Mobile TeleSystems and Russian Agricultural Bank have affected four months maximum. Yields on government debt in rubles two years, known as OFZs, rose 10 basis points yesterday to 6.1 percent, the highest since June 9, compared with two-year U.S. Treasury at 0.54 percent.

"Reducing the amount of rubles out there means less money for local debt, so prices have eased," said Dmitry Dudkin, head of fixed income research at UralSib Financial Corp. in Moscow, in a telephone interview yesterday. rossii Bank interventions are "the equivalent of clearing large amounts of rubles, as if they no longer exist," he said.

Capital flight

The departures are harming the ruble and forcing the central bank to increase sales in foreign currency, the Bank Chairman Sergey Ignatiev said rossii finance committee of the Duma in Moscow yesterday. The central bank has more than doubled its estimate of capital flight this year to U.S. $ 22 million on 16 November. The outputs in the year to the end of October total about $ 21 billion, Ignatiev said this week.

Russia has achieved since 2005 ruble against a basket of dollars and euros to limit changes that erode the competitiveness of exporters in the nation. The controller allows the ruble to trade within a corridor called floating against the basket, changing the range of 5 kopeks each time interventions over U.S. $ 650 million.

The ruble fell 0.6 percent to 31.3975 per dollar at 1:30 pm in Moscow, extending a slide of 1.8 percent this month. It fell 0.3 percent to 35.9828 against the basket, which consists of about $ 55 euros per cent and 45 per cent. The floating row ranged from 32.8 and 36.8 on 13 October, after the band was extended to four rubles of three, Ulyukayev said in an interview on 24 November.

MTS, Russia Agricultural

The yield on the Moscow-based Gazprom's ruble two years reached 6.46 percent this week, the highest since July 1, while the dollar-denominated debt maturing in 2013 yielded 3.46 percent yesterday, a minimum of two weeks.

The average price of Russian ruble bonds listed on Micex has fallen 0.4 percent in November, bound for the biggest monthly decline since May, according to the CBI Micex index.

The gap between bond yields Mobile TeleSystems, Moscow-based 'ruble in 2018 and dollar bonds maturing in 2020 was the largest since Russia's largest mobile phone provider made the issuance of U.S. in June. The performance of the ruble reached 7.83 percent on Nov. 22, the highest since July 5.

Agricultural Bank Russian bonds rubles for February 2018 yielded 8.52 percent yesterday, the highest in eight months and 251 basis points more than the lender's debt to Moscow-based state dollars eight years, the biggest gap since March.

Bond sales

Companies are taking advantage of lower costs in dollars. Gazprom is selling $ 1 billion five-year bonds, a person with knowledge of the sale, said last week. VEB, state development bank in Russia, raised the same amount in denominations of 15 years on 10 November. OAO Lukoil, the country's largest independent oil company, issued $ 800 million 10-year bonds on Oct. 29.

The government may delay its first issuance of debt denominated in rubles abroad until "weak" market conditions decline, the Moscow-based OAO Gazprombank told clients in a note sent by email November 24 . Belarus postponed its debut sale of bonds under Russian ruble "indefinitely" according to a regulatory filing on Nov. 24.

Ruble bonds are declining, as a result of negative sentiment in global markets and a tightening of domestic liquidity, "said Elena Kolchin, head of fixed income products in the Renaissance Moscow Managers, which manages U.S. $ 1.5 billion in assets. "To limit the negative impact of the recent strengthening of the dollar in global markets, the central bank had to increase its assistance to support the ruble and the affected local liquidity."

"Attractive" Yields

The amount of rubles in the market will likely be boosted in the second half of December, the government spends the remaining funds of the budget before the end of 2010, according to Alexander Dotkin, a bond trader at the Bank Zenit in Moscow.

"The bonds to these current levels are attractive ahead of the usual liquidity at the end of the year," said Dotkin by email yesterday.

Russian government bonds in dollars slid yesterday, with the yield of bonds maturing in 2020 to 2 basis points to 4.87 percent.

The extra yield investors demand to hold the Russian government debt rather than U.S. Treasuries rose 10 basis points to 230 today, according to JPMorgan Chase & Co. 's EMBI index. The difference compared to 144 for Mexico's debt, which has the same rating Baa1 by Moody's Investors Service, and 181 for Brazil, which is rated lower than Baa3 two steps.

Default Swaps

The yield of Russian bonds is 27 basis points below the average for emerging markets, down from a maximum of 15 months from 105 in February, according to JPMorgan indexes.

The cost of protecting Russian debt against default by five years using credit-default swaps rose half a basis to 155.5 yesterday, according to data provider CMA. Swaps credit-default pay the buyer face value in exchange for the underlying securities or the cash equivalent of a government or a company fail to adhere to its debt agreements.

Russia credit-default swaps is 17.5 basis points more expensive than contracts in Turkey, classified as four levels below Ba2 by Moody's. Turkey was 40 basis points over Russia on 20 April.

In a signal source is tight rubles, Russian Ruoni, the average interest rate of 31 charged by banks to lend local currency to each other, reached 3.42 percent on Nov. 22, the highest since April 29 according to the Bank rossii.

Capital controls

The amount of Russian lenders have in deposit accounts and correspondent central bank, another indicator of liquidity, was 827 billion rubles ($ 27 billion) yesterday, down from 1.1 trillion rubles early October.

Political leaders canceled a bond auction central bank designed to mop up excess rubles in the market yesterday. Rossii Bank has held only a sale of the call rossii Obligatsii Banka, or OBRs in November, the scrapping of the weekly auctions set for November 11 and 18.

While Brazil and South Korea are imposing capital controls to curb the appreciation of the exchange, Russia is exploiting the reserves of the third-largest in the world to avoid defeat in the ruble as companies pay foreign debt and economic growth lagging behind encourages investors to flee the country. Russia's international reserves, second only to stocks in China and Japan, have fallen 14.4 billion U.S. dollars from a high of 503.7 billion U.S. dollars on 15 October, rossii Bank said yesterday.

Russia sold $ 3.2 billion and € 437,600,000 ($ 584,000,000) in October to prop up the ruble, the highest since January 2009, according to central bank data published on November 8. Rossii Bank has been selling an average of $ 325 million of foreign currency per day in November, Aurelija Augulyte, emerging markets analyst at Nordea Bank AB, said by telephone from Copenhagen yesterday

The European Commission is pushing to include tests of liquidity of banks in the coming year stress test of the European Union following the financial crisis in Ireland, according to two people familiar with the discussions.

Possible changes follow concerns that recent evidence made public in July did not show that banks could withstand the financial crisis, said the people, who declined to be identified because the talks are private.

This year the stress tests at the European level focused on levels of capital that banks had to absorb losses and measure the risks posed by the lack of liquidity. The regulators will meet the test data at the beginning of next year, under the direction of the European Banking Authority, the European Central Bank and the Commission, the executive arm of the EU's 27 nations.

"You need a clear vision of what will be liquid and will not be and there are too many variables," said Simon Gleeson, a financial regulatory lawyer at Clifford Chance LLP, in a telephone interview in London today. "That's why we have not done so -. It is very easy to ask, but very difficult to do in practice"

In preparation for the tests this year the stress of the EU, some countries indicated that it would be difficult to compare banks 'liquidity,' said one person familiar with the discussions.

Ireland Rescue

Ireland is in talks with the European Union and the International Monetary Fund by 85 million euros (113.7 billion U.S. dollars) aid package that the authorities try to prevent the country's financial crisis spreads to Portugal and Spain. Ireland's financial system after the implosion of banks accumulated losses when a housing boom ended a decade.

Allied Irish Banks Plc and Bank of Ireland Plc stress tests exceeded European holdings in their capital. Anglo Irish Bank Corp. has not been tested. German Hypo Real Estate Holding AG, Agricultural Bank of Greece SA and five Spanish savings banks are not stress tests across the EU in 91 banks in July.

banks' ability to measure stress tests "to support the economic crisis. The scenarios in this year include securitized debt products being downgraded four levels of rating companies, down 20 percent in the value of European equities in 2010 and 2011, falling house prices and evidence in 50 other macroeconomic parameters.

The tests were criticized for not being strict enough, because European banks are listed by regulators to require only 3.5 billion euros of new capital, about a tenth of the lowest estimate of analysts.

"Demand"

Stress tests next will be "demanding," said Jonathan Faull, director general of financial services to the commission, at a conference organized by the regulator of the markets of France in Paris.

Regulators are "going to try to draw all the lessons of this year to try to improve" the stress testing methodology, Chantal Hughes, spokeswoman for the commission, told reporters in Brussels. The European Banking Authority, or EBA, is scheduled to conduct the test in 2011 "sometime early next year," he said.

In the past two weeks, three of Ireland traded lenders reported an outflow of deposits since late June amid concerns that losses from bad loans exceed the stress tests conducted by the central bank . dependence on Irish lenders emergency liquidity on the European Central Bank rose another 7.3 percent to 130 million euros in October, Ireland's central bank said on November 1 because they were frozen at the markets wholesale.

Lost Deposits

Allied Irish, Bank of Ireland and Irish Life & Permanent Group Holdings Plc lost 12 million euros, euros, 10 billion and 600 million euros of deposits of enterprises, respectively, since late June, "said Emer Lang, analyst at Dublin-based securities firm Davy, in a note to clients on 24 November.

"We have cooperated fully" with the Europeans "stress tests in the past and will continue," said Ronan Sheridan, a spokesman for Allied Irish, in a telephone interview.

Anne Mathews, spokeswoman for Bank of Ireland, declined comment. Anglo Irish spokesmen declined to comment immediately. Ray Gordon, a spokesman for Life and Irish Permanent, could not immediately be reached for comment.

Heidi Ashley, spokesman for the Financial Services Authority in the UK, William Lelieveldt, a spokesman for the European Central Bank, and Congiu Franca Rosa, spokesman for the Committee of European Banking Supervisors declined comment. CEBS replace the EBA based in London in January.

reserves the measures of bank liquidity available assets and cash that can be used to pay liabilities.

Assicurazioni Generali SpA, the third largest insurance company in Europe, plans to increase its holdings of real estate and asset management to promote the Central and Eastern Europe and Asia to increase profitability.

The insurer seeks to expand its real estate portfolio of 30 billion euros (40 billion U.S. dollars) "medium term" of 24.2 million euros at 30 September, Trieste, Italy-based company said in a statement.

"Generali focus new investments not only to take the market cycle in European countries, but also to diversify the portfolio in areas that offer attractive yields, as the U.S.," Generali said in a statement. "In China, will begin to invest the resources generated locally by the insurance company."

Generali aims to boost its assets under management in Asia, focusing on China and Central and Eastern Europe "to increase support for their local operations." In China, the Hong Kong joint venture with Guotai AMC will begin operations in early 2011, Generali said.

CEO Giovanni Perissinotto, who led the purchase of 30 percent of China Guotai Asset manager last year, is looking to expand in emerging markets and Eastern Europe to increase profitability following the global financial crisis.

Generali aims to triple the assets under management in Asia through its banking unit BSI private, profit 15 billion U.S. dollars of assets under management in 2013 from the current $ 5 billion, Perissinotto, said during a speech on the day of investor in the company today in Venice. They also plan to hire employees in Hong Kong to promote the entry.

The insurer declined to 3.2 percent in Milan trading, and fell 36 cents to € 14.10 by 13:38, giving the company a market value of around 22 million euros. The Europe 500 Insurance Index fell 3.4 percent this year compared with a decrease of 25 percent of Generali.

third-quarter earnings of Generali rose 13 percent to 440 million euros as revenue in its life insurance unit rose, the company said on 11 November. Generali reiterated that it expects to report higher operating margins for the year and an increase in net income compared to 2009.

Bank of Spain Calls on Country's Lenders to Disclose Real-Estate Holdings

The Bank of Spain asked the country's banks to make an "extra mile" to disclose their real property in the middle of the country's concern also need to be rescued after the Irish accepted a bailout.

Lenders have to give more information about the risks associated with property and real estate, with details of the guarantees and reserves set aside to cover, in March 2011, Javier Ariztegui deputy, said in a speech in Barcelona. He also told banks to cut costs in a "swift and decisive" and completes mergers reduce the number of groups of savings banks in nearly two thirds.

"Spain and the Spanish banking system requires creditors to renew our funding that we have," he said, saying that "no place" to delay the ongoing restructuring in the industry. "The best way is to show every day that banks and savings banks are healthy and profitable."

The spread of sovereign debt crisis is spreading from Europe to Spain and Portugal, as Irish officials race to complete a deal for an international aid package before reopening the financial markets next week. All banks in Ireland passed the tests by European regulators of stress in July, while five Spanish savings banks do not exercise.

Stock prices are falling and the financing of the rising costs of Spanish lenders. Banco Santander SA, Spain's biggest bank, fell 3.6 percent to 7.54 euros, at 11:57 am in Madrid, while Banco Espirito Santo SA, Portugal's biggest bank, traded by market value , fell 1.1 percent to 2.97 euros.

Wholesale funding

Ariztegui said the stress tests for Spanish banks, published in July still "adequately describe the current situation of the banking system and its risks." In addition to the information, shall publish in its real estate, banks will have to give a report on the status of their wholesale funding, he said.

Spanish lenders have € 181,000,000,000 ($ 240 billion) of "exposure" care "of construction and real estate, according to the Bank of Spain.

The observations were made in the text of a speech today in Barcelona Ariztegui which was published on the website of the Bank of Spain

Companies face the biggest pension deficit at least since 1994

Companies face the biggest pension deficit at least since 1994 include the sale of bonds in the fastest pace in over seven years to cover the hole betting that future returns will exceed its borrowing costs.

United Parcel Service Inc., the largest business parcel delivery, Dow Chemical Co., Northrop Grumman Corp. and PPG Industries Inc. sold at least $ 5,250,000,000 U.S. bonds business investment grade in November to fund their pensions, which is the busiest month since June 2003.

The effort of the Federal Reserve to keep interest rates low to stimulate the economy has led to the obligations of the pension companies, which are linked to bond yields to increase by 105.8 billion U.S. dollars this year to $ 1.44 trillion October, according to Milliman Inc. Now, companies are taking advantage of borrowing costs in the lowest on record as Goldman Sachs Group Inc., said that interest rates will rise as the economy recovers world.

"They are fighting fire with fire," said John Lonski, chief economist at Moody's Capital Markets Group in New York, in a telephone interview. "They are victims of low bond yields, why not go ahead and use them as compensation?

yields of investment grade corporate bonds, which is used as a reference for determining the future of corporate responsibilities to retirees, fell to 3.53 percent on Nov. 4, the lowest in the history, Bank of America Merrill Lynch index data show.

Refuse to finance

the pensions of companies in 500 of Standard & Poor's with about $ 1 trillion in assets are 77 percent funded this year, down from 82 percent in late 2009, Bank of America, Merrill Lynch said in a report dated 29 October. Few, if any, borrowers have had their credit ratings cut to the issuance of debt to finance pension obligations, said Lonski.

Yields can not move substantially higher in the coming years, he said. "They're willing to bet that future returns will exceed the actual cost of debt," he said.

Elsewhere in credit markets, the extra yield investors demand to own company rather than government bonds of similar maturity debt rose 1 basis point to 170 basis points, or 1.7 percentage points, the highest since 7 Global October according to Merrill Lynch Bank of America general corporate market index. The average yield of 3.714 percent.

The cost of insuring bonds sold by Portugal and Spain rose to records of the concern of the European Union and International Monetary Fund bailout of Ireland could not stop the fiscal crisis from spreading. Swaps credit-default in Spain rose 3.5 basis points to 303 while contracts linked to Portugal's debt increased 13 basis points to 489.

Swaps credit-default pay the buyer face value in exchange for the underlying securities or the cash equivalent of a company or country do not adhere to its debt agreements. A basis point on a contract protecting $ 10 million debt from default for five years is equivalent to $ 1.000 a year.

Bank of Ireland Bonds

Debt of the largest lenders in Ireland fell amid speculation the government will force the bondholders to share the high cost of the nation's 85 million euros (113 billion) rescue.

Allied Irish Banks 750 million euros Plc 5.625 percent notes due in 2014 fell 7 cents on the euro at 70 cents, down 9 percent, according to composite prices. Bank of Ireland 974 million euros from 4,625 percent senior unsecured notes due 2013 fell 4.3 cents on the euro, or 5 percent, to 80.5 cents.

Deutsche Bank AG, Germany's biggest lender, raised ¥ 80,000,000,000 ($ 954,000,000) of Samurai bonds as the Polish government postponed the sale of securities, citing "volatile" markets debt.

Samurai Bonds

Frankfurt-based Deutsche Bank sold ¥ 28,200,000,000 Floating Rate Notes of three years, giving 30 basis points above the London interbank offered rate three-month yen and 51.8 billion yen in five-year notes 0.95 percent to yield 30 basis points more than the yen swap rate.

Poland plans "to issue Samurai bonds in the near future when the market situation becomes more stable, allowing better pricing for our theme," wrote the deputy finance minister Dominik Radziwill in an e-mailed response to questions . borrowing costs in the nation rose to a maximum of five months in a sale of 10-year bonds last week as the debt crisis of Europe curbed demand for longer-term notes. Samurai bonds are yen-denominated bonds sold in Japan by foreign borrowers.

KKR & Co. and its partners are committed debt financing from four banks to support the acquisition of Del Monte Foods Co., maker of canned fruits and pet food, according to a statement yesterday.

Bank of America, Merrill Lynch, Barclays Capital, JPMorgan Chase & Co. and Morgan Stanley in arranging funding, joining KKR Capital Markets LLC. KKR, Vestar Capital Partners and Centerview Partners agreed to pay $ 19 per share in San Francisco Del Monte. The valuation of 5.3 billion U.S. dollars includes $ 1.3 billion debt of Del Monte.

Pension deficit

The pension deficit is 380 billion U.S. dollars the highest since at least 1994, David Bianco, chief equity strategist U.S. at Bank of America Merrill Lynch in New York, said in the report last month.

The Fed has kept its benchmark rate in a range from zero to 0.25 percent from December 2008 to stimulate the economy and reopen credit markets after the credit takes worst since the Great Depression. This month the central bank said it will buy more Treasuries to maintain low interest rates low and avoid deflation.

Goldman Forecast

Goldman Sachs team expects that the rates of Treasury bonds with longer maturities up "in the economic recovery, both in the U.S. and the world, and the normalization of the expectations of U.S. inflation ., "wrote strategists Charles Himmelberg, Alberto Gallo, Lotfi Karoui and Annie Chu in a November 19 report. The yield on the benchmark 10-year Treasury increased to 3.3 percent by late next year, the New York-based firm said.

The benchmark return of 10-year Treasury was at 2.87 percent today from 2.9 percent late last week and compared with a low this year of 2.38 percent on 07 October.

"If you really believe that rates are rising, should be the issuance of debt," said Gordon Latter, managing director of RBC Global Asset Management in Minneapolis. The latter said his company plans that customers issue bonds to help cover the pension deficit.

The difference between pension assets of the 100 largest company and its projected liabilities has improved over two months after the extension by 108 billion U.S. dollars in August to a deficit of 459.8 billion U.S. dollars, the largest deficit of at least a decade, actuarial and consulting firm based in Seattle Milliman said in a statement.

Rate of Return

Pension plans have a median of 8.1 percent expected rate of return, Milliman said. During the past 12 months, assets in the plans returned 11.4 percent, while state funding declined 21 billion U.S. dollars, "primarily due" to the lower discount rates.

Get a return of 8.1 percent is "very difficult" since the last bond yields, "said Ashish Shah, co-head of global lending at AllianceBernstein LP in New York.

"Probably would have to take a greater amount of risk that most plans get comfortable with that kind of change today," Shah said in a telephone interview.

The S & P 500 has gained 9.4 percent this year, including reinvested dividends. U.S. corporate bonds have returned 9.9 percent, and Treasury bonds have handed investors a 7.2 percent, according to data from Bank of America Merrill Lynch index.

Less flexibility

While replacing a pension liability in corporate debt may reduce volatility, the bond issue may limit the financial flexibility of the company, said Jon Waite, a director and chief actuary for SEI investment manager, which oversees more of $ 164 billion in assets in Oaks, Pennsylvania.

"It's a real balancing act for the" chief financial officer, Waite said in a telephone interview.

Companies are also using their cash reserves to fund pension obligations because they are skittish about economic growth and are unwilling to hire more workers or invest in their businesses, said Tom Meyer, head of client portfolio management at headquarters in Chicago, Legal & General Investment United States, which oversees about $ 18 billion.

"It is not surprising that contributions to the plans have been produced at a very serious and significant," Meyer said in a telephone interview. "The issuance of bonds to fund pension plans, which seems opportunistic."

Thailand's growth in manufacturing slowed in October

Thailand's growth in manufacturing slowed in October as global economic expansion will slow and the country's worst flooding in five decades affect demand.

The industrial production index rose 6.2 percent last month from a year earlier, the Office of Industrial Economics, said on its website today. That compares with 8.1 percent increase reported earlier in September.

the largest economy in Southeast Asia after Indonesia grew by 6.7 percent last quarter, the slowest pace this year, as exports declined and agriculture declined. Prime Minister Abhisit Vejjajiva, said November 24 the government "can not be complacent" about growth and has a room for stimulus measures if necessary.

"We expect the weak production" in the future due to a slowdown in export growth, Rahul Bajoria, a Singapore-based economist at Barclays Plc, said before the report. With "manageable inflation and the general risks of external growth, the Bank of Thailand, will most likely keep rates on hold."

The Bank of Thailand in October held its benchmark rate at 1.75 percent after increasing in July and August, regulators in Asia tried to stem the dollar profits and protect their economies from a slowdown in global expansion. The central bank is likely to remain unchanged borrowing costs in 2011 to counteract the lack of growth, the state planning agency, said this week.

Thai export growth slowed to 15.7 percent in October, the slowest pace in a year, a report showed last week, and the baht has appreciated more than 10 percent this year, the best performing in Asia , raising concerns that the property in Thailand can be more expensive compared to its regional rivals.

Brazilian President-elect promised Dilma Rousseff full "autonomy" for the country's central bank, as Alexandre Tombini appointed to run the institution and bring the highest inflation in 20 months back to destination.

The 46-year-old Tombini may be assisted in this task by the Finance Minister Guido Mantega, who during a press conference yesterday to announce his re-election, said it would cut spending and avoid new expenses. Tombini inauguration Jan. 1 after serving as a board member since 2005. Replaces Henrique Meirelles, 65, the longest running Brazilian central bank chief.

"The choice of Tombini Rousseff reinforces his desire that the Ministry of Finance and the central bank line," said Luciano Rostagno, chief strategist at CM Capital Markets, a Sao Paulo Stock Exchange, with headquarters and futures brokerage. "Inflation is surprisingly high and would require increased expenditure control."

Traders are increasing bets Tombini may have to raise rates at its first monetary policy meeting in January, estimates based on future interest rates, the local contract. Policy makers boosted borrowing costs this year by 200 basis points, or 2 percentage points to 10.75 percent from a record low.

"Dilma wants to reduce the noise between fiscal and monetary authorities, so this is good news," said Zeina Latif, an economist at RBS Securities Inc. in Sao Paulo.

Yields on Brazil's future, long-term rates fell yesterday after Mantega, said it would reduce government spending, reducing pressure on the bank to increase borrowing costs.

Yields on futures contracts maturing interest rate of January 2011, the most traded on the Bolsa de Valores de Sao Paulo, rose five basis points to 10.702 percent today. The real rose 0.02 percent to 1.7213 per dollar from 1.7216 yesterday.

Inflation Target

Consumer prices, measured by the benchmark IPCA-15 gauge rose 5.47 percent in the year to mid-November, the national statistics agency, said this week. The central bank targets inflation of 4.5 percent, plus or minus 2 percentage points.

Rousseff also announced yesterday that Miriam Belchior Paulo Bernardo replaced as Minister of Planning, on 1 January. Belchior currently oversees an investment plan of 293 billion to improve infrastructure.

Mantega Tombini Belchior and Brazilian monetary council will be responsible for establishing the annual inflation target and interest rate term used by the state development bank.

Meirelles said yesterday that "this is the right time to end the mission" and will remain in office until the end of President Luiz Inacio Lula da Silva on 31 December. Tombini is an "excellent choice," said Meirelles.

Tombini Rousseff, said yesterday that he said the central bank has the independence it needs to fight inflation.

"Total" Autonomy

"Dilma told me that in this regime there is no autonomy of the half, but full functional autonomy," said Tombini, which was the group that designed the system of inflation targeting in Brazil.

Responsible for the central bank are appointed and dismissed by the president of the country and are not bound by the terms. Lula appointed Meirelles to replace Arminio Fraga, even before it opened on January 1, 2003.

Meirelles gave Lula cabinet level in 2003, ensuring the head of the bank has a direct channel of communication with the president, a privilege that must be maintained, "said former Central Bank President Carlos Langoni, director of the Getulio Vargas Foundation in Rio Janeiro.

Before joining the central bank in Brasilia, Tombini, born in Porto Alegre in the southern state of Rio Grande do Sul, was the principal advisor to the executive director of Brazil in the International Monetary Fund.

Board Vote

Tombini, who has a doctorate in economics from the University of Illinois at Urbana-Champaign, must be approved by the Senate. He is one of eight people in the central bank's board will vote to establish the rate of interest at the meeting from December 07 to 08. Individual votes are not made public.

"The fact that Mantega Rousseff is to maintain a good indicator for the markets that there will be some continuity, but politics can not be exactly the same," said Claudio Loser, former Western Hemisphere director of the International Monetary Fund, which now runs Centennial Latin American research company based in Washington.

The extra yield investors demand to hold Brazilian debt rather than U.S. Treasuries has fallen to 177 basis points from 1,446 basis points on December 31, 2002, the day before Lula took office, according to JPMorgan Chase & Co. 's EMBI index.

the largest Latin American economy will expand 7.6 percent this year, the fastest pace in more than two decades, according to the median forecast in a central bank survey of about 100 economists.

Rate outlook

Merchants are responsible for the political stakes will have to resume raising interest rates early next year and boost the reference value up to 12.75 percent in late 2011, according to estimates based on future rates.

Some analysts said Mantega past support for increased spending as a possible source of tension with the new central bank chief.

"Tombini is a symbol of responsible money management," said Roberto Padovani, chief strategist at Banco WestLB do Brasil SA. "At the same time, Mantega represents an expansionary fiscal policy."

Along Tombini and Belchior in a press conference yesterday, told reporters Mantega Rousseff reduce spending, to avoid further costs and reduce the amount of capital the Treasury may transfer to the state development bank next year. Rousseff wants Brazil to grow more than 5 percent over the next four years, with no pressure on inflation, said Mantega.

"It looks like we will have more of the same with the economic team," said Jankiel Santos, chief economist at Espirito Santo Investment Bank, in a telephone interview. "The biggest challenge for Tombini will convince the Finance Minister that government spending affects the dynamics of inflation."

Putin's Hometown Challenges Moscow on First Bond Since 2005

St. Petersburg sold debt for the first time since 2005, with a yield close to Moscow, the capital city that sets the benchmark for municipal borrowing costs in Russia.

the second largest city sold 1.7 million rubles (53.6 million dollars), or 44 percent of 3 billion rubles for five-year bonds offered a yield of 7.91 percent according to a statement released by the finance committee of the city today. The municipality plans to issue up to 25 billion rubles next year to help finance spending, Eduard Batanov, the head of the finance committee of St. Petersburg, said in a telephone interview. The yield on the bonds due in Moscow in June 2015 rose 43 basis points this month to 7.65 percent today.

St. Petersburg, the hometown of President Dmitry Medvedev and Prime Minister Vladimir Putin is coming to market as the government of Russia and Belarus are more reluctant to offer bonds in rubles because of a decline in the currency. The ruble is the second worst performer among 25 emerging-market currencies tracked by reporters so far this half, appreciating 0.3 percent against the dollar compared with a gain of 5 percent for the Brazilian real.

"Historically, we have to offer higher yields, but during the years of our absence from the market of our credit quality has not deteriorated, our debt has been steady," said Batanov on 23 November.

The Finance Ministry has reduced some sales of federal government bonds, known as OFZs, and OAO Gazprombank told clients this week that he expects the government may delay its first offering of debt denominated in rubles abroad. Belarus, which had planned to become the first foreign country to sell bonds denominated in the Russian currency has postponed the sale of two-year degrees "indefinitely" yesterday.

Size Premium

Ruble weakness and falling markets in Europe and Ireland is looking for a bailout will hurt all borrowers in local currency in Russia, including St. Petersburg, which may have to offer a higher premium to Moscow, said Konstantin Kostrub, the head of fixed-income trading at ING Groep NV in Moscow.

St. Petersburg is ranked Baa2 by Moody's Investors Service, one level below the Russian state, and BBB by Fitch Ratings and Standard & Poor's, the same level as the sovereign. Moscow is Russia the same level in all three rating companies.

"Their credit quality is high enough, but you may need to offer a premium of 150 basis points for a successful placement," said Kostrub by email yesterday.

Analysts at Bank of Moscow and TKB Capital, an investment bank, say they hope that St. Petersburg will have to pay a premium for little or no control over Moscow's bonds because the smaller city has strong finances.

Moscow last debt sold on October 28, when it issued 8.6 billion rubles of municipal bonds in September 2013, with a yield of 6.65 percent. The yield was 6.7 percent today.

"The shortage of supply '

"The municipal debt offers a value play well on the OFZ, are relatively liquid," said Sergio Dergachev, who helps manage the equivalent of $ 8.5 billion of debt, including corporate bonds in Russia in the Union Privatfonds Investment in Frankfurt. "Debt Muni offers scarcity value, and regions which do not reach the markets that often."

The extra yield investors demand to hold the Russian government debt rather than U.S. Treasuries fell 2 basis points to 218 today, according to JPMorgan Chase & Co. 's EMBI index. The yield spread compares with 140 basis points for similar debt-rated 176 points for Mexico and Brazil, two steps that is rated below Baa3 by Moody's.

The yield of Russian bonds is 27 basis points below the average for emerging markets, down from a maximum of 15 months from 105 in February, according to JPMorgan indexes.

Default Swaps

The cost of protecting Russian debt against default by five years using credit-default swaps gained 3 basis points to 141.5 on Nov. 24, according to data provider CMA. Swaps credit-default pay the buyer face value in exchange for the underlying securities or the cash equivalent of a government or a company fail to adhere to its debt agreements.

Russia's credit default swaps is 15 basis points more expensive than contracts in Turkey, classified as four levels below Ba2 by Moody's. Turkey was 40 over Russia on 20 April.

The yield on the federal ruble bonds due 2016 fell 6 basis points, or 0.06 percent, to 7.37 percent. Government bonds in dollars per 2,020 won, lowering the yield on three basis points to 4.823 percent.

The ruble added 0.2 percent to 31.2 per dollar today. non-deliverable, or opinions that provide guidance to the expectations of currency movements, allowing foreign investors and companies to fix the exchange rate at a specific level in the future, show speed ruble 31.4420 per dollar in three months.

Change Capital

The city of 4.6 million people was the imperial capital of Russia after it was founded by Tsar Peter the Great in the 18th century. The Bolsheviks moved the capital to Moscow in 1918 after taking power last year.

St. Petersburg is less than 50 billion rubles of debt outstanding after the repurchase of a previous batch of bonds in the past five years, the Bank of Moscow, said in a report of 22 November. Moscow's debt amounted to 278.8 billion rubles on October 1, also including loans and bonds denominated in foreign currency, according to the committee on the public debt of the city government of Moscow.

Moscow, Russia's largest municipal lender, represented about 87 percent of bonds issued by regional governments this year.

St. Petersburg bonds can become "new blue chips" in the market, according to the Bank of Moscow. St. Petersburg has "stronger budgetary parameters" in Moscow and do not plan a substantial increase in debt, TKB Moscow-based capital, said on 22 November.

"From the standpoint of credit quality, we see a difference between St. Petersburg and Moscow and rate them on the same level," said Boris Kopeykin, S & P analyst in Moscow, in a telephone interview in November 23. "What sets St. Petersburg, Moscow also is the almost total absence of debt."

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Friday, November 26, 2010

U.S. Chase Black Friday shoppers Offers Best Buy,

European Economic Recovery Strengthens for 2nd Month,

European Stocks, U.S. Futures Drop on Debt Concern

Falling the gold in New York.

Less treasury bonds sold from May returns After Jump

Dollar Climbs to Seven-Week High

Boat European prices of gasoline fell in reducing the cost of Brent crude

Stocks, Won Decline as North Korea Warns of War

South Korea current account surplus widened to a maximum of three months in October

consumer prices in Japan fell for a 20th month in October

Ireland's Relief Proves Fleeting as `Day of Reckoning' Nears

Betting in Spain on budget cuts to stop the spread of debt

Portugal Says EU Can't Force Governments to Accept Rescue Aid

Russian companies face higher borrowing costs ruble in 9 months

Bank Stress Tests May Cover Liquidity

SPA plans to increase its holdings of real estate and asset management

Bank of Spain Calls on Country's Lenders to Disclose Real-Estate Holdings

Companies face the biggest pension deficit at least since 1994

Thailand's growth in manufacturing slowed in October

Battle for Brazil Central Bank's inflation

Putin's Hometown Challenges Moscow on First Bond Since 2005

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