Dec 18, 2010 ~ Business

Saturday, December 18, 2010

unemployment rate rose to 21 and Payrolls fell in 28 U.S. states

North Carolina led the nation with 12,500 job cuts last month, followed by Massachusetts, with 8,600 layoffs, and Ohio in 7800, the Labor Department figures showed today in Washington. Unemployment increased more in Georgia and Idaho, while workers in Nevada are facing the highest rate in the country at 14.3 percent.

Payrolls fell in 28 U.S. states and the unemployment rate rose to 21, showing most of the world's biggest economy took part in the back in November in the labor market.

The report is consistent with the December 3 figures showed that unemployment rose last month for the first time since August. The commitment of the Federal Reserve to buy an additional $ 600 billion of Treasuries in June and the $ 858,000,000,000 bill passed by Congress extending all the Bush tax cuts-was for two years, can help boost growth and reduce unemployment.

The report shows "an unequal distribution of improvement with some disappointing results," said Russell Price, an economist at Ameriprise Financial Inc. in Detroit. "We've been pretty clear evidence that demand is starting to improve and the tax program that was approved Monday night should be accelerated. That increased demand will drive forward further improvements in employment."

Main Index

Another report showed the economy is about to be harvested in 2011. The index of leading economic indicators increased 1.1 percent in November, the biggest gain in eight months, the Conference of New York, said today.

After Nevada, the unemployment rate was higher in California and Michigan by 12.4 percent, today's report from the Labor Department showed. Michigan, part of the so-called Rust Belt manufacturing, saw its unemployment rate fell 0.4 percentage points, leading to the lowest level since February 2009 as the labor force fell by 19,500 workers.

Yahoo! Inc., owns the largest U.S. Web portal, is one of the companies are still cutting payrolls. The company is cutting about 600 jobs, or about 4 percent of its workforce, part of an effort to answer almost two years. The notification process was launched on 14 December and most of the cuts will come from the product, said Kim Rubey, a spokeswoman for Sunnyvale, California, Yahoo.

Unemployment in North Dakota, the lowest in the U.S., was unchanged at 3.8 percent.

November Payrolls

December 3 Labor Department report showed payrolls rose 39,000 in November, and the unemployment rate rose to 9.8 percent, the highest since April .

State and local employment data are derived independently of national statistics, which are usually released the first Friday of each month. The state figures are subject to large sampling errors because they come from small studies, so the most reliable national figures, according to the Bureau of Labor Statistics of the Government.

Today's report showed Texas led the states with the greatest gains in payroll that employers added 19,100 workers. New Jersey was second with an increase of 10,000.

The unemployment rate held at 9.2 percent in New Jersey, rose to 8.3 percent from 8.2 percent in New York, and fell to 9 percent from 9.1 percent in Connecticut .

Unemployment in Georgia increased by 0.3 percentage points to 10.1 percent in November after having fallen in the past two months. Idaho rate climbed at the same rate to 9.4 percent, just below the nearly three-decade high of 9.5 percent reached in February.

The efforts of the Federal Reserve Will Affect on the U.S Economy

The efforts of the Federal Reserve to cut interest rates and injecting money into the financial system have affected the U.S. economy, making it more likely that recovery will be sustained, leading the Conference Board index economic indicators showed.

Nine of the 10 components of the measure designed to assess the growth prospects for the next three to six months improved in November, the biggest gain in seven years, the research group in New York reported today. For the first time since May 2009, the month before the recession ended, the spread between interest rates in the short and long term, made the largest contribution.

The drop in claims for unemployment benefits, increased consumer and business spending and rising factory orders, everything is reflected in the index shows expansion is expanding. The gains mark the end of the initial recovery phase, where improvements in the measures are more influenced by the Federal Reserve, including interest rates and money supply, flooded all the others.

"This is what the Fed wants to see," said Michelle Meyer, economist at Bank of America Merrill Lynch in New York.

Major Contributor

Today's report showed a slowing in supplier deliveries was the biggest contributor to growth in the LEI, which states that factories are having a demand for meeting time more difficult. The yield curve, reflecting the spread in interest rates and jobless claims showed the greatest improvements coming.

The yield curve has represented more than half of the gain of the LEI from the beginning of recovery, "said Ellen Zentner, senior U.S. economist Macro Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. His average contribution was 0.34 percentage points.

The money supply has added an average of 0.04 percentage points to the indicator since June 2009 though was the second largest contributor to the rate three times since April, and tied for largest in May.

Zentner subtracting the yield curve and the money supply adjusted for inflation the index of leading indicators and benchmark to December 2007, the onset of recession. On that basis, the measure rose 0.8 percent in November, the biggest since March and the second increase in eight months.

"Compared to 2007, you can show you around when help from the Fed began when we entered recovery," Zenteno said. The recent gains excluding the yield curve and the money supply suggests that "growth has resumed outside the Fed's help."

Higher gain

The leading index, with all its components, rose 1.1 percent in November, the biggest increase since March.

Fed's Open Market Committee on December 14, reiterated his pledge to leave interest rates low for a "prolonged period" and maintained a program of 600 billion U.S. dollars to buy Treasury until June. In a statement accompanying the announcement, policy makers said that while economic recovery is "continuous" is "insufficient" to reduce unemployment.

Unemployment rose to 9.8 percent in November and was 9.5 percent or more than 16 months, the longest streak since monthly records began in 1948.

The economy is picking up speed and can grow 3 percent to 3.5 percent next year, former Fed Chairman Alan Greenspan said in an interview yesterday afternoon in Washington. The pickup in growth should lead to enhanced recruitment and the increase in productivity tops out, he said.

See Greenspan

"The U.S. economy certainly has some momentum," he said. "The fourth quarter looks good. The growth rate would be 3.5 percent or more" for the last quarter of this year.

The last time the nine components of the leading index increased in a month was in October 2003 when the recovery from the recession of 2001 collected. The U.S. economy grew by 3.6 percent in 2004, the highest in four years, and the unemployment rate fell half a percent to close at 5.5 percent.

Economists this week increased its forecast for consumer spending in the fourth quarter after the government reported a larger profit to the estimated retail sales in November and revised months before the show even larger increases. The increase in estimates was on top of previous improvements to 2011 based on prospects compromise imposed by President Barack Obama and Republicans in Congress earlier this month.

The tax agreement "makes us more optimistic about growth in 2011," said economists at Credit Suisse in New York, today in a research note. The analysts, led by Neal Soss, today raised its forecast for gross domestic product next year to 3.3 percent, half a percentage point more than the previous forecast.

"The economy has more momentum as it is," he wrote. "The upgrade to our 2011 numbers come against a backdrop of continued improvement in the reading of GDP growth in 2010."

China is letting its currency appreciate ,Jon Huntsman said

China is letting its currency appreciate, as in the country "immediate concern"not only because of U.S. pressure and Europe. U.S. Ambassador in China, Jon Huntsman said.

"Inflation is on the horizon, they are trying to make the transition from export to the largest ever assembled in world history to a model based on the consumer, and to do that, you have to have a currency properly valued," Huntsman said in an interview on "Charlie Rose" show that aired yesterday on U.S. public television.

President Barack Obama is pressing his Chinese counterpart Hu Jintao to allow rapid appreciation of the currency to help reduce trade imbalances that threaten to unleash protectionism and threaten global economic recovery.

Huntsman called the finding "very slow. "

China, which has kept the yuan to rise about 2.5 percent from a two-year dollar parity was removed in June, has argued that letting its currency appreciate more quickly can cause social and economic disruption.

Huntsman also said he expects some "ideological rigidity"that leads to leadership changes in China in 2012, after which it is likely that a period of reform.

"If I were looking to the future, I would say that the years 2013 to 2015, 2016 will be very important from the standpoint of reform. "

Visa & MasterCard plunged more than 10 percent in the New York Stock Exchange yesterday and Could be Damaged

Visa Inc. and MasterCard could face permanent damage to the fastest growing part of its business after the Fed proposed rules that could reduce rates of debit card transactions by 84 percent.

"It's all negative," wrote Scott Valentin, an analyst at FBR Capital Markets in a note to clients. "This significant impact on the business model of networks."

Visa and MasterCard, the world's largest payment networks, plunged more than 10 percent in the New York Stock Exchange yesterday after the Fed suggested capping called interchange fees at 12 cents each. Currently, the networks charge merchants an average of 1 percent of the purchase price, no matter the cost, and pass that money to banks that issue cards.

The change, if approved by the Federal Reserve after a public comment period, would eliminate most of the $ 16.2 billion in revenue generated debit cards last year to U.S. lenders, including Bank of America Corp, JPMorgan Chase & Co. and Wells Fargo & Co.

"These credit card giants and banks are imposing fees that do not relate to the actual cost of processing, and distributors and dealers have no way of negotiation or even resist these increases," the U.S. Sen. Richard Durbin, Illinois Democrat who pushed for the top, said in an interview. "This new law brings the Federal Reserve in the picture and changes the dynamic."

Visa fell 29 cents to $ 66.90 at 4:15 am in the market in New York Stock Exchange, after falling 13 percent yesterday, the highest in two years. MasterCard fell $ 2.23, or 1 percent, to $ 221.26, after falling 10 percent yesterday.

More competition

The exchange rate debit last year's average was 44 cents per transaction, or 1.14 percent of the purchase price, according to a draft of the proposed rules. Fed staff said the plans should provide for the exchange of 7 cents or 12 cents, a reduction of 73 percent to 84 percent. Initial Wall Street yesterday set the cut to 90 percent.

The proposed reductions to align U.S. exchange rates more closely with other countries, including Australia and 27 European Union nations. Visa Europe Ltd., operator of the continent's largest network payments, agreed to cut rates to 0.2 percent as part of an agreement to end the EU antitrust action, the European Commission said last week. MasterCard agreed to the same rate as last year.

Network options

The Fed has not yet decided how to implement a rule that would require banks to retailers to choose between at least two separate networks for debit transactions routing change could create more competition and San Francisco MasterCard, Visa .

MasterCard said the Fed did not take into account "the full range of costs" related to debit card programs and that the rules would change the costs of traders to their customers.

"Consumers do not, banks and payment networks are the biggest losers as a result of this regulation," said Noah Hanft, general counsel of Purchase, New York, MasterCard said in a statement. "This type of price control is wrong and contrary to competition."

Visa, which derives 20 percent of its revenue from debit cards in the U.S., said the rules are created "unintended consequences" for the industry and consumers.

Actual costs

"The Federal Reserve's proposal includes artificial caps on the exchange of debit not truly reflect the value of card acceptance and do not reflect the actual costs of managing a debit network secure, reliable and efficient," said Will Valentine A spokesman for Visa said in a statement.

While Visa and MasterCard do not keep exchange rates, the caps may prompt banks to renegotiate their contracts for services, payments networks largest source of income.

The covers are based on information obtained from issuers of debit cards, networks and dealers about the costs, the Fed staff wrote in a note that the Vice President, Janet Yellen, prepared for the meeting. This approach means that the Fed is unlikely to change much when writing the final rule, Jaret Seiberg, a policy analyst with MF Global financial services in Washington, said in a research note.

"Substantive changes will require new evidence, which is unlikely given the amount of work of the Federal Reserve has invested in this project," said Seiberg.

Retailers

The Retail Industry Leaders Association, which represents companies such as Wal-Mart Stores Inc., Home Depot Inc. and Target Corp., said the Fed's proposal validates the demands of the traders that the payments market is broken.

The Fed's proposal is a step forward in efforts to bring relief to traders and consumers, "said Brian Dodge, a spokesman for Rila.

Bankers push lawmakers to change or eliminate provisions Durbin passed in July as part of reform legislation Dodd-Frank financial, according to Kenneth Clayton, senior vice president and general counsel of the policy board of the American Bankers Association .

"Congress needs to revisit the issue," said Clayton. "A delay in the performance would be welcome."

To compensate for loss of profits, banks can eliminate the rewards debit and charge cards to some customers to use them, said John McDonald, an analyst at Sanford C. Bernstein & Co., in a Dec. 15 note to clients. Deposit account rates can go up and banks could promote other products that are not covered by the legislation, such as credit cards that require consumers to pay their bills in full each month, wrote.

Cards or cash

Debit cards have become an increasingly popular substitute for cash as credit card issuers cut bills and loans slowed amid the financial crisis and recession.

the U.S. consumer spending debit cards rose 8 percent last year to $ 1,450,000,000,000, while credit purchases fell 10 percent, according to the Nilson Report, an industry newsletter. The total debit transactions increased 13 percent to $ 38.6 million, while credit fell by 4 percent to 22.36 billion.

The law allows the central bank to consider the costs of fraud made by lenders to determine the appropriate rates of exchange. Fed staff said in its note that it lacked sufficient information to make a recommendation to the Council on this issue and seek input during the public comment period, which ends Feb. 22.

Fraud

"The biggest cost for most of our institutions in the provision of these services are the costs of fraud and fraud prevention costs," said Bill Cheney, chief executive of the Credit Union National Association.

While the law exempts banks with assets less than $ 10 billion, including most community banks and credit unions, institutions remain concerned that Visa and MasterCard can ultimately lower rates of exchange for all , said Cheney.

"Establishing a cap ensures that the issuer is able to receive an exchange rate at an excessively high," Yellen said in the memorandum outlining the proposals.

high yields of loans have gone from 10 percent & exceeded junk bonds since October

The gains in the iBoxx USD index leveraged loans include a 3.14 percent yield in this quarter, according to index administrator Markit Group Ltd. That compares with an increase of 1.92 percent from quarter to date Bank of America Merrill Lynch U.S. High Yield Master II index.

high yields of loans have gone from 10 percent for the year in the U.S., and exceeded junk bonds since October, as borrowers offer higher coupons on the bank's debt to generate demand amid a fall on new collateralized loan obligations.

The loan companies are offering more coupons for deals arranged for less than the debt is being included in so-called leveraged structured products, including CLOs, according to Jonathan Blau, head of global strategy for leveraged finance at Credit Suisse Group AG in New York. The high-yield bonds, which are used less in structured products, are more volatile and tend to have wider price swings in response to the crisis as concern for sovereign debt.

"Investors are taking advantage of the credit market are now using zero or very low leverage," said Blau. "Therefore, in order to comply with the obstacle of return that investors are demanding issuers have to offer much more widely to get deals done."

The overall performance of the year to date loan rate rose from 10 percent this week, closing at 10.47 percent yesterday, according to data from Markit. The indicator is composed of about 850 loans from 700 issuers. The total return performance index is 14.13 percent so far this year.

The past performance of loans between 1997 and 2007 have been about 5 percent, according to Otis Casey, a credit analyst at Markit in New York. High performance, high-risk debt is rated below Baa3 by Moody's Investors Service and BBB-by Standard & Poor's.

'Good Returns'

About a third of all loans have been refinanced since the beginning of 2009, according to data provided by Credit Suisse, which have an average new all-in coupon of 5.7 percent, 230 basis points above the all average coupon of the largest loans.

"We have a situation that is much easier in terms of generating a good return to investors without a lot of leverage," said Blau. "What has happened since Lehman and the crisis is that the money has flown into the loan market."

About $ 3.5 billion of CLOs backed widely syndicated loans have been issued this year from 02 December. About 91.1 billion U.S. dollars of ECO were organized in 2007 at the top of the market, according to Morgan Stanley.

CLOs are a type of collateralized debt obligation that the high-performance, high-risk loans and slice them into securities of varying risk and return.

Declining Market

A new edition busy schedule has not affected prices of loans this year because supply has not been able to keep the lending market continue to shrink. So far this year about $ 345 million in U.S. leveraged loans have been organized over $ 157 million in the same period last year.

The nominal volume of the Standard & Poor's / LSTA Loan Index fell to 504.8 billion U.S. dollars in November this year of 525.3 billion U.S. dollars in January, according to a report by the New York-based CreditSights Inc.

"The volume of new issuance has not put a damper on things, because ultimately, the flow of payments and has outstripped supply," said George K. Goudelias, senior portfolio manager at Seix Investment Advisors LLC, which has $ 11.5 billion in assets under management of leverage. "We expect supply and demand will be more balanced."

The rate increase

Leveraged loans are also about to get a boost as investors anticipate an increase in interest rates, according to a report by December 13 at Pacific Investment Management Co. earned Loans "well before" the last period of rising interest rates from 2004, the portfolio manager of Eve Tournier and the product of Michael Brownell, wrote in the report.

Investors are speculating that the London interbank offered three months, which banks charge to lend to one another, will rise more than 1 percent in mid-March 2012 from 0.30 percent today.

When the central bank tightened monetary policy for short-term rates tend to increase, helping to loans, which are variable rate products, said Blau.

"An increase in the front of the curve to help the loans," he said. "Everything that the negative effects produced due to a tightening of credit is overwhelmed because the rates are rising and you have more coupon."

rising Coporate bonds and growing total confidence in economic recovery.

Occidental Petroleum Corp. and Bank of America Corp. took $ 15,500,000,000 of corporate bond sales in the U.S. this week, pushing the monthly release in late December 2009 amid growing total confidence in economic recovery.

Occidental Petroleum, the largest producer of oil in the ground in the continental U.S., sold $ 2,600,000,000 of notes in the largest offering in over five weeks. Charlotte, North Carolina-based Bank of America issued $ 1.5 billion of fixed rate debt in its first such sale since August.

corporate bond issuance has risen to 62.6 billion U.S. dollars this month, surpassing the 58.1 billion U.S. dollars sold throughout December 2009, as yields on the contract, the company's debt investment grade tighter since May-junk bond spreads to levels last seen more than three years ago. Investors are betting the recovery of U.S. economy will accelerate even if the European countries struggle to manage their debts, said James Barnes, a money manager at National Penn Investors Trust Co.

"What is winning at the moment is the possibility that it is the economic expansion we've all been waiting for," said Barnes, who helps oversee $ 1 billion in fixed income assets in Wyomissing, Pennsylvania. "The market saw what was happening abroad and pushed him aside."

The extra yield investors demand to own high yield, high risk, or junk, bonds were unchanged at 554 basis points this week, after trading as low as 540, the narrowest since November 16, 2007, according to Bank of America Merrill Lynch High Yield Master II index. absolute returns of debt fell 2 basis points to 7.91 percent, the index data show.

Greece Reviews

The high-yield bonds are rated below Baa3 by Moody's Investors Service and below BBB-by Standard & Poor's. A basis point is 0.01 percentage point.

Moody's downgraded the credit rating five levels to Baa1 Ireland and Greece yesterday placed bonds Ba1 ratings on review for possible downgrade. Spain sold 2.4 million euros (3.2 billion) in bonds, unless your ultimate goal, as funding costs rose after Moody's said it was considering the possibility of reducing the country's Aa1 rating .

Spreads on corporate bonds with investment grade fell 2 basis points to 169 basis points, according to Bank of America Merrill Lynch U.S. Corporate Master Index. The bond yields 4.12 percent, 3 basis points lower than last week, the index data show.

Slow pace

This week's sales have dropped from an average of 2010 of $ 22.5 million last week to 30.3 billion U.S. dollars.

"With yields rising Treasury bond, which could have put people off a bit, because all the yields are not as attractive as it used to be earlier this year," said Mirko Mikelic, a money manager high level who helps oversee 14 billion U.S. dollars of fixed income assets at Fifth Third Asset Management in Grand Rapids, Michigan. "Everybody expected to increase yields, but that has happened so quickly now."

Treasury notes and 10 years, the market barometer, rose at a rate of 3.56 percent until December 16, the highest since May, after the Federal Reserve said that economic recovery continues and keeps its $ 600 billion purchase of the debt. That is 99 basis points more than the yield of 3 November, the day the Fed announced its plan, and 6 basis points less than a year ago.

speculative-grade borrowers Swift Transportation Co. for Syniverse Holdings Inc. sold 4.18 billion U.S. dollars of high-yield debt this week.

Western oil sales

Occidental Petroleum, based in Los Angeles, sold $ 600 million three-year bonds yield 50 basis points more than similar Treasury bonds to maturity, $ 700 million five-year debt with a spread 60 basis points and $ $ 1.3 million 10-year bonds at 80 basis points above the benchmark December 13. It was the largest sale since Coca-Cola Co. $ 4,500,000,000 of securities issued on 4 November.

Bank of America, the largest U.S. lender, issued bonds to 10 years in its first offer for sale of $ 1.5 billion five-year debt on August 17, before facing the demands of investors in mortgage to repurchase almost $ 13 billion in loans that have not been able to document key data such as values and household income.

The borrowers are rushing to issue debt to take advantage of low income before interest rates rise further, said Chad Morganlander, a Florham Park, New Jersey, a fund manager based Stifel, Nicolaus & Co., which has $ 90 billion in assets.

"We're still in the world of cheap money," said Morganlander. "Measuring Treasury yields 2.5 percent to 3.5 percent, is to encourage corporate decision makers to accelerate their release after the New Year."

Canadian dollar fell for a second week against the dollar

Canadian dollar fell for a second week against the dollar as investors turned to the perceived safety of government debt in the U.S. Europe's concern for the sovereign debt crisis deepens.

The currency, dubbed the loonie for the bird's image in the C $ 1 coin, retired a month of high risk appetite of investors declined and stocks of crude and compare progress. The attractiveness of U.S. assets was also polished U.S. Treasury yields rose to their highest in seven months. Details next week may show gains slowed in the Canadian consumer price and retail sales.

"The heritage and the positive history of commodities was making earlier in the week, but in the second half of the problems in Europe and risk aversion overwhelmed," said George Davis, chief technical analyst of fixed income and of currency strategy at Royal Bank of Canada Dominion Securities RBC in Toronto. "Europe has created a tone of an offer to the U.S. dollar and Canadian dollar."

The Canadian currency weakened 0.5 percent to C $ 1.0140 per U.S. dollar yesterday in New York, from $ 1.0091 on 10 December. It touched C $ 1.0001 on 15 December, the strongest since the last time you traded in a one-on-one with the dollar on 11 November. One Canadian dollar buys 98.62 U.S. cents.

Canadian government bonds rose, pushing the benchmark 10 - year bond yield down 12 basis points to 3.19 percent from 3.30 percent on 10 December. A basis point is 0.01 percentage point. The yield touched 3.37 percent on Dec. 14, the highest since June 21. The price of the 3.5 percent security due June 2020 gained 95 cents to C $ 102.55.

Two weeks off

The Canadian dollar depreciated to a two-week low yesterday, C $ 1.0147, as an agreement by EU leaders at a two-day summit in Brussels did not allay the concern of the debt crisis will extend from Greece and Spain to other nations in the region.

Moody's Investors Service downgraded the credit rating to Baa1 Ireland Aa2 yesterday after the government was forced to seek outside help last month, staggered by losses in the country's banking system. The new rating, three levels above non-investment grade, is the same that led countries including Russia and Lithuania.

The EU leaders agreed to amend the treaties of the block to create a permanent mechanism for crisis management in 2013. Divisions erupted on measures to prevent debt crises from involving Portugal and Spain.

"It's good to have a mechanism, but instead is in 2013 so there is much to be discounted in the market," said CJ Gavsie, director general for foreign exchange trading in Toronto at BMO Bank of Montreal, Capital Markets.

For now, Germany ruled the filling of the present 750 billion euros ($ 1 billion) of emergency funds or aid by land to Portugal or Spain, which reinforces the skepticism in the markets.

U.S. Yields Surge

The dollar rose against most major counterparts this week as benchmark Treasury yields rose to 10 years, touching 3.56 percent on 16 December, the highest since May 13. The stock prices of U.S. government decreased as the Federal Reserve said on December 14 the U.S. economic recovery is permanent, and Congress passed an 858 billion U.S. dollars to extend the Bush tax cuts-was for two years. Barack Obama President signed the bill into law yesterday.

Crude oil, the main export product of Canada, cut a breakthrough. January futures fell as low as $ 87.01 a barrel yesterday in New York after rising to $ 90.76 a barrel on 7 December, the highest since October 2008. The Standard & Poor's / Toronto Stock Exchange Composite Index fell 0.3 percent during the past five days, the first loss in three weeks.

Profit for the year

The Canadian dollar gained 4.4 percent last year to an extent of 10 currencies of developed countries "The U.S. dollar fell 1.8 percent."

Bank of Canada Governor Mark Carney may want to consider selling Canadian dollars as an option for moderate gains in the currency driven by purchases of other central banks, Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, wrote in a report yesterday.

The strength of the Canadian dollar undermines the ability of Carney to raise interest rates to curb rising levels of household debt, Shenfeld said in the report. Further gains in the currency may slow growth, he said.

"It is a weapon has not yet been touched: fighting fire with fire," wrote Shenfeld. "Canada could coincide with the central bank's foreign intervention in favor of our intervention currency compensation, the sale of an equivalent volume of crazy."

Consumer prices rose last month at an annual rate of 2.2 percent compared with a rate of 2.4 percent in October.

Retail sales rose 0.5 percent in October after increasing 0.6 percent the previous month. Sales have declined since May. The national statistics agency data are presented on 21 December.

The dollar hit its highest in nearly three months against the yen this week

The dollar hit its highest in nearly three months against the yen this week as Treasury yields attracted buyers and Barack Obama President signed into law a bill of 858 billion U.S. dollars tax cut. The euro fell to a two-week low against the dollar on concern an agreement reached at the EU summit this week will not contain the region's problems of debt. Two reports next week are forecast to show U.S. sales new and existing homes picked up in November.

The dollar rose for a second straight week against the euro and Treasury yields reached a maximum of seven months in stronger than expected economic data and concerns about Europe's crisis extends debt-driven demand U.S. currency.

"The positive cycle is beginning to accelerate U.S. and good for the U.S. dollar," said Andrew Busch, global currency strategist at Bank of Montreal in Chicago. "Besides, we have bad news for Ireland and Greece. Things are positive for the dollar there."

The dollar rose 0.3 percent to $ 1.3188 per euro from $ 1.3226 on December 10 and touched $ 1.3133, the strongest since December 2 The dollar rose to 83.98 yen to 83.95 weeks ago and came to 84.51 yen, the highest since Sept. 24. The euro was 0.3 percent percent, at 110.77 yen, from 111.04 yen.

The dollar index, which tracks the greenback against the currencies of six major U.S. trading partners, including the euro, yen and sterling, rose 0.4 percent to 80,362, from 80,070 in October December. The euro has gained 1.6 percent against the dollar this month and the yen has fallen 0.4 percent.

Economic Indicators

Bond yields hit record highs week as reports signaling strong U.S. demand economic growth dampened by the perceived safety of debt. U.S. retail sales, producer prices and industrial production rose more than expected in November. Philadelphia region increased production this month at the fastest pace since April 2005.

Yields of 10-year Treasury reached 3.56 percent on 16 December, the highest since May 1913. U.S. Yields of 30-year bonds reached 4.6 percent, the highest since April 30.

"The dollar has strengthened since exceeded the bond market," said Yu-Dee Chang, who oversees $ 160 million in assets as chief executive of ACE Investment Strategists LLC in McLean, Virginia. "The country's highest interest rates tends to have a stronger currency."

EU leaders met 16 to 17 December in Brussels, where the treaty was agreed to modify the block to create a permanent mechanism for crisis management to enter into force in 2013, while the leaders struggled to bridge the divisions on the immediate measures to stabilize the bond market.

Germany's role

Germany, the largest European contributor to the purchase of Greece and Ireland, pushed through a proposal that would allow financial assistance "if necessary" to prop up the euro and can force bondholders to bear some costs future bailouts.

German Chancellor Angela Merkel has ruled out putting more money on the table, the reorganization after the Greek European rescue FSF so that you can buy government bonds with problems, or more intertwined European economies through the sale of joint bond.

"We're a little disappointed by their inability to address the comprehensive solution to the crisis of sovereign debt is clearly needed," said Steven Englander, chief currency strategist Group of 10 Citigroup Inc. in New York, Tom Keene. "The market is afraid of a financial breakdown of the euro area."

Moody's Steps

Moody's Investors Service yesterday downgraded the credit Ireland for five levels to Baa1 after the government was forced to seek outside help last month, staggered by losses in the banking system. The company places ratings of 16 December Ba1 foreign and local currency ratings of Greece's debt on review for possible downgrade.

sovereign debt crisis of Europe was held in late 2009 after a new government in Greece said that the budget deficit was twice the previous administration disclosed. nations of the region put together a rescue fund in May, Greece and Ireland have benefited.

The euro has fallen 9.7 percent this year, a measure of the currencies of 10 developed countries. The yen has gained 10.9 percent, while the dollar has fallen by 1 percent.

The dollar fell against most of its counterparts after the Fed said after its meeting on December 14 will maintain its asset purchase program in an effort to boost the U.S. economy.

Reference Rate

The Fed left its benchmark interest rate unchanged at zero to 0.25 percent, where it has been since December 2008.

The pound was the worst performance against all their older colleagues. The pound weakened 1.7 percent to $ 1.5533 and lost 1.4 percent to 84.91 pence per euro.

Lloyds Banking Group Plc, a British bank that is 41 percent owned by the government, said yesterday it expects to report a further impairment charge of 4.3 billion pounds (6.7 billion) due to the Irish loan losses.

The Swiss franc rose against all of its partners. It added 1.3 percent to 0.9686 against the dollar and touched 0.9559 yesterday, the strongest since Nov. 5. Which rose 1.5 percent to 1.2785 per euro and hit a record 1.2721 yesterday.

The Bank of Japan will meet December 21 to set its benchmark interest rate.

Existing home sales in the U.S. increased at an annual rate of 4.75 million in November, the National Association of Realtors will report on December 22. An independent study indicates the Commerce Department reported December 23 November sales of new homes rose at an annual rate of 300,000 from a 283,000 rate in October.

Corn rose to a maximum of five weeks

Corn rose to a maximum of five weeks after a private forecaster lowered his estimate for next year's planting in the U.S., the largest producer and exporter. Soybeans also advanced.

Informa Economics Inc. said corn farmers to plant 90.755 million acres, less than a November forecast of 93.055 million. Soybean planting is 77.565 million, compared to a record $ 77.714 million this year, the Memphis-based researcher said today in a report. Reports said that farmers can plant more acres of cotton in five years, after prices rose to a record.

"We are in a battle for acres and wants to build trade at a premium" to encourage more planting, said Mike Zuzolo, president of Global Commodity Google Analytics & Consulting in Lafayette, Indiana. "This is an issue not be resolved until the planting season, starting in Texas in February, Zuzolo said.

Corn futures for March delivery rose 9 cents, or 1.5 percent, to settle at $ 5.965 a bushel at 1:15 pm at the Chicago Board of Trade, capping a 3.9 percent gain for the week was moving towards the room. Earlier, the price reached $ 5.99, the highest since November 09.

Soybean futures for March delivery rose 10 cents, or 0.8 percent, to $ 13.105 a bushel in Chicago, 2.9 percent in the week.

South American crops

The price also increased speculation that bad weather can damage crops in Brazil and Argentina, the largest exporter after the U.S.

crop stress of hot, dry weather throughout Argentina will increase within two weeks from December 19, according to a report by the World Meteorological Inc. Southern Brazil will be drier and warmer, private forecaster said. Corn prices have risen 44 percent this year, and soybeans rose 25 percent.

"The market is worried about crop stress is already starting to reduce production in South America," said Mark Schultz, principal analyst at Northstar Commodity Investment Co. in Minneapolis. "The rains have been erratic this year, and crops are deteriorating."

Corn gained after the U.S. Congress yesterday approved a plan of 858 billion U.S. dollars of tax cuts that includes incentives to help buoy demand for fuel made from crops, said Schultz.

U.S. exit ethanol hit a record 939,000 barrels per day in the week ended December 3, Energy Department data show.

"The demand for ethanol will increase next year," said Schultz.

Corn is the largest U.S. crop, valued at 48.6 billion U.S. dollars in 2009, followed by soybeans at 31.8 billion U.S. dollars, government data.

Sugar rose the most in four weeks while Sugar production in south-central Brazil falling 18%

Sugar rose the most in four weeks, including reduced production in Brazil, the world's largest producer, may be a sign of a record harvest is coming to an end. Cotton rose the most allowed by U.S. ICE

Sugar production in south-central Brazil fell 18 percent in the second half of November last year, Unica, an industry group said on 14 December. The harvest is usually completed in December, the U.S. agricultural attaché in Sao Paulo.

"Unica's figures show that we are near the end of the harvest, which can be a very good support for London and New York futures," said Fabienne Pointier, an analyst at Lausanne, Switzerland-based research firm Kingsman SA.

Raw sugar for March delivery rose 1.5 cents, or 4.8 percent, to close at 32.5 cents per pound at 2 pm in the U.S. ICE New York, the biggest gain since Nov. 18. This week, the price rose 12 percent, the most since early October.

Earlier, the product reached 32.97 cents, the highest since Nov. 11. The price has gained 21 percent this year.

In London, refined sugar futures for March delivery rose $ 23.40, or 3 percent, to $ 790.70 a ton on the New York Stock Exchange LIFFE.

Cotton futures for March delivery rose the exchange limit of 4 cents, or 2.7 percent, to $ 1.5012 in New York, the highest since Nov. 10 when the fiber reached a record 1 $ 5195. The price, by 9.6 percent this week, has almost doubled this year amid an overall deficit.

Cotton tides

Production in Shandong Province of China, the second largest producer, plunged 22 percent this year from 2009, after natural disasters hurt crops in the central region of Agriculture Information, said today.

"The market is still to ration supplies," said Mike Stevens, an independent operator in Mandeville, Louisiana.

China is the largest producer. U.S. is the leading exporter.

Cocoa futures for March delivery fell $ 52, or 1.7 percent, to $ 2.951 per ton in New York. The price has fallen 10 percent this year.

London cocoa futures for March delivery dropped 23 pounds, or 1.1 percent, to 1.983 pounds ($ 3.077) per tonne.

Inventories with a valid class certificate in European warehouses controlled by NYSE Liffe increased 21 percent over the past two weeks.

The orange juice futures for March delivery rose 0.4 percent, or 0.3 to 1.574 dollars per pound. The price has advanced 22 percent this year.

Irish government bonds fell While the gold rising for the third time this week

Irish government bonds fell after Moody's Investors Service downgraded the credit rating of Ireland. The agency said this week that could reduce Spain. Gold has risen 26 percent this year, an item for tenth consecutive annual increase, in the midst of the crisis in Europe and the increasing debt that the Federal Reserve buying government bonds.

Gold rose for the third time this week as concern that the fiscal crisis deepened in Europe boosted demand for the metal as a haven.

"The Fed has kept the door open for further purchases of bonds and the debt crisis in the euro area is heating up again," said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. "That's going to take a good apartment in gold prices."

Gold futures for February delivery rose $ 8.20, or 0.6 percent, to settle at $ 1,379.20 an ounce at 14:22 on the Comex in New York. The metal touched a record $ 1432.50 on 7 December.

The Federal Reserve held this week a plan to buy back $ 600 billion in bonds to boost the economy. benchmark interest rate the U.S. has been the record level of zero to 0.25 percent for two years.

Through yesterday, the gold assets in exchange-traded products have risen 17 percent this year to 2,097.83 metric tons. Holdings reached a record 2,104.65 tonnes on 14 October.

'Strong' demand

"We expect gold and silver will continue to back out strongly in an environment where central banks keep interest rates low and investment demand remains strong," said analysts at Deutsche Bank AG in a report released today.

Gold prices are still up 0.4 this week, the second consecutive weekly loss.

Silver futures for March delivery rose 35.1 cents, or 1.2 percent, to $ 29,133 an ounce on the Comex, down 1.8 percent in the week. The metal has gained 73 percent this year.

Palladium futures for March delivery fell $ 3.95, or 0.5 percent, to $ 738.60 an ounce on the New York Mercantile Exchange. The price is 0.8 percent this week.

Platinum futures for January delivery fell 10 cents to $ 1698.50 an ounce. The price is 1.4 percent this week.

Palladium has risen 81 percent this year, and platinum rose 15 percent.

Oil gained 0.4 percent on U.S. report & Crude oil Rose on U.S rate

Oil gained 0.4 percent on U.S. report and showed that German business confidence unexpectedly rose to a record in December. Fuel consumption U.S. rose 6.5 percent in November from a year earlier, according to a report released today by the American Petroleum Institute.

Crude oil rose on U.S. rate leading economic indicators rose in November by the most in eight months, a sign that the recovery will strengthen next year and increase demand for fuel.

"Right now, the oil market is taking its cues from the expectations of global and national economic growth," said Jason Schenker, president of Prestige Economics LLC, an energy consultancy in Austin, Texas. "A large number of leading economic indicators provides additional support to bullish growth prospects."

Crude for January delivery rose 32 cents to settle at $ 88.02 a barrel on the New York Mercantile Exchange. Futures climbed 0.3 percent this week and 11 percent this year.

U.S. index leading economic indicators, an indicator of the headquarters in New York The Conference Board, the prospects for the next three to six months, rose 1.1 percent to the highest level since March. U.S. is the largest country in the world of oil it consumes.

Other signs of growth, the Ifo institute, based in Munich, said its business climate index, based on a survey of 7,000 executives, rose to 109.9 from 109.3 in November. That's the highest level since records of the reunified Germany began in 1991. Economists forecast a drop to 109, the median of 36 forecasts in a survey.

U.S. Fuel demand

Total deliveries of petroleum products, a measure of demand, rose to 20 million barrels a day last month from 18.8 million in November 2009, according to the API. Consumption during the first 11 months of 2010 rose 2.4 percent to 19.2 million barrels a day.

"The upturn in demand is a very good sign about the economic recovery," said John Felmy, chief economist at the Washington-based API, in a telephone interview. "There has been a steady rise in demand for industrial fuels this year."

Total products supplied, a measure of U.S. demand for fuel, rose 1 percent to 20.2 million barrels last week, the highest level since January 2009, according to a report from the Department Energy 15 December.

Brent crude for February settlement gained 7 cents to $ 91.67 a barrel on the ICE Futures Europe exchange in London.

Dollar strengthens

"People are saying the economy is improving, and if that's the point, which should lead to more high demand for oil, or trade the U.S. dollar more than the people more confidence" said Jonathan Barratt, managing director of brokerage services for commodities in Sydney.

The dollar gained 0.5 percent to $ 1.3173 per euro at 3:05 pm in New York from $ 1.3244 yesterday after Ireland's credit rating five levels was reduced today by Moody's Investors Service. The currency has advanced 3.7 percent in the last four weeks.

Moody's downgraded to Baa1 from Aa2 Ireland, three levels above non-investment grade, and said further downgrades are possible.

The Thomson Reuters / Jefferies CRB Index of 19 commodities advanced today with a 26-month, led by sugar and coffee. He earned as much as 1.2 percent, to 321.04, the highest intraday level since October 6, 2008. Was 1 percent to 320.62 at 3:05 pm in New York. All commodities in the rate of increase.

Trading range

Oil futures have traded in a range of less than $ 3 a barrel in December and changed direction every day from 09 December.

"It's all about cash flow, and we'll be following the dollar and equities," said Kyle Cooper, director of research at IAF Advisors in Houston. "Just the same sort of market to go sideways. No one wants to go above $ 90 or under $ 85."

Oil may reduce next week on speculation U.S. Department of Energy will report an increase in supplies after the biggest decline in more than eight years in the data this week.

Eighteen of 34 analysts and traders, or 53 percent, crude fall forecast by 23 December. Nine of the respondents, or 26 percent, predicted that prices would rise and seven estimates there will be little change.

U.S. Crude inventories fell 9.85 million barrels in the week ended Dec. 10 to 346 million, according to the Department of Energy. Supplies are 7.2 percent above the average of five years, according to government report on 15 December.

"The physical market is tightening a bit with the cooler temperatures," said Tobias Mera, product manager at Credit Suisse Group in Zurich. "But looking further ahead, inventories remain high, so I do not know much more upside there. The prices will remain around $ 90."

volume of oil in electronic commerce on the Nymex was 540,208 contracts in New York 15:05. Volume was 657,203 contracts yesterday, 3.5 percent below the average of the last three months. Open interest was 1.37 million contracts.

Copper heading for the third consecutive weekly gain

Copper heading for the third consecutive weekly gain as European Union leaders agreed on a plan to contain future crises of debt and economic reports in the U.S. and Germany strengthen the prospects for demand for the metal.
EU leaders agreed to amend the treaties of the block to create a permanent mechanism for crisis management in 2013. U.S. index leading economic indicators rose in November by the most in eight months, a sign of recovery will strengthen next year. German business confidence gained to a record in December as we told yesterday here.

"People are more optimistic than two months ago, " said Michael K. Smith, president of T & K Futures and Options in Port St. Lucie, Florida. "The U.S. will continue to grow worldwide."

Copper futures for March delivery added 2.7 cents, or 0.7 percent, to $ 4.143 a pound at 10:58 am on the Comex in New York. Before today, the metal gained 43 percent since 1 July, as global inventories declined.

"We are still looking for more, " said Kevin Tuohy, a metals trader at MF Global UK Ltd. in London. "Copper will be driving the other metals."

On the London Metal Exchange, copper for delivery in three months rose $ 74.50, or 0.8 percent, to $ 9,065.50 per metric ton (4.11 dollars per pound). Prices reached a record U.S. $ 9267.50 on 14 December.

Tin, lead, aluminum and zinc also gained on the LME. Nickel was unchanged.

Rising U.S. stock options to second highest level

Trading in U.S. stock options jumped to second highest level in nearly four decades of history yesterday, driven by investors with contracts for the capture of the dividends paid by the biggest funds traded.

Volume jumped to 30.7 million contracts on stocks, indices and ETFs, according to Chicago-based Options Clearing Corp., which clears and settles all trades in contracts traded. The S & P 500 SPDR Trust ETF, which follows the reference measure of U.S. stocks, represented about one-third of that volume. The record of 30.8 million set on May 6, when the U.S. moves lost $ 862 billion in value in less than 20 minutes.

Traders who bought options to receive the quarterly dividend ETFs led operations yesterday, said Henry Schwartz, president of Trade Alert LLC, a provider based in New York options market analysis. The S & P 500 ETF and others began trading today without the right to receive a dividend.

"The trading activity of dividends is how professionals in the cash crop that is at stake," said Schwartz. The owners of the call-money-are entitled to receive the underlying value of the contract seller, who must deliver the shares at the exercise price. Call the owners will exercise the options before the ex-dividend date for the dividend, and most do, he said.

Active Contracts

Yesterday alone most active contract was called December, the Financial Select Sector SPDR Fund $ 15, which traded 1.89 million times, a 15-fold increase over the four-week average for all calls of the Foundation. Monitor banks and agents ETF closed at $ 15.53 today.

The SPDR S & P 500, which is the fund's largest and most market-traded, will pay 65 cents per share on January 31 people who bought shares before today. The fund up 91.7 billion U.S. dollars of all 500 companies in the benchmark U.S. equity principal.

The majority of 8.38 million yesterday SPDR S & P 500 trades call focused on December 10 contracts, with exercise prices between 110 and 124, Schwartz wrote in a note to clients today. Open interest, or the number of existing contracts, of these options was reduced by 937,000, showing that about 94 percent of owners to exercise their call options, Schwartz wrote. The 55,000 contracts not exercised, adjusted to the values words, indicate traders dividends made nearly $ 2.6 million in revenue, he said.

Options began trading in the U.S. in the exchange when the Chicago Board Options Exchange began on April 26, 1973. There were 1.1 million contracts traded in that year. First volume exceeded 100 million contracts in 1981. Trade reached one billion in 2004 and $ 2 million in 2006.

Philadelphia volume

More than half of yesterday's volume in the nine U.S. options markets was held in Philadelphia Nasdaq OMX PHLX, the data show OCC. The Chicago Board Options Exchange was second with 14 percent, followed by the International Stock Exchange with 12 percent and the exchange of Euronext NYSE Arca in 11 percent.

"This trading strategy is made possible through the incentive fee is only available to a select group of market participants and not otherwise be economically viable," said Boris Ilyevsky, a CEO of ISE, a unit with Frankfurt-based Deutsche Boerse AG said in an e-mail. dividend trades accounted for more than 46 percent of the volume of yesterday, he said.

Nasdaq spokeswoman Silvia Davi did not immediately return a call seeking comment.

Operators using the dividend capture options often lead to the PHLX volume because its creator, the Nasdaq OMX Group Inc., is one of the places that cover the fees of the companies by making more profitable trades for initiating transactions.

Unclaimed Dividends

Unclaimed dividends are allocated to traders who sold stock options not exercised. The amount you receive depends on the number of contracts that are short and the percentage of total number of open contracts which are not exercised before the ex date. If 95 percent of the money options are exercised, the dividends for the remaining 5 percent would be distributed to the sellers of unexercised options.

At the same time buying and selling the same number of options back to the last possible day, a trader can increase the rate of allocation of calls of unclaimed dividends to 99.9 percent and receive more of the dividends claimed, "said Schwartz.

The strategy "takes advantage of how the allocation process works," said Schwartz. "And the merchants can earn dividends that otherwise would have been assigned to a rate of 95 percent."

ISE trades called dividend capture "objectionable" in a March report and said it is not compatible with the practice because it benefits the institutional investors at the expense of people.

"This strategy not only distort the market share with millions of contracts, but also takes advantage of the fact that individual options traders - that may sophistication lack of resources - can not exercise their depth in the money options purchase to pick up a corporate dividend payments, "said ISE.

Falling the UK Stocks & The FTSE 100 index

UK stocks fell for a third day led by a decline in banks as an agreement between the leaders of Europe to create a mechanism for crisis management to alleviate the concern that some euro zone nations will no longer pay their debts & The FTSE 100 index fell 0.2 percent to 5,871.75 at the close at 4:30 pm in London early this week cut to 1 percent. The index has risen for three consecutive weeks as China refrained from raising interest rates and economic data bolstered confidence in the U.S. recovery. The FTSE All-Share Index little changed, while the Irish ISEQ Index fell 0.5 percent.
Lloyds Banking Group lost 3.6 percent after saying it expects to report an increased impairment charges due to the Irish loan losses. AstraZeneca Plc slid more than two years after the second largest pharmaceutical company in Britain could not get U.S. approval a blood-thinning medicine. Autonomy Corp. gained 5.3 percent after rumors of purchase and a better than expected earnings in the prognosis of Oracle Corp.

"We are reaching the stage now that the fears of the euro zone debt could have a belt on potential gains to be made next year," said Joshua Raymond, market strategist at City Index in London. "Being a witch days triples, where options and futures contracts expire, and little more than a week after Christmas Day, it seems that traders are in the process to wrap things waiting to leave of absence from the market. "

EU Agreement :

Union leaders agreed to amend the treaties of the block to create a permanent mechanism of the debt crisis in 2013, as it struggled to overcome divisions on immediate measures to stabilize the bond market. The mechanism does not solve the current crisis of sovereign debt, economists say as Carsten Brzeski at ING Group NV in Brussels.

Lloyds fell 3.6 percent to 66.5 pence after saying it expects to report a further impairment charge of 4.3 billion pounds (6.7 billion) due to the Irish loan losses. About 10 percent of its 26.7 billion pounds of loans in the Republic is likely to be classified as impaired before the year end, Lloyds said.

Royal Bank of Scotland Group Plc, which currently sells around 3.9 million pounds of project finance assets of Bank of Tokyo-Mitsubishi UFJ Ltd., dropped 5.7 percent to 37.82 pence. Barclays fell 1.4 percent to 259.75 pence.

Financial Stability

The Bank of England said the UK financial stability remains vulnerable to the crisis in Europe of sovereign debt, even after banks were rebuilt and improved the system's resistance.

UK institutions also face risks from a surge in bond yields, rising interest rates, and overheating in emerging markets, the central bank said in its Financial Stability Report published today.

Bank of Ireland Plc fell 14 percent to 31.85 euro cents and Allied Irish Banks Plc lost 1.1 percent to 45 cents.

Moody's Investors Service today downgraded Ireland Baa1 from Aa2 credit, said banks may need to use 10 billion euros (13.3 billion) from a contingency fund of 25 million euros of capital as part of an international rescue plan.

AstraZeneca fell 6.7 percent to 2941 pence, the biggest drop since November 2008, after the drug maker failed to win U.S. approval for Brilinta, rival Plavix, the world's second best selling drug.

The Food and Drug Administration requested additional analysis of a study called Plato Brilinta compared with Plavix in patients with severe chest pain or heart attack before.

Autonomy advances

Autonomy, the second largest software company in the UK, rose 5.3 percent to 1,543 pence. The Daily Mail reported yesterday that the software maker may be the subject of a bidding war between Microsoft Corp. and Oracle in January. The newspaper did not cite anyone.

Autonomy is winning "on the press speculation that it may be a target of the offer from Microsoft or Oracle," said Ben Critchley, a sales trader at IG Index in London.

Moreover, Oracle, the software manufacturer in the world's second largest, and Research In Motion Ltd., maker of the BlackBerry smartphone, profit forecast that topped analysts' forecasts.

Panmure Gordon & Co. raised its estimate of the price of the shares of Autonomy of 1726 pence and reiterated its buy recommendation, saying Oracle's earnings forecast, RIM and Accenture Plc point to a "strengthening of the IT market B2B companies .

Punch Taverns Plc rose 12 percent to 74.45 pence. The British operator of more than 6,700 pubs said that is likely to meet its forecast for the year after its sales rose-management division pubs.

ITE Group Plc, the international organizing events based in London, rallied 12 percent to 244.1 pence after saying it bought International Exhibition Company ZAO by 33 million euros.

Rising The asian stocks & The MSCI Asia Pacific index

Asian stocks rose for a second week of this month as steelmakers led gains after China refrained from raising interest rates and U.S. data improved in addition to The MSCI Asia Pacific index rose 0.4 percent to 133.59 this week. The indicator closed up three days of this week and rose to peak on 13 December, after China abstained from raising interest rates to cool inflation, U.S. reports on consumer confidence, the trade deficit and jobless claims exceeded forecasts.

BlueScope Steel Ltd., Australia's largest steelmaker, rose 9.1 percent in Sydney. Honda Motor Co., which has North America, its biggest market, gained 3 percent in Tokyo. China Overseas Land & Investment SA, controlled by the Ministry of Construction of the nation, lost 2.9 percent after a report that China will tighten controls in the housing market. HSBC Holdings Plc, Europe's biggest lender, fell 1.7 percent in Hong Kong after Moody's Investors Service placed Spain and Greece score credit in the review.

"Fears of a rise in interest rates in China have not come to fruition until now," said Tim Schroeders, who helps manage $ 1 billion in Melbourne in Pengana Capital Ltd. "There is a sense of relief in the markets . This may only be temporary and that the Chinese authorities are increasingly worried about inflationary pressures undermining the economy's growth prospects in the long term. "

. This may only be temporary and that the Chinese authorities are increasingly worried about inflationary pressures undermining the economy's growth prospects in the long term. "

Regional Benchmarks

   -In Hong Kong Hang Seng index declined 1.9 percent, while the Shanghai Composite Index rose 1.9 percent this week. India's Sensitive rose 1.8 percent. The measure was closed on December 17 for a holiday.
   -In Japan, the Nikkei 225 Stock Average rose 0.9 percent, its seventh consecutive weekly gain and its longest winning streak since the eight-week period ended April 2. Australia S & P / ASX 200 rose 0.4 percent. Kospi index in South Korea rose 2 percent.

      -Steelmakers led gains this week, with an indicator to monitor the materials shares up 1 percent, the most among 10 industry groups in the MSCI index of Asia Pacific.
      -BlueScope Steel, which receives 22 percent of its sales in Asia rose 9.1 percent to $ 2.29 in Sydney. JFE Holdings Inc., Japan's second largest steelmaker, rose 2.7 percent to 2836 yen in Tokyo. JSW Steel Ltd., an Indian producer of the metal, rose 12 percent to 1,164.75 rupees in Mumbai.
     -While China's inflation accelerated at its fastest pace in 28 months in November, building the case for Prime Minister Wen Jiabao, to raise interest rates, instead of China ordered lenders on 10 December the park more money in the central bank to counter the threat of inflation.

more money in the central bank to counter the threat of inflation.
Effective tool :

"The government seems to be using the reserve requirement at the time as an effective tool," said Hugh Simon, co-manager of the Dreyfus Greater China Fund, "They have to have some relief on inflation. The market is not expensive."
The MSCI Asia Pacific index has risen 11 percent this year, with stocks in the index by value of 14.8 times estimated earnings on average, compared with 23 times at the beginning of the year.
U.S. exporters gained after the data improves the U.S. economy increased the confidence of the recovery continues.
Honda, the second largest manufacturer in Japan by market value, gained 3 percent to 3.235 yen this week. Canon Inc., the world's largest camera maker, climbed 1 percent to 4.145 yen. James Hardie Industries SE, the largest seller of home siding in the U.S., up 2.5 percent to $ 6.68 in Sydney.

Consumer Confidence :

     Confidence among U.S. consumers increased more than expected in December to the highest level in six months at the same time, Americans began to increase holiday spending. The index of Thomson Reuters / University of Michigan preliminary consumer sentiment rose to 74.2 from 71.6 in late November. Economists expected a December reading of 72.5, according to the median estimate in a survey.
A Commerce Department report showed the U.S. trade deficit was reduced to $ 38,700,000,000 in October.
The number of U.S. workers filing initial claims for unemployment benefits unexpectedly fell last week, pointing to a labor market that is on the mend. Applications for payment of unemployment insurance fell 3,000 to 420,000, the lowest in three weeks, showed Labor Department figures. Economists expected an average increase in applications to 425,000.
U.S. Employment
China Overseas Land slipped 2.9 percent to $ 14.58 in Hong Kong. China Resources Land Ltd., a developer controlled by the state, declined 1.6 percent to $ 13.54 in Hong Kong. Guangzhou R & F Properties Co., the largest builder in the southern city of China, fell 1.9 percent to $ 10.64 in Hong Kong.
China will tighten controls on the housing market and curb speculative investment from next year until 2015, Xinhua News Agency reported on 16 December, citing China's Ministry of Housing and Urban-Rural Development.
"The bench of the property is likely to be a unit tax," said Andrew Sullivan, director of institutional sales OSK Securities Ltd. in Hong Kong "Some investors are locking in gains for the end of the year."
HSBC Holdings, which receives 36 percent of its revenue in Europe fell 1.7 percent to $ 80.15 in Hong Kong in Hong Kong. Li & Fung Ltd., which is the largest supplier of Wal-Mart Stores Inc. and gets 27 percent of its sales in Europe fell 2.3 percent to $ 43.80 in Hong Kong.
credit rating of Spain can be cut from Aa1 by Moody's Investors Service on concern about rising borrowing costs, the potential losses in the banking system and deficits in the regions of the country, the agency said that 15 of December.
Moody's also placed ratings Ba1 Greece of bonds on review for possible downgrade, citing growing concerns about whether the country will be able to reduce its debt to "sustainable levels" and the status of Ireland credit was reduced five levels by Moody's December 17, after last month the government was forced to seek outside help.

The dollar rose to its strongest against the euro in two weeks

The dollar rose to its strongest against the euro in two weeks as Treasury yields in almost seven months of concern and policy makers in Europe are not doing enough to stem the crisis in the region boosted debt demand for U.S. financial assets.

The dollar rose 0.5 percent to $ 1.3181 per euro at 4:06 pm in New York from $ 1.3244 yesterday and touched $ 1.3133, the strongest since Dec. 2. The dollar rose 0.1 percent against the yen at 83.97 yen from 83.91 yen. 84.51 reached on December 15, the most since Sept. 24.

The euro rose earlier after EU leaders agreed to create a mechanism to contain future debt crisis and German business confidence unexpectedly rose. Beyond the permanent structure of the debt crisis in 2013, the leaders struggled to overcome divisions on immediate measures to stabilize the bond market.

"We are seeing a situation where the U.S. dollar should do a bit better," said Shaun Osborne, currency strategist at TD Toronto-Dominion Bank Securities unit of Toronto. "The euro is likely to fall still offers taking into account the still very significant fiscal challenges that we have sovereignty in the euro area."

Yields of 10-year Treasury fell nine basis points to 3.33 percent after touching 3.44 percent. Yesterday, the production reached 3.56 percent, the highest since May 13.

EU Summit

EU leaders concluded a two-day summit in Brussels today. They agreed to modify the treaties of the block to create a permanent mechanism for crisis management to enter into force in 2013.

Germany, the largest European contributor to the purchase of Greece and Ireland, pushed through a proposal that would allow financial assistance "if necessary" to prop up the euro and can force bondholders to bear some costs future bailouts.

German Chancellor Angela Merkel has ruled out putting more money on the table, the reorganization after the Greek European rescue FSF so that you can buy government bonds with problems, or more intertwined European economies through the sale of joint bond.

U. K. won 't pay

British Prime Minister, David Cameron, said his country will not pay in the rescue mechanism of the euro-region and said he wanted the European Union budget frozen as he sought to distance Britain's policies region.

The Ifo institute, based in Munich, said its business climate index, based on a survey of 7,000 executives, rose to 109.9 from 109.3 in November. That's the highest since records of the reunified Germany began in 1991. Economists forecast a drop to 109, the median of 36 forecasts in a survey.

Moody's Investors Service downgraded the credit rating of Ireland for five levels to Baa1 after the government was forced to seek outside help last month, staggered by losses in the banking system.

"The financial strength, the Irish government could decline further if economic growth would be weaker than currently projected, or the cost of stabilizing the banking system appear to be higher than currently forecast," said Moody's.

Yearly View

The euro fell against most of his 16 counterparts on the stock exchange has fallen 9.7 percent this year, a measure of the currencies of 10 developed countries.

U.S. Congress passed a bill of 858 billion was extended by two years, all the tax cuts of the Bush era, sending the measure to President Barack Obama for his signature. Obama plans to sign the bill into law at 3:50 pm at the White House, the government said in an emailed statement.

The Conference Board's measure of the U.S. perspective for the next three to six months rose 1.1 percent, the most in eight months, after increasing 0.4 percent revised in October, the New York group, said today.

The pound was the worst performance against all their older colleagues. The pound weakened 0.7 percent to $ 1.5525 and lost 0.2 percent to 84.91 pence per euro.

Impairment charge

Lloyds Banking Group Plc, a British bank that is 41 percent owned by the government, said it expects to report a further impairment charge of 4.3 billion pounds (6.7 billion) due to the Irish loan losses.

The yen headed for a weekly decline against a basket of 10 currencies as the MSCI Asia Pacific Index of regional shares rose. People's Bank of China, Zhou Xiaochuan, said his nation will not increase reserve ratios and interest rates at the same time, the South China Morning Post, citing a speech at Peking University.

Zhou said yesterday that the increases in mandatory bank reserves do not rule out increases in interest rates, the English-language newspaper in Hong Kong said today.

"The risk sentiment remains strong, supporting higher-yielding currencies against the currencies of developed nations," said Koji Fukaya, senior currency strategist in Tokyo at Credit Suisse Group AG. "The currencies should strengthen against the yen."

Union leaders agreed to amend the treaties of the block to create a permanent mechanism of the debt crisis in 2013

Union leaders agreed to amend the treaties of the block to create a permanent mechanism of the debt crisis in 2013, as it struggled to overcome divisions on immediate measures to stabilize the bond market.

One day after the European Central Bank is armed with more capital to withstand the crisis, the EU began to discuss measures such as offering short-term loans or the use of funds from the main block of bailout to buy bonds of countries difficulties.

"My vision is of a Europe growing closer - - at different speeds in some cases, to be sure," said German Chancellor Angela Merkel told reporters after an EU summit in Brussels.

For now, Germany ruled the filling of the present 750 billion euros ($ 1 billion) of emergency funds or aid by land to Portugal or Spain, which reinforces skepticism about the search market in Europe by the correct formula to quell the fiscal contagion that threatens the euro.

Shaping the future "is to some extent, a facade, and that does not solve the current crisis," said Carsten Brzeski, economist at ING Group NV in Brussels. "The European leaders did not address the issue of debt sustainability and the potential problems of insolvency by 2013."

The euro gained 0.1 percent to $ 1.3254 at 2:45 pm in Brussels, while bonds of Portugal, Spain, Greece and Ireland have slipped. Moody's Investors Service follow-up warnings that may cut the credit rating of Spain and Greece, announce today that Ireland downgraded five notches to Baa1 from Aa2 with negative outlook.

Ongoing negotiations

Luxembourg Prime Minister Jean-Claude Juncker, said the ongoing discussions on a more flexible use of the main components 440 million fund instead of waiting until the last minute to fix all lines of life-or-nothing do with the package of 85 billion euros granted to Ireland on 28 November.

Asked whether the short-term loans or bond purchases are being debated, Juncker said the measures being considered are "exactly what you mentioned."

These measures to ease tensions at the ECB, which has bought € 72000000000 debt weaker countries "since May stabilize markets. Yesterday, the ECB shore up its capital base to protect against loss of purchasing, voting nearly double its capital to 10.76 million euros.

"Let's be honest," said International Monetary Fund Dominique Strauss-Kahn in an interview with Charlie Rose of PBS. "The European Union needs a little more time, until perhaps early next year to be able to produce a complete package."

No "speculation"

Powered by a public outcry in Germany against fiscally irresponsible to shore countries, Merkel was opposed to put more money on the table or more intertwined European economies through the joint sale of bonds. Merkel did not rule out the more flexible use of current background, refusing to enter the "speculation."

In a departure from the German insistence that each country to determine their own destiny, Merkel said Tuesday that national fiscal discipline will not only the region of the 16-nation euro on a stronger footing.

Merkel and French President Nicolas Sarkozy said that a closer coordination of tax rates to businesses could return to the agenda as Europe seeks to forge a more unified and correct defects in the makeup of the euro.

In a blow to 12.5 percent of Ireland rate of corporation tax, Sarkozy said: "I do not think you can have the lowest corporation tax in the euro area and then transfer your debt." Said Spanish Prime Minister Jose Luis Rodríguez Zapatero, the tax debate is an "important development" that will play over the years.

"Need more '

The Italian Prime Minister Silvio Berlusconi, put calls for borrowing euro area as a whole in the same category, taking note of the German opposition, but that the proposal has to mature. Be studied further. "

The main business of the summit, Germany won an EU commitment to a treaty amendment to establish a system of crisis resolution in 2013 that would allow financial assistance "if necessary" to prop up the euro and could force to bondholders to bear some of the costs of future bailouts.

German insistence on the reduction of bond values when countries have problems in the future triggered the latest phase of the debt crisis, which culminated in Ireland support package and causing concern that Portugal and Spain will be next .

While the costs to bondholders are not mentioned in the two-sentence amendment agreed yesterday evening, the leaders adopted a decision on 28 November by the finance ministers that the depreciation was performed on a "case by case "according to the practices of the IMF.

"Clarification useful"

ECB President Jean-Claude Trichet, called for a commitment not to the bond amortization term a "useful clarification."

Merkel necessary amendment to avoid German high court that the mechanism of future aid, the EU wants to start when the current is extinguished rescue package in mid-2013.

The compromise text states: "Member States whose currency is the euro will establish a stable mechanism to be activated if necessary to safeguard the stability of the euro area as a whole. The granting of any need for financial assistance under mechanism shall be subject to strict conditions. "

Merkel did not get everything he wanted. Germany originally pushed to allow financial aid only as a "last resort", a language that could have dismissed the contingency credit lines, or because the IMF the lead in the ranking of Europe's economic problems.

Last reviewed a year ago, the treaty is the EU equivalent of a constitution, binding on EU institutions in Brussels and in the management of national governments in European affairs. The 27 countries, including 11 outside the euro region, must ratify the amendment.

European finance ministers plan to work out the details of the future system of March for it to come into force in the middle of 2013.

Canadian dollar fell to a two-week high against the dollar

Canadian dollar fell to a two-week high against the dollar as the debt crisis of Europe concern extended damped investor appetite "for risk and U.S. Treasury yields near a seven-month highs currency U.S. more attractive.
The Canadian currency lost for the second straight week against its U.S. counterpart, which rose today against the most important partners such as the euro and Australian dollar, Ireland's credit rating was cut five levels. Canadian Imperial Bank of Commerce suggested politicians consider selling Canadian dollars to limit long-term gains in the currency.
"The problems in Ireland with the cut this morning, have provided the stimulus for a move to risk aversion and buying U.S. dollars to Treasuries as a safe haven," said Darren Richardson, merchant Toronto corporate senior CanadianForex Ltd., an online foreign exchange dealer. "Canada, Australia and the euro have been sampled."
Canadian currency, nicknamed the Canadian dollar slipped 0.8 percent to C $ 1.0140 per U.S. dollar at 5 pm in Toronto, from $ 1.0061 yesterday. It touched C $ 1.0147, its lowest level since December 2. The currency, which fell 0.5 percent in the week, came to C $ 1.0001 on 15 December, the strongest level since trading at parity with the dollar on 11 November. One Canadian dollar buys 98.62 U.S. cents.
The Canadian currency "was found forward selling well in area C $ 1.01," wrote Shaun Osborne, chief currency strategist based in Toronto at the TD Toronto-Dominion Bank's securities unit in an e-mail.
Profit for the year
The Canadian dollar gained 4.4 percent last year to an extent of 10 currencies of developed countries. The Australian dollar rose 11 percent, while the dollar fell 1.8 percent and the euro fell 10 percent.
Bank of Canada Governor Mark Carney may want to consider selling Canadian dollars as an option for moderate gains in the currency driven by purchases of other central banks, Avery Shenfeld, CIBC's chief economist, wrote in a report released today.
The Canadian dollar's strength undermines the ability of Carney to raise interest rates to curb rising levels of household debt, Shenfeld said in the report. Further gains in the currency may slow growth, he said.
"It is a weapon has not yet been touched: fighting fire with fire," wrote Shenfeld. "Canada could coincide with the central bank's foreign intervention in favor of our intervention currency compensation, the sale of an equivalent volume of crazy."
The call for the Bank of Canada to intervene "may have some impact in thin markets," wrote David Watt, senior currency strategist at Toronto's Royal Bank of Canada RBC Capital Markets said in an e-mail.
"More modest '
"However, the movements of millions of Canadian dollars have been rather modest in recent times, and its performance in the last 24 hours is consistent with the Australian dollar and New Zealand dollar, so it might just be that we overnight to catch up "Watt wrote.
Canadian government bonds rose, pushing yields on benchmark notes 10 years by eight basis points, or 0.08 percentage point to 3.19 percent. They touched 3.16 percent, the lowest since Dec. 7. The price of the 3.5 percent security due June 2020 rose 65 cents to C $ 102.54.
The action and crude oil, the main export product of Canada, varied. The Dow Jones Industrial Average was little changed after falling 0.4 percent. Crude for January delivery fell as much as 0.8 percent to $ 87.01 a barrel in New York before trading at $ 88.02. $ 86.83 touched on 15 December, the lowest since 02 December.
Seven months
Yields of 10-year bond traded at 3.33 percent, after reaching 3.56 percent yesterday, the highest since May 1913. It closed at 2.80 percent on 30 November.
Currencies of countries linked to the growth as Canada, New Zealand and Australia fell against the dollar today on concern a summit of European Union do not produce enough to keep the problems of sovereign debt spreads in the region. While the EU leaders agreed to amend the treaties of the block to create a permanent mechanism of the debt crisis in 2013, he struggled to overcome divisions on immediate measures to stabilize the bond market.
Moody's Investors Service downgraded the credit rating to Baa1 Ireland Aa2 today after the government was forced to seek outside help last month, staggered by losses in the country's banking system. The new rating is just three levels above non-investment grade.

rising in most U.S Stocks

Most U.S. stocks rose, sending the Standard & Poor's 500 to a debt crisis in two years, as concern better than expected earnings forecasts from Oracle Corp. and Research In Motion Ltd. and the acquisition of a regional bank in Europe is spreading shade.

Oracle rose 3.9 percent for the highest price since 2001. Marshall & Ilsley Corp. rose 18 per cent of Bank of Montreal has agreed to buy the lender for $ 4.1 billion. Freeport-McMoRan Copper & Gold Inc. advanced 2 percent as metals rose. Drug manufacturers slipped, with Merck & Co., dragging down the Dow Jones industrial average after AstraZeneca Plc, failed to win U.S. approval for a new blood thinner.

About six stocks gained for every five that fell on U.S. exchanges. The S & P 500 rose 0.1 percent to 1243.91 at 4 pm in New York, its highest close since September 2008. The Dow Jones fell 7.34 points, or 0.1 percent, at 11,491.91. The Chicago Board Options Exchange Volatility Index, or VIX, sank 7.4 percent to 16.11, the lowest since April.

"The economic data has been confirmed," said Philip Orlando, New York, chief market strategist at Federated Investors Inc. actions, which manages $ 341 300 000 000. "Corporate earnings have been strong. As market recognizes that, you will begin to see a good Santa Claus rally to reflect more confidence in the macro."

View Rating

The S & P 500 rose yesterday to its highest level since the aftermath of the collapse s Lehman Brothers Holdings Inc. in September 2008 for the first time claims for jobless benefits fell unexpectedly and builders began work on more homes in November. His recent rally has led to testing more than 15.5 times reported profits, the highest since June.

Oracle, the second largest software maker, rose 3.9 percent to $ 31.46. The company reported second-quarter earnings that beat analysts' estimates, helped by sales of databases and hardware expansion. Oracle was upgraded to "outperform" from "market perform" at Oppenheimer & Co.

Research In Motion Ltd. rose 1.6 percent to $ 60.20. The BlackBerry maker forecast fourth-quarter earnings of at least $ 1.74 per share, exceeding analysts' average forecast.

The S & P 500 Regional Banks Index of 11 companies met 1.5 percent. Bank of Montreal will pay 0.1257 of its shares for each share of Marshall & Ilsley, a bank based in Toronto, said in a statement. The deal values Marshall & Ilsley to $ 7.75 per share, 34 percent higher than yesterday's closing price of $ 5.79 on the New York Stock Exchange.

Marshall & Ilsley soared 18 percent to 6.85 dollars, its biggest increase since May 2009. Regions Financial Corp. rose 1.8 percent to $ 6.24. KeyCorp gained 4.1 percent to $ 8.42.

"Betting strongly"

U.S. options Traders are making more optimistic bets on banks in more than a year, speculation in financial companies will converge when the economy improves and analysts predict a growth of 21 percent profit next year.

"People in the options market are betting heavily that these actions will go up," said Chris Rich, chief options strategist at JonesTrading Institutional Services LLC in Chicago. "I'm seeing a lot of smart kids money to buy off-the-money call-in banks. When I see everyone marching in the same direction at the same time, that's something to take notice. Is a strong signal."

InterMune Inc. rose 145 percent, to $ 34.89. Esbriet drug company, a treatment of mild to moderate idiopathic pulmonary fibrosis, a serious lung disease, is recommended for approval by European regulatory committee.

Sara Lee, JBS

Sara Lee Corp. gained 5.3 percent to $ 17.26. The maker of Jimmy Dean breakfast foods is examining whether to sell the Brazilian beef processor JBS SA, according to the Wall Street Journal. JBS the largest meat processing company, began the search for Downers Grove-based Sara Lee in Illinois and talks on and off for months, the newspaper said, citing people familiar with the matter.

Sara Lee may also try to put their business in drinks and meat for sale, said the WSJ.

Stocks fell in Europe today even if the European Central Bank and the Bank of England created a temporary swap line to help ease the liquidity to lenders in Ireland where the sovereign debt crisis intensifies . The Bank of England could provide up to 10 million pounds ($ 15,500,000,000) to the ECB in exchange for euros, if necessary, the central bank based in Frankfurt, said in a statement. The facility will allow funds to be made available to the central bank of Ireland.

Ireland Bonds

Irish bank bonuses high collapsed after Moody's Investors Service downgraded the credit rating of the country into five levels, citing its financial strength and decrease the cost of bailing out lenders. Moreover, the International Monetary Fund cut its forecast for economic growth in Ireland. The Washington-based fund said it expects the Irish economy to grow 0.9 percent in 2011, compared with 2.3 percent estimated by the Fund in October.

"You see this constant coming and going in Europe," said John Praveen, the Newark, New Jersey, head of investment strategy based on Prudential International Investments Advisers LLC, which oversees 690 billion U.S. dollars. "There is still concern about the lowering of credit even when European policy makers try to offer some relief. Other than that, everything else seems to be working very well."

U.S. index leading economic indicators rose in November by the most in eight months, a sign of recovery will strengthen next year. The Conference Board's measure of the outlook for the next three to six months rose 1.1 percent after rising 0.4 percent in October revised.

Merck, Pfizer

Merck, the drug maker's second-largest U.S., fell 1 percent to $ 36.48. Pfizer Inc., the biggest drugmaker in the world, fell 1.1 percent to $ 17.03.

AstraZeneca fell the most in more than two years in London trading after the drugmaker in the UK failed to win U.S. approval for a new blood thinner Plavix rival, the world's second best selling drug. The Food and Drug Administration requested additional analysis of a study called Plato Brilinta compared with Plavix in patients with severe chest pain or heart attacks earlier, AstraZeneca said yesterday.

solar stocks declined after DigiTimes said Germany is in talks to reduce incentives for solar PV systems by 16 percent on 1 July. First Solar slid 1.7 percent, $ 133.25. JA Solar Holdings Co. fell 3.3 percent to $ 6.67.

Discover Financial Services lost 2.8 percent to $ 18.02. The fourth largest U.S. payments network had its fiscal 2011 earnings estimate cut to $ 1.72 per share, from $ 1.79 per RBC Capital Markets, which cited a "major" release of loan loss reserves during the fourth quarter of fiscal 2010 .

Business

Welcome to our website