Dec 20, 2010 ~ Business

Monday, December 20, 2010

Arabica coffee prices can vertical pin up to a record $ 4 a pound

Arabica coffee prices can establish a "vertical pin up"to a record $ 4 a pound at the end of the first quarter with a daily profit of 50 cents per pound after surging to a 13 year old boy a week Last, the researcher said Shawn Hackett.

Coffee is no longer a "commodity value" and roasters face a "demand rationing orgy panic, " wrote Hackett, president of Hackett Financial Advisors Inc. in Boynton Beach, Florida, in a report dated 18 December. Robusta coffee prices traded in London may rise to $ 2,500 per tonne on the growing demand in Asia and the lack of production growth in Vietnam, the world's largest producer of grains, Hackett said via email yesterday.

The rains in Latin America is likely to maintain coffee production output over the past two years, according to Hackett. Arabica coffee will probably end the year at $ 3 a pound, said Hackett.

Coffee futures in New York on Dec. 17 jumped to 13 year high of $ 2,267 a pound. Robusta coffee in London closed the week at $ 1,986 a tonne.

Rice, cocoa, timber, milk and natural gas are products that still have "pockets of value, " according to Hackett. Continued Commodity Index of 17 commodity futures likely to rise to a record year-end, said yesterday in e-mail. The index closed at 603.35 on December 17 and the high is 615.04 on 3 July 2008.

Copper rose more in a week in New York amid speculation

Copper rose more in a week in New York amid speculation that the U.S. economy is recovering and after hedge funds bet on the metal more profit.

U.S. Department of Commerce on December 22 may revise its estimate of third quarter growth at an annualized rate of 2.8 percent versus a previous estimate of 2.5 percent. Hedge funds have the largest net-long positions, or bets on higher prices in New York in five years, government data.

"The enterprise market is entering the final year," said David Thurtell, analyst at Citigroup Inc. in London. "Hedge funds want to keep them high to get good performance numbers and probably also anticipate good tickets New Year."

Copper futures for March delivery added 4.7 cents, or 1.1 percent, to close at $ 4.206 a pound at 1:01 pm on the Comex in New York. That's the biggest one day gain for a most-active contract since Dec. 13. The metal has risen 46 percent since July 1, in part by demand from emerging markets.

Speculative long positions, or bets prices of copper will rise, outnumbered short positions by 30,268 contracts on the Comex division of the New York Mercantile Exchange in the week ended Dec. 14, Washington-based Commodity Futures Trading Commission said on 17 December. That was the highest net long since March 2005.

On the London Metal Exchange, copper for delivery in three months rose $ 131, or 1.4 percent, to $ 9,201 per ton (4.17 dollars per pound).

Tin, aluminum, zinc and lead also won in London. Nickel fell.

The crude oil trading near the highest levels in two years

The crude oil trading near the highest levels in two years, is likely to "escape" to $ 94 a barrel if prices remain above $ 87 bracket, according to Chart Partners Group Ltd.

Commodities such as oil, gold and copper is optimistic short-term trends going into January, and that "flirting" with a "cycle of opposition, correction" in the long term, said Thomas Schroeder, CEO of partners Graphics, a company based in Bangkok in technical research. The level of $ 87 per barrel is a turning point and was the highest of the year a few months ago, Schroeder said. Crude oil futures settled above $ 87 a barrel, three times in November before rebounding above $ 88 a barrel in December.

"It appeared more than $ 87, turned down and had a severe fall, turned over $ 87.'s Having trouble deciding whether to keep that level," said Schroeder. "While the support is $ 87, I think we'll have some more significant peaks in January to treat."

Crude for January delivery gained 48 cents, or 0.6 percent to $ 88.50 a barrel in electronic trading on the New York Mercantile Exchange and was at $ 88.36 a barrel at 8:46 am Singapore time. By November, futures settled above $ 87 a barrel in October 2008.

An oil rally next month will be his "last race of force before a downslope of the cycle develops," said Schroeder. Table of crude oil is also showing divergence bear, where the peaks in the Relative Strength Index and Moving Average Convergence / Divergence of the indicators are getting ever higher, unlike the upward trend in oil prices, said .

"The indicators are not confirming a new record, which means oil up insurance, the rally is short term," said Schroeder. "That usually means ordering around the world throughout the world, is waiting for someone else to buy and no one ever does. That is a sign of underlying weakness that I think will start to come through in January."

World zinc mining companies can pay 15 to 20 percent

World zinc mining companies can pay 15 to 20 percent less than the foundries of the raw material for processing into refined metal next year after fees were reduced in the cash market, according to Macquarie Group Ltd.

"Assuming a zinc base price of $ 2,000 a metric ton, we could see a base treatment charge of about $ 200 - $ 210 per dry metric tonne," the bank said in a report released today. This would be a reduction of about $ 40 - $ 50 per ton of reference for this year of $ 253 per tonne at a base price of $ 2,000 a tonne, the bank said.

Mining companies including Teck Resources Ltd., and foundries, and Korea Zinc Co. and Mitsui Mining & Foundry Co., are negotiating rates for next year. The producers seek lower rates when the raw material, or concentrate are called, in case of shortage. Zinc is used to galvanize steel.

The current differential between the terms of place and reference point is $ 125 to $ 145 a tonne, it said. The reference rates "will fall sharply in 2011, given the differential between the terms of reference, period," he said.

treatment costs are fees paid by miners to smelters for processing metal concentrates to produce and pay per dry metric tonne of zinc concentrate processed.

Miners typically pay a premium over market conditions in place to ensure reliable customers for concentration. The "differential of three digits would be very generous," the bank said.

Court Escalator

Zinc for delivery in three months advanced 0.8 percent to $ 2,293.50 a ton on the London Metal Exchange at 4:56 pm Tokyo time. Refined zinc production obtained at 1.1 million tonnes in October, surpassing the demand for 1.036 million tons, the International Lead and Zinc Study Group said Dec. 15. Production in September was 1.095 million tonnes against the demand of 1.07 million tonnes, the report said.

Rates also have "price participation" clauses allowing smelters to benefit from higher prices. An escalator is a percentage increase in the rate base treatment for each dollar increase in the price of zinc on the LME over the base price.

Mining companies can promote a new cut in the escalators and escalators called the reference point of 2011, the bank said. the participation of this year prices had been reduced to the narrow range of at least 20 years, he said.

Natural gas rose for a second day in New York

Natural gas rose for a second day in New York on forecasts of below-normal temperatures in the eastern U.S. that can increase demand for fuel.

Gas futures gained as much as 2.3 percent as the weather can be colder than normal in the east coast and the Great Lakes region from December 27 through January 2, according to the National Weather Service . Earlier forecasts had shown above-normal temperatures in New England during that period.

"It seems we'll have another attack of cold," said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. "I think the market has found support at $ 4 after last week flush and seems to be recovering a little."

Natural gas for January delivery rose 7.8 cents, or 1.9 percent, to $ 4,144 per million British thermal units at 12:24 in the New York Mercantile Exchange after climbing to $ 4,158. Futures have dropped 26 percent this year.

The low temperature in New York on December 27 can be 26 degrees Fahrenheit (-3 degrees Celsius), three degrees below normal, according to AccuWeather Inc. in State College, Pennsylvania. The low temperature in Chicago may be 15 degrees Celsius, four degrees below normal.

"Next week it has tended most coldest day this more general, temperatures below normal expectations," said Stephen Strum, president of Frontier time in Tulsa, Oklahoma, in a note to customers today.

Heating increased demand

heating demand in the U.S. can be 18 percent above normal for December 26 through December 30, according to Weather Derivatives in Belton, Missouri.

There may be storms in "Christmas and New Year then" on the east coast, according to Time Commodity Group LLC in Bethesda, Maryland.

About 52 percent of U.S. households the use of natural gas for heating, according to the Department of Energy.

Gas also rose on speculation a rebound in U.S. economy boost industrial demand.

Data scheduled for release on December 22 will probably show U.S. Gross domestic product grew 2.8 percent in the third quarter, versus a previous estimate of 2.5 percent.

The Thomson Reuters / Jefferies CRB Index of 19 commodities gained 0.8 percent to 323.07.

The Energy Department reported last week that 164 million cubic feet of gas were withdrawn from the inventories for the week ending 10 December, above the five-year average decline of 153 million dollars. Total stocks 3561000000000 cubic feet, 1 percent below last year's level and 9.9 percent above the five year average.

gas reserves will reach 1.833 trillion cubic feet at the end of the winter season in March, about 171 million cubic feet higher than at the end of March 2010, the Energy Department said on 7 December in its report Monthly short-term Energy Outlook.

OAO Uralkali agreed to buy OAO Silvinit for $ 7.8 billion in cash and stock

OAO Uralkali agreed to buy OAO Silvinit for $ 7.8 billion in cash and stock to benefit from growing demand.

Uralkali buy 20 percent of Otkritie Silvinit Financial Corp. for $ 1.4 million, or $ 894.50 per share, the Berezniki-based company said in a statement. It will buy the remaining shares worth 6.4 billion U.S. dollars from 13 December.

The acquisition is the third largest this year announced in the base material after purchase s Newcrest Mining Ltd. Lihir Gold Ltd., and proposed Vedanta Resources Plc, the acquisition of Cairn India Ltd.. The combined entity would have a value of $ 23900000000, from December 17 prices, Uralkali said, it expects to complete the deal in early May 2011.

potash producers are being consolidated as an increase in grain prices, driven by drought this year in Russia, the floods in Canada and the dry fields in Kazakhstan and Europe, increasing the purchase of fertilizer by farmers. Uralkali and Silvinit combined represent 17 percent of global production of potash, creating the second largest producer after Potash Corp. of Saskatchewan Inc., according to UK-based industry consultant Fertecon Ltd.

The acquisition is "attractive" for minority shareholders Uralkali, Anna Kupriyanov, a Moscow-based analyst at UralSib Capital, wrote today in a note. To Silvinit, "translates to a price below the current market share - a refusal Silvinit minorities," he said.

Shares slide

Silvinit slipped to 15 percent, to 26,615.01 rubles in Moscow trading, the biggest drop in 19 months, before closing at 27,296.99 rubles. Uralkali fell 1.1 percent to 212.64 rubles.

Investors will receive 133.4 shares for each common share Uralkali in Silvinit of his property, and 51.8 shares for each preferred title, the statement said. VTB Capital Plc and Goldman Sachs International is advising Uralkali, while Merrill Lynch is advising International Silvinit.

The money offered is 10.15 times Silvinit end of 12 - month earnings before interest, taxes, depreciation and amortization and the populations of 11.6 times. That compares with 20.87 times cash offer EBITDA of BHP Billiton Ltd. for Potash Corp. of Saskatchewan Inc. in August that was overturned by the Canadian government.

Uralkali can sell up to 50 billion rubles ($ 1.6 billion) of bonds to finance the transaction and issue 1.2 billion new shares, adding to the 2.1 billion outstanding, CEO Pavel Grachev, said today a conference call. Uralkali seek antitrust approval of the offer this week and the shareholders of both companies will vote in the tiebreaker until 4 February.

Kerimov control

Russian billionaire Suleiman Kerimov and his companions took control of shares in Uralkali and Silvinit between June and August, with a view to a merger. Solikamsk based Silvinit, whose production exceeds that of Uralkali, was valued at 246 million rubles on December 17, compared with 457 billion rubles Uralkali.

The merger will have a "positive effect" on the market, Potash Corp. CEO Bill Doyle told analysts on 15 December. Potash Corp., based in Saskatoon, Canada, last month fought 40 billion U.S. dollars of BHP Billiton's proposed acquisition.

Potash miners eight largest, whose control of the market and exceeds the oil cartel OPEC has sought to strengthen its control over prices of potash, a form of potassium used to increase crop yields. Uralkali exports through Belarus Potash Co., which controls about 30 percent of world trade.

Silvinit has operated through the International Potash Co. and is discussing a "transitional period" before switching, general director Vladislav Baumgertner Silvinit said at the press conference.

Dual output

Uralkali and Silvinit two minefields in Vernekamskoye deposit in Perm near the Ural Mountains, which has the second largest reserves in the world, according to the website of Uralkali. Both companies has doubled production in the first half as the use of fertilizer was recovered from a global economic recession, with Uralkali produce 2.42 million tons and tons Silvinit 2,570,000.

The two combined have the capacity to produce 10.6 million tonnes in 2010, behind Potash Corp. and Plymouth, Minnesota-based Mosaic Co., according to Uralkali. Russian companies to increase the annual production of 2.4 million tonnes in 2012, Grachev said.

Uralkali reported net income of $ 274 million in the first half by international standards, while Silvinit reported a profit of 261 million U.S. dollars by using methods of Russia.

European stocks rose &strength the economic recovery enough to withstand the crisis

European stocks rose, erasing the losses that followed Lehman Brothers Holdings Inc. 's 2008 bankruptcy, amid speculation that the economic recovery is strong enough to withstand the crisis in the region of sovereign debt.

Volkswagen AG, the largest European carmaker, soared 3.7 percent after saying it expects sales in China to grow as much as 15 percent next year. Abertis Infraestructuras SA added 1.3 percent in the Sunday Times said that CVC Capital Partners Ltd. may bid for the Spanish motorway operator. Retailers retired as snow Christmas shopping interrupted.

The benchmark Stoxx Europe 600 Index rose 0.7 percent to 278.38 closing at 4:30 pm in London, the highest since September 12, 2008, the last trading day before the collapse of Lehman. The index has advanced 6.3 percent this month as U.S. reports showed that applications for unemployment benefits unexpectedly fell, builders started work on more homes and manufacturing in the New York region recovered more than expected.

"The start of 2011 could be very good and we still have a lot of driving market liquidity," said Michael Koehler, chief strategist at Landesbank Baden-Wuerttemberg in Mainz. "The latest economic data we have, particularly the USA, was generally very good and definitely not going to see a relapse. However, the issue of sovereign debt crisis is still not resolved."

Financial Crisis

The Stoxx 600 fell 44 percent through March 2009 as the collapse of Lehman Brothers fed the worst financial crisis since the Great Depression, as banks around the world to depreciation and loss of data from more than $ 1.8 billion .

France risks losing its top AAA grade as the debt crisis in Europe caused a wave of sales, which threatens to engulf the highest-rated borrowers in the region, with Belgium also faces a possible cut, analysts and investors, said.

"Every sovereign may be penalized in the next year," said Toby Nangle, who helps oversee 46 billion U.S. dollars as head of asset allocation at Baring Asset Management in London. "It would be a great thing if France was to be stripped of its AAA rating. I do not think that the probability of a cut is reflected in the market."

national reference rates rose in 14 of the 18 western European markets today. CAC 40 in France and Germany's DAX was up 0.5 percent. The UK 's FTSE 100 advanced 0.3 percent.

VW gains

Volkswagen shares rose 3.7 percent prefer to € 126.25 as the automaker said it expected group sales in China to grow 10 to 15 percent next year.

"The total market next year looks very healthy for us," said Weiming Soh, executive president of China automaker, in an interview at the Guangzhou Auto Show.

Moreover, Audi AG, Volkswagen's luxury brand, the car will probably beat its target for the A1 deliveries next year and may further increase production to meet demand for subcompacts, the head of the unit sales he said.

Abertis Infraestructuras rose 1.3 percent to € 13.63 in the Sunday Times reported that CVC Capital Partners, which bought a minority stake in Abertis earlier this year, is preparing a 12 million euros ($ 15,800,000,000) offer by the company.

Banco Popolare SC jumped 5.6 percent to 3.50 euros on speculation that the Fondazione Cariverona can buy shares through two of the lender to provide rights of millions of euros after Goldman Sachs Group Inc. updated stock.

888, Mobistar

888 Holdings Plc rose 18 percent to 57.75 pence, the biggest gain since its initial share sale in 2005. The online gambling company, said that in the early stages of talks with Ladbrokes Plc about a possible takeover bid.

Mobistar SA advanced 3.8 percent to € 47.42 seconds after Belgium, the largest mobile phone company has been upgraded to "buy" at Deutsche Bank AG.

Rhodia SA rose 7.2 percent to € 24.39, the highest price in almost three years. The specialty chemical company hopes to be able to defend their profit margins in 2011 the prices of raw materials, while a high level, being less stable, Investir, citing an interview with the CEO, Jean-Pierre Clamadieu .

Morgan Stanley raised the stock "overweight" from "equal weight."

Retail stocks were the only down 19 industry groups in the Stoxx 600 as the snow stopped Christmas shopping. Inditex SA, the largest clothing retailer, fell 2.7 percent to € 56.60. Lower Dixons Plc, the UK's largest consumer electronics retailer, fell 6.2 percent to 22.84 pence.

Metro Slide

Metro AG, Germany's largest retailer, lost 2.6 percent to € 54.37. Haniel & Cie GmbH is considering reducing its stake in the company, Business Week, citing unidentified people close to the company.

Haniel is to establish a "more balanced portfolio" by investing in small companies, the spokesman said Dietmar Bochert today. He refused to say whether the company plans to reduce its stake in Metro. Ruediger Stahlschmidt, a Metro spokeswoman, declined comment.

Gartmore Group Plc fell 8.6 percent to 95.75 pence after the fund manager in the UK which went on sale in November, said it is discussing a proposed acquisition with Henderson Group Plc, based on a "little off" of December 16 closing price of 98.75 pence. Henderson Group, which aims to expand its consumer business and operations in emerging markets, rose 0.1 percent to 130.6 pence.

Ingenico SA sank 5.6 percent to € 26.05 at the world's largest manufacturer of payment card terminals, said a bidder for the company has not been able to present a binding offer that is acceptable to its board.

Allied Irish Banks Plc fell 8.9 percent to 41 cents as the Sunday Business Post said the Irish government can use new powers to take full control of the lender as soon as this week. A spokesman for Irish Finance Ministry declined to comment on the report. Ronan Sheridan, a bank spokesman, also declined comment.

German stocks rose, with the DAX index rebound from last week's decline, as investors speculated that economic recovery will support Europe's crisis of sovereign debt.

Volkswagen led gains in the benchmark DAX index, increased 3.7 percent. Munich Re added 1.5 percent as the world's largest reinsurer, said it would maintain stable dividend payments. Metro AG fell 2 percent, Haniel & Cie GmbH is said to consider reducing its stake in the company.

The DAX rose 0.5 percent to 7,018.6 at the close of 5:30 pm in Frankfurt, last week cut 0.3 percent decline. The measure has advanced 4.9 percent this month as U.S. reports showed builders began work on more homes and manufacturing in the New York region recovered more than expected. The broader index recovered hdaX 0.6 percent today.

"The start of 2011 could be very good and we still have a lot of driving market liquidity," said Michael Koehler, chief strategist at Landesbank Baden-Wuerttemberg in Mainz. "The latest economic data we have, particularly the USA, was generally very good and definitely not going to see a relapse. However, the issue of sovereign debt crisis unresolved."

France risks losing its top AAA grade credit as the debt crisis in Europe caused a wave of sales, which threatens to engulf the highest-rated borrowers in the region, with Belgium also faces a possible cut, the Analysts and investors said.

Christmas retail sales

German retail sales for Christmas this year have exceeded their level in 2009, the German Federation of Retail, said, without providing data. Snow hampered shopping "slightly" to the beginning of the week, known as HDE retail group said in an emailed statement yesterday.

Volkswagen's preferred shares gained 3.7 percent to € 126.25. Chinese sales are up 10 percent to 15 percent in 2011 in line with the broader market, Weiming Soh, chief executive of the company in China, said in an interview in Guangzhou, southern China today. Volkswagen group sales in China rose 38 percent in the first 11 months of 2010 to 1.8 million units compared with the previous year, Soh said in a previous meeting.

Moreover, Audi AG, Volkswagen's luxury brand, the car will probably beat its target for the A1 deliveries next year and may further increase production to meet demand for subcompacts, Peter Schwarzenbauer, head of the unit sales, he said.

Munich Re, E. ON

Munich Re rose 1.5 percent to € 113.3. The company plans to pay at least 5.75 euros per share dividend and adhere to its policy of paying at least a quarter of its profits to shareholders, Boersen-Zeitung, citing an interview with the Chief Financial Officer Joerg Schneider.

E. ON AG, 0.6 percent to € 22.54. Germany's largest utility said it has agreed to sell its gas network in Italy to an Italian group consisting of investment funds F2i SGR SpA and AXA Private Equity. The enterprise value is around 290 million euros (380.7 million U.S. dollars), with E. ON for € 255 000 000 Net cash.

Moreover, the German electricity for delivery next year coal prices rose rose to a maximum of two years, which can make electricity generation more expensive.

Metro, Germany's largest retailer, fell 2.6 percent to € 54.37, the first three-day retreat. Haniel wants big investors adjust their portfolio and make strategic investments in "small pearls" that benefit from global trends, the magazine WirtschaftsWoche CEO Juergen Kluge quoted as saying.

Shareholder Haniel and Schmidt-Ruthenbeck group together own 50.01 percent of Metro, the magazine said. The two could keep control of Metro with a 40 percent WirtschaftsWoche said, quoting an unidentified manager at Metro.

Conergy AG surged 18 percent to 58 cents, the highest price in two months. The solar module manufacturer, said it reached an agreement with creditors to reduce debt by 188 million euros.

U.S. stocks drift between gains and losses

U.S. stocks drift between gains and losses as Boeing Co. fell on concern that could delay its new 787 Dreamliner and the deterioration of Intel Corp. dragged on technology shares.

Boeing fell 2.7 percent after the Seattle Times reported the company was preparing to announce a new delay to the 787. Intel fell 0.8 percent after a Wall Street Journal report that the proposed purchase of chip maker McAfee Inc. is facing antitrust scrutiny from Europe. American Express Co. fell 4.1 percent after Stifel Nicolaus & Co. cut its rating on the stock.

The S & P 500 rose less than 0.1 percent, to 1,244.47 at 11:45 am in New York after gaining 0.3 percent in early trading. The Dow Jones industrial average fell 33.72 points, or 0.3 percent, at 11,458.19. benchmark indexes fell to their lows of the day after Moody's Investors Service cut its rating on some Irish lenders and debt.

"It's going to be bumpy," said Jason Pride, director of investment strategy at Glenmede in Philadelphia, which manages $ 19 billion. "We do not expect European issues to disappear in the short term. The market is particularly vulnerable to any news, even as we see improvement in U.S. economic and corporate fundamentals. Should be a week very light in terms volume and increases the potential for more volatility. "

U.S. equities climbed the last three weeks, sending the S & P 500 to a data set in two years, as stronger than expected in retail sales, housing construction and increased confidence in economic recovery. The S & P 500 rose 12 percent this year through Dec. 17 as the Fed expanded a plan to buy bonds to stimulate the economy and corporate profits beat estimates.

European shares

Shares acquired in Europe, the Stoxx Europe 600 Index up to 1.1 percent to its highest level since the September 12, 2008.

Federal Reserve Bank of St. Louis, James Bullard, president of U.S. said the gross domestic product in 2011 will be stronger than people thought. Bullard, who spoke in an interview with CNBC, also said that the decline in U.S. unemployment be a slow process. "We must walk before we can run here," he said.

"We are optimistic about the possibility of actions well next year as geopolitical tensions and other risks are left out," said Andrew Milligan, head of global strategy at Standard Life Investments Ltd. in Edinburgh. "This market is largely driven by revenue growth, but those expectations will be more moderate as the year unfolds." His company oversees 222 billion U.S. dollars worldwide.

Depressions Technology

Intel fell 0.8 percent to $ 21.29. proposed purchase of chip maker McAfee Inc. world faces antitrust scrutiny from European Union, which can start a lengthy "phase two" of research, the Wall Street Journal, citing unidentified sources.

Boeing had the second biggest drop in the Dow sinks 2.7 percent to $ 63.30. The world's biggest airline said it would increase the production rate of 777 for the second time this year in their fight to delay the 787 Dreamliner.

American Express fell more in the Dow, declining 4.1 percent to $ 42.20. The largest issuer of credit cards for purchases US-shortened to "hold" from "buy" Stifel Nicolaus & Co.

Huntington Bancshares Inc. added 4 percent to $ 6.48. The Columbus, an Ohio-based bank was raised to "buy" from "neutral" in the Bank of America Corp.

SLM Corp. had the biggest increase in the S & P 500, rising 6.6 percent to $ 12.86. The maker of student loans can go up to the "young high" during the next 18 months and could attract a buyer, Barron's, citing anyone.

Chesapeake Energy Corp. advanced 6.9 percent to $ 24.90. Carl Icahn, the billionaire investor, increased its share of natural gas producer to an equivalent of 5.8 percent, according to a regulatory filing. Icahn has taken and intends to seek further discussions with Chesapeake.

China stocks fell the most in a month as tensions on the Korean peninsula fueled a sell-off in risky assets, adding to the lingering concerns of investors that the government may raise interest rates to control inflation.

Jiangxi Copper Co. and Aluminum Corp. of China Ltd. fell more than 3 percent of commodity prices fell and the dollar rose after South Korea said it will continue with a live fire drill carried Korea North of threats of retaliation. Kangmei Pharmaceutical Co. led a retreat among health-care companies after the Economic Observer said the government could reduce drug prices by 40 percent.

"Tension on the Korean peninsula can be fed investor pessimism about the end of year," said Wu Yang, associate director of Guotai Junan Futures Research Institute. "The market is always beaten by such shocks."

The Shanghai Composite Index, which remains the largest stock exchanges in China, fell 60 points, or 2 percent, to 2836.75 at 2:11 pm, the most since Nov. 23. The CSI 300 index fell 2 percent to 3,162.72, led by healthcare companies.

South Korea started a live-firing drill, plans for leading the North Korean threat of retaliation, because the Security Council failed to agree on measures to ease the tension on the peninsula.

artillery positions on the island of Yeonpyeong, which was bombed by the North last month, started the year at 2.30 pm local time after the fog cleared, said a Defence Ministry official who requested anonymity, citing policy government. North Korea and China are communist allies.

Jiangxi Copper, the largest copper producer, fell 3.9 percent to 38.88 yuan. Aluminum Corp. of China fell 2.8 percent to 10.09 yuan.

Rate of concern

Copper futures prices fell 0.3 percent in Shanghai. The dollar advanced to $ 1.3150 per euro as of 11:33 am in Tokyo from $ 1.3188 in New York on December 17, after reaching $ 1.3125, the highest since December 2 .

The Shanghai Composite Index, the worst performer among the major benchmarks in Asia this year, has fallen 10 percent since reaching a peak almost seven months, on 8 November, the concern that monetary tightening to curb economic growth. The index has lost 14 percent this year.

"People are still worried about further tightening policy, such as increases in interest rates," said Larry Wan, the Beijing-based head of investment in Union Life Asset Management Co., which oversees the equivalent of $ 2,210,000,000. "The government has not increased rates, however, as had been speculated in the market. It's like a sword hanging over the market."

China Construction Bank Corp. rate of decline for lenders, falling 1.7 percent to 4.63 yuan. Kweichow Moutai Co., the largest Chinese manufacturer of alcoholic beverages by market value, fell 4.6 percent to 195 yuan.

Rate Outlook

China's inflation could exceed 5 percent to 6 percent in some months of next year, the People's Daily reported today, citing Ba Shusong, a researcher at the Center of State Council Development Research. Inflation may be 4 to 5 percent for all of 2011, Ba was quoted as saying.

Central bank governor Zhou Xiaochuan said the government moves securities account when making policies.

"We are doing everything possible in making policy decisions to take the stock market's reaction into account," China Central Television reported on 18 December, citing Zhou. "But when you have only a limited number of policy instruments, which can hardly cover all the bases."

China raised interest rates in October for the first time since 2007, inflation reached 4.4 percent on an annual basis, the highest since September 2008. Since then, the central bank has raised reserve requirements for lenders three times in five weeks. The last increase was on 10 December.

Drug makers fall

National Development and Reform Commission may reduce drug prices by an average of 40 percent of 658 different items for the fourth time since 2009, the Economic Observer reported today, citing unidentified officials from drug companies.

One indicator of population health care, fell 3.3 percent today, the most among 10 industry groups in the CSI 300.

Pharmaceutical Kangmei lost 6.2 percent to 20.80 yuan. Beijing Tiantan Biological Products Corp. retreated 3.6 percent to 23.03 yuan, while North China Pharmaceutical Co. fell 4.3 percent to 16.18 yuan.

China stocks face "headwinds" of optimism among retail investors, the volatility of the rise and the dollar, the China International Capital Corp.

Lower expectations of yuan appreciation, based on non-deliverable twelve months, to "cold water" on the view that currency gains will be used as a tool to combat inflation, Hong Hao, global equity strategist Beijing-based venture, wrote in a report today.

NDF in twelve months fell 0.23 percent to 6.5339 per dollar, from 9:38 am in Hong Kong. It reflects the commitment of the currency will strengthen 1.9 percent in a year.

Dubai shares rose for a second day Dubai International Capital LLC, an investment company owned by the emirate's ruler, agreed with creditors to restructure about $ 2.5 billion. benchmark for Abu Dhabi won.

Arabtec Holding Co., the largest construction company in UAE, advanced from the 07 December and Dubai Islamic Bank PJSC, the largest Shariah-compliant lender in the country, gained the most since Dec. 1. Dubai DFM General Index rose to 0.9 percent before closing 0.1 percent to 1,641.15 at 2 pm in the emirate. Abu Dhabi index rose 0.3 percent, the most in more than a week. In Israel, the TA-25 Index added 0.2 percent to close at a record 1,308.73 in Tel Aviv.

"The positive development of the weekend with the restructuring DIC" pushed stocks higher, said Akram Annous, MENA strategist at Al Mal Capital PSC in Dubai. "It's another pending resolution of an issue related to the restructuring of the debt that must be punished by the economy of repair."

Dubai International said December 17 "title economic terms have been agreed in principle" with the coordinating committee of creditors representing the creditors of the company to alter the terms of the debt. Lenders get 2 percent interest for $ 2 billion loan and extend the maturities of six years, the company said. About $ 500 million of loans have maturities ranging from four years with a cash coupon of interest unchanged.

Borse Dubai Sale

Borse Dubai Ltd., the company that controls two of Dubai, the stock exchange, sold shares of Nasdaq OMX Group Inc. to help pay $ 1.1 billion of a $ 2,450,000,000 term loan. He raised 497 million U.S. dollars from the sale of 22.78 million shares in Nasdaq OMX and $ 175 million from the sale of 8,000,000 shares of Nasdaq OMX's Nomura Holdings Inc, the Dubai government office of the media said in an emailed statement on 16 December.

Moreover, Abu Dhabi offered $ 1.5 billion to buy 20 percent stake in the London Stock Exchange Group Plc owned by Borse Dubai, the Sunday Times reported, without saying where it got the information. The three stock exchanges in the UAE can be combined as part of the agreement, the report said.

"A change UAE market makes the most cost-effective, more unified foreign investors," said Al Mal Annous

London Stock Exchange spokesman Alastair Fairbrother and a spokesman for the Dubai Stock Exchange declined to comment when contacted by phone today.

Arabtec jumped 2.6 percent to 2 dirhams. Dubai Islamic gained 1.9 percent to 2.17 dirhams.

Government Bonds

Emaar Properties PJSC, the nation's largest developer, increased 0.6 percent to 3.57 dirhams, the highest since Dec. 14. The company said Dec. 16 it has identified "best and most viable" options for conversion of debt to capital of Amlak Finance PJSC.

Oman gauge rose 0.7 percent GCC 200 Index of companies in the Persian Gulf are less than 0.1 percent. Saudi Arabia's Tadawul All Share Index rose 0.2 percent. Kuwait Stock Exchange Index decreased less than 0.1 percent. Bahrain and Qatar markets were closed for a holiday.

Egypt's benchmark EGX 30 Index dropped for the third consecutive day, falling 0.3 percent.

In Israel, government bonds rose. The bond yields of 5 percent in 2020 due January Mimshal Shiklit fell 4 basis points to 4.66 percent, matching the lowest since Dec. 7. The shekel weakened 0.1 percent to 3,593 against the dollar on 17 December.

The euro fell after Moody's Investors Service downgraded some Irish lenders

The euro fell after Moody's Investors Service downgraded some Irish lenders and debt. Boeing Co. led losses in the Dow Jones Industrial Average amid concerns that delayed its new 787 Dreamliner.

The euro fell against 14 of the 16 major pairs at 11:36 am in New York, falling to 1.2 percent to a record low against the franc. 500 of Standard & Poor's changed little after rising 0.3 percent in the first 15 minutes of trading. Boeing fell to 3.4 percent after the Seattle Times reported that it will release a new delay to the 787.

The euro extended losses as Moody's downgraded the state-controlled Anglo Irish Bank Corp. and Irish Nationwide Building Society, with grades of scrap and reducing Ireland in a variety of bonds, or securities backed by cash flows of the other debts. Intel Corp. also dragged the benchmark U.S. stock after a Wall Street Journal report that faces European antitrust scrutiny in the purchase of McAfee Inc.

"The market is vulnerable," said Alan Gayle, senior investment strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees 52.5 billion U.S. dollars. "There's still nervousness about the prospect of further cuts in Europe. In the U.S., things are improving, both from the standpoint of business and economics. However, the global nervousness will be around for a while and increases the vulnerability of markets to any news. "

The S & P 500 fell to its lowest level since September 2008 as an industrial and technology companies led declines among the 10 major industry groups. The index has risen more than 11 percent in 2010 amid improving corporate profits and the Federal Reserve's efforts to inject more money into the economy.

European shares

The Stoxx Europe 600 index rose 0.7 percent, trimming an earlier gain of 1.1 percent. Volkswagen AG, the largest automaker in Europe, rebounded 3.4 percent after saying it expects sales in China to grow 10 to 15 percent next year. Abertis Infraestructuras SA rose 1.7 percent after a Sunday Times report that CVC Capital Partners Ltd. may bid for the Spanish motorway operator.

Banco Popolare SC rose 5.5 percent, the first increase in eight days, after Goldman Sachs Group Inc. raised its recommendation on the bank to "neutral" from "sell."

airline stocks retreated as snow in European air travel disrupted for a third day. British Airways Plc sank 1.6 percent, while Deutsche Lufthansa AG lost 0.6 percent.

Euro weakens

The euro fell 0.8 percent against the yen, which weakened to its lowest level in nearly two weeks, and dropped 0.5 percent against the dollar at $ 1.3125. The New Zealand dollar strengthened against all 16 of its most actively traded counterparts, advancing by 0.8 percent compared with the U.S. currency.

The yield on the benchmark 10-year French fell seven basis points to 3.32 percent.

Similar to the U.S. due U.S. Treasury yield fell eight basis points to 3.26 percent before the Fed to buy up to $ 17 billion of securities maturing between 2014 and 2020 as part of its program-called quantitative easing.

The MSCI Emerging Markets Index fell 0.3 percent. Shanghai, China Composite Index sank 1.4 percent, the biggest drop in nearly three weeks, on speculation that the government will increase interest rates to curb inflation.

Investors are too optimistic given the prospects of tighter monetary policy, Hong Hao, an equity strategist at Beijing-based China International Capital Corp., wrote in a report released today.

The Hungarian forint weakened 1.4 percent against the euro, extending losses after the central bank raised its benchmark rate to 5.75 percent from 5.5 percent due to inflation concerns will accelerate.

South Korea's Kospi index lost 0.3 percent, comparing a previous version 1.5 percent drop, after the country conducted a live fire drill without calling the vengeance of its northern neighbor.

difficulty raising funds amid debt crisis in the region After The euro weakened

The euro weakened on speculation some European nations will have difficulty raising funds amid debt crisis in the region after the rating companies downgraded the credit quality of Ireland and is considered further cuts.

The single currency has depreciated against 14 of 16 major counterparts, fell to a two week low against the dollar and the yen as Moody's Investors Service downgraded two lenders based in Dublin to junk status. Costs to ensure France's public debt rose to a record, indicating the nation may be at risk of losing their top rating. The Swiss franc rose to a record high against the euro as investors sought refuge from the situation in the area of sovereign debt.

"We clearly have a whiff of panic in the air," said Boris Schlossberg, director of currency research at GFT Forex online merchant in New York. "Market players run from one story to the next until it comes to the base. At this point, everyone is playing the domino theory."

The euro fell 0.7 percent to $ 1.3101 as of 10:46 am in New York, the weakest since 02 December. The common currency fell 1 percent to 109.65 yen from 110.77 yen, the lowest since Dec. 7. The U.S. currency fell 0.4 percent to 83.69 yen from 83.98 yen.

yields on ten-year bond fell six basis points to 3.27 percent after touching 3.26 percent, the lowest level since 13 December.

Earnings, Yen

"With what is happening in yields, which has a specific impact on the dollar-yen," said David Watt, senior currency strategist at RBC Royal Bank of Canada Capital unit in Toronto. "The fact that we are seeing dollar-yen react positively to the widening of me says it's the growth impact of fiscal stimulus."

Barack Obama President on December 17 signed into law a bill 858 billion U.S. dollars of tax cuts.

The cost of insuring the debt of the French government has tripled this year, reaching a record high of 105.5 today, according to data provider CMA.

Swaps credit-default linked to French bonds implies a rating of Baa1, seven steps below its actual range of the top of Aaa by Moody's, according to the group of companies based in New York market research capital.

French Scene

"This means that you have something like an increase in risk appetite," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group LLC in Greenwich, Connecticut. "The euro is clearly falling behind."

The ECB said it had "serious doubts" that the Irish bills to fix the banking system threatens the central bank's ability to execute its liquidity operations. The bank said in a position paper dated Dec. 17.

"The ECB is clearly felt that the fact that the Irish government can change the status and treatment of bondholders owner of the Irish banks could increase uncertainty about the security used in financing operations of the ECB" Stephan said Maier, a rate strategist at UniCredit SpA in Milan. "This story also shows that there was a lack of coordination between the ECB and the Irish, who could be weighing on the market too."

Anglo Irish Bank Corp. and Irish Nationwide Building Society, both controlled by the Irish state, had its senior debt ratings cut to junk today by Moody's Investors Service. Moody's has downgraded the credit rating of Ireland for five levels to Baa1 on December 17, the day after Greece placed on review for possible downgrade.

Swiss Haven

The Swiss franc rose to a record of the era of the euro appreciated 1.1 percent to 1.2641. Against the dollar appreciated 0.3 percent to 0.9655.

The Swiss National Bank last week kept the three-month Libor rate target at 0.25 percent in an attempt to keep a lid on the currency. The strength of the franc against the euro has threatened the recovery of exports.

"As Ireland has launched a new outbreak of tension, is considered the work of regional currencies as a safe haven," said Derek Halpenny, European head of currency research at Bank of Tokyo-Mitsubishi UFJ Ltd ,The concern in Europe related to the budget deficit is something that Switzerland does not have to deal with."

The dollar against the euro was boosted by demand for security and optimism in the world's largest economy is improving. The Commerce Department report of 22 December that the U.S. economy grew at a rate of 2.8 percent annually during the third quarter, above its initial estimate of a 2.5 percent pace.

Dollar Index

The dollar index, which tracks the greenback against the currencies of six major U.S. trading partners, including the euro, yen and pound, rose to 0.4 percent.

Exchange Rates Australia, Canada and New Zealand, all the nations whose economies are tied to raw materials, have appreciated by at least 20 percent since the beginning of 2009, its central bank boosted interest rates to curb inflation increase in the prices of their commodity exports.

"The commodity currencies are on the extremes," said Ken Dickson, a money manager who helps oversee 240 billion U.S. dollars at Standard Life Investments in Edinburgh. "The Australian dollar is fully valued. The advantage is limited and would not be defending the long positions."

The pound rose against the euro amid concern over European nations

The pound rose against the euro amid concern over European nations will have difficulty raising funds as the Confederation of British Industry said the Bank of England will start raising interest rates within six months.

Sterling strengthened against the single currency of 16 nations at the IWC issued its report and the data showed that mortgage lending in the UK rose for the first time in six months. Government bonds advanced, leaving the 10-year yield at least a week as the military exercises in South Korea and threats of retaliation by the North increased demand for the safety of fixed income assets.

"Sterling is benefiting from the work of diversification in the back of the concerns of the euro and I had come out and tell the CBI that the Bank of England would be to hike within six months," said Jane Foley, currency strategist Currency of Rabobank International in London. There was talk last week the rate is being carried forward, "so this is just to consolidate a new debate," said Foley.

The pound strengthened 0.3 percent against the euro at 84.62 pence per euro as of 2:20 pm in London. Was one percent, to $ 1.5552 from $ 1.5533 in New York last week.

The pound has lost 1.4 percent in the last week.

Since late 2009, the British currency has lost 5.3 percent, compared with a decline of 10 percent for the euro and a loss of 1 cent per dollar.

The Bank of England raised its benchmark interest rate a quarter point every three months from the second quarter of 2011 to mid 2012, based in London CBI predicted in a report released today. It then goes to step up the pace of increases at the end of this year with a 2.75 percent rate, the prognosis of CHF.

MPC decision

Minutes of the December Bank of England Monetary Policy Committee meeting, on 22 December, is likely to show members remained divided on its decision to keep key interest rate at a record low of 0.5 percent and have the asset purchase program at 200 billion pounds.

MPC member Adam Posen, who has asked the bank to increase the stimulus, said last week policy makers should not "overreact" to inflation. His colleague Andrew Sentance voted to increase rates since June.

The pound may fall to resume next year as a slowing economy prompts investors to withdraw bets on higher interest rates, Bank of Tokyo-Mitsubishi UFJ Ltd., said.

"The expectations to reverse '

"We doubt much to the Bank of England will be able to start raising its official bank rate over the next six months," wrote Derek Halpenny, European head of currency strategy in London, in a note to investors today. "The rate hike expectations tend to invest in during the first quarter to take the pound lower, too."

Gross mortgage lending fell 5 percent to 11.1 million pounds in November from the previous month, the Council of Mortgage Lenders said today. A separate report based on data from six lenders published by the Bank of England showed that banks granted 45,000 loans for home purchases last month, compared with 44,000 in October, the first rise in six months.

The 10-year gilt yield fell seven basis points to 3.49 percent. It was 3.65 percent on December 16, the highest since May 1920. Past performance declined to 3.485 percent today, at least since 13 December. The safety of 4.75 percent due in March 2020 rose 0.58, or 5.8 pounds per 1,000-pound face amount, to 109.87. The yield on the two years has changed little over 1.16 percent.

Gilts have returned 5.9 percent this year compared with a gain of 5.5 percent for German bonds, the reference values of the euro region, according to the compliance rates by the Federation European Society of Financial Analysts. Treasuries have returned 5.7 percent, the indexes show.

Romania delaying the first sale of bonds denominated in euros initially planned for the fourth quarter until 2011

Romania plans to sell bonds denominated in euros in the first quarter, as part of the program three-year bonds worth 7 million euros ($ 9,200,000,000), Deputy Finance Minister Bogdan Dragoi said.

The Ministry of Finance will take the organizers of the program early next year, after the administration selected a group of law firms last week to advise on the sale, Dragoi said in an interview today in Bucharest.

Romania delaying the first sale of bonds denominated in euros initially planned for the fourth quarter until 2011 after resuming the search for legal counsel in an appeal against the selection process. The country plans to turn to international markets twice next year to help finance a budget deficit of 4.4 percent of gross domestic product in accordance with its international creditors, Dragoi said on 29 November.

The government is seeking funds in foreign markets after the demand dropped leu-denominated debt in the second half of this year due to a ceiling of self-imposed return of 7 percent. The ministry dropped the cap last month and has paid a yield to 7.3 percent, an increase of value added tax has increased expectations that inflation will accelerate.

Bond Program

The government, which appealed to the International Monetary Fund and the European Union for a ransom of 20 billion euros last year, wanted to raise at least 1 million in euro-denominated bond sale for the first time in the program EMTN, former Finance Minister Sebastian Vladescu said on 26 August.

The sales took place after the law firm challenged the results of an initial offer to select legal counsel. Selected ministry in Vienna, Erste Group Bank AG and Paris-based Societe Generale SA to arrange the sale.

Romania last tapped international markets in March, when it sold 1 million in five-year bonds with a coupon of five percent in the country's largest supply of debt. The bonds have fallen from the sale, the increased yield of 5.308 percentage points today, from 4.91 percentage points when sold.

The ministry has sold nearly 3 billion lei ($ 920 million) in treasury bonds denominated in leu-of lei 4.6 billion expected this month after leaving the lid of yield 7 percent. Average yields ranged from 6.88 percent to 7.17 percent, Dragoi said the government wants to shape a flat yield curve previously.

"It looks like a yield curve is forming for leu-denominated Treasury given the good results we've seen in past auctions," Dragoi said.

The yield on the 10-year bond touched the lowest level in one week & Treasuries rose for the third consecutive day

Treasuries rose for the third consecutive day the longest winning streak this month that the Federal Reserve prepared to buy up to $ 17 billion in two operations, the most in a single day.

The yield on the 10-year bond touched the lowest level in one week military exercises in South Korea and threats of retaliation by the North increased demand for safety. The European Central Bank said last week that it has "serious doubts" that the banking legislation introduced by the Irish government endangers the ECB's ability to execute its liquidity operations.

"The market is a bit exhausted right now," said David Ader, head of government bond strategy in Stamford, Connecticut, of CRT Capital Group LLC. "People have been battered, beaten and shocked by the decision we had to higher yields. They're saying," Maybe we did enough and we sell the purchase of the Fed. "

The yield on the benchmark 10-year fell six basis points, or 0.06 percentage point to 3.27 percent at 9:47 am in New York, according to BGCantor Market Data. The price of 2,625 per cent security due in November 2020 gained 02.01, or $ 5 per $ 1,000 face amount, to 94 18/32.

The yield touched 3.26 percent, the lowest since Dec. 13, rising to 3.56 percent on Dec. 16, the highest since May 13. Yields will be reduced to 2.98 percent on March 31.

Fed LBO

The Fed will hold two separate purchases of U.S. debt today as part of its plan to buy 600 billion U.S. dollars in bonds over Treasuries June and reinvest your maturing mortgage. The central bank expects to reinvest $ 250 000 000 000 to $ 300 million dollars in revenue from mortgage-backed debt and agency securities in Treasury bonds during that time.

From 10:15 am New York, the central bank will purchase Treasury bonds due in February 2018 to November 2020. The Fed plans to buy $ 7000000000 $ 9 billion worth today, according to the website of the New York Fed. This operation will close at 11 am

Starting at 1:15 pm and ends at 2 pm, the Fed will buy Treasuries maturing in December 2014 to May 2016. The central bank purchase of $ 6 million and $ 8 billion of bonds in this maturity level.

The purchase amount would be the biggest since the Fed restart the program after completing the purchase 1700000000000 dollars of debt in March.

Ried Thunberg survey

Fund managers in a survey of Ried Thunberg ICAP week became less pessimistic about the outlook for Treasuries in March. Ried sentiment index rose to 48 for the seven days ended December 17, 1946 before the week. A figure below 50 indicates investors expect prices to fall.

The company, which is a unit of the world's largest broker interbank and is based in Jersey City, New Jersey, interviewed 26 money managers control $ 1380000000000.

U.S. government bonds have fallen this month as the gap between yields on Treasuries with longer maturities showed second round of quantitative easing, the Fed may be your last.

The difference between 10 - and 30-year yields fell to 1.05 percentage points on December 15 from a record 1.60 points on November 10, the most since the 1980s. The change in the yield curve is carried out as Bank of America Merrill Lynch index data show U.S. bonds due in 10 years or more lost 4.64 percent this month, cutting 2,010 Gain to 8.37 percent.

U.S. Economy

Flattening usually heralds the end of the Fed cuts interest rates to stimulate growth. U.S. reports this month showed gains in retail sales, consumer sentiment and industrial production after the central bank increased its balance to a record high of 2.39 billion, injecting money into the financial system. Is the addition of 600 billion dollars, buying Treasury bonds through quantitative easing.

"A peak in the yield spread between 10 and 30 marks the end of an easing cycle," said Steven Wieting, managing director of economic and market analysis at Citigroup Inc.

Bonds won the ECB said in a position paper dated Dec. 17 and posted on their website that has "serious doubts" that the Irish law the bank may threaten the central bank independence and ability to execute trades of liquidity . The Irish Government on December 14 introduced legislation that would give power to alter the rights of bondholders "in the payment of interest and debt and to appoint administrators to banks if needed.

South Korea said a live-firing drill that brought threats of retaliation by North Korea was completed without incident, after the Security Council failed to agree on measures to ease the tension on the peninsula .

Canadian dollar weakened against its U.S. counterpart for a third day as crude oil, the main export of the country, reversing progress.

The Canadian dollar as the currency is known, declined after Canadian wholesale prices fell unexpectedly stagnated and national activity index of the Chicago Federal Reserve. Canada's currency was the closest to parity with the dollar last week over a month. Data tomorrow may show gains in the consumer price index slowed, while retail sales were stable.

"You have to oil prices, emerging from the top during the night, and concerns about what is happening to the Canadian economy," said David Watt, senior currency strategist at RBC Royal Bank of Canada Capital unit in Toronto. "If the U.S. industrial sector is not frantic, you can have an impact on Canadian exports to the U.S."

The Canadian currency depreciated 0.5 percent to 1.0193 per U.S. dollar at 10:36 am in Toronto after advancing as much as 0.4 percent, from $ 1.0140 on 17 December. It touched C $ 1.0001 on 15 December, the strongest level since it was last in line on November 11 and reached C $ 1.0147, a minimum of two weeks, on 17 December. One Canadian dollar buys 98.11 U.S. cents.

The Canadian dollar depreciated last week as an agreement by EU leaders at a two-day summit in Brussels did not allay the concern of the sovereign debt crisis stretching from Greece and Spain to other nations in the region. The single currency fell compared with 15 of the 16 major counterparts today, playing two-week lows against the dollar and the yen, as the European Central Bank expressed concern that the Irish banking legislation threatens the ability of ECB to carry out its liquidity operations.

Crude for January delivery rose as much as 0.8 percent to $ 88.75 a barrel before falling 0.9 percent to $ 87.26 in New York.

The Federal Reserve said it would limit its purchases to 70 percent of any single security of the Treasury as part of its plan to expand its balance sheet is known as quantitative easing.

The central bank had temporarily relaxed its limit of 35 percent in November to announce additional purchases of $ 600 billion in Treasuries until June. The New York Fed said in a statement given percentages allowable purchase of three brackets into account the open market system, or EMS, which consists of values that has, over 30 percent to 70 percent.

The Fed has acquired about 137.5 billion U.S. dollars of Treasury bonds since resuming the purchase of U.S. government debt on 12 November. The central bank may buy as much as $ 17 billion in debt through two open market operations today, as much as you restart the program after completing 1.7 trillion U.S. dollars to buy debt in March .

"This gives an explanation about what the end game is that the Fed with regard to purchases of individual security," said Simon Thomas, a government economist in New York debt of Jefferies Group Inc., one of 18 major dealers who trade with the central bank. "There are some issues that the Fed has more than 40 percent and people wondered if it would still be cheaper if there is no liquidity because the Federal Reserve has them all. Now not only can the Fed with 100 percent of a problem but also will take much longer to increase their participation. "

Farm

The Fed introduced a sliding scale for the amount of individual guarantees that you can buy in an operation when it has more than 30 percent. The rate of increase of debt to be purchased from a reduction in safety especially as the percentage held in its account increases in SOMA.

As of December 17, the Fed owned 49.93 percent of the note coupon of 8.75 percent Treasury due August 15, 2020, and 49.82 percent of the 8.5 percent coupon maturing in footnote 15 February 2020, according to Fed data compiled by Barclays Plc.

The Fed had said Nov. 3 that would allow individual security holdings to the principle of self-imposed 35 percent above the level "only modest increases, according to a statement released that day on the website of the Fed's New York. Once the security has reached 30 percent, "purchase, the warranty offered will usually have a cap of 5 percent of the total issue size outstanding in each subsequent operation," the statement said.

The central bank also plans to re-invest 250 billion U.S. dollars to $ 300 million dollars in revenue from mortgage-backed debt and agency securities in Treasury bonds.

Asian stocks fell for a third time in four days as concern mounted Europe's debt crisis will spread and South Korea held a mock artillery retaliation has led to threats by North Korea.

HSBC Holdings Plc, Europe's biggest lender by market value, fell 1.1 percent in Hong Kong. Ricoh Co., a manufacturer of office equipment that receives 23 percent of sales in Europe fell 1.9 percent in Tokyo. Sony Corp. fell 1.2 percent after the maker of Bravia TVs, said sales of TV sets fall short of its full-year target. Santos Ltd., Australia's third largest oil and gas producer, rose 4.1 percent after agreeing to sell part of its gas project in Australia.

"Debt problems in Europe continue to affect the appetite for risk," said Yoji Takeda, who helps manage about $ 1.1 billion at RBC Investment (Asia) Ltd. in Hong Kong. "There is also a slight concern at the escalation of tensions on the Korean peninsula, but is unlikely to become a major skirmish. Asian stocks remain attractive, given the region's strong economic growth."

The MSCI Asia Pacific Index fell 0.3 percent to 133.20 as of 8 pm in Tokyo, with more than two populations in decline for each advanced. The index rose to an intraday high of two 1/2-year high on 14 December as U.S. reports increased economic reliance on a global recovery, easing concerns that Europe's crisis of debt and China's measures to curb inflation, will affect growth.

South Korea's Kospi index declined 0.3 percent, compared to earlier losses of 1.5 percent. The government went ahead with a live firing drill to Yeonpyeong Island, a month after North Korea bombed the island near a disputed maritime border off the west coast of the peninsula, killing four people.

Oracle, RIM

Japan's Nikkei 225 Stock Average fell 0.9 percent. Shanghai, China Composite Index fell 1.4 percent and Hong Kong's Hang Seng index fell 0.3 percent. Australia S & P / ASX 200 lost 0.6 percent. India's Sensitive Index gained 0.1 percent.

Future over 500 of Standard & Poor's fell 0.2 percent today. The indicator rose 0.1 percent in New York on December 17 at 1243.91, its highest close since September 2008 as better than expected earnings forecasts from Oracle Corp. and Research In Motion Ltd., as well as acquisition of a regional bank in Europe overshadowed concerns debt crisis from spreading.

European shares fell on December 17 as an agreement between the leaders of the region to create a mechanism for crisis management to alleviate the concern that some euro zone nations can not pay their debts. Ireland's credit rating was reduced five levels by Moody's Investors Service on 17 December.

The decline in HSBC

HSBC fell 1.1 percent to $ 79.25 in Hong Kong. Standard Chartered Plc, the British bank that receives three-quarters of revenue from Asia, dropped 1.7 percent to HK $ 210 in Hong Kong.

"The concern is that European investors continue to see outbreaks of sovereign debt that could affect the global economy," said Don Williams, who helps manage about $ 1.8 million at Platypus Asset Management Ltd. in Sydney

An indicator of the companies in information technology, had the second-biggest decline among 10 industry groups in the MSCI index of Asia Pacific.

Ricoh fell 1.9 percent to 1168 yen in Tokyo. HTC Corp., the maker of mobile phones in Taiwan that has Europe as its second largest market after the United States, declined 0.8 percent to NT $ 865. LG Display Co., the world's No. 2 maker of flat panel displays which receives about 18 percent of sales in Europe, sank 2.6 percent to ₩ 39.200 in Seoul.

Objective Sony TV

Sony Corp., the third largest worldwide manufacturer of televisions, fell 1.2 percent to 2.930 yen. TV sales in the year ending March 31 may miss a target of 25 million units a "little," Vice President Hiroshi Yoshioka said today without elaborating.

Drug manufacturers in China fell after the Economic Observer reported that the government could reduce drug prices by an average of 40 percent.

Kangmei Pharmaceutical Co. sank 4.6 percent to 21.15 yuan in Shanghai. Beijing Tiantan Biological Products Corp. retreated 2.8 percent to 23.22 yuan, while North China Pharmaceutical Co. fell 2.6 percent to 16.46 yuan.

Shares of shipping companies bulk fell after the Baltic Dry Index of shipping rates for commodities fell 1.4 percent in London on 17 December to its lowest level since August 5, extending its fall session overnight.

China Cosco Holdings Ltd., China's largest dry bulk, fell 1.2 percent to $ 8.03 in Hong Kong in Hong Kong. STX Pan Ocean Co., South Korea's largest, fell 2.6 percent to 11,400 won. Hyundai Merchant Marine Co. fell 4.6 percent to ₩ 39,750.

Rally Japan?

The MSCI Asia Pacific index rose 11 percent in 2010 to 17 December, compared with gains of 12 percent in the S & P 500 and 9 percent in the Stoxx Europe 600 index. Stocks in Asia benchmark were valued at 14.7 times estimated earnings on average at the close on December 17, versus 14.6 times for the S & P 500 and 12.3 times for the Stoxx 600.

Japan's Nikkei 225 has underperformed the regional benchmark, since it has fallen 2.3 percent this year through Dec. 17. Kathy Matsui, chief equity strategist for Japan at Goldman Sachs Group Inc. in Tokyo, is telling clients to buy cars and technology producers because the benefits will increase as withdrawing yen against the dollar after hitting a 15-year high in October.

"Many investors make the mistake of being too emotional hung on the structural problems in Japan, and therefore cyclical opportunities are lost," said Matsui, 45, who has covered Japanese equities for 20 years. "If you have the stars aligned to a better U.S. economy, weak yen, the profits going back to 2007, peaks and very low birth weight foreign investors, which could easily deliver 15 to 20 percent .

Taiwan Airlines

Among the shares that advanced, Santos rose 4.1 percent to $ 13.50. The company will increase by 665 million U.S. dollars ($ 658 million) selling a 15 percent stake in its proposed Gladstone liquefied natural gas to Total SA and Korea Gas Corp. has just completed a sale of shares to institutional investors, increase of A $ 500 million.

Taiwan airlines advanced after the Economic Daily News reported that the island may raise the daily limit of Chinese tourist arrivals to 4,000 from 3,000. The newspaper did not say where it obtained the information. Liu Te-shun, vice chairman of mainland China's Taiwan Affairs Council, did not immediately return calls to his office.

China Airlines Ltd., Taiwan's largest airline, increased 1.9 percent to NT $ 24.80. Its smaller rival EVA Airways Corp. rose 3.9 percent to NT $ 36.40.

In Bombay, Hero Honda Motors Ltd., maker of half the motorcycles sold in India, surged 18 percent to 1,980.5 rupees. The company said sales of Honda Motor Co. 's of its 26 percent stake in the company in India will lead to lower royalty payments technology. Honda, the world's largest manufacturer of motorcycles, agreed last week to sell its stake to Hero Group for $ 1.9 million so it could focus on the development of full ownership unit in India.

New York Metropolitan Transportation Authority is selling $ 350 million in Build America Bonds

New York Metropolitan Transportation Authority is selling $ 350 million in Build America Bonds, a leading end of 2010 the issues of debt liabilities.

States and municipalities are scheduled to sell $ 400 million in federal grant values this week, the fewest since the last week of 2009. The drop follows two weeks of selling manufacturing assets in American history of the program 21 months. About $ 1.1 billion in bond issuance is expected, the lowest total since the week ended December 31, 2009.

Even if the transit agency is required to pay higher yields to get the deal done, is probably still cost less than the issuance of tax exempt after the program expires on December 31, said Peter Coffin, president of Boston Advisors Breckinridge Capital Inc., which manages about $ 13 billion in municipal debt, including $ 600 million in taxable.

The MTA, which faces a deficit of at least $ 207 million in 2012, has seen its budget of 12 billion U.S. dollars suffer for a payroll tax in New York and seven suburban counties adopted as part of a ransom of 2009 no has met projections. In January and February, the state has reduced its forecast for the grants by $ 336 million. The estimate was reduced another $ 50 million for the MTA in July.

In October, the agency increased fees and ticket prices for trains as part of a plan to generate $ 400,000,000 next year amid state funding cuts. The agency is also raising tolls on bridges and two tunnels starting December 30.

Extra Performance

The extra yield over Treasuries investors demand for 30 - year MTA Americas Build fell to 266 basis points on December 17, 275 basis points, where the authority of the securities sold in July, according to Municipal Securities data Regulatory Board.

"It's a slow week, but full of people not what the agreement will have a bit of attention," said Coffin. "It makes perfect sense in the world for them to try to capture the subsidy now."

The agency estimates call for all-in cost of borrowing by 4.65 percent against 5.5 percent for tax-exempt.

"We believe that there is liquidity to sell bonds," said Patricia McCoy Director of Finance at a meeting last week.

Building Americas was created under the stimulus legislation by President Barack Obama as a means to lower borrowing costs for cities and channeling money to job creation projects construction. While Obama and the Democrats supported the extension of the program, which have run into opposition from Republican critics of the stimulus. Extensions of two times last Democratic-controlled House only seat in the Senate.

With the certainty of Savings

"We were hopeful the Build America program would be extended," said Aaron Donovan, spokesman for the authority, in a telephone interview. "If it was not, he wanted to issue the bonds now to ensure we could achieve savings subsidy for sure."

The grant has been left out of the 858 billion U.S. dollars bill extending by two years the tax cuts of the Bush era. Rep. John Mica of Florida, which is destined to become Speaker of the House Transportation and Infrastructure in January, said Dec. 17 it plans to introduce a "reincarnation" Build America Bonds program next year.

Yields on top-rated tax-exempt municipal bonds for the past 30 years has decreased by about 10 basis points, following the proposal of Mica, the most since August 18, reaching 4.72 percent. bond prices to thirty years also confirmed shipping rates dropping 10 basis points, the most since November 16 at 4.44 percent.

The iShares S & P AMT Free National Bond Fund, an exchange-traded fund that tracks the Standard & Poor's index of municipal bonds, rose 1.32 percent on the same day, the highest since January 2009, 99, $ 96 held in New York Stock Exchange.

Continuation Program

If the proposed Mica is correct, then the result Building America can lead a rally for tax exemption in 2011, Regina said Shafer, who helps oversee $ 5.3 billion in tax-exempt municipal bonds as senior vice president of fixed income USAA Investment Management Co. in San Antonio.

"A lot of our low yield of Treasury bonds had been due to uncertainty about BAB" said Shafer. "If it does get extended, we would see an even stronger market into the next month."

More than $ 185 million in building America have been sold since April 2009. That exceeds the emission estimates from analysts at JPMorgan Chase & Co. and Barclays Plc, which forecast totals $ 100 million and $ 150 billion, respectively, during the advent of the program.

The following is a description of a pending sale of U.S. debt City:

BOARD OF REGENTS STATE OF UTAH, which oversees the higher education system, plans to sell $ 365 million in tax-exempt bonds and $ 24.5 million in debt subject to alternative minimum tax today to refinance existing debt. The securities will be backed by revenue from student loans, and carry the highest rating of Moody's Investors Service and the third highest rating, AA by Standard & Poor's. RBC Capital Markets and Bank of America Merrill Lynch to underwrite the offering. (Added 20 December)

Investors can profit in 2011 by buying the U.S. currency against Japan

Investors can profit in 2011 by buying the U.S. currency against Japan as the yield difference between bonds of the two countries is expanded for the dollar, according to Franklin Templeton Investments.

U.S. yields up in the midst of an economic recovery and concerns about the size of the government loan program, wrote Michael Hasenstab, who heads the 43.7 billion U.S. dollars Templeton Global Bond Fund in San Mateo, California. Also increase as the program of the Federal Reserve buys Treasury is nearing its end and the markets speculate on the central bank's ability to reduce your balance before inflation is based, wrote in a report that details Franklin Templeton 2011 perspectives.

"There can be potential opportunities to capitalize on increasing returns in the U.S. for the long position of the dollar against the Japanese yen," wrote Hasenstab. "There was a strong correlation between the bilateral exchange rate and the difference between yields in the U.S. and Japan, and we expect this relationship to continue, given the large investment flows involved."

The dollar traded at 83.85 yen from 6:55 am in London after rising to 84.51 yen on December 15, the strongest level since 24 September. The dollar has weakened 9.8 percent against the yen this year.

The Templeton Global Bond Fund has exceeded 97 percent of competitors in the past five years.

Large differentials

Treasury bonds two years offers investors up to 44 basis points in extra yield on 15 December on similar maturity Japanese government, the most since July 28. Yields on benchmark 10-year Treasury rose to 3.56 percent on Dec. 16, the highest since May 1913.

Franklin Templeton expects yields to rise in most countries that the global economy recovers, Hasenstab wrote. To protect against loss in global bond portfolios, said his investment team "significant reduction" mean duration of this year and did not own Treasuries and Japanese bonds and a minimum investment in the euro area debt at the end of September.

Hasenstab said he is in favor of short-maturity bonds in countries such as Australia, Israel and South Korea. These positions are likely to benefit due to currency gains, he wrote.

"We hope that the currencies of economies with relatively strong growth, the policy is likely to tighten in the short term, it should appreciate against the currencies of the G-3, where monetary policy is likely to remain loose for a extended period under Hasenstab.

The Bank of England will start raising interest rates within six months to curb inflation, the Confederation of British Industry said.
The Monetary Policy Committee will increase its benchmark interest rate a quarter point every three months from the second quarter of 2011 until mid 2012, the London-based group said in a report released today. It then goes to step up the pace of increases at the end of that year with a rate of 2.75 percent.
"The persistent strength in energy prices and raw materials is a growing concern, as is likely in the sense that inflation will not fall as sharply as many expect," said CBI chief economic adviser, Ian McCafferty. "Growth in the beginning of 2011 is likely to be very slow, but we hope that the recovery itself to stay on track."
Bank of England policy makers remain divided on the need to curb inflation or increased bond purchases to offset the effect on the economy of the fiscal burden of government. Inflation accelerated to 3.3 percent in November, exceeding the government's limit of 3 percent for the ninth month.
The Consumer-price growth "significantly higher" central bank target of 2 percent next year and only fall "just below" the goal in the first quarter of 2012, the CBI forecasts. Inflation to end 2012 at 2.4 percent, he said.
The pound was little changed against the dollar today and traded at $ 1.5536 as of 10:41 am in London.
Growth forecasts
The CBI said the economy will grow 0.6 percent in the current quarter before slowing to 0.2 percent in the first three months of 2011. The average growth of 2 percent in 2011, he said, maintaining a prediction of September, and accelerate to 2.4 percent in 2012. It also forecasts housing prices will fall by 4 percent next year and remain unchanged in 2012.
Gross mortgage lending fell 5 percent to 11.1 million pounds (17.2 billion U.S. dollars) in November from the previous month, the Council of Mortgage Lenders said today. A separate report based on data from six lenders published by the Bank of England showed that banks granted 45,000 loans for home purchases last month, compared with 44,000 in October, much less than half the peak of the real estate boom 2007.
The Bank of England left its emergency plan with option to buy bonds unchanged at 200 billion pounds this month and kept the benchmark rate at a record low of 0.5 percent.
MPC member Adam Posen, who has asked the bank to increase the stimulus, said last week policy makers should not "overreact" to inflation, because it may decrease to below 1 percent in two years. His colleague Andrew Sentance, however, voted to raise interest rates since June.

Argentina can send a current account deficit for the first time in a decade next year, raising concerns that the peso will weaken further and become the worst performing currency in Latin America for the third consecutive year.

The deficit is likely to be equal to 0.4 percent of gross domestic product in 2011. The weight can be slid 8 percent to 4.29 per dollar at the end of next year.

Argentina may report its first current account deficit since 2001, imports exceed exports. The measure of trade in goods, services and investments will probably be reduced by 73 percent in the third quarter last year to $ 1 billion. A weaker peso could erode the dollar return in local currency bonds after obtaining 16 percent in 2010, compared with 15.3 percent for Brazil's debt and 8.7 percent for Notes from Russia.

"For an investor holding a role in weakening peso is important to take away from their statements," said Alejandro Urbina, manager of emerging market debt Silva Capital Management in Chicago, in a telephone interview. "Beyond the 4.25 per dollar, I start to look different local investment. But that's my high estimate for things to go."

Urbina, whose holdings include bonds in Argentine pesos, said he believes that the government allowed the peso to weaken to 8 percent. Silva has about $ 800 million under management and advice.

Fernández Strategy

The government of the publication of current account data at 2 pm, New York and the trade balance data on 22 December. The trade balance likely fell in November to $ 881,000,000 from $ 1.2 billion a year earlier.

President Cristina Fernandez de Kirchner will seek a weaker peso next year to curb rising imports, boost exports and avoid a current account deficit, said Juan Pablo Fuentes, Latin America economist at Moody's Analytics Inc. in West Chester, Pennsylvania .

"That will be the best way to prevent the current account deficit falling," he said. "That slows down imports, promoting exports and domestic production support."

Weight may drop as much as 12 per cent to 4.50 per dollar in 2011 when the government fails to slide, Fuentes said in a telephone interview.

Credit Default Swaps

The currency rose 0.1 percent last week to 3.9742 per dollar and has fallen 4.4 percent in 2010.

The extra yield investors demand to hold government bonds in dollars rather than U.S. Treasuries rose 18 basis points to 533 on December 17, according to JPMorgan Chase & Co.

The cost of insuring Argentine bonds against default for five years fell 11 basis points to 637, according to CMA DataVision. Swaps credit-default pay the buyer face value in exchange for the underlying securities or the cash equivalent of a government or a company fails to meet debt agreements.

Consumer prices

Standard & Poor's upgraded the foreign currency ratings of eight companies in Argentina on 17 December after a review of the business environment in Argentina. Alto Palermo SA, Latin American company Infrastructure and Services SA, IRSA Inversiones y Representaciones SA, Telefonica de Argentina SA, Transportadora de Gas del Sur SA and Telecom Personal SA were raised to B. Loma Negra Ciasa was raised to B + and BB-Petrobras Argentina SA, the company said in a statement.

Argentina drop weight can slow next year to curb rising consumer prices that Goldman Sachs Group Inc. estimates above 25 percent, said Jorge Todesca, a former deputy economy minister who now heads the investigation of Buenos Aires Finsoport company.

"The exchange rate is the only anchor the government against inflation," Todesca said in a telephone interview in Buenos Aires. Weight is expected to slide in line with the target of 4.10 per dollar in 2011 Fernández budget.

"Lax" fiscal and monetary policy is driving domestic consumption, together with inflation, is driving demand for imports, said Bertrand Delgado, an economist at Roubini Global Economics LLC in New York.

The government said spending last month rose 52.7 percent in annual terms in October. The central bank raised its money supply growth target in August after beating its original target.

Reserve Construction

Argentina policy makers try to accumulate reserves, while the peso weakened to shore up margins of exporters' profit, a strategy for Fernandez defended in a speech of 07 December in Buenos Aires.

"Without government intervention, the peso would be worth about 1.86 per dollar, he said.

Import demand will rise even more next year the Government to increase spending and central bank maintains an expansionary monetary policy before the October presidential elections, said Delgado.

"There will be some contraction or a contraction in progress, the current account surplus," said Delgado. "It will have an impact on weight."

Treasury bonds advanced for a third day in the longest streak of gains this month

Treasury bonds advanced for a third day in the longest streak of gains this month as the escalation of tensions on the Korean peninsula drove investors to the perceived safety of U.S. government debt.

Bond yields also rose about one percentage point higher than under attracted buyers this year. South Korea said today that a live fire drill was completed without incident after threats of retaliation by North Korea. The Federal Reserve is scheduled to buy up to $ 17 billion of Treasury bonds with maturities between 2014 and now 2020.

"What happened in Korea is of course something that the markets are aware of and lying in the bottom," said Rasmus Enthusiast, fixed income strategist at Credit Suisse Group AG in Zurich. "Any global crisis will cause a rally in Treasuries."

The yield on the benchmark 10-year bond fell one basis point to 3.32 percent as of 6:03 am in New York, according to BGCantor Market Data. The guarantee of 2,625 percent, due in November 2020 gained 3 / 32, or $ 0.94 per $ 1,000 face amount, to 94 5 / 32.

Treasuries rose on December 16 and December 17, pushing 10-year yields by 20 basis points, or 0.20 percentage point. The yield rose to 3.56 percent on Dec. 16, the low this year of 2.33 percent on Oct. 8.

ten-year rates will be reduced to 2.98 percent on March 31.
live-fire exercises "would be impossible to prevent the situation on the Korean peninsula after the explosion," he cited North Korea's state Korean Central News Agency of the Ministry of Foreign Affairs said on 18 December.

Flattening of the curve

U.S. government bonds fell this month as the gap between yields on Treasuries with longer maturities showed purchases by the Fed, its second round of quantitative easing, may be the last.

The difference between 10 - and 30-year yields fell to 1.05 percentage points on December 15 from a record 1.60 points on November 10, the most since the 1980s. The change in the yield curve call is being held as Bank of America Merrill index data show Lynch U.S. bonds due in 10 years or more lost 4.64 percent this month, trimming gain of 2.010 to 8.37 percent.

Flattening usually heralds the end of the Fed cuts interest rates to stimulate growth. U.S. reports this month showed gains in retail sales, consumer sentiment and industrial production after the central bank increased its balance to a record high of 2.39 billion, injecting money into the financial system. Is the addition of 600 billion dollars, buying Treasury bonds through the so-called quantitative easing.

End of Cycle

"A peak in the yield spread between 10 and 30 marks the end of an easing cycle," said Steven Wieting, managing director of economic and market analysis at Citigroup Inc. "It's part of a recovery and improvement of growth expectations. If the outlook is for a stronger recovery, then QE is limited and can not expand beyond it. "

The U.S. economy grew at an annual rate of 2.8 percent in the third quarter, faster than the 2.5 percent estimate issued last month, the Commerce Department said December 22. Consumer spending rose 0.5 percent in November after an increase of 0.4 percent in October, a survey showed that before the December 23 report.

"The economy continues to recover," said Hiroki Shimazu, a Tokyo-based economist at Nikko Cordial Securities Inc., part of Sumitomo Mitsui Financial Group Inc., Japan's third-largest bank by assets traded. "Fear of deflation will gradually disappear. The push up yields."

Less bearish outlook

The 10-year rate can increase to 3.5 percent by June 30, Shimazu said.

The difference between yields on 10-year bonds and Treasury inflation-protected securities, an indicator of expectations operator in consumer prices during the life of the securities, widened to 2.29 percentage points this year low of 1.47 percentage points in August. The five-year average is 2.09 percentage points.

Fund managers in a survey of Ried Thunberg ICAP weekly Inc. became less pessimistic about the outlook for Treasuries in March.

Ried sentiment index rose to 48 for the seven days ended December 17, 1946 before the week. A figure below 50 indicates investors expect prices to fall. The company, which is a unit of the world's largest broker interbank and is based in Jersey City, New Jersey, interviewed 26 money managers control $ 1380000000000.

Brazil is behind all the major countries of Latin America in the dollar bond market

Brazil is behind all the major countries of Latin America in the dollar bond market this year for the first time since 1997 amid the concern of the president-elect, Dilma Rousseff, you can not curb spending growth.

The return of 8.4 percent of Brazil's bonds this year is the lowest among the eight countries of the region followed by JPMorgan Chase & Co. 's EMBI +. Argentine bonds gained 31 percent, the biggest advance in the region.

Rousseff plan to increase cash payments to the poor are helping to fuel speculation that spending will follow the policies of President Luiz Inacio Lula da Silva, public expenditure rose by 27 percent in the first nine months of the year . The average performance of Brazil's dollar bonds rose 88 basis points, or 0.88 percentage point, from 13 October last week to five months of 5.61 percent, according to JPMorgan.

"Dilma not been tested," said Michael Roche, an emerging markets strategist at MF Global Holdings Ltd., a New York broker. "We need to build a risk premium in the country's sovereign spread until proven otherwise."

The central bank raised interest rates this year by 200 basis points to curb inflation, public spending helped trigger the biggest economic expansion in more than two decades. Consumer prices rose 5.63 percent in the 12 months to November, the fastest pace since February 2009.

Alexandre Tombini, Rousseff selection to head the central bank will increase borrowing costs to 12.75 percent 10.75 percent by the end of next year to stem inflation, futures trading shows rates. Tombini, who has served on board the central bank since 2005, was confirmed by the Senate last week.

Minimum Wage

the largest economy in Latin America will grow 7.6 percent this year, according to a survey of 10 December the central bank of about 100 economists.

Rousseff, who takes office Jan. 1, said last month it is considering increasing the minimum monthly wage to 700 reais ($ 409) by the end of his term of four years of 510 reais. The government's budget proposal for 2011 increases the minimum wage of 540 reais a month, the Workers Party Serys Slhessarenko senator told reporters in Brasilia on December 17.

"A normal reaction, considering a new government is underway, is to be concerned about how the new president will carry out the tax bills," said Marcelo Saddi Castro, who oversees 18 billion as chief investment real SulAmérica Investimentos in Sao Paulo, in a telephone interview. "The lower the minimum wage, the better the impact on fiscal accounts."

Budget Deficit

The budget deficit increased to the equivalent of 3.4 percent of gross domestic product in August, more than five months before reducing to 2.4 percent of GDP in September, when the government received a lot of revenue from the sale of state oil reserves of Petroleo Brasileiro SA.

The office of the Ministry of Finance press would not comment.

Rousseff, who said that social programs and the need for investment in Brazil is not reduced, committed on television on November 1 registration to control public spending because "the most important feature of a government in the world today not spend what you can not spend. "

"We're getting conflicting statements and his administration has done little to ease concerns about policies in the future," said Vitali Meschoulam, strategist at Morgan Stanley in New York, in a telephone interview. "We do not know if they will leave more or less fiscal stress that the previous government."

U.S. Treasury Bonds

The increase in U.S. Treasury yields have deepened the fall in Brazil's dollar bonds in the last month, said Meschoulam.

The U.S. bond yield 10 years touched 3.56 percent last week, the highest level since May 13, speculation about Barack Obama president's decision to extend the tax cuts adopted under his predecessor may boost U.S. growth ., while worsening the nation's budget deficit.

The extra yield investors demand to own Brazilian dollar bonds instead of U.S. Treasuries fell 2 basis points at 6:29 pm New York to 197, according to JPMorgan.

The cost of protecting Brazil's bonds against default for five years fell 2 basis points to 113, according to CMA prices. 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 real rose 0.2 percent to 1.7108 per U.S. dollar.

Yields on Brazil's overnight rate for futures contracts in January 2012 rose 1 basis point to 11.86 percent.

BNDES

The Finance Minister Guido Mantega, who shall hold office under Rousseff said in November that Brazil plans to cut funding for state development bank by 50 percent next year in an effort to topple the world the second highest interest rates adjusted for inflation.

BNDES, as the lender is known, will conduct an auction of local corporate bonds on 20 December as part of a government plan to boost trade in the secondary market, according to a bank official who declined to be identified accordance with the policy.

The bank auctioned bonds issued by the Cia. De Bebidas das Americas, Tractebel Energia SA and Cia. Energetica de Minas Gerais, according to three investors who received an email from the bank detailing the plan. The auction will take place between 11 am and 11:30 am

Brazil's bonds dollar again to 11 percent last year, beating Mexico's debt, Moody's Investors Service raised the South American country with an investment grade rating of Baa3. Brazil won its first investment grade rating in April 2008, when Standard & Poor's raised to BBB-. Fitch Ratings matched the movement of a month later.

The yield on Brazil's bonds touched 4.72 percent on Oct. 13, the lowest since JP Morgan began tracking the data in December 1997.

"You have a credit that was too tight and had passed in previous years, the good news in the fundamentals and is priceless," said Meschoulam. "So far, Brazil is less likely to be upgraded to the smallest loans in the region and on a relative basis seems less attractive."

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Monday, December 20, 2010

Arabica coffee prices can vertical pin up to a record $ 4 a pound

Copper rose more in a week in New York amid speculation

The crude oil trading near the highest levels in two years

World zinc mining companies can pay 15 to 20 percent

Natural gas rose for a second day in New York

OAO Uralkali agreed to buy OAO Silvinit for $ 7.8 billion in cash and stock

European stocks rose &strength the economic recovery enough to withstand the crisis

rising in German stocks

U.S. stocks drift between gains and losses

China stocks fell the most in a month

Dubai shares rose for a second day Dubai International Capital

The euro fell after Moody's Investors Service downgraded some Irish lenders

difficulty raising funds amid debt crisis in the region After The euro weakened

The pound rose against the euro amid concern over European nations

Romania delaying the first sale of bonds denominated in euros initially planned for the fourth quarter until 2011

The yield on the 10-year bond touched the lowest level in one week & Treasuries rose for the third consecutive day

Canadian dollar weakened against its U.S. counterpart for a third day

it would limit its purchases to 70 percent as part of its plan to expand its balance sheet ,FED Said

Asian stocks fell for a third time in four days

New York Metropolitan Transportation Authority is selling $ 350 million in Build America Bonds

Investors can profit in 2011 by buying the U.S. currency against Japan

The Bank of England will start raising interest rates within six months to curb inflation

the peso will weaken further and become the worst performing currency in Latin America .

Treasury bonds advanced for a third day in the longest streak of gains this month

Brazil is behind all the major countries of Latin America in the dollar bond market

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