Dean Yates http://blogs.reuters.com/dean-yates Dean Yates's Profile Fri, 05 Feb 2010 04:55:36 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.5 Asia shares fall; euro up on Swiss cbank takj http://www.reuters.com/article/idUSSGE61401520100205?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/dean-yates/2010/02/05/asia-shares-fall-euro-up-on-swiss-cbank-takj/#comments Fri, 05 Feb 2010 04:55:36 +0000 http://blogs.reuters.com/dean-yates/2010/02/05/asia-shares-fall-euro-up-on-swiss-cbank-takj/ SINGAPORE, Feb 5 (Reuters) – Asian stocks fell to near
five-month lows on Friday as investors dumped riskier assets
after rising sovereign debt problems in the euro zone and poor
jobs data sent U.S. and European stocks tumbling.

The U.S. dollar extended gains from the previous session as
investor anxiety about sovereign debt in Greece, Portugal and
Spain sparked a sell-off in the euro and growth-linked
currencies such as the Australian dollar.

But the euro rebounded slightly on Friday against the Swiss
franc on rumours that the Swiss central bank had intervened to
weaken its own currency. Overnight, the euro had hit its lowest
level in more than eight months against the dollar and plunged
to a 15-month low against the Swiss franc <EURCHF=>.

Asian stock markets and commodity prices recoiled on fears
that growing euro zone troubles could impede or even derail the
global economic recovery.

An unexpected rise in U.S. unemployment claims heightened
those concerns ahead of non-farm payrolls data due later on
Friday, a number that will be closely watched by markets for
signs of an improvement in America’s jobless rate.
[ID:nN04233513]

Japan’s Nikkei average <.N225> dropped more than 3 percent
to its lowest in seven weeks, with exporters hurt by a stronger
yen as well as the escalating problems in Europe. The yen, like
the dollar, has firmed as investors move into assets
traditionally seen as safe havens in times of market turmoil.

Dariusz Kowalczyk, chief investment strategist at SJS
Markets in Hong Kong, said worse may lay ahead for Asian stocks
in the second quarter.
He said the waning impact of fiscal stimulus measures in big
economies would trigger a double-dip recession in the United
States, Europe and Japan by the end of the year, and that
markets would see it coming.

“When it comes to equities, markets usually anticipate
changes in the direction of the global economy about two
quarters before they occur,” Kowalczyk said.

“Obviously when you look at what’s happening with the
market this year, some might say the correction has already
begun. But I think this correction, while it is painful, is not
the major one that will come ahead of the double dip.”

Asia Pacific stocks outside Japan as measured by MSCI
<.MIAPJ0000PUS> fell more than 3 percent to levels last seen in
early September. Declines were led by resource stocks, which
fell 4 percent as commodity and energy prices fell on worries
about the strength of the global recovery.

Asian stocks outside Japan have fallen close to 9 percent
this year after rising 68 percent in 2009 on the back of
government measures worldwide that stimulated spending and
dragged the global economy back from the abyss.

Australian shares fell 2.8 percent. Top miners Rio Tinto
Ltd <RIO.AX> slumped 5.6 percent and BHP Billiton Ltd <BHP.AX>
lost 3.9 percent. Both were especially hard hit by a slump in
commodities prices as the U.S. dollar jumped. In Hong Kong, the
benchmark Hang Seng Index <.HSI> was down 3 percent.

EURO INTERVENTION?

The euro jumped to the day’s high of 1.4905 francs
<EURCHF=> on EBS after falling as far as 1.4551 francs, its
lowest since October 2008, and later held around 1.4730 francs,
up 0.6 percent on the day.

Traders said it was not clear if the Swiss central bank had
actually intervened to buy euros and sell the Swiss franc,
although there was talk it had used trading platform EBS.

The Swiss National Bank bank has pledged to stem a
sharp-run up in the france against the euro because its fears a
stronger franc will erode the country’s export competitiveness
and threaten its broader recovery.

The euro had dropped to levels which could prompt
intervention and the market was wary of the possibility.

The weakness in the euro was partly attributed to widening
Greek, Portuguese and Spanish bonds’ yield spreads over German
benchmarks. [GVD/EUR].

In Asian trade, the dollar index <.DXY><=USD> surged past
80 for the first time since mid-July 2009 while the euro <EUR=>
fell to as low as $1.3710, which was its lowest since May 2009.

Major U.S. stock indexes fell as much as 3 percent
overnight, their worst losses in more than nine months, with
the Dow <.DJX> briefly dipping below the significant 10,000
mark. [.N]

Financial, commodity and materials sectors were all hit
hard by fears of escalating government debt problems in Greece,
Portugal and Spain. [ID:nLDE6130RE]

“I think it’s a confidence issue right now. We definitely
do need to see unemployment in the U.S. start to decline before
consumption can really start to pick up,” said Lorraine Tan,
director of Asia equity research at S&P in Singapore.

Shanghai copper was seen falling around 3 percent after a
plunge in London sent the metal to it lowest in more than three
months.

Oil <CLc1> rose 27 cents to $73.41 per barrel, after its
biggest one-day drop since July in the previous session as the
dollar jumped.
(Editing by Kim Coghill)

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Asia shares slide on economy fears; dollar climbs http://www.reuters.com/article/idUSTRE5B30HG20100205?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/dean-yates/2010/02/05/asia-shares-slide-on-economy-fears-dollar-climbs/#comments Fri, 05 Feb 2010 01:58:54 +0000 http://blogs.reuters.com/dean-yates/2010/02/05/asia-shares-slide-on-economy-fears-dollar-climbs/ SINGAPORE (Reuters) – Asian stocks fell to near five-month lows on Friday as investors dumped riskier assets after rising sovereign debt problems in the euro zone and poor jobs data sent U.S. and European stocks tumbling.

The U.S. dollar climbed, having surged in the previous session, after investor anxiety about sovereign debt in Greece, Portugal and Spain sparked a sell-off in the euro and growth-linked currencies such as the Australian dollar.

Asia Pacific stocks outside Japan as measured by MSCI fell 2.1 percent to levels last seen in mid-September. Declines were led by resource stocks, which fell more than 3 percent as commodity and energy prices fell on worries about the strength of the global economic recovery.

Japan’s Nikkei average fell 3 percent to its lowest in seven weeks.

Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong, said worse may lay ahead for Asian stocks in the second quarter.

He said the waning impact of fiscal stimulus measures in big economies would trigger a double-dip recession in the United States, Europe and Japan by the end of the year, and that markets would see it coming.

“When it comes to equities, markets usually anticipate changes in the direction of the global economy about two quarters before they occur,” Kowalczyk said.

“Obviously when you look at what’s happening with the market this year, some might say the correction has already begun. But I think this correction, while it is painful, is not the major one that will come ahead of the double dip.”

Asian stocks outside Japan have fallen more than 8 percent this year after rising 68 percent in 2009 on the back of government measures worldwide that stimulated spending and dragged the global economy back from the abyss.

Australian shares tumbled 2.6 percent, with top miners and banks sliding. Rio Tinto slumped 5.3 percent and BHP Billiton dropped 3.6 percent in early trade.

Major U.S. stock indexes fell as much as 3 percent overnight, their worst losses in more than nine months, with the Dow briefly dipping below the significant 10,000 mark.

Financial, commodity and materials sectors were all hit hard by fears of escalating government debt problems in Greece, Portugal and Spain.

An unexpected rise in U.S. unemployment benefits also spooked Wall St, heightening concerns ahead of the non-farm payrolls data due later on Friday.

In Asian trade, the dollar index surged past 80 for the first time since mid-July 2009 while the euro fell to as low as $1.3716, which was its lowest since May, 2009.

The weakness in the euro was partly attributed to widening Greek, Portuguese and Spanish bonds’ yield spreads over German benchmarks.

Shanghai copper was seen falling around 3 percent after a plunge in London sent the metal to its lowest in more than three months.

U.S. crude oil futures hovered around $73 a barrel after posting their steepest one-day percentage fall since July the previous day when the dollar soared and demand concerns resurfaced.

(Editing by Kim Coghill)

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Asia shares slide; Toyota sinks to 10-month low http://www.reuters.com/article/idUSTRE5B30HG20100204?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/dean-yates/2010/02/04/asia-shares-slide-toyota-sinks-to-10-month-low/#comments Thu, 04 Feb 2010 03:24:41 +0000 http://blogs.reuters.com/dean-yates/2010/02/04/asia-shares-slide-toyota-sinks-to-10-month-low/ SINGAPORE (Reuters) – Asian stocks fell on Thursday, with Toyota Motor hitting a 10-month low on investor concerns over its massive vehicle recall, which in turn helped rival carmakers buck the broader downward trend and post solid gains.

The U.S. dollar was on a firm footing while the New Zealand dollar dived after a sharp jump in unemployment, dragging other growth-linked currencies such as the Australian dollar along with it.

Financial markets are expected to remain cautious ahead of the European Central Bank’s (ECB) rate decision and the Bank of England’s monetary policy meeting, both due later on Thursday.

Investors are also awaiting U.S. non-farm payrolls data on Friday after statistics on Wednesday showed signs of stabilization in the job market in the world’s largest economy.

Asia Pacific stocks outside Japan as measured by MSCI were down 0.7 percent, with virtually all sectors in the red, as traders took profits from gains in recent sessions and after a weaker close on Wall Street, where stocks slipped on fears of increasing U.S. government regulation in a host of sectors from banking to healthcare.

Shares of resource firms were the biggest drag on Asian markets, with the resource sector index shedding 1.4 percent after a rally in recent days on hopes that a revived global economy would mean greater demand for oil and metals.

Japan’s Nikkei average fell 0.6 percent, weighed down by further selling in Toyota Motor Corp, which tumbled 3.5 percent.

Toyota’s woes worsened after the Obama administration stepped up pressure on the world’s largest carmaker to address a range of safety issues.

Its shares have lost more than 20 percent of their value since a recent high on January 21 as a deepening recall tarnishes the company’s reputation for safe vehicles. The carmaker is set to report third-quarter results after the market closes at 0600 GMT.

In contrast, Honda Motor Co jumped after the automaker, Japan’s second biggest, raised its annual outlook far beyond investor expectations and said it anticipated more growth next financial year. Honda was up 2.3 percent.

“While Toyota has to halt production due to the recall and will probably have to review its supply chain into next fiscal year, Honda has surprised us with strong results and has returned nearly to its best shape,” said Yoshihiko Tabei, analyst at Kazaka Securities.

Shares in South Korean automakers also rallied on hopes they would pick up market share from Toyota. Hyundai Motor was up 3.5 percent while Kia Motors gained 2.5 percent.

CURRENCIES EYE EUROPEAN MEETINGS

In currency markets, the New Zealand dollar fell to its lowest in five months, dropping to as low as $0.6965, from $0.7070 late on Wednesday, after data showed the country’s jobless rate rising to a 10-year high.

Investors pushed back expectations of a rate rise to June from April after the surprising data, reducing some of the currency’s high-yield appeal.

The euro was also on the defensive, slipping to $1.3888, from $1.3894 late in New York on Wednesday. The single currency continues to be on shaky ground on fresh fears that Portugal could join Greece as the next country to face fiscal problems.

The ECB is widely expected to keep rates unchanged at its meeting on Thursday as financial woes in Greece, Portugal and Spain endanger the currency bloc’s recovery.

The U.S. dollar was steady against a basket of major currencies, with euro zone troubles adding to the view that the greenback will gain further ground at the expense of the euro.

U.S. data on Wednesday showed signs of a stabilization in the jobs market while the Institute for Supply Management’s index of non-manufacturing companies rose to 50.5, from 49.8 in December.

All that bodes well for the nonfarm payrolls numbers due on Friday. A Reuters poll of top 20 forecasters estimated 8,000 jobs were added to the economy.

The Bank of England’s monetary policy meeting will also be in focus on Thursday. The BOE is expected to halt its quantitative easing program, although interest rates are likely to be held at 0.5 percent.

Shanghai copper was seen plunging at the open on Thursday, possibly to its 5 percent downside limit, after a reversal in sentiment sent London metal sliding to 2-½ month lows in the previous session.

NYMEX crude for March delivery dipped 17 cents to below $76.81 a barrel, after slipping 25 cents on Wednesday, when data showed U.S. crude oil stocks rose last week much more than forecast on higher imports and lower demand by refiners curbing operations.

(Editing by Kim Coghill)

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Asia shares rise on U.S. cues; Aussie rebounds http://www.reuters.com/article/idUSTRE5B30HG20100203?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/dean-yates/2010/02/03/asia-shares-rise-on-u-s-cues-aussie-rebounds/#comments Wed, 03 Feb 2010 03:29:17 +0000 http://blogs.reuters.com/dean-yates/2010/02/03/asia-shares-rise-on-u-s-cues-aussie-rebounds/ SINGAPORE (Reuters) – Asian shares rose on Wednesday with resources stocks leading the way, as demand for riskier assets increased after Wall Street rallied on upbeat U.S. earnings and economic data.

The U.S. dollar steadied after slipping from six-month highs against a basket of currencies as investors moved back into higher-yielding, growth-linked currencies after market jitters in recent weeks.

The Australian dollar bounced from Tuesday’s sell-off, which came after the Reserve Bank of Australia shocked investors by leaving interest rates unchanged.

Rising sales of previously owned U.S. homes and robust earnings from U.S. bellwethers in the consumer and industrial sectors pointed to a steady rebound in demand, fuelling gains of as much as 1.3 percent in key U.S. stock indexes overnight.

But some analysts cautioned against predicting a strong run in Asian stocks despite the appearance of more appetite for risk.

While companies overall had been beating earnings estimates, not a lot of upgrades had been forthcoming, said Andrew Orchard, strategist at Royal Bank of Scotland in Hong Kong.

“We see it as a year of volatility, a year of consolidation with maybe single digit returns between the positive and the negative,” said Orchard.

“Of course between the months you could see a few weeks of rallies, a few weeks of sustained falls, but overall we think it won’t be too different from where we began the year.”

Japan’s Nikkei stock average edged up 0.3 percent, with rises by exporters on the strong U.S. data offsetting declines for Toyota Motor Corp, whose U.S. sales slid 16 percent after its massive vehicle recall.

Fears of an extended sales slump pushed Toyota down 3.7 percent, compounding a slide that has sent the stock down 17 percent since its recall was announced on January 21.

All eyes will be on Toyota when it announces Q3 results on Thursday and how the recall will affect its 2010 earnings forecasts. Rival Honda Motor Co reports Q3 results later on Wednesday.

Asia Pacific stocks outside Japan as measured by MSCI rose 1 percent, climbing further away from 3-month lows.

MSCI’s Asia exJapan resources index was up nearly 2 percent, the biggest contributor to the rise in Asian shares for the second day in a row.

Shanghai copper was seen rising around 1 percent at the open on Wednesday after fresh gains in London, as the latest batch of positive U.S. data helped soothe jangled investor nerves.

Top Australian miners had been sold down over the past few weeks on worries about moves by China, their biggest customer, to rein in bank lending. But signs of a sustainable global recovery have lured investors back into resources stocks.

“At the end of the day demand for commodities will remain reasonably robust. I don’t see anything that’s happened to derail that theory,” said David Spry, research manager at broker FW Holst.

Global miner BHP Billiton rose 2.4 percent.

CURRENCIES

The dollar index hovered around the 79 mark, after retreating from a six-month high of 79.547 struck on January 31.

The Australian dollar was at $0.8848, bouncing from a low of $0.8780 on Tuesday and recovering some of the losses suffered when the Reserve Bank of Australia left its benchmark rate unchanged at 3.75 percent, defying expectations of a rate hike.

The euro held on to gains made overnight, climbing to $1.3953 in Asian trade. It faces a stiff fight uphill as credit worries related to Greece fester in the background.

U.S. crude futures slipped back below $77 a barrel on Wednesday after an industry report showed a bigger than expected build in U.S. crude oil stockpiles last week.

NYMEX crude for March delivery was down 34 cents at $76.89 a barrel by 0016 GMT, after settling $2.80 higher on Tuesday, when the encouraging economic data and a weak dollar helped boost prices.

Gold prices were steady at around $1,114.65 per ounce after hitting their highest level in almost two weeks the previous day, with investors cautiously awaiting U.S. jobs data later this week to gauge prospects for the U.S. economy and the dollar.

(Editing by Kim Coghill)

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Asia shares rebound; resource stocks surge http://www.reuters.com/article/idUSTRE5B30HG20100202?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/dean-yates/2010/02/02/asia-shares-rebound-resource-stocks-surge/#comments Tue, 02 Feb 2010 03:09:49 +0000 http://blogs.reuters.com/dean-yates/2010/02/02/asia-shares-rebound-resource-stocks-surge/ SINGAPORE (Reuters) – Asian shares rebounded on Tuesday, led by resources stocks, after strong U.S. manufacturing data raised hopes the global economic recovery was on a firmer footing as governments move to withdraw stimulus spending.

Japan’s Nikkei stock average rose 1.88 percent while resources firms such as Australian miners were among the best performers in the region, buoyed by prospects for the world economy and the outlook for oil and metals demand.

The U.S. dollar steadied, after falling away from six-month highs on a basket of currencies, while the Australian dollar retained broad gains ahead of a widely expected interest rate hike later in the day.

The Institute for Supply Management’s manufacturing index showed U.S. factory activity grew in January at a faster rate than expected, following similar surveys from China, Australia and the euro zone.

Khiem Do, head of the Asia multi-asset group at Baring Asset Management, which oversees $50 billion, said the key to such positive data driving strong stock markets higher this year would be final demand in the United States, Europe and Japan.

“There is still a big question mark over that, which is why I think we will continue to see volatility in terms of what investors think about their growth prospects for this year,” he said, referring to the world’s major industrialized regions.

The United States, Europe and Japan have been the slowest to recover from the 2008-2009 global financial crisis and government stimulus measures are still a key source of their demand.

Much of the recent growth has come from emerging markets such as China, India and Latin America.

Besides responding to the bullish global factory data, Japan’s benchmark Nikkei index got a boost from Toyota Motor Corp, which rose 5.5 percent after it detailed plans on Monday to fix nearly 4.5 million vehicles equipped with faulty accelerators in North America and Europe.

The jump in the world’s top automaker comes after about an 18 percent tumble over the last seven business days.

Asia Pacific stocks outside Japan as measured by MSCI were up 1.5 percent, climbing from 3-month lows. The index lost 6.4 percent in January as a host of unsettling factors prompted investors to take profits after a 68 percent rally in 2009.

MSCI’s Asia exJapan resources index was up 3 percent, the biggest contributor to the rise in Asian shares. BHP Billiton Ltd, the world’s top miner, jumped 3.1 percent while Rio Tinto Ltd rallied 5 percent.

Shanghai copper was expected to open sharply higher on Tuesday, after a late turnaround in London copper on the firm U.S. manufacturing data that saw the metal end up 0.7 percent.

YEN EASES

The yen was broadly lower as investor appetite for riskier, higher-yielding assets improved just a little after the U.S. data helped Wall Street stocks regain some ground.

The dollar index, a measure of the greenback’s performance against six major currencies, was down 0.35 percent at 79.182, off a high of 79.534, its strongest since late July.

The Aussie dollar edged up to $0.8920, extending gains made on Monday, ahead of a central bank rate decision at 0330 GMT.

All 20 economists polled by Reuters expect a 25 basis point hike in the cash rate to 4 percent, with the market pricing in a nearly a 80 percent chance of such a move.

Crude oil futures rose half a percent or 42 cents to $74.86 per barrel after gaining by more than $1 a barrel in New York on Tuesday on optimism that the U.S. economy has turned the corner.

Gold prices softened still hovered near $1,105 per ounce after posting their biggest daily gain in three months in the previous session boosted by the rally in oil, dollar weakness and strong U.S. data. (Editing by Kim Coghill)

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Asia shares fall to three-month lows http://www.reuters.com/article/idUSTRE5B30HG20100201?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/dean-yates/2010/02/01/asia-shares-fall-to-three-month-lows/#comments Mon, 01 Feb 2010 07:22:17 +0000 http://blogs.reuters.com/dean-yates/2010/02/01/asia-shares-fall-to-three-month-lows/ SINGAPORE (Reuters) – Asian stocks fell to three-month lows on Monday with investors cautious after new data strengthened the case for tighter Chinese monetary policy and as attention focused on key U.S. economic reports due this week.

European shares were also expected to retreat by as much as 1.2 percent amid lingering worries about Greece and other weak euro zone members.

U.S. stock futures pointed to a slightly higher open after Wall Street ended lower on Friday despite data showing the U.S. economy grew at its fastest pace in six years in the fourth quarter.

Markets are bracing for a big week with a number of major central bank meetings across the world and a raft of economic reports out of the United States, culminating in the non-farm payrolls data on Friday.

Many of Asia’s stock markets lost ground on Monday, rattled by U.S. losses last week, while Japan’s Nikkei stock average ended flat.

“A correction in Asia is healthy, definitely. Prices have moved ahead quite well,” said Alex Boggis, fund manager at Aberdeen Asset Management, which oversees about $240 billion in investments.

“Obviously over the last year markets have moved ahead quite strongly based on … a dramatically improving environment. But has it really dramatically improved?”

Asia Pacific stocks outside Japan as measured by MSCI were off 0.84 percent, a 3-month low. The index lost 6.4 percent in January, its worst month in a year, after a 68 percent surge in 2009, as a host of unsettling factors prompted investors to take profits.

According to data from Nomura, foreigners sold nearly $4.1 billion in stocks in six Asian markets ex-Japan in the week ended January 31 — led by $1.7 billion in Taiwan, $1.2 billion in India and $811 million in South Korea.

The U.S. dollar held at its highest levels in six months on Monday, while the euro huddled near seven-month lows on euro zone fiscal concerns, and higher yielding currencies remained pressured by the closing of leveraged trades.

Fresh worries over public finances of Greece, Portugal and other smaller euro zone countries have also weighed on global stocks. Fears that Athens will not be able to service its heavy debt have prompted investors to shun riskier investments.

Also high on investor radar screens has been China, where a pair of business surveys on Monday underlined the mounting challenge policymakers face to curb inflation in the world’s third-largest economy.

An index based on an official survey of purchasing managers last month eased from a 20-month high in December but remained firmly in expansionary territory, while an index derived from a companion poll by HSBC scaled an all-time high.

“Industrial activity continues to accelerate, implying stronger GDP growth in the first quarter. But rising input and output prices also point to greater inflationary pressure, which will likely prompt more tightening measures in the coming months,” said Qu Hongbin, chief economist for China at HSBC.

The Shanghai Composite Index fell 1.6 percent but Hong Kong’s Hang Seng index managed to recoup early losses.

South Korean shares bucked the overall trend, ending up 0.25 percent, with automakers posting strong gains on firm January sales data and troubles at rival Toyota Motor Corp, which has been hit by a massive recall of vehicles.

Hyundai Motor ended up 2.65 percent, while Kia Motors closed 5.63 percent higher. Toyota, the world’s top automaker, fell 1.15 percent after losing almost 14 percent last week.

Toyota will announce on Monday details of its plan to fix accelerator pedals that have led to the recall of 2.4 million cars in the United States as it scrambles to put its worst public relations crisis behind it.

The Australian dollar hovered at its weakest since mid-December as investors unwound yen-funded carry trades on a report that a UK regulator would like to restrain carry trading generally.

The euro teetered at its lowest since last July, holding just above $1.3850 where one trader reported talk of a barrier yet to be triggered. It tested that level several times.

U.S. Treasury bonds slipped but their losses were limited as many investors held back ahead of key economic data and events this week.

Before the jobs data on Friday, investors will get a snapshot of U.S. manufacturing sentiment on Monday and President Barack Obama will also make remarks on the U.S. budget at 1545 GMT (10:45 a.m. EST).

The benchmark 10-year notes edged down 5/32 in price to yield 3.609 percent, up about 2 basis points from late New York trade on Friday. T-note futures were unchanged at 118-05/32.

Oil prices steadied below $73 a barrel on Monday, pausing from the previous session’s 1 percent decline which came as concerns about sluggish energy demand outweighed stronger-than-expected U.S. economic data.

NYMEX crude for March delivery edged lower to $72.75 a barrel by 0645 GMT (1:45 a.m. EST).

(Editing by Kim Coghill)

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Asia shares at 3-mth lows; China fears weigh http://www.reuters.com/article/idUSSGE61002A20100201?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/dean-yates/2010/02/01/asia-shares-at-3-mth-lows-china-fears-weigh/#comments Mon, 01 Feb 2010 07:20:39 +0000 http://blogs.reuters.com/dean-yates/2010/02/01/asia-shares-at-3-mth-lows-china-fears-weigh/ SINGAPORE, Feb 1 (Reuters) – Asian stocks fell to
three-month lows on Monday with investors cautious after new
data strengthened the case for tighter Chinese monetary policy
and as attention focused on key U.S. economic reports due this
week.

European shares <.FTEU3> were also expected to retreat by
as much as 1.2 percent amid lingering worries about Greece and
other weak euro zone members.

U.S. stock futures <SPc1> pointed to a slightly higher open
after Wall Street ended lower on Friday despite data showing
the U.S. economy grew at its fastest pace in six years in the
fourth quarter. [.N]

Markets are bracing for a big week with a number of major
central bank meetings across the world and a raft of economic
reports out of the United States, culminating in the non-farm
payrolls data on Friday. [ID:nN29208716].

Many of Asia’s stock markets lost ground on Monday, rattled
by U.S. losses last week, while Japan’s Nikkei stock average
<.N225> ended flat.

“A correction in Asia is healthy, definitely. Prices have
moved ahead quite well,” said Alex Boggis, fund manager at
Aberdeen Asset Management, which oversees about $240 billion in
investments.

“Obviously over the last year markets have moved ahead
quite strongly based on … a dramatically improving
environment. But has it really dramatically improved?”

Asia Pacific stocks outside Japan as measured by MSCI
<.MIAPJ0000PUS> were off 0.84 percent, a 3-month low. The index
lost 6.4 percent in January, its worst month in a year, after a
68 percent surge in 2009, as a host of unsettling factors
prompted investors to take profits.

According to data from Nomura, foreigners sold nearly $4.1
billion in stocks in six Asian markets ex-Japan in the week
ended Jan. 31 — led by $1.7 billion in Taiwan, $1.2 billion in
India and $811 million in South Korea.

The U.S. dollar held at its highest levels in six months on
Monday, while the euro huddled near seven-month lows on euro
zone fiscal concerns, and higher yielding currencies remained
pressured by the closing of leveraged trades. [ID:nTOE61001R]

Fresh worries over public finances of Greece, Portugal and
other smaller euro zone countries have also weighed on global
stocks. Fears that Athens will not be able to service its heavy
debt have prompted investors to shun riskier investments.

Also high on investor radar screens has been China, where a
pair of business surveys on Monday underlined the mounting
challenge policymakers face to curb inflation in the world’s
third-largest economy. [ID:nSGE61000U] [ID:nTOE61003S]

An index based on an official survey of purchasing managers
last month eased from a 20-month high in December but remained
firmly in expansionary territory, while an index derived from a
companion poll by HSBC scaled an all-time high.

“Industrial activity continues to accelerate, implying
stronger GDP growth in the first quarter. But rising input and
output prices also point to greater inflationary pressure,
which will likely prompt more tightening measures in the coming
months,” said Qu Hongbin, chief economist for China at HSBC.

The Shanghai Composite Index <.SSEC> fell 1.6 percent but
Hong Kong’s Hang Seng index <.HSI> managed to recoup early
losses.

South Korean shares <.KS11> bucked the overall trend,
ending up 0.25 percent, with automakers posting strong gains on
firm January sales data and troubles at rival Toyota Motor Corp
<7203.T>, which has been hit by a massive recall of vehicles.

Hyundai Motor <005380.KS> ended up 2.65 percent, while Kia
Motors <000270.KS> closed 5.63 percent higher. Toyota, the
world’s top automaker, fell 1.15 percent after losing almost 14
percent last week.

Toyota will announce on Monday details of its plan to fix
accelerator pedals that have led to the recall of 2.4 million
cars in the United States as it scrambles to put its worst
public relations crisis behind it.

The Australian dollar <AUD=> hovered at its weakest since
mid-December as investors unwound yen-funded carry trades on a
report that a UK regulator would like to restrain carry trading
generally.

The euro teetered at its lowest since last July, holding
just above $1.3850 <EUR=> where one trader reported talk of a
barrier yet to be triggered. It tested that level several
times.

U.S. Treasury bonds slipped but their losses were limited
as many investors held back ahead of key economic data and
events this week.

Before the jobs data on Friday, investors will get a
snapshot of U.S. manufacturing sentiment on Monday and
President Barack Obama will also make remarks on the U.S.
budget at 1545 GMT.

The benchmark 10-year notes <US10YT=RR> edged down 5/32 in
price to yield 3.609 percent, up about 2 basis points from late
New York trade on Friday. T-note futures were unchanged at
118-05/32 <TYv1>.

Oil prices <CLc1> steadied below $73 a barrel on Monday,
pausing from the previous session’s 1 percent decline which
came as concerns about sluggish energy demand outweighed
stronger-than-expected U.S. economic data.

NYMEX crude for March delivery <CLc1> edged lower to $72.75
a barrel by 0645 GMT.
(Editing by Kim Coghill)

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Rising jobless casts shadow over world trade: Lamy http://www.reuters.com/article/everything/idUSTRE5AB0SS20091112?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/dean-yates/2009/11/12/rising-jobless-casts-shadow-over-world-trade-lamy/#comments Thu, 12 Nov 2009 05:16:46 +0000 http://blogs.reuters.com/dean-yates/2009/11/12/rising-jobless-casts-shadow-over-world-trade-lamy/ SINGAPORE (Reuters) – Rising unemployment is the biggest threat to free trade and could spark greater protectionist policies around the globe, the head of the World Trade Organization said on Thursday.

WTO Director General Pascal Lamy, who is attending a meeting of Asia-Pacific trade and finance ministers in Singapore, told broadcaster CNBC that he did not expect an improvement in the job situation in the next one or two years.

“I think the biggest threat is in the deterioration of the jobs market where unemployment is rising hard, then inevitably protectionist functions appear,” Lamy said when asked what was the biggest challenge to free trade.

Jobless queues have jumped across the industrialized world since the global economic crisis erupted a year ago and have been a prime reason nervous governments have resisted calls to start winding back stimulus measures.

The U.S. jobless rate hit a 26- year high of 10.2 percent in October and economists polled by Reuters expect it to rise to 10.5 percent by the middle of next year.

In Japan, the world’s second-largest economy, the jobless rate in September recovered from a record high, falling to 5.3 percent from 5.5 percent in August and 5.7 percent in July, but job availability remained near a record low.

Lamy said protectionist tendencies so far had remained “very contained and measured.”

“The violence of the crisis has triggered protectionist reactions here and there. There has been slippage, countries with a bit of buy local, a bit of increasing the tariffs, a bit of anti-dumping, a bit of safeguards,” he said.

Ministers at the meetings of the Asia Pacific Economic Cooperation (APEC) forum in Singapore have agreed that stimulus policies should remain in place for now.

“They have to maintain it because there is not yet firm evidence of a sustained improvement in global private demand,” Australian Treasurer Wayne Swan told reporters.

Lamy said the jury was still out on whether the Doha Round of trade liberalization talks, stalled for eight years, could be concluded by the 2010 target date.

“For the moment, that’s the target and we are trying to accelerate, move it forward. What I got here was a certain sense of urgency, which of course has a lot to do with the necessity to keep trade open in order to exit the crisis,” Lamy said.

WASHINGTON TOO SLOW

Lamy said in an interview with an Italian newspaper this week that the United States had been slow in reaching a negotiating position in the Doha talks.

He said that after a year spent putting in place the new U.S. administration, next year’s U.S. mid-term elections could prove a further problem in finalizing the Doha talks.

Trade ministers are due to meet in Geneva at the end of the month to assess progress.

Australian Foreign Minister Stephen Smith said he did not share the skepticism of some about the Doha round, adding APEC had a role to play in reinforcing its importance.

“I am expecting a very strong communique from leaders so far as openness of markets and trade is concerned, underlining and reinforcing Australia’s and APEC’s strong view of the importance of successfully concluding that round,” he said.

The WTO’s 153 members must turn vague discussions on the Doha round into real negotiations with concrete proposals laid down on paper, Lamy said last month.

Broad agreement has been reached in many areas of the talks, launched in late 2001 to create new market opportunities and help developing countries prosper through trade.

But they are stalled over differences between exporters and importers, and rich and poor countries on how much to cut farm subsidies and industrial and agricultural tariffs.

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