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Thursday, December 23, 2010

HSBC Holdings and Standard Chartered said that sales will double in 2011

HSBC Holdings Plc and Standard Chartered Plc, the largest foreign insurers yuan of bonds sold in Hong Kong, says that sales will double in 2011 as demand outstrips supply and appreciate the yuan.

New problems may increase to a record 80 billion yuan ($ 12 billion) next year, with up to 30 billion yuan of sales in the first quarter, according to HSBC, the No. 2 bond insurer sum so-called penumbra. Standard Chartered, the fourth largest, said that sales could reach 100 billion yuan as the Moscow-based United Co. Rusal and BP Plc plan issues. Offers of this year total 40.7 billion yuan
.

"We're likely to see strong growth to around 80 billion yuan in 2011," said Sean Henderson, head of HSBC's debt syndicate in Asia, in a telephone interview. The dim sum market has grown 10 times since 2008 as China seeks to use the city as an international center to promote the use of the yuan beyond their borders for trade and finance.

The foreign exchange earnings forecasts stimulated an increase of 45 percent each month in yuan deposits in Hong Kong and a high of 217.1 billion yuan in October, according to latest figures from the Hong Kong Monetary Authority, the creation a base of investors looking for yuan-denominated securities. Bond issuers can save about 197 basis points, or 1.97 percentage points in interest payments sell yuan bonds in Hong Kong rather than Shanghai.

Cantonese Food

Dim sum bonds, named after brunch Cantonese food, pays a yield of around 1.83 percent, according to Treasury Markets Association, which tracks 30 outstanding issues, including the notes sold part of China Development Bank Corp. and Bank of China Ltd. The average yield paid three to five-year bonds sold by government-linked companies in China is 3.8 percent, according to Bank of America Merrill Lynch quasi China -Government Index.

investment grade companies in Asia pay an average of 4.76 percent to sell bonds denominated in dollars, according to JPMorgan Chase & Co. 's Asia Credit Index.

China Development Bank bonds dim sum due in November 2013 performance of 1.9 percent, according to the prices of TMA. dollar-denominated bonds lender in October 2014 because the 2.93 percent yield, according to BNP Paribas prices, while its yuan bonds due in October 2013 to pay 3.7 percent, according to Chinabond prices.

Bank of China, the No. 1 insurer of dim sum bonus this year, said this week it plans to establish an index tracking the performance of most-traded notes dim sum, according to an e-mailed statement from the bank in December . 20. Nobody in the Bank of China was able to provide a forecast dim sum of bonds yesterday, said Clarina Man, a spokeswoman.

Issuer Pipeline

Haitong Securities Co. 's Hong Kong unit of a fund of 5 billion yuan of bonds in September to invest in renminbi bonds offshore.

"The pipeline for issuers is still very strong," said Kong Weipeng, head of fixed income investments Haitong International Asset Management, in an interview in Hong Kong on 22 December. "A stable assessment would be helpful for developing the bond market yuan at sea. In the long term, people expect the yuan to appreciate."

The yuan may rise to 6 percent next year against the dollar, Zhang Ming, deputy head of Beijing-based International Office of the State Finance Research supported by the China Academy of Social Sciences, said in an interview this week.

China's currency is the best performance among the BRIC economies in the last decade. The yuan has strengthened 25 percent against the dollar in the last 10 years, surpassing the 15 percent gains of the Brazilian real, 3.4 percent in the rupee in India and a 8.7 percent slide in the Russian ruble.

BP, Rusal

The yuan gained 0.05 percent to 6.6431 per dollar yesterday in Shanghai, the China Foreign Exchange Trade System. non-deliverable show traders are betting on an advance of 2.1 percent over the next 12 months.

Rusal plans to hire banks to sell yuan-denominated bonds and carry out a sale as soon as the first quarter of 2011, head of the company capital markets Mukhamedshin Oleg said on December 17 in Moscow. The sale of one billion yuan would be a "reasonable" he said.

BP, based in London, was considering selling yuan-denominated bonds, Gary Admans, manager of the company's debt capital markets, told a conference in London on 7 December. International Finance Corporation, private investment arm of the World Bank, aims to provide about 100 billion yuan of five-year bonds, Nina Shapiro, IFC's CFO said on October 20.

Galaxy, VTB

The government of China and China Development Bank was the issuance in the bond market very weak this year, with 14.6 billion yuan of sales between them.

The casino operator Galaxy Entertainment Group Ltd. sold the first dim sum bonus this month speculative grade. The 1.38 billion yuan of three-year bonds were to yield 4.625 percent.

VTB Group, the second largest bank in Russia, became the first company of one of the emerging markets outside Asia to sell yuan-denominated bonds on 10 December. The three-year bonds were yielding 2.95 percent, compared with a yield of 5.9 percent for five-year bonds VTB dollars.

Elsewhere in credit markets of China, the credit default contracts to five years in exchange for the country's bonds were little changed at 68 basis points yesterday, CMA prices show. The contract rose 17 basis points in November after falling in October and September. Swaps credit-default tends to decrease as improving investor confidence and rising as it deteriorates.

"The imbalance in demand"

The government bond yield 3.67 percent due in October 2020 rose 3.5 basis points yesterday to 3.83 percent, Interbank funding data center shown. interest rate swaps to a year, the fixed cost required to receive the floating rate repurchase seven days, up eight basis points to 3.15 percent yesterday.

"The current imbalance between investor demand and supply of bonds is such that there could lead to 100 million yuan to 150 billion yuan from the issue," Daniel Mamadou, co-head of Asian capital markets and their own solutions to Deutsche Bank AG, said in a telephone interview. "But all market players are now understood that this will be a process that is carefully controlled and administered by the Bank, both of China and Hong Kong Monetary Authority."

Deutsche Bank, who helped organize the first dim sum bonus of high performance, is the largest insurer session.

HSBC forecast for the new issue that regulators can make borrowers repatriate earnings and cross currency swap markets develop further, "said Henderson.

Treasuries fell after reports showed initial jobless claims fell and consumer spending advanced

Treasuries fell after reports showed initial jobless claims fell and consumer spending advanced.

Benchmark yields rose for a fourth week as the government said it would auction 99 billion U.S. dollars in notes next week, the same amount sold in the last two months. U.S. debt has handed investors a loss of 2.1 percent this month, the biggest since December 2009, Bank of America Merrill Lynch index shows.

"We have to drift to higher rates to the provision of next week," said Jason Rogan, director of operations for U.S. government New York, Guggenheim Partners LLC, a brokerage for institutional investors. "We are in the typical commercial rental, so no big bets will be made until the new year."

The yield on the benchmark 10-year advanced four basis points, or 0.04 percentage point to 3.39 percent at 1:59 pm in New York, according to BGCantor Market Data. The price of 2,625 per cent security due in November 2020 fell 9 / 32, or $ 2.81 per $ 1,000 face amount, to 93 21/32.

ten-year yields hit a seven-month high of 3.56 percent on Dec. 16 and had their longest streak of weekly gains since May 2009, when he completed a seven-week gain on debt exceed the government's concern demand. The yield rose six basis points this week.

Trading in Treasury bond stood at 2 pm in New York tomorrow and remain closed throughout the world to celebrate Christmas. Trading in the UK will be closed December 27 and December 28 in observance of Christmas and Boxing Day.

Treasury Volume

About $ 165 billion in Treasuries changed hands yesterday through ICAP Plc, the lowest level since 26 November, which was on Thanksgiving after the U.S., according to the most agent in the world between operators. The average daily volume this year was 251 billion U.S. dollars.

The Treasury announced today that it will auction 35 billion in bonds to two years on December 27, the same amount of debt in five years the following day and $ 29 billion in bonds for seven years on 29 December.

"Next week is all about supply, and that's what the market will start to turn," said David Ader, head of government bond strategy in Stamford, Connecticut, of CRT Capital Group LLC. "The economic data have improved enough to make us believe that the risk of decline has decreased, but at the same time, information is more balanced here than it seems. We still have 9.8 percent unemployment and very low inflation . The market is trying to find some stability. We must be on a wide range of 2.75 percent, to 3.75 percent next year. "

Jobless Claims

Initial claims for unemployment insurance decreased in 3000 to 420,000 in the week ended Dec. 18, the Labor Department figures showed today. And collecting those benefits fell last week to 4.06 million.

The U.S. unemployment rate rose in November to 9.8 percent, the highest since April, while hours worked and incomes have stagnated, the Labor Department reported on 3 December.

Household purchases by 0.4 percent last month after an increase of 0.7 percent in October, which was almost two times higher than previously estimated, the Commerce Department reported today. preferred measure of inflation the Federal Reserve remained at a record low.

The difference between the rates of 10-year bonds and Treasury Inflation Protected Securities, an indicator of expectations operator in consumer prices during the life of the securities is known as the equilibrium rate, has changed little at 2.32 percentage points today, compared with this year's low of 1.47 percentage points.

Fed LBO

The Fed bought $ 26 billion in Treasury bills this week as part of its effort to keep interest rates low and generate long term economic growth. Next week the central bank will conduct two rounds of purchases of assets, the purchase of six billion to $ 8 billion in bonds maturing in June 2013 to November 2014 on 28 December and $ 4 billion to $ 6 billion of bonds maturing in June 2012-June 2013 on the following day.

The Central Bank bought 14.6 billion U.S. dollars in debt in two operations on 20 December, the most in a single day in the second round of quantitative easing.

"Yields are rising as the Federal Reserve has been the only buyer with the rest of the market on hold until the new year and pushed from the data that has been at best a weak team," said Paul Horrmann, a agent in New York Tradition Asiel Securities Inc., an interbank broker. "The money is coming out of bond funds, and that feeling, along with the offer, will drive higher returns at the end of the year."

Bond mutual funds had the largest customer of the recall of more than two years last week. the U.S. bond funds experienced the withdrawal of 8.62 billion U.S. dollars in the seven days ended Dec. 15, compared with $ 1,660,000,000 the week before, according to the Investment Company Institute, a trade group based in Washington.

Canada mortgage bond sales fell 16 percent this year

Canada mortgage bond sales fell 16 percent this year and may be changed slightly in 2011 as the country's courts, the agency's housing supply to reduce borrowing costs.

Canada Housing Trust, the financial arm of the housing agency in the nation, sold C $ 39,400,000,000 (38.8 billion U.S. dollars) this year. The issuance surged to a record C 46.9 billion U.S. dollars last year as the credit limit other sources of funding for banks and mortgage lenders.

"It was becoming evident in the performance of voice that might supply was outstripping demand," said David Deslauriers, general director of public finance at Toronto-Dominion Bank, by telephone from Toronto. "The program began to reduce the size of the problems."

Although many factors influence mortgage rates, reduced mortgage bond sales Canada can mean more expensive mortgages for consumers and banks rely on sources of financing more expensive, DesLauriers said. Canada mortgage bonds are backed by the federal government, making them relatively cheap financing.

Canada Housing, the largest issuer of debt after the federal government, sold C $ 23,800,000,000 dollars in fixed rate bonds to five years, C $ 7,900,000,000 of floating-rate bonds for five years and C 7.8 billion U.S. dollars of fixed-rate bonds to 10 years old this year. The Ottawa-based trust, which issued quarterly, buys mortgages to support the sale of debt.

Canada Housing has "done a better job of aligning the size of mortgage bond investors demand," said Andrew Hainsworth, head of capital markets debt at the Bank of Montreal, by telephone from Toronto. "They want a little spread out the performance of CMBS. It is also part of repairing credit markets after the financial crisis."

Ontario passed

yields on housing bonds in Canada five years was trading at about 25.5 basis points above the federal benchmarks this week, compared to 23.5 basis points earlier this year, according to Hainsworth. By contrast, Buenos Aires ranges from five years have increased by six basis points this year.

Elsewhere in credit markets, the extra yield, or spread, investors demand to own the debt of Canadian companies rather than the federal government widened to 140 basis points yesterday from 139 basis points on December 21, according to the rate of Bank of America Merrill Lynch. The spread was as narrow as 114 basis points in March, according to the data. A basis point is 0.01 percentage point.

Canadian corporate bonds returned 6.9 percent this year, including reinvested interest, according to Merrill Lynch index, which is 722 bonds with a nominal value of C $ 284 000 000 000. The bonds rose 15 percent last year.

Provincial earnings

The spread of U.S. corporate debt on Treasury bonds was 169 basis points from December 21, according to another Merrill Lynch index, unchanged from December 20. Treasuries have lost 2 percent this month, comparing his return for the year to 5.7 percent, Merrill Lynch data show. Canadian government bonds have fallen 0.3 percent this month yesterday, trimming the gain of 2010 to 5.9 percent.

In the provincial bond market, the relative yields were 53 basis points yesterday, from 52 on 21 December. It fell to 39 basis points in January, the closer this year. The bonds returned 6.8 percent this year.

The Canadian gross domestic product grew 0.3 percent in October after contracting 0.1 percent the previous month. Statistics Canada releases the data at 8:30 am today in Ottawa.

The mortgage bond spreads were so narrow as 18 basis points in early 2010 and like everyone on May 46 amid the crisis of European sovereign debt, Hainsworth said. The issue has a C average of about 27 billion U.S. dollars annually.

Outlook 2011

Canada believes that demand for housing to finance mortgage lenders, investors' appetite for debt and performance of the broader credit markets when deciding the scale and pricing issues, the trust said in an emailed statement.

The issue may be C $ 40 billion in 2011, based on current emission of about C $ 10 billion per quarter, according to Hainsworth. Besides participating in the Canada Mortgage Bond program, lenders can finance mortgages through other means such as issuing bonds, packaging and selling mortgages as securities backed by mortgages, or financing through deposits, Hainsworth he said.

"That is a reasonable estimate of what we will be seeing in the coming quarters, given what we know now," said Deslauriers, referring to the C $ 40,000,000,000 prognosis.

Canada Housing paid 26.5 basis points over benchmark government on December 15 to sell C $ 6 billion in five years, the debt of 2.75 percent. About a quarter of the question, which was led managed by TD, Bank of America Merrill Lynch, Canadian Imperial Bank of Commerce and Royal Bank of Canada, was bought by international investors.

The issue brought the total of outstanding mortgage bonds C Canada to 195.5 billion U.S. dollars, with the majority of C $ 173 000 000 000, with fixed interest and other floating rate.

Puerto Rico Electric Power is selling $ 500 million in liabilities Build America Bonds

Puerto Rico Electric Power Authority, the largest U.S. utility public authority by revenue, is selling $ 500 million in liabilities Build America Bonds before the end of the program to save $ 130,800,000 in tax-free loans, said Finance Director Martin V. Arroyo Feliciano.

The agency rushed to the government-subsidized debt before the December 31 deadline for the capture of the program 35 percent savings in interest costs and avoid the traditional borrowing tax-exempt.

U.S. issuers brought forward sales expected this month to capture the subsidy, so that the last three months of 2010, the fourth largest sales, as America began building in April 2009. Government Development Bank for Puerto Rico decided the offer earlier this month as it became less likely that the program be extended, said Arroyo.

"We started running around getting information, I had to leave my treasurer to go on vacation," he said in a telephone interview from San Juan. "But we did."

The current problem, backed by the cost of electricity, can produce 6.25 percent for bonds to 30, said. That's a premium of around 180 basis points, or 1.80 percentage points over U.S. Treasuries. With the subsidy, the cost of the general interests of the authority may be less than 5 percent, he said.

Energy yields

In comparison, the debt to 30 years tax exemption backed by revenues from energy rated A, sixth highest investment grade, yielded 5.91 percent yesterday, according to index of the fair market value. The authority is rated BBB + by Standard & Poor's and Fitch Ratings, the degree of third-lowest investment. Moody's Investors Service ranks A3 useful, level.

Build America rates compared with 5.72 percent yield on the obligations of long-term utility companies rated BBB to A, according to the rate of Bank of America Merrill Lynch.

While the number of units to increase the income of the authority, the income stream is safe, "said Bud Byrnes, executive director of Encino, California, RH Investment Corp.

"They trade more cheaply than any credit out there and we will not go bankrupt," Byrnes said in a telephone interview. "Consequently, there will be a market."

The bonds of Puerto Rico, a self-governing commonwealth ceded to the U.S. in 1898 after the Spanish-American War, offer investors an exemption from any state tax, unlike most municipal debt.

'Deal of the Week

The authority had $ 10.1 billion in revenue bonds outstanding before the sale, making it second only to the State Department of Water Resources.

"This is the deal of the week," said Tony Shields, a director in public finance department at Williams Capital Group LP in New York. "It will be a tremendous interest."

The authority, a monopoly that provides electricity to 1.4 million consumers, is the largest power utility by the number of customers and revenue, according to preliminary offer documents.

Funds will be used for Puerto Rico Via Verde project, a pipeline that will transport natural gas to several power plants, the documents show. The money can also be used to finance the authority's plan for capital improvements.

The project, which will be completed in February 2012 according to bond documents, is part of a government to encourage the development of alternative energy to lower fuel costs on the island. The use of natural gas will save customers $ 1,000,000,000 dollars, "said Arroyo.

The ultimate authority Americas building sold in April, with 30 - year securities to yield about 6.13 percent, about 149 basis points over benchmark Treasuries. Securities traded on December 20 with an average yield of 6.43 percent, or 199 basis points above U.S. government debt.

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

Metropolitan Water Reclamation District of Greater Chicago, a wastewater utility serving more than 5 million people, plans to sell $ 500 million of debt and tax-exempt liabilities as early as 3 January. The values are top-ranked of the three major credit rating companies. JPMorgan Chase & Co. The marketing of equity underwriters.

In France borrowers are said by Standard & Poor's in a bet the euro zone's second largest economy comes to grips with its budget deficit

Situation in France as one of the safest in the world, borrowers are said by Standard & Poor's in a bet the euro zone's second largest economy comes to grips with its budget deficit.

After a year in which the rating companies downgraded the debt of European nations from Spain to Ireland, New York, S & P said today that France deserves a AAA credit rating because of the sovereign "wealth and depth "of its economy and see that the government of President Nicolas Sarkozy will consolidate its budget deficit.

The announcement may encourage investors to buy French debt after the yield on the 10 years the country rose this week, analysts speculated the eurozone crisis of sovereign debt may cost the nation its higher grade. Fitch Ratings today downgraded the debt of Portugal in a separate level and said the crisis in Europe reflects investor concern about the euro "viability. "

"The stable outlook is based on our view of the important achievements of the French government with its budgetary consolidation strategy, enabling it to meet its fiscal targets through 2013, " analysts at S & P and headquartered in Madrid, Marko Mrsnik said in a report released today.

The cost of insuring the French public debt rose to a record this week, having tripled this year. The credit default swaps in the country are now more expensive than lower-rated securities in the Czech Republic and Chile, according to data provider CMA.

Rating of France was vulnerable to a rethinking of corporate credit rating due to its budget deficit and because its banks are the largest holders of debt issued by so-called peripheral countries, analysts said before today's announcement.

Steelmakers led gains in U.S. corporate bonds in Russia for the second consecutive year

Steelmakers led gains in U.S. corporate bonds in Russia for the second consecutive year as OAO Severstal and Evraz Group SA has benefited from a rise in metal prices and demand for construction projects.

Debt sold by two largest steelmakers in Russia returned more than 20 percent this year compared with 10 percent for the benchmark sovereign bonds. The performance difference between 2013 Severstal notes and public debt fell to 12 basis points on December 16, the narrowest spread since it sold in 2008.

"Steel makers were the hardest hit during the crisis and had the most runs well with market growth and recovery of the industry performed better," said Nikita Gusakov, head of capital markets debt Citigroup Inc. in Moscow, by email.

The export prices of hot rolled coils, a benchmark steel product, rose 13 percent to $ 619 per ton this year, according to Metal Bulletin. Orders in Russia will increase due to projects related to the Winter Olympics and World Cup, both taking place in the country in the coming years, said Giacomo Baizini, chief financial officer of Evraz in Moscow.

"We have greatly improved our liquidity position," said Baizini in an e-mailed response to questions. "Business Outlook for 2011 and beyond is also good, given the expected demand for various construction projects in Russia."

Change of Fortune

The 2018 dollar bonds Evraz returned 22 percent this year, while bonds returned 2,013 Severstal 20 percent. Returns to both surpassed 100 percent in 2009. The notes fell 43 percent in 2008, the price shown.

"This rally may have run out and steel makers are likely to perform in line with the market next year," said Gusakov. "The spreads may tighten Reprice only if the entire market."

Russian metals companies spent 18.2 billion U.S. dollars in foreign acquisitions between 2006 and 2008, according to data compiled by Moody's Investors Service. That left struggling to pay and refinance its debt during the financial crisis after a fall in revenues due to falling prices of metals.

Evraz, the second-largest steelmaker in Russia, was forced to renegotiate loan terms with international lenders and became the Russian state bank VEB and development of the domestic market for refinancing ruble last year.

The Moscow-based company has cut the short-term debt to 22 percent in June this year 46 per cent in June 2009, while its cost of capital was reduced to 6 percent from about 10 percent in October 2009, according to a November 23 filing the company's Web site.

"Top Picks"

A "significant improvement in credit metrics" allow companies to outperform metals in the debt market, Dmitry Dudkin, a bond analyst at UralSib Financial Corp. in Moscow, said in an email response to questions sent. "They remain our best options as we expect more deleveraging."

The exchange rate has changed little to 30.6100 per dollar at 17:00 Moscow closure, its strongest level since 11 November. non-deliverable, or opinions that provide guidance to the expectations of currency movements and interest rate differentials and allow companies to hedge against fluctuations show the ruble 30.8795 per dollar in three months.

Russian bonds in 2020 the dollar rose, pushing the yield 13 basis points below 5.01 percent. The price of ruble notes maturing in August 2016 the country increased, with the yield down a basis point to 7.62 percent.

The cost of protecting Russian debt against default by five years using credit-default swaps fell 2 basis points to 147, below the peak year of 217, according to data provider CMA. The contracts 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.

Swaps, differential

Swaps credit-default for Russia, rated Baa1 by Moody's Investors Service, the third lowest investment grade, cost of 6 basis points more than the contracts in Turkey, classified as four levels lower than Ba2. Russia swaps cost as much as 40 basis points less on 20 April.

The extra yield investors demand to hold the Russian debt rather than U.S. Treasuries fell 4 basis points to 196, according to JPMorgan EMBI + index. The difference compared to 141 for Mexico's debt with similar qualifications and 179 for Brazil, two steps that is rated below Baa3 by Moody's.

The yield of Russian bonds is 43 basis points below the average for emerging markets near lowest since September 2009 and below a maximum of 15 months from 105 in February, according to JPMorgan rates .

2008 Collapse

The difference in performance between Severstal dollar bonds due in 2014 and Russia's dollar bonds due 2030 rose to 27 percentage points in November 2008, the widest spread since the bonds were sold in 2004. The difference between 2011 pipemaker OAO TMK notes and Russia's foreign debt jumped to a record 54 percentage points in the same month, the data show.

Russia's successful bid for the 2018 months of hosting the soccer World Cup last has also helped drive the biggest bond rally in five months and forced the steel shares' more as the government prepares to spend 3.8 billion in stadiums, airports and roads.

Severstal Cherepovets based in Moscow doubled this year, making it the biggest winner in the benchmark Micex in 2010. OAO GMK Norilsk Nickel, the world's largest manufacturer of metal, added 60 percent and OAO Novolipetsk Steel rose 50 percent. That compares with an increase of 6.7 percent for OAO Gazprom gas exports and a decline of 13 percent of OAO Rosneft, the country's largest oil company.

20 percent of Severstal bond rally this year compared to 16 percent return for 2011 dollar bonds of the Moscow-based consumer lender ZAO Russian Standard Bank. Both companies are rated B + by Fitch Ratings, four levels below investment grade.

China's benchmark rate money market rose to a maximum of three years

China's benchmark rate money market rose to a maximum of three years, on speculation a shortage of funds will worsen as banks hoard cash before the New Year holiday.

The repurchase rate recovered to seven days after the central bank pumped a total of 26 billion yuan (3.9 billion) of capital in the financial market this week, sixth weekly injection net. Policy makers on December 10 ordered lenders to park more money with the central bank for the third time in five weeks to curb inflation.

"Banks are collecting money to prepare for the demand for cash withdrawal during the holidays and to meet the requirement of loan-deposit ratio at the end of each month," said Liu Junyu, bond analyst with Shenzhen-based China Merchants Bank Co., the sixth largest lender in the nation. "Everyone is very short of money after making payments for the reserve ratio rise on Monday."

The interest rate of seven days, which measures the cost of loans between banks, rose 150 basis points to 5.67 percent, the highest since October 2007, according to a published daily fixing at 11 hours by the National Center for interbank funding. That was the biggest daily gain since June 2008.

The People's Bank of China sold 1 billion yuan in bonds to three months, with a yield of 1.8131 percent in open market operations, unchanged for the sixth consecutive week, according to a statement posted on its website.

The government bond yield 3.28 percent due in October 2020 rose 3.5 basis points to 3.80 percent, Interbank funding data center shown. interest rate swaps for one year, or the fixed cost for receiving the variable interest rate of seven-day repurchase, up eight basis points to 3.15 percent.

The yuan was little changed at 6.6431 per dollar as of 4:30 pm in Shanghai, the China Foreign Exchange Trade System.

Delivery within twelve months rose 0.1 percent to 6.5043 per dollar, reflecting the currency bets will strengthen 2.2 percent in a year.

setting a date for the adoption of the euro "would be very risky and unwise.", Robert Holman

Just a year ago, Poland and the Czech Republic is preparing to join the euro currency and share with the nations of Italy to Germany and Ireland to Greece.

Now, the Czech central bank board member Robert Holman said setting a date for the adoption of the euro "would be very risky and unwise." Polish central bank governor Marek Belka wants the euro zone to "normalize" before the country joins.

The worst crisis that hit the euro since its inception a decade ago, causing the two largest economies of the European Union to withdraw a commitment to give up their currencies in the short term. That is encouraging investors who see Poland as a better bet without its currency is linked to the nations receiving emergency rescues, while austerity measures and reduction of inflation could push borrowing costs lower than Germany Czech Republic, according to BNP Paribas SA.

"Countries in Eastern Europe clearly see the benefits of having a flexible currency at this time," said Thomas Kirchman, who helps manage 12 billion euros ($ 16,000,000,000) in European bonds at Deka Investment GmbH in Frankfurt. "In the end, will join the euro, but this will be a longer process."

The zloty will increase by 5 percent against the euro in six months, the biggest rise in emerging markets, and the crown strengthened by 4 percent. The Czech bond yields in the best of Europe from June performers will be reduced to 60 basis points on German 10-year bonds next 96 years, BNP Paribas and Raiffeisenbank AS predict.

Lower debt

Czech 10-year bonds is likely to yield 15 basis points, or 0.15 percentage point less than German bonds in late 2012 and 70 basis points less than 12 months later, according to Bartosz Pawlowski, chief London-based strategy for Eastern Europe, Middle East and Africa at BNP, France's largest bank. The yield on the 10-year Polish bonds probably will be reduced to 275 from 307 a year, said in a report earlier this month.

Both countries have less debt than the average for the eurozone of 87 percent of GDP, with Poland at 57 percent and the Czech debt at 43 percent, European Commission forecasts show. The Czech economy is forecast to grow by 2.2 percent next year and Poland may expand 3.7 percent, up from 1.5 percent in the euro zone, according to the International Monetary Fund in Washington.

Closer links with the euro zone, which helped fuel gains of more than 25 percent in the crown and the zloty from 2004 to 2008, have become the biggest drag on the currency as the EU policy makers of the struggle to restore confidence in the most indebted countries in the monetary union. The zloty weakened 3.5 percent against the dollar in the last year and the crown fell 4.5 percent, the biggest drop in emerging markets after the currency of Romania, Bulgaria and Hungary.

Ireland Rescue

The EU and the IMF provides rescue € 85000000000 for Ireland and 110 billion euros to Greece this year. Irish rescue sent the Spanish bond yields to the highest in relation to German bonds since the inception of the euro late last month. Portugal may face downgrades as reducing risk budget stalemate in the "slow" economic recovery, Anthony Thomas, principal analyst with London-based Moody's Investors Service in Portugal, said in a statement.

The debt crisis has raised doubts about "whether the euro area is standing on solid foundations," said Ceska Narodni Banka board member Holman in an interview in Prague on 09 December. Polish central bank governor Belka told reporters in Warsaw the same day, while the adoption of the euro remains "a strategic objective," the EU must find a solution to its debt crisis in the first place.

No target date

Poland and the Czech Republic agreed to relinquish their national currencies as part of its entry into the EU in May 2004. Hungary will not set a deadline for adopting the euro before 2012, Economy Minister Gyorgy Matolcsy told a press conference in Budapest on 08 September.

"A couple of years it was negative" crown and the zloty, "said Ulrich Leuchtmann, head of currency strategy at Frankfurt-based Commerzbank AG, the second largest bank in Germany. However, stagnation in the euro is "net positive" because the financial health of Poland and the Czech Republic is better than most members of the euro, he said.

While Romania has an official goal of euro adoption in 2015, President Traian Basescu said on 22 September, the exchange may require a delay of up to two years. Bulgaria scrapped a plan in April to enter the exchange rate mechanism this year after reviewing the 2009 budget deficit beyond the limit of the EU.

Baltic expansion

European monetary union continues to expand with Estonia will become the 17 member euro zone on January 1 and the third post-communist country to adopt the single currency after Slovenia in 2007 and Slovakia in 2009. Lithuania and Latvia have their currencies pegged to the euro and the two nations intend to enter into monetary union in 2014.

Eastern European currencies weaken as speculators debt counseling Irish and Greek now turn its attention to countries with stronger links with the euro area, "said Savvas savouries, chief economist Toscafund Asset Management in London. Hungarian forint may lose more than 50 percent of its value to lead the decline, said savouries.

"It will be a domino effect and the last domino to fall will be bigger," he said. "It will be Poland."

Currency strategists at some of the world's largest banks, like Barclays and Credit Suisse AG are more optimistic. The crown will join the 24.4 euros in late June, 25,234 on 17 December. The zloty appreciated to 3.91 per euro from 3.9927, median 20 shows the projections.

The forint may weaken 0.5 percent against the euro, according to forecasts by the strategists.

Consolidation

Czech government bonds and Polish and are overcoming the debt of countries in the euro area. The notes yield 10-year Czech koruna has fallen 42 basis points since June to 3.84 percent. German Bund yields rose 29 basis points to 2.93 percent during the same period. Poland 10 - year bond yields rose 5 basis points to 5.98 percent, compared with an increase of 160 basis points for Greece and 335 for Ireland.

Czech lawmakers approved the 2011 budget on 15 December that the spending cuts in public wages and social benefits to help meet the prime minister's promise Petr Necas, in June to cut the fiscal deficit within the EU limit of 3 percent of GDP by 2013 from 5.8 percent last year.

The Czech Republic is ranked A by Standard & Poor's, the fifth lowest rating of investment grade, and Poland is a step below A-. Germany has the top AAA rating from S & P.

"Fiscal consolidation and the prospect of better grades" may increase the Czech bonds, said Michal Brozka, a Prague-based analyst at Raiffeisenbank. "The question remains, of course, the amount of ransom from the periphery of the eurozone will weigh on German bonds."

notes 10-year Treasury went to the longest streak of weekly losses in 19 months

notes 10-year Treasury went to the longest streak of weekly losses in 19 months before a report that economists said showed consumer spending gained last month, fueling speculation the central bank will reduce purchases assets.

Five-year notes fell for a second day amid concern printing money by the Federal Reserve fuel inflation and sap demand for fixed income assets as the economy recovers. The Fed has to slow or stop its quantitative easing program called in response to an acceleration in the economy next year, the Philadelphia Fed Charles Plosser, the president said yesterday. The yields indicate traders added to bets inflation will accelerate in the economic outlook improves.

"Economic data have been much better than expected, pointing to the fact that the bond bull market is behind us," said Matteo Regesta, fixed income strategist at BNP Paribas SA in London. "The landscape is one of the highest yields of here."

The benchmark yield rose to 10 basis point to 3.36 percent as of 6:43 am in New York, according to BGCantor Market Data. The price of 2,625 per cent security due in November 2020 fell 1 / 32 or 31 cents per $ 1,000 face amount to 93 28/32. The two-year yield is little changed at 0.64 percent, while 1,375 percent security maturing in 2015 rose one basis point to 2.02 percent.

Government interest

ten-year yields have climbed almost half a percentage point in the last four weeks and are set for the longest run of increases since May 2009, when rates of completing a seven-week gain in the government's concern borrowing would exceed demand .

Treasury bonds gave investors a loss of 2.1 percent this month, according to Bank of America Merrill Lynch indexes. The last time the U.S. sovereign debt fell more than a month was in December 2009, when it fell 2.6 percent.

Spending by U.S. consumers, representing about 70 percent of the economy, rose 0.5 percent after rising 0.4 percent in October. Bed Bath & Beyond Inc., the retailer of the Union, home products based in New Jersey, yesterday raised its profit forecast.

A separate report may show stocks of durable goods, excluding cars and aircraft, rose 1.8 percent.

The difference between the rates of 10-year bonds and Treasury inflation-protected securities, an indicator of expectations operator in consumer prices during the life of the securities, was 2.31 percentage points today, from this year low 1.47 percentage points in August. The average of the last five years is 2.09 percentage points.

The reaction of the Fed

"If the rate of growth of the economy continues to strengthen and is sustainable, then I'll be looking for the Fed to react to that," Plosser said in an interview yesterday "The advantage of Hays," with Kathleen Hays . "That may be to reduce the amount of accommodation in a gradual manner. One way would be to begin to stop some of the purchases or slow."

The Fed plans to add 600 billion U.S. dollars to the economy by buying Treasury bonds, while President Barack Obama agreed to extend the tax cuts to stimulate growth.

The Treasury is expected to announce today the sizes of the two auctions five to seven years scheduled for next week.

Probably going to sell 99 billion U.S. dollars of notes, unchanged from November auctions of the securities.

December advance in U.S. yields reflecting expectations of economic growth, said Peter Jolly, head of Sydney-based market research for investment banking unit of National Australia Bank Ltd., the biggest lender in the nation. Inflation has remained under control, and that will support bonds, he said.

Preferred Price

"The U.S. economy, but is recovering, inflation has very little," said Jolly. "Yields have risen far enough. There is some history of the recovery in yields."

Today's report also shows spending measure the Fed's preferred price, which excludes food and fuel, rose 0.9 percent from a year earlier, according to economists. The figure corresponds October, which was the lowest since records began in 1960.

ten-year rates will be reduced to 3.3 percent by March 31 and then move to 4 percent in late 2011, said Jolly.

A survey of banks and securities companies projects yield will rise to 3.53 at the end of next year, with the most recent forecasts given the highest weighting. Investors who bought today would earn 2 percent, reflecting both lower prices and interest payments.

Client Retreat

Bond mutual funds had the largest customer of the recall of more than two years last week.

the U.S. bond funds experienced the withdrawal of 8.62 billion U.S. dollars in the seven days ended Dec. 15, compared with $ 1,660,000,000 the week before, according to the Investment Company Institute, a trade group based in Washington.

Financial markets are closed today in Japan for a holiday. The negotiation of the Treasury is scheduled to stop at 2 pm in New York and stay closed tomorrow in the world for Christmas, according to the Securities Industry and Financial Markets Association website.

Trading in the UK will be closed December 27 and December 28 in observance of Christmas and Boxing Day, the association said.

U.S. spending increased in November for the fifth consecutive month

U.S. spending increased in November for the fifth consecutive month and intensified corporate purchasing of equipment, more evidence the U.S. economy is winning the game in 2011.

Household purchases increased 0.4 percent after increasing 0.7 percent in October, which was almost two times higher than previously estimated, the Commerce Department figures showed today in Washington. The agency also reported a 2.6 percent gain in stocks of capital goods such as computers and electronic equipment.

rising incomes and stock prices are giving consumers the means to power purchases account for 70 percent of the world's largest economy, improving the earnings prospects of companies such as Bed Bath & Beyond Inc. A drop in applications for jobless benefits reported today shows that employers are reducing the pace of layoffs, a step towards reducing unemployment near a 26-year high.

"The recovery is moving at top speed," said Jim O'Sullivan, chief economist of MF Global Ltd. in New York. "The unemployment rate will gradually drop, which in turn should reduce downward pressure on inflation."

first-time filings for unemployment insurance declined in 3000 to 420,000 in the week ended Dec. 18, according to Labor Department figures released today.

Another report today showed a measure of consumer confidence rose to a maximum of six months in December. The index of Thomson Reuters / University of Michigan final consumer sentiment rose to 74.5, from 71.6 in November. The preliminary reading was 74.2 in December.

Stocks, Treasuries

The shares were little changed after the reports. 500 of Standard & Poor's dropped from 0.1 to 1,257.03 at 11:40 am in New York. The index has risen more than 12 percent this year on prospects for economic growth. Treasuries fell, sending the yield on the benchmark 10-year to 3.38 percent from 3.35 percent late yesterday.

Today's reports add to a series of better than expected data that have led economists to raise their estimates for economic growth. Retail sales rose more than expected in November, the trade deficit narrowed as exports jumped to a maximum of two years in October, and the regional figures, as well as across the country showed the factories are increasing production.

Economists at Morgan Stanley in New York today increased its estimate of up to consumer spending this quarter to 4.1 percent from 3.5 percent. Projected the economy will expand at a rate of 4.5 percent in October-December period, compared with a previous estimate of 4.3 percent.

Tax Cuts Extended

The extension of the Bush cuts on income tax for two years, a reduction in payroll tax next year and the Federal Reserve plan to buy $ 600 billion of Treasuries are rising optimism.

Housing remains a weak spot for the economy as a projection of unsold properties on the market weight. Purchases of existing homes rose 5.5 percent to a 290,000 annual pace of 275,000 in October, which was slower than previously estimated, the Commerce Department said today.

"While the economic environment has stabilized and is improving it may, it seems as if the consumer continues to face challenges as a result of the macroeconomic environment, such as historically high unemployment rates," said Leonard Feinstein, co-chairman of Bed Bath & Beyond, in a conference call yesterday.

Forecast earnings

Union, New Jersey, Bed Bath & Beyond yesterday raised its forecast fiscal-year earnings as much as $ 2.90 per share, from a previous forecast of $ 2.76.

Economists predict that consumer spending would rise 0.5 percent. Estimates ranged from increases of 0.1 percent to 0.8 percent. The October gain changes in spending the most since August 2009.

Inflation remained below the comfort zone of the Federal Reserve. The central bank move preferential prices, which excludes food and fuel, rose 0.1 percent from the previous month and rose 0.8 percent from a year earlier, matching the gain in 12 months in October as the smallest history.

The economy grew at a rate of 2.6 percent in the third quarter, the government reported yesterday. Consumer spending grew at a rate of 2.4 percent, the fastest since the first three months of 2007.

Unemployment rate

The growth was not fast enough to reduce unemployment, which rose last month to 9.8 percent. Fed officials last week continued its program to purchase up to an additional $ 600 billion in Treasuries in June to try to boost prices in the economy and support.

"Consumer spending has moved into a period of healthy growth and we believe that even if we do not keep the pace extremely strong in the fourth quarter, consumer spending will grow strongly in 2011," said Dean Maki, chief U.S. economist Barclays Capital Inc. in New York.

Today's report of durable goods, the Commerce Department showed that total orders fell 1.3 percent, pressured by the ongoing demand for airplanes, and reserves excluding transportation equipment rose more than expected.

Capital spending has been a source of strength for the world's largest economy, while household purchases are starting to accelerate. Manufacturing industry helped pull the U.S. the worst recession since the 1930's, has remained strong throughout the recovery, driven in part by foreign demand for American-made goods.

Major benefits

Some manufacturers are projecting higher earnings as orders increase. Joy Global Inc., the manufacturer of P & H Joy Mining equipment.

"The rate of stock enhancement supports our view that mining customers continue to increase their capital spending plans," said Mike Sutherlin, CEO of Milwaukee-based company said in a statement on 15 December. "We continue to increase our production to meet forecasted demand growth."

European shares were little changed after three days of gains

European shares were little changed after three days of gains down the benchmark Stoxx Europe 600 Index and the highest in 27 months.

Aixtron AG, which manufactures equipment used to produce displays of light emitting diodes, rose 9.3 percent on a report that won an order in China. Allied Irish Banks Plc fell 19 percent after becoming the fourth lender to fall under government control since 2008. SSAB fell 2.9 percent in Sweden's largest steelmaker said its fourth-quarter earnings will be "close to zero."

The Stoxx 600 fell below 0.1 percent to 281.3 at 4:32 pm in London, after swinging between gains and losses of at least 20 times. The indicator has recovered from the collapse that followed the collapse of Lehman Brothers Holdings Inc. 's September 2008, companies reported higher revenues, the European Union rescued Greece and Ireland and the Federal Reserve announced 600 billion dollars of additional bond purchases to support recovery.

"Despite the very low trading volume, it seems as if the risk is still higher," said Christian Falkner, an analyst at Alfa Wertpapierhandels GmbH in Frankfurt. "If the sovereign debt crisis not get much worse, will not impact too negatively on the stock market. In late January, investors start looking at the preliminary reporting of U.S. companies and orientation for 2011. "

Trading volume in the Stoxx 600 has fallen every day this week as Christmas approaches.

U.S. Economy

Reports in the U.S. today showed that consumer spending and purchases of new homes rose, fewer people filed applications for unemployment benefits and benefits, and consumer confidence rose to a maximum of six months.

service industries weakened Britain in October, led by the government, transport and telecommunications services, indicating that economic recovery may have lost momentum. Services, which represent three quarters of the economy, fell 0.4 percent from the previous month, when they rose 0.7 percent, the Office for National Statistics said.

national benchmark indexes fell in 9 of the 18 western European markets. The French CAC 40 lost 0.2 percent, Germany's DAX fell 0.2 percent and Britain's FTSE 100 gained 0.2 percent.

Aixtron gains

Aixtron rose 9.3 percent to 27.27 euros, the biggest gain in more than two months. The LED industry in China is expected to install 700 to 800 units of metal organic chemical vapor deposition equipment, or MOCVD, the machines in 2011, more than double the pace of this year, Digitimes.com, without saying where it got the information. A manufacturer of LED has ordered 400 to 500 of Aixtron MOCVD machines, Digitimes said, citing unidentified sources.

SAS AB rose 14 percent to 23.6 kronor, the biggest increase in eight months. Deutsche Lufthansa AG could announce plans to acquire the largest airline in the Nordic region and in the first half of 2011, according to a person familiar with the discussions.

Novo Nordisk A / S, the world's largest maker of insulin, advanced 3.2 percent to 633 crowns, the first advance of this week. The company said a study of the last stage of insulin Degludec showed "significantly reduced" risk of hypoglycemia during the night compared with insulin glargine.

Allied Irish Banks plunged 19 percent to 32.5 cents after the Supreme Court said the government can take control of the lender without the approval of shareholders. The state will inject € 3,700,000,000 ($ 4.8 billion) in the Dublin-based bank and raise its stake to 92 percent from 19 percent.

SSAB lost 2.9 percent to 107.6 kronor as the steelmaker said its operating profit in the fourth quarter will be affected by lower shipments and production and is expected to be close to zero.

Ericsson AB fell 1.6 percent to 77.2 kronor as Goldman Sachs Group Inc. downgraded the world's largest manufacturer of mobile phone networks to "neutral" from "buy."

Logitech International SA fell 1.7 percent to 18.45 Swiss francs, the world's largest maker of computer mice was reduced to "neutral" from "outperform" from Exane BNP Paribas.

U.S. stocks fell after a five-day rally sent 500 Standard & Poor's most expensive level since June

U.S. stocks fell after a five-day rally sent 500 Standard & Poor's most expensive level since June, offsetting a rebound in durable goods orders and a drop in jobless claims.

Lennar Corp. and D.R. Horton Inc. fell at least 3 percent after a government report showed that fewer than expected new homes were sold in November. Micron Technology Inc. lost 3.2 percent as the largest U.S. manufacturer of computer memory chips in fiscal first-quarter sales that missed analysts' estimates. Nasdaq OMX Group Inc. fell 1.6 percent after BMO Capital Markets cut its rating on the shares.

The S & P 500 fell 0.1 percent to 1,257.58 at 11:25 am in New York. His statement yesterday to a maximum of two years pushed its valuation to 15.7 times reported profits, the highest since June. The Dow Jones industrial average rose 19.53 points, or 0.2 percent, at 11,579.02. the U.S. stock exchange are closed tomorrow for the Christmas holiday.

"The stock market has gone too far, too fast," said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees 342 billion U.S. dollars. "Many people wonder how far it will go before a withdrawal. The economic data points that we receive are good in general, but not crazy good. That may explain the muted response from investors."

46% dive

The S & P 500 Index completed its recovery this week's fall of 46 percent following the bankruptcy of Lehman Brothers Holdings Inc. 's September 2008, government data showed the U.S. economy grew at an fastest pace in the third quarter than previously estimated. The stock index rose 6.6 percent in December to the night after posting a total gain of 13 percent in September and October, the largest increase in those months since 1998.

U.S. equity futures compared decreases after the Labor Department figures showed that jobless claims fell last week and the number of people runs unemployment benefits fell to a minimum of two years, reinforcing the evidence of the labor market is improving. first-time filings for unemployment insurance declined in 3000 to 420,000 in the week ended Dec. 18.

Moreover, the Commerce Department said stocks of goods such as computers and communications equipment rose 2.6 percent after declining 3.6 percent in October, which was lower than previously estimated. Another Commerce Department report showed that spending by U.S. consumers increased in November for the fifth consecutive month, showing most of the economy is strengthening ahead of 2011.

Home Sales

Stocks extended declines on concerns about weakness in the U.S. housing market. New home builders are selling less than estimated in November, purchases increased 5.5 percent to a 290,000 annual pace of 275,000 in October, which was lower than estimated, the Commerce Department figures showed.

All 12 stocks in the S & P 500 Supercomposite Homebuilding Index fell, sending the group down 2.5 percent. Lennar, the homebuilder U.S. third largest, fell 3.8 percent $ 18.24. D.R. Horton, the homebuilder's second-largest U.S. by revenue, fell 3 percent to $ 11.91.

Micron fell 3.2 percent to $ 8.02. Fiscal first-quarter sales of $ 2,250,000,000 missed the average analyst projection of $ 2,370,000,000.

Nasdaq lost 1.6 percent to $ 23.77 after BMO Capital Markets downgraded the stock exchange operator market "run" from "outperform."

High optimism

"Optimism about the stock was very high but people are afraid to short the market," said Mark Bronzo, who helps manage 21 billion U.S. dollars in Irvington, New York, Security Global Investors. "The economy is growing at a moderate pace, but most data points are moving in the right direction. The U.S. is likely to surprise positively."

Optimism on U.S. stocks among newsletter writers rose to its highest level since mid-October 2007, the week after the S & P 500 and Dow Jones rose to records. The proportion of publications followed by Investors Intelligence Bullish rose to 58.8 percent on 21 December from 56.8 percent a week earlier, the company said yesterday. The sentiment has improved since October 2008 when the financial crisis brought the figure to at least 20 years of 22.2 percent.

Bed Bath & Beyond Inc. had the biggest gain in the S & P 500, rising 6.2 percent to $ 50.63. The home furnishings retailer forecast full-year earnings of at least $ 2.86 per share, beating analysts' average estimate by 5 cents. The company also announced a plan to repurchase $ 2 billion.

Alcoa Inc. rose the most in the Dow, rising 2.4 percent to $ 15.51. The largest U.S. aluminum producer can be purchased for $ 22 per share next year, TheStreet.com 's Jim Cramer said.

Most Asian stocks fell as developers in China fell

Most Asian stocks fell as developers in China fell after the government intensified the control of real estate investments to curb rising property prices of housing, the fight against the gains among exporters and producers basic.

China Vanke Co., the nation's biggest developer, lost 1.8 percent in Shenzhen. Bank of China Ltd., the country's third largest lender by market value, fell 1.2 percent. Li & Fung Ltd., the largest supplier of Wal-Mart Stores Inc., rose 2.3 percent in Hong Kong after a government report showed the U.S. economy expanded more rapidly than previously estimated.

"It helps us to see signs that the U.S. economic outlook appears brighter in the short term, but how long this can be sustained remains an issue," said Castor Pang, research director in Hong Kong Cinda International Holdings Ltd. "The markets tend to move sideways toward the end of the year. more policy tightening may occur at any time. Developers are particularly under selling pressure."

The MSCI Asia Pacific excluding Japan Index Index increased 0.1 percent to 470.97 as of 18:38 in Hong Kong, with about seven shares fell for every five that advanced. The index has risen 5 percent this month that China has refrained from raising interest rates and U.S. reports on consumer confidence, the trade deficit and unemployment exceeded analysts' estimates.

Australia S & P / ASX 200 rose 0.4 percent, its highest close since 05 November, as purchases of companies in the country rose to a record this quarter.

New Zealand NZ 50 Index gained 0.3 percent that economists say the economy will recover after a report by Statistics New Zealand today showed gross domestic product unexpectedly contracted in the third quarter.

Shanghai Retreats

Taiwan's TAIEX index rose 0.4 percent. Hong Kong Hang Seng index declined 0.6 percent, while Japanese markets are closed today for a public holiday.

Shanghai, China Composite Index fell 0.8 percent. The government increased land supply this year and increased the control of real estate investments by foreign companies that will not stop further measures to contain the 18 months of increases in property prices, land and resources and ministries of Commerce reported.

China Vanke retreated 1.8 percent to 8.84 yuan in Shenzhen. China Overseas Land & Investment SA, controlled by the Ministry of Construction of the nation, fell 1.4 percent to $ 14.60 in Hong Kong in Hong Kong. Country Garden Holdings Co., the developer controlled by China's richest woman, lost 1.3 percent to HK $ 2.95.

Bank of China fell 1.2 percent to HK $ 4.04. Agricultural Bank of China Ltd., the country's fourth largest lender by assets, fell 4.2 percent to HK $ 3.86. China Construction Bank Corp., the second largest lender, fell 0.7 percent to HK $ 6.86.

U. S. Economic Growth

U.S. futures in 500 of Standard & Poor's were little changed today. U.S. stocks and oil rose to the highest level since 2008 yesterday after government reports showed the economy grew faster than previously expected and crude supplies fell to its lowest level since February.

500 of Standard and Poor's gained 0.3 percent to 1,258.84 at 4 pm in New York yesterday, driving its gain this year to 13 percent. The index rose for a fifth day after a report showed the U.S. economy grew at an annual rate of 2.6 percent last quarter, above the government's earlier estimate of 2.5 percent.

Li & Fung, which has U.S. as its main market, gained 2.3 percent to $ 44.25 in Hong Kong. Hon Hai Precision, which gets about 36 percent of U.S. sales, rising 1.7 percent to NT $ 118 in Taipei. Infosys Technologies Ltd., the second largest exporter of software in India, rose 1.1 percent to 3,367.9 rupees.

The oil producers gain

Meters commodity producers and companies in consumer staples led the advance among 10 industry groups in the MSCI Asia Pacific excluding Japan Index.

BHP Billiton Ltd., the world's biggest mining and Australia's No. 1 oil and gas producer, rose 1.4 percent to $ 46.47 in Sydney. PetroChina Co., the nation's largest oil company, rose 0.4 percent to $ 9.98 in Hong Kong in Hong Kong. Ezra Holdings Ltd., a provider of logistics services to the oil and gas, rose 3.5 percent to S $ 1.77.

Oil rose 0.7 percent to $ 90.48 a barrel in New York, future meeting after the U.S. Energy Department said inventories fell 5.33 million barrels. Crude for February delivery hit the highest level since October 2008.

The MSCI Asia Pacific excluding Japan index has risen 13 percent this year on speculation that growth in corporate profits is the climate of Europe's debt crisis, China's measures to curb inflation property prices and concerns about the pace of U.S. recovery economic.

Reservations Mozambique

Trinidad Ltd., the division of luxury menswear Li & Fung Group, rose 3.4 percent to HK $ 8.26 after it agreed to buy Cerruti Holdings, the distributor of men's clothing with the same brand, because as € 52.6 million ($ 69 million).

Rio Tinto Group, the world's third largest mining, rose 0.5 percent to $ 87.20 after offering a 3.9 billion U.S. dollars (3.9 million) to Australia coking coal developer Riversdale Mining Ltd. reserves for Mozambique as demand increases. Riversdale rose 1.7 percent to $ 16.57.

Alliance Global Group Inc., owner of the largest casino in the Philippines and the local franchise of McDonald's, rose 6.3 percent to 11.80 pesos, the advance of the third largest in the MSCI Asia Pacific excluding Japan Index today. The company said it will buy 60 percent of Fil-Estate Land Inc. for 5 million pesos ($ 113 million) to expand its business related to tourism. Fil-Estate rose 26 percent to 1.16 pesos.

Sun Pharmaceutical Industries Ltd., the largest drug maker in India by market value, rose 5 percent to 452.95 rupees after a U.S. court Appeals ruled in his favor in a case related to the cancer drug Eloxatin.

China's stocks fell for a second consecutive day

China's stocks fell for a second consecutive day that the government increased control of real estate investments and concerns that may become more expensive for smaller companies to borrow money after a gauge of borrowing costs increased.

China Vanke Co. dropped more than 1.5 per cent, losses to property developers, after the Commerce Ministry has ordered local authorities to stop the passage of some foreign-owned investments to slow
speculative

purchase. Laibao Shenzhen High-tech Co., a manufacturer of conductive glass for touch screens, was an indicator of smaller companies at least two weeks. The repurchase rate seven days, which measures the cost of loans between banks, rose to its highest level since October 2007.

"Uncertainty about the controls is the decision of the market," said Deng Changrong, strategist at Huaxi Securities Co. in Shenzhen. "As the market lacks liquidity at the moment, there is no support for a strong recovery."

The Shanghai Composite Index, which remains the largest stock exchanges in China, lost 22.68, or 0.8 percent, to 2,855.22 as of 3 pm The CSI 300 Index fell 0.8 percent to 3,188.61. The CSI SmallCap 500 company with a market cap average of 7.1 billion yuan, fell 2 percent to its lowest level since 10 December.

The Shanghai Composite Index, the worst performer among the major benchmarks in Asia this year, has fallen 13 percent this year on concern that monetary tightening to curb economic growth.

An indicator of property companies in the Shanghai Composite Index fell 0.7 percent. China Vanke, the nation's largest developer, retreated 1.8 percent to 8.84 yuan.

Investment property

China is going to prevent overseas companies benefit from the purchase or sale of properties completed or under construction in the country, the Ministry of Commerce, said in a statement. The ministry will strengthen the review of building projects with foreign currency flows, according to a November 22 statement was published on its website yesterday.

Housing prices in 70 Chinese cities rose 7.7 percent in November from the previous year, even after the government raised borrowing costs for the first time in three years, suspended to purchase mortgages from a third country and pledged to introduce a property tax. Sales volume increased 15 percent.

China's benchmark rate money market rose to a maximum of three years as banks hoard cash before the New Year holiday. The interest rate for seven days increased 150 basis points to 5.67 percent, according to a published daily fixing at 11 am by the National Interbank Funding. Policy makers on December 10 ordered lenders to park more money with the central bank for the third time in five weeks to curb inflation.

SmallCap losses

Shenzhen Laibao loss rate for small businesses, falling 3.7 percent to 62.40 yuan. Greenland Yunnan Biological Technology Co. tumbled by the limit of 10 percent on the day to 34.32 yuan after the company's 43.3 million shares held by the controlling shareholder Xuekui were frozen by the department of public safety.

The city of Beijing, described as the worst traffic in the world, introduced measures such as limiting the number of new passenger vehicles in the capital to ease the congested roads.

The city will issue new license plates through a lottery and requiring that passenger vehicles are not registered in Beijing to request a permit before entering the capital, according to a statement released before a news conference in municipal government today. The restriction to passenger vehicles outside the city begins on January 1, the statement said.

SAIC Motor Corp., the largest automaker in China by market value, declined 1.6 percent to 16 yuan. Beiqi Foton Motor Co. fell 2 percent to 26.06 yuan.

National Development and Reform Commission has submitted a proposal for a quota of 7.5 trillion yuan loan for the next year the State Council, the Economic Observer said, without citing anyone.

The People's Bank of China had initially proposed a quota of 6.5 trillion yuan, the NDRC, as the national planner knows, had suggested eight trillion yuan, the report said.

Banks Gain

Industrial Bank Co. advanced 1.7 percent to 24.60 yuan. Agricultural Bank of China Ltd., the country's third largest by assets, rose 0.4 percent to 2.63 yuan.

Aluminum Corp. of China led gains for metal producers, rising 1.7 percent to 10.59 yuan. Yunnan Aluminum Co. rose 4.6 percent to 12.35 yuan.

Aluminum for delivery in three months on the London Metal Exchange rose 1.1 percent yesterday to its highest since Nov. 9.

SEC passed an audit of California to sign the fraudulent statements made by an energy company in China

Investigation of the Securities and Exchange Commission of auditors in China based companies listed on U.S. exchanges share is a signal for investors to approach these people with caution, said International Strategy & Investment Group.

The SEC on Dec. 21 passed an audit of California to sign the fraudulent statements made by an energy company in China. Auditors have been scrutinized for signs of the financial statements of companies based in China access to U.S. markets through reverse mergers, in which a closely held company acquires a publicly traded company and may sell shares after an IPO.

"This is the ultimate 'buyer beware' investment sector," said Donald Straszheim, China research director at the ISI, which was ranked first in the macro and Economy category in 2009 survey by Institutional Investor magazine . Individual investors, it might be a good service to stay just a few. Even the most sophisticated institutional investors tend to avoid the opacity world and risks, "he said.

Straszheim, which is headquartered in Los Angeles, estimates that "hundreds of small companies in China that have sold shares in the U.S. through reverse mergers, in order to exploit the growing demand for U.S. investors who want access to China's economy.

Xia Lihua, a spokesman for the Securities Regulatory Commission China, refused to comment on the SEC investigation.

SEC Claims

Moore Stephens Wurth Frazer and Torbet LLP Orange County, one of several companies that have fallen under the scrutiny of the SEC, "did not exercise professional skepticism and due professional care" in the audit of China Energy Savings Technology Inc ., which was ordered to pay about $ 35 million in March 2009 for overstating revenue, the SEC said in a statement on 21 December.

China Energy Savings has been withdrawn from the list. Calls to Hong Kong office of the company were not returned.

Dean Yamagata, the partner in charge of the audit, was banned from working as an accountant for at least two years. Frazer and Yamagata not admit or deny the allegations. To resolve the claims of the SEC, Yamagata Frazer and agreed to pay $ 129,500 and hire an independent consultant for training in fraud detection, auditor independence and other duties related to audit functions.

The SEC has identified "hundreds" of companies so small ", where nearly 100 percent no, 95 percent, 100 percent of the shares are in the People's Republic of China" and the financial statements are signed by a small U.S. auditor, Wayne Carnall, chief accountant of the SEC Division of Corporation Finance, told a public meeting of the Company Accounting Oversight Board in April.

Legal Requirements

"It matters more than accounting firms own problems," said Hubert Tse, a partner at the law firm of Boss & Young in Shanghai. "It's their job and responsibility to work on that and ensure that the IPO applicants meet all legal requirements and the U.S. listing."

The PCAOB, created by the Sarbanes-Oxley Act in 2002 to oversee auditors of public companies, is looking for ways to celebrate the U.S. auditors for the work they outsource to audit firms based in China.

"The news about the SEC investigation is not surprising," said Michael Yoshikami, who oversees about $ 1 billion in Walnut Creek, YCMNet Advisers based in California. "Standards for transparency have a ways to go to reach a level where one can expect accuracy. However, this does not change our view that Chinese companies represent a growing percentage of IPOs."

"Frothy levels'

At a time when China's government is trying to keep the economy from overheating, a record number of companies are selling shares in the U.S. Forty-one Chinese companies have sold shares through initial offerings in the U.S. this year, capping a record year surpassing the 37 operations in 2007.

investor demand for emerging market stocks, including China, will remain in "levels of foam," Yoshikami said, who was named by Barron's as one of the Top 100 Independent Financial Advisors in 2009. "The business opportunity is simply too great to ignore."

The gross domestic product of China will expand by 9.2 percent this year, about to overtake Japan as second largest economy in the world. The People's Bank of China has raised the amount of reserves banks must set aside, including the request for an increase of 10 December, the third time in five weeks to control inflation and prevent asset bubbles.

"The feeling of hostility '

While the SEC investigation "may damage the sentiment in the short term for Chinese listed companies, the demand for these small business growth remains strong," said Jeff Papp, senior analyst at Oberweis Asset Management. These small Chinese companies are attractive by improving the governance and valuations are still "cheap," he said. That trade on average less than 10 times reported earnings, compared with more than 50 for large populations such as Baidu Inc., Papp said.

The Bank of New York Mellon China ADR Index, which has American depositary receipts of Chinese companies and Hong Kong, gained 0.4 percent yesterday, taking its rise this year to more than 12 percent. Shanghai, China Composite Index fell 0.8 percent to 2,855.22 as of today around 3 pm. The indicator has fallen 13 percent in 2010.

"Research such as this, inevitably, a shadow that is broader and wider than the facts of the case itself," said Straszheim. "I doubt that will cause permanent damage to the broad interest of investors in the global economy of China."

Hong Kong stocks fell as concerns about China's control of property investment

Hong Kong stocks fell as concerns about China's control of property investment overshadowed the optimism of a global recovery after the U.S. economy expanded faster than expected.

China Overseas Land & Investment SA, controlled by the ministry of nation building, slid 1.4 percent. Li & Fung Ltd., the largest supplier of Wal-Mart Stores Inc., rose 2.3 percent. Changsha Zoomlion Heavy Industry Science & Technology Development Co., a manufacturer of construction equipment, rose 8 percent in its debut.

"It helps us to see signs that the U.S. economic outlook appears brighter in the short term, but how long this can be sustained remains an issue," said Castor Pang, research director in Hong Kong Cinda International Holdings Ltd. "The markets tend to move sideways toward the end of the year. more policy tightening may occur at any time. Developers are particularly under selling pressure."

The Hang Seng index lost 0.6 percent to close at 22,902.97, after rising to 0.5 percent. The Hang Seng China Enterprise Index called H shares of Chinese companies fell 0.8 percent to 12,516.52.

The Hang Seng index has rebounded 21 percent lower this year on May 25 on speculation that growth in income of companies to overcome concerns about the pace of U.S. economic recovery and China's measures to curb rising property prices. Participation in the trade of arms in an average 14.4 times estimated earnings, compared with 12.7 times on 25 May.

China Overseas Land fell 1.4 percent to $ 14.60 in Hong Kong. Hang Lung Properties Ltd., a real estate developer in Hong Kong and China, fell 1.5 percent, to 36.25 Hong Kong dollars.

Foreign investment property

The Commerce Ministry has ordered local authorities to stop the passage of some foreign-owned investments to curb speculative buying, said in a statement that was released November 22 on its website yesterday.

Li & Fung advanced 2.3 percent to $ 44.25 in Hong Kong, the biggest gain in the Hang Seng index. Techtronic Industries Co., maker of Hoover vacuum cleaners and Ryobi power tools, rose 0.6 percent to $ 10.60 in Hong Kong.

The U.S. economy grew at an annual rate of 2.6 percent revised in the third quarter, compared with an estimate of 2.5 percent issued last month, a Commerce Department report showed yesterday.

Trinidad Ltd. gained 3.4 percent to HK $ 8.26 after it agreed to buy Cerruti Holdings by as much as € 52.6 million ($ 69 million). Cerruti operates licensing and distribution of men's clothing with the same brand.

Both Trinidad and Li & Fung Ltd. are subsidiaries of closely held Li & Fung group.

Mixed debuts

Zoomlion rose 8 percent to $ 16.18 in Hong Kong. The company sold 869.6 million shares at HK $ 14.98 each, raising net proceeds of HK $ 12,500,000,000 ($ 1.6 billion) in an initial public offering, according to a statement.

Hengxin Technology Ltd. declined 1.3 percent to 2.22 HK dollars in its debut. The supplier of coaxial cables used in mobile communications sold 98.7 million shares at HK $ 2.25 each, raising net proceeds of HK $ 95 million in a sale in Hong Kong initial share.

United Energy Group Ltd. plunged 16 percent to 1.51 Hong Kong dollars after the investment holding company said it will not proceed with a share placement had been considering.

Six stocks fell for each that rose among the 45 components of the indicator. Their future slipped 0.9 percent to 22.894.

U.S. Stock futures retained losses

U.S. Stock futures retained losses after durable goods orders was down the average economist forecast.

500 of Standard & Poor's index contracts fell 0.1 percent to 1,252.70 at 8:33 Eastern time. The benchmark measure of U.S. shares closed yesterday at a maximum of two years.

Durable goods orders fell 1.3 percent in November, fell more than forecast 0.5 percent.

emerging market stocks fluctuated as increased confidence in the strength of U.S. recovery

The emerging market stocks fluctuated as increased confidence in the strength of U.S. recovery was offset by concern that China's tightening measures to slow growth in the third largest economy in the world.

Hon Hai Precision Industry Co., which makes computers Apple Inc. iPhones and Hewlett-Packard Co., rose 1.7 percent after a government report showed the U.S. economy expanded faster than expected. China Vanke Co. dropped 1.8 percent in the southern city of Shenzhen of China as an indicator of lending rates rose to its highest level in more than three years.

The MSCI Emerging Markets Index has changed slightly to 1,126.37 as of 21:49 London time, after gaining 0.2 percent and falling 0.1 percent. Taiwan's TAIEX index rose 0.4 percent, the highest since May 2008. The Philippine Stock Exchange index rose 1.3 percent to a maximum of two weeks. The Shanghai Composite Index, in the worst benchmark Asia to carry out this year, sank 0.8 percent.

"Uncertainty about the controls is the decision of the market," said Deng Changrong, strategist at Huaxi Securities Co. in Shenzhen. "As the market lacks liquidity at the moment, there is no support for a strong recovery."

Stocks in emerging Europe and Africa fluctuated, with the Czech PX gauge up 0.2 percent, BUX for Hungary and Poland's WIG20 fell 0.2 percent and the benchmark index in South Africa has changed little.

Air Pact

Hon Hai Precision, which gets about 36 percent of U.S. sales rose to a maximum of two months in Taipei. Catcher Technology Co., a manufacturer of notebook covers, rose 6.7 percent.

One indicator of population monitoring of information technology increased more among the 10 industry groups in the MSCI index of developing nations.

In Kuala Lumpur, Malaysia Airline System Bhd, the national airline, rose 5.4 percent, gaining for a second day of the signing of an agreement with the Dutch Air France-KLM KLM unit to promote cooperation close.

Alliance Global Group Inc., owner of the largest casino in the Philippines and the local franchise of McDonald's, rose 6.3 percent, the second largest gain in today MSCI Emerging Markets Index. The company said it will buy 60 percent of Fil-Estate Land Inc. for 5 million pesos ($ 113 million) to expand its business related to tourism. Fil-Estate rose 26 percent, its biggest gain since March 1.

China Vanke, the nation's largest developer, retreated 1.8 percent. CINDA Real Estate Co. lost 1.7 percent.

China's benchmark rate money market rose to a maximum of three years as banks hoard cash before the New Year holiday. The interest rate for seven days increased 150 basis points to 5.67 percent, according to a daily fixing published by the National Interbank Funding Center. Policy makers on December 10 ordered lenders to park more money with the central bank for the third time in five weeks to curb inflation.

Sales Dubai farms are gaining momentum a year after planning to freeze the payment of 24.9 billion U.S. dollars in loans

Sales Dubai farms are gaining momentum a year after the emirate's corporate logo shook world markets with plans to freeze the payment of 24.9 billion U.S. dollars in loans.

DP World Ltd., the port operator, yesterday agreed the sale of 75 percent of its unit in Australia, raising $ 1.5 billion. Borse Dubai Ltd, which controls two of Dubai, the stock exchange, raised $ 672,000,000 December 16 with the sale of half its stake in Nasdaq OMX Group Inc., owner of capital exchange second largest U.S. . UU .. Both companies said they use the funds to pay the debt.

Dubai and its state-controlled companies have so far been able to renegotiate with creditors. About $ 20 billion in debt and interest will be published next year, according to Egyptian investment bank EFG Hermes Holding SAE, raising the question whether Dubai will be forced to sell assets abroad, such as luxury retailer Barneys New York, Inc., USA hotel and casino group MGM Mirage and Canadian entertainment company Cirque du Soleil, Inc., all accumulated during the boom years.

"Dubai has been quite successful in negotiating difficult for significant cuts in the main creditors," said Gabriel stars, an emerging markets economist at brokerage Exotix Holdings Ltd. in London. "This negotiation needs some indication that they are cutting their coat according to their material, which is not credible if, while in turn drip superfluous costume jewelry, which is what non-core assets have reached to represent. "

Private equity sale

Emirates NBD PJSC, which is 56 percent owned by the Dubai government, agreed to sell a 49 percent stake in its unit credit card processing for about 2 billion dirhams ($ 545 million) to Abraaj Capital Ltd. , Dubai-based private equity firm that manages $ 6.6 billion, the bank said today. The bank is one of the largest lenders of Dubai World.

Dubai has indicated that it may be selling some of its most valuable assets with Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the Supreme Prosecutor Dubai and the new chairman of Dubai World, November 28 saying that Dubai may sell units in some of its "core" companies to help reduce debt. Among the most precious national assets are Emirates Airline Dubai, the hotel operator Jumeirah Group LLC, Dubai Maritime City and Jebel Ali Free Zone.

"Realistic Approach '

"There has been an evolution in the public discourse, which has resulted in a very pragmatic and realistic approach," said Standard Chartered Plc, a senior economist Philippe Dauba-Pantanacce. "All options are on the table and this augurs well for the medium-term solution to the outstanding debt."

Barclays Capital estimates that in September of Dubai and its state-owned entities have about $ 112 million in debt - which represents more than 140 percent of gross domestic product - that accumulated during the years of growth in real estate industries and tourism.

Dubai World, one of the emirate's top three holding companies owned, has creditors to accept the new terms to 24.9 billion U.S. dollars of debt in October. Nakheel PJSC its property unit is working on a similar agreement of at least $ 10.5 billion in debt. Dubai International Capital LLC, an investment company owned by the ruler of Dubai, issued a loan of U.S. $ 2 billion for six years and a $ 500 million for four years, said on 17 December.

"Dubai Inc. certainly need cash," said Fahd Iqbal, research director at EFG Hermes. "But the need for cash, so far, has not been enough to push Dubai Inc. to consider the division of value, non-core assets at low multiples internal force."

Insurance costs fall

The cost of protecting debt against default emirate was reduced to 427 basis points on Dec. 22, its lowest level since 11 November, according to prices provided by CMA DataVision. Has been reduced from a peak of 651 basis points on Feb. 15. A basis point equals $ 1,000 annually on a contract protecting $ 10 million of debt.

The Dubai government debt, excluding the state-controlled companies is $ 30 billion, Mohammed Ibrahim al-Shaibani, director general of the court of the ruler of Dubai and CEO of the Dubai Investment Corporation, said on 28 November. He said, however, there would be no fire sale of assets.

"There is no plan to sell assets in any other region," said the chairman of DP World, Sultan Ahmed bin Sulayem in a conference call yesterday to explain the sale of its Australian unit Citi Infrastructure Investors, a unit of Citigroup Inc. "This is purely an opportunity to better manage our money "and for use in higher-margin markets of South Asia, Africa and South America, he said.

Nasdaq Sale

The sale of the participation of Dubai in the Nasdaq shows how difficult it is to recover their investments. Borse Dubai Nasdaq bought OMX shares an implicit price $ 41.01 per share in 2007, according to a statement at the time, and sold about half of them last week, 47 percent to $ 21.82 per share.

Dubai holdings has already attracted interest from some of the largest companies in the world buys. Carlyle Group, the second largest privately held company, and buying other companies have evaluated the purchase of assets owned by Dubai, the Washington-based company co-founder David Rubenstein said on 26 October.

"Dubai has built a strong portfolio of businesses with a global presence," said Rami Sidani, head of investments at Schroders Plc in the Middle East. "Emirates Airline is the most interesting and valuable company of Dubai and needs to attract huge interest. There are also companies like Dubai Airports, Dubai Duty Free and the Jumeirah Group, which are great assets."

Five-Year Plan

Dubai World and Dubai have reported both creditors of possible asset sales.

Dubai World could fetch up to U.S. $ 19.4 billion in eight years by selling assets, a person familiar with the matter said on August 25. If you sell these assets immediately, would probably receive 10.4 billion U.S. dollars, said the person at the time.

Dubai International, part of Dubai Holding, has submitted a plan to creditors to sell assets over five years to repay their debts, two people briefed on the plan said on September 15. The company has already sold shares in Sony Corp., European Aeronautic Defence & Space Co. and India's ICICI Bank Ltd. in recent years, despite poor market conditions. In June, sold its stake in Merlin Entertainments, which is majority owned by Blackstone Group LP, the largest shopping.

Dubai International still owns stakes in companies such as UK medical imaging company Alliance Medical Ltd. and the British hotel chain Travelodge Hotels Ltd., according to its website.

"Dubai has in its business model a number of activities that are not only a great success, some are global in scope and expertise," said Standard Chartered Dauba-Pantanacce. "Interest of investors just might be too high in the sale of some of these assets."

Forecasts for inflation in Brazil are declining more than two years after policy makers

Forecasts for inflation in Brazil are declining more than two years after policy makers said they are prepared to increase borrowing costs to curb consumer prices, show bond yields.

The yield gap between inflation-indexed bonds and fixed-rate government maturing in 2013 fell 25 basis points, or 0.25 percentage point, to 612 yesterday after the central bank said there was a need " adjustment "in interest rates to curb consumer price increases. The difference in yield, an indicator of investor sentiment about inflation annually over the next two years, got to 637 earlier this week, the highest since December 2008.

The demand for inflation protection is decreasing in Brazil speculation linking the countries of Chile to Thailand in increasing borrowing costs. Brazilian bonds linked to an index of consumer prices exceeded the fixed nominal bonds in each of the past four months amid political leaders concerned for not acting quickly enough to contain inflation that accelerated to a high of 23 months.

"With rate increases, inflation expectations should fall next year," said Marcelo Schmitt, manager of fixed income portfolio Sul America Investimentos, which has 18 billion reais (10.6 million euros) under management. The excess return of inflation-indexed bonds can "come to an end," he said in a telephone interview in Sao Paulo.

Schmitt said he has been selling inflation-linked bonds and the purchase of fixed rate debt in the last two weeks.

The performance of inflation-linked notes rose 18 basis points yesterday, the most since Nov. 29 to 6.33 percent. Government debt fixed rate rose, pushing up prices and pushing yields up 7 basis points to 12.45 percent.

"Mismatch"

Annual inflation accelerated to 5.79 percent in the 12 months through mid-December, driven by food prices, credit and wage growth. It was the fourth consecutive month consumer prices exceeded the government target of 4.5 percent, plus or minus two percentage points.

Policy makers need to "contain the mismatch between the rate of expansion of domestic demand and production capacity of the economy," the report said the central bank's quarterly inflation released yesterday.

increases in interest rates 150 basis points, up 12.25 percent and a stable currency would bring down inflation to around 4.5 per cent target over the next two years, Charles Hamilton, director of the bank central to economic policy, told reporters in Brasilia yesterday. The real has risen 40 percent against the dollar in the last two years.

'Strong signal'

The inflation report sent "a very strong signal" that the central bank will "start the cycle of increases in January," said Marcelo Salomon, chief economist for Brazil at Barclays Plc in New York, in a telephone interview. The risk of inflation overshooting the upper limit of the central bank's target has decreased, while regulators sent a "clear message" that will act quickly, he said.

Barclays moved yesterday its forecast for a rate increase from January to March, predicting that the central bank will raise borrowing costs 150 basis points in late April.

Tombini Alexandre, who was confirmed as central bank president by the Senate last week, will increase lending rates by 50 basis points when he chairs his first policy meeting on 18 to 19. and push it up to about 12.5 percent by the end of 2011, interest rate futures contracts "program. Brazil's 10.75 percent rate compares with borrowing costs U.S. between zero and 0.25 percent.

The extra yield investors demand to hold Brazilian dollar bonds instead of U.S. Treasuries fell 1 basis point to 180 at 6:21 am New York time, according to JPMorgan Chase & Co.

Default Swaps

The cost of protecting debt of Brazil against nonpayment for five years with credit-default swaps fell 1 basis point to 113, according to data compiled by CMA. Swaps credit-default pay the buyer face value in exchange for the underlying securities or the cash equivalent of a government or a company fail to adhere to its debt agreements.

The real rose 0.2 percent to 1.6972 per dollar.

Brazil's inflation-indexed bonds maturing in less than five years returned 12.7 percent this year, compared with an increase of 11.2 nominal fixed-income securities, according to data compiled by the association of capital markets.

Debt on consumer prices in the U.S. gained 8.1 percent this year, while similar values in Turkey returned 24 percent, Bank of America Merrill Lynch data show.

bonds indexed to inflation in Brazil "may lose some of the appeal had so far," Salomon said Barclays.

the speculation of investors on money market mutual funds are likely to be rescued by their parent companies during a crisis



Federal Reserve chairman, Ben S. Bernanke said the speculation of investors on money market mutual funds are likely to be rescued by their parent companies during a crisis could undermine the stability of the industry that manages $ 2790000000000.

Bernanke, in a December 09 letter to Anthony J. Carfang, a partner at Chicago consultancy Treasury Strategies said the market developments that reinforce the speculation whether the money funds can be rescued are a "concern" and the support of sponsors should be addressed in the context of reforms envisaged in the industry .

Carfang in November criticized a proposal that Moody's Corp. ratings on money funds, consider the possibility of rescuing the parents in case of losses. Bernanke, in his letter, Carfang encouraged to submit their views on the Moody's proposal to the Securities and Exchange Commission.

"I think he's saying he wants the word to go, but he would not do directly," Carfang said today in an interview.

Barbara Hagenbaugh, a spokesman for the Federal Reserve, Bernanke confirmed he sent the letter and declined to comment on it.

Money market funds have been under increasing regulatory scrutiny since September 2008, the collapse of Fund $ 62,500,000,000 Reserve Primary, only the second fund to expose investors to losses. Its closure caused an industry-wide performance that helped the markets global credit freeze.

The SEC this year to comply with new rules requiring funds to boost cash holdings of cash and easy to sell, reduce your level of lower-rated debt and reveal more about what they have.

Money Reform Fund

President's Working Group on Financial Markets, an advisory body to the White House, Bernanke, a member, has reviewed the proposed regulations and urged market participants to submit comments to the SEC.

Bernanke, in his letter, before the conclusions of the working group's report that "uncertainty among investors about the actual availability of the discretionary aid during crises can contribute to the vulnerability of money market funds 'run' ".

"An evolution in market conventions that would reinforce this dynamic is worrying, and I think it is important to address support of the sponsors of money market funds in the broader context of reforms that can make funds less vulnerable to Pops, "Bernanke wrote Carfang.

Carfang has called the Moody's proposal "fundamentally disturbing," the rating firm would have no objective way to measure whether a money manager of a fund to support problems. Fund prospectuses explicitly tell customers that their investments are not guaranteed.

Qasim Abbas, a spokesman for Moody's, said he could not comment immediately.

The Primary Reserve Fund closed after writing to zero $ 785 million in debt issued by Lehman Brothers Holdings Inc. The fund gained 98 percent of the money from customers during the two years following closing.

Orchard increased its capital flagship hedge funds almost 14 times

Orchard Capital Partners Ltd., a hedge fund based in Asia Stark was out of investments last year, increased its capital flagship hedge funds almost 14 times after returning more than three times its regional peers this year.

Gemini Fund managed orchard $ 96,200,000 on December 1, from $ 7 million in early January, JED said Teall Huerta co-founded with Stuart Wilson. The fund, which bets on both rising and falling stocks in the region, returned 21 percent in its first 11 months.

The Eurekahedge Asia Long / Short Equity Hedge Fund Index, tracking about 300 funds, has gained 6 percent this year, at least since a 2.9 percent increase in 2002 and years with losses 2000 and 2008, as the fear of a relapse in the U.S. recession, Europe's crisis of debt and inflation in Asia rattled markets. Huerta also raised $ 150 million equity accounts tailored to certain investors, bringing the total assets of $ 520 million.

"The strategies of equity is more liquid than the appetite of investors was this year," said JED in an interview yesterday. "Many investors and funds that are many headwinds that the macro were difficult to deal with most of the year."

equity products in most capital inflows this year in the company, which also manages the investments of credit, said JED. Huerta has offices in Hong Kong and Singapore.

Buy Stark

focused hedge fund assets in Asia grew by $ 2.2 billion in the first nine months of the year, according to Chicago-based data provider Hedge Fund Research Inc.

JED, 42, and Wilson, 40, were the directors of Stark before he bought the Milwaukee Asian business of hedge funds based in Wisconsin, in October last year. Stark sold the unit to focus on values most frequently traded, Cam Stephenson, his communications director, said in October 2009.

Gemini Garden break the turnover rate among emerging and developed economies of Asia and adjust the quantities of stocks and put options, which rise as stocks decline, JED said.

"This year has been both individual names as macro and sector themes," says JED. "Throughout the year, had to be very agile. It was an environment that was more of a business environment that the investment environment."

Gemini Garden returned 0.5 percent in January by reducing bullish bets on a single stock and the addition of options on indices, which gained in value as indicators declined, JED said. Eurekahedge Asia Long / Short Equity Hedge Fund Index lost 2 percent this month.

Betting exchange

In September and October, increased the size of the holdings of key, Wilson said, without naming actions. These bets, along with the change of holdings in emerging Asia to the developed economies in the region, fears of inflation in the first rose, helped the fund from 13 percent in two months, nearly twice the average of peers.

The fund bet more in developed economies such as Taiwan, Australia and Japan earlier this year as it benefited from U.S. policies economic stimulus.

He ran back to developing Asia, including China, India and Indonesia, between March and September, following government measures to snuff out the first signs of inflation gained strength. Corporate profits remained strong, companies continued reinvestment and capital flowed from developed countries to emerging markets, said JED.

The expectation of further measures to combat inflation in China, Indonesia and India in the fourth quarter led to the poor performance of developing Asia, he added. Economies more sensitive to the U.S., Japan, Korea and Taiwan benefited from relief instead of monetary policy in the U.S. and Europe.

Indonesia Bulls

Throughout the year, the fund stands on Indonesia, says JED. Companies in China, India and Japan are increasingly buying assets in the country to ensure the supply of coal, iron ore and copper after the acquisitions in Australia have become more complicated and expensive.

"Indonesia is a place with abundant natural resources available," he said. "The markets really have not allocated a proportionate amount of capital in that country."

The Jakarta Composite Index has risen almost 50 percent this year, the sixth best-performer among 84 major stock indicators.

A sale of shares for U.S. $ 1.1 billion in PT Semen Gresik sales and other recent actions have increased the number of shares in public hands and helped boost investor interest in the developed world in search of yields emerging countries, said JED.

Outlook "choppy"

"We believe 2011 will be similar, it will be one where the macro headwinds are likely to be a determinant of high performance," said JED. "We believe the next two or three months will be very busy in the development of Asia for the simple reason that inflation is a problem that must be addressed by the adjustment."

It is expected that Japan, Korea and Taiwan to take advantage of excess capital flowing out of the U.S., especially technology companies.

The lower cost coverage implied volatility also helped boost the fund's performance, Wilson said. The Chicago Board Options Exchange Volatility Index, known as the VIX, and a measure of the cost of using options to insure against declines in the S & P 500 has fallen 29 percent this year.

structured deposits sold by retail and private banks in Asia have also allowed fund managers to obtain hedge against price volatility or price changes, JED said.