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krisluke
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29-Jan-2011 10:31
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Dollar, franc may hold gains if Egypt worries persist
* Egyptian civil unrest prompts safe-haven buying * Yen recovers after fall on demand from Japan exporters * Emerging market currencies down sharply versus dollar (Adds fresh quote, outlook, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, Jan 28 (Reuters) - The U.S. dollar and Swiss franc are likely to hold gains next week should tensions in Egypt persist, raising concerns about stability in the Middle East and North Africa and increasing investor demand for safer havens. A slew of economic data and central bank decisions is due next week, including the U.S. government's closely watched monthly non-farm payrolls report, but analysts said civil unrest in Egypt, if not contained, could easily trump macro fundamentals. Both the dollar and Swiss franc rallied on Friday, with the greenback and franc rising 0.8 percent and 1.2 percent, respectively, against the euro. Emerging market currencies also sold off, led by the Turkish lira and the Israeli shekel as news reports showed dozens of people were wounded after police and demonstrators fought in the streets of Cairo in protests against President Hosni Mubarak's three-decade rule. With Egyptian markets closed on Fridays and Saturdays, investors sold shekels and lira and bought the dollar in a proxy trade during the unrest. Oil futures also surged on the unrest in Egypt, rising 4.3 percent to $89.36 per barrel on fear that prices may continue spiking from current levels. "This could really encompass the region. Egypt is really the pivot point in the entire Arab world and has implications for things like the price of oil," said Dan Dorrow, head of research at FX advisory and execution firm Faros Trading in Stamford, Connecticut. "If Monday looks a lot like today, then the political risk premium will swamp any kind of of central bank and economic fundamentals and we could see more safe-haven moves to the Swiss franc." Spot gold also rose on Friday as investors sought protection from political risk, rising 2.0 percent at $1,337.50 per ounce. Next week, the biggest focus will be the release on Friday of January U.S. employment, with the economy expected to have created 146,000 jobs in the month. But unless the report shows a blockbuster number, the dollar is unlikely to gain much from it. In late afternoon trading, the euro fell 0.8 percent to $1.3615. Earlier it fell as low as $1.3584 on electronic trading platform EBS, just shy of $1.3570, the 50 percent retracement of its decline from November to January. As the euro's recent rally lost momentum, Goldman Sachs said in a research note on Friday it closed its long euro/dollar position, with a gain of about 2.7 percent. Goldman's chief FX strategist, Thomas Stolper, however, said in an e-mail the bank remains constructive on the euro and expects it to hit $1.40 in three months, $1.45 in six months, and $1.50 in one year. Meanwhile, euro positioning in the latest week remained on the long side, data from the Commodity Futures Trading Commission showed, as the value of the dollar's short position rose to the highest in two months. The euro fell 1.2 percent against the Swiss franc to 1.2826 francs while the dollar dropped 0.4 percent versus the franc to 0.9419. In the emerging market world, the dollar rose to a four-month high against the Israeli shekel, up 1.7 percent at 3.7090. Jitters spread over to the Turkish lira, which fell to a seven-month low against the greenback. Late afternoon, the dollar surged 2.3 percent against the Turkish lira to 1.6132. The Egyptian pound weakened sharply this week due to the turmoil, while the Egyptian EGX-30 equity index is down more than 22 percent from its January peak. With no trading on Friday, further losses are likely when trading resumes. Win Thin, global head of emerging market strategy at Brown Brothers Harriman, said while Egypt has a small economy and no longer is a major player in oil exports after it turned net oil importer, it is an important geopolitical player. Thin noted that Egypt is only one of two Arab countries that have signed peace treaties with Israel -- the other being Jordan -- and therefore the United States considers it as an important ally in the region. Egypt also controls the Suez Canal, through which an estimated 8 percent of global sea trade travels. "So clearly, it is in U.S. and European interests to see a negotiated solution," Thin said. (Additional reporting by Nick Olivari; Editing by Leslie Adler) |
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iPunter
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29-Jan-2011 10:14
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You are right, Sir ... this is indeed very scary and thus worrying, very... especially in this day and age, when the Internet itself has become the 'life-source' of every person. For without the Internet, it would be similar to, or even worse than, without oxygen, telephone, etc... Hope God will help the world to remain peaceful...
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krisluke
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29-Jan-2011 10:01
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the egyptian riots becos of internet usage ? ?? Oh my god !!! | ||||
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krisluke
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29-Jan-2011 09:51
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Instant View - Widespread protests in Egypt
CAIROL (Reuters) - Egyptian armed forces backed by armoured cars deployed in Cairo and other major cities on Friday to tackle huge popular protests demanding the resignation of President Hosni Mubarak.
HILLARY CLINTON, U.S. SECRETARY OF STATE "We want to continue to partner with the Egyptian government and the Egyptian people. What will eventually happen in Egypt is up to the Egyptians." "As a partner of Egypt we are urging that there be a restraint on the part of the security forces, there not be a rush to impose very strict measures that would be violent and that there be a dialogue between the government and the people of Egypt." ANGELA MERKEL, GERMAN CHANCELLOR "We must do all we can so that the violence comes to an end so there are no innocent victims." "There is no point in locking up people or to reduce the access to information. We must come to a peaceful dialogue in Egypt. The stability of the country is of course extremely important but not at the cost of freedom of opinion." ITALIAN FOREIGN MINISTRY "The stability of Egypt is a priority for us and for the entire region KARL-THEODOR GUTTENBERG, GERMAN DEFENCE MINISTER "There is a risk of an infectious momentum (in the Middle East)...there's a chance for stabilising the region, but the people who are asking for their rights need to get (them)." Asked if Germany would take any action, Guttenberg said that there will be no intervention. "It's not intervening because that's something we certainly can't do." IRANIAN FOREIGN MINISTRY OFFICIAL "The justice-seeking movement of the Egyptian people is based on religious teachings and an Islamic awakening in the region and is aimed at taking back Egypt to its real place in domestic, regional and international scenes." The official urged the Egyptian government to "accept people's rightful demands and avoid reacting violently to protesters." DAVID CAMERON, BRITISH PRIME MINISTER "We in the West have taken rather a simple view that what matters is just the act of holding an election. Real democracy is actually about the building blocks you put in place, about the rule of law, the rights, the strength of your civil society, the freedoms you have in that country and I think we need to take a more mature and thoughtful approach to these countries." URI ROSENTHAL, DUTCH FOREIGN AFFAIRS MINISTER "It is important that popular discontent be expressed and at the same time the repressive nature of the regime be removed. Reforms are needed in the political and social sphere." MICHELLE ALLIOT-MARIE, FRENCH FOREIGN MINISTER "Only dialogue among all parties can lead to a significant and positive development of the situation so as to take into account the aspirations for greater liberty and democracy which have been expressed. Egyptian authorities will have to find appropriate ways of satisfying them." "France, a friend of Egypt, calls for calm and responsibility on all sides." VITTORIO COLAO, VODAFONE CHIEF EXECUTIVE "This morning the Egyptian government asked us to shut down ... the entire network. We checked and found this was a legitimate request. We complied. We will be instructed when to turn it back on . I hope this will be very soon" ERIC SCHMIDT, GOOGLE CHAIRMAN "We obviously think it's a bad idea (Egypt's decision to shut down communications), we obviously do not want these things to happen." GOOGLE STATEMENT "The Internet has been one of the greatest innovations of our lifetime because of the access to information it gives people around the world. We believe that access is a fundamental right, and it's very sad if its denied to citizens of Egypt or any country." |
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krisluke
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29-Jan-2011 09:49
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Egypt's Mubarak sends in army, resists demands to quit
A protester walks in front of a fire in downtown Cairo
CAIRO (Reuters) - Egyptian President Hosni Mubarak refused on Saturday to bow demands that he resign, after ordering troops and tanks into cities in an attempt to quell an explosion of street protest against his 30-year rule. Mubarak dismissed his government and called for national dialogue to avert chaos after a day of battles between police and protesters angry over poverty and autocratic rule. Medical sources said at least 24 people had been killed and over a thousand injured in clashes in Cairo, Suez and Alexandria. The unprecedented unrest has sent shock waves through the Middle East, where other autocratic rulers may face challenges, and unsettled global financial markets on Friday. U.S. President Barack Obama said he had spoken with Mubarak and urged "concrete steps that advance the rights of the Egyptian people." Demonstrators at first cheered tanks and armoured cars as they filed through Cairo and Suez, but the mood appeared to change. The army, deployed for the first time in four days of protests, cleared Cairo's Tahrir square towards midnight. Shortly after Mubarak's speech, protesters drifted back in their hundreds, defying a curfew. "It is not by setting fire and by attacking private and public property that we achieve the aspirations of Egypt and its sons, but they will be achieved through dialogue, awareness and effort," said Mubarak, in his first public appearance, on state television, since unrest broke out four days ago. Shots were heard in the evening near parliament and the headquarters of the ruling National Democratic Party was in flames, the blaze lighting up the night sky. Cars were set alight and police posts torched. U.S. AID Mubarak, long a close ally of Washington and beneficiary of U.S. aid, has justified his autocratic style partly by citing a danger of Islamist militancy. The Muslim Brotherhood opposition, however, appears to have played little role in the unrest. Mubarak made clear he had no intention to resign over the protests, triggered by the overthrow two weeks ago of Tunisian President Zine al-Abidine Ben Al Ben Ali. Street protests in Tunis focussed on similar issues of poverty and political repression. Demonstrations have also flared in Yemen. "There will be new steps towards democracy and freedoms and new steps to face unemployment and increase the standard of living and services, and there will be new steps to help the poor and those with limited income," Mubarak said. "There is a fine line between freedom and chaos and I lean towards freedom for the people in expressing their opinions as much as I hold on to the need to maintain Egypt's safety and stability," he added. Obama also called on the Egyptian government to halt interference in access to the Internet, mobile phone service and Internet social networks that have been used by protesters. "I want to be very clear in calling upon the Egyptian authorities to refrain from any violence against peaceful protesters," he said. Anthony Skinner, Associate Director of political risk consultancy Maplecroft, said Mubarak's conduct was reminiscent of that of Ben Ali in his final days in power. UNCHARTED TERRITORY "Mubarak is showing he is still there for now and he is trying to deflect some of the force of the process away from himself by sacking the Cabinet. "We will have to see how people react but I don't think it will be enough at all. I wouldn't want to put a number on his chances of survival -- we really are in uncharted territory." Markets were hit by the uncertainty. U.S. stocks suffered their biggest one-day loss in nearly six months, crude oil prices surged and the dollar and U.S. Treasury debt gained as investors looked to safe havens. "I think the next two to three weeks, the crisis in Egypt and potentially across the Middle East, might be an excuse for a big selloff of 5 to 10 percent," said Keith Wirtz, president and chief investment officer at Fifth Third Asset Management in Cincinnati, Ohio. Many protesters are young men and women. Two thirds of Egypt's 80 million people are below 30 and many have no jobs. About 40 percent of Egyptians live on less than $2 a day. Elections were due to be held in September and until now few had doubted that Mubarak would remain in control or bring in a successor in the shape of his 47-year-old son Gamal. Father and son deny that Gamal is being groomed for the job. (Additional reporting by Dina Zayed, Marwa Awad, Shaimaa Fayed and Yasmine Saleh,, Alison Williams and Samia Nakhoul in Cairo, Alexander Dziadosz in Suez; Writing by Angus MacSwan and Ralph Boulton; editing by David Stamp) |
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krisluke
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29-Jan-2011 09:45
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INTERVIEW-Oil veteran Pickens sees $120 this year
* Says spare capacity could be less than 1 mln bpd
* $120 the minimum that will "kill demand" * Pickens' commodity fund down 15 pct in 2010 (Recasts, reorders, adds background) By David Sheppard NEW YORK, Jan 28 (Reuters) - Billionaire energy investor T. Boone Pickens may have missed out on last year's commodity boom, but the long-time bull told Reuters he sees further gains in store for oil prices that are now pushing $100 a barrel. In a market that he said increasingly resembles 2008, crude oil should hit $120 this year, a rally that could help revive the hedge fund he runs after a 15 percent loss in 2010. He said the world's spare capacity was shrinking to worrying levels that would give OPEC little ability to quickly meet demand, meaning that prices would have to climb high enough to stop people using more oil. "You've got a similar situation to 2008, with extra supplies available in this market possibly less than 1 million barrels (per day) now," Pickens, 82, told Reuters in a telephone interview on Friday. He did not expand on his statement that global spare capacity was possibly as low as 1 million barrels, a pittance in a world that consumes more than 88 million bpd, but acknowledged "many people think it's more like 4 million" bpd. "You're going to see $100 this quarter and it's going to go even higher, to $120 or more this year," he said. "You need to get to at least $120 to see prices start to kill demand." That's a more bullish view than most, with analysts forecasting an average of $90.40 a barrel for U.S. crude this year, according to a Reuters poll this week. Brent crude in London hit a 28-month high of $99.74 a barrel on Friday as unrest in Egypt sparked fears that instability could spread in the Middle East. U.S. crude rallied more than 4 percent to settle at $89.34 a barrel. Pickens is a veteran of numerous aggressive takeover deals in the U.S. oil industry in the 1980s, and now chairs Dallas-based hedge fund BP Capital Management, which has separate funds for equities and commodity bets. BP Capital Management's equity focused fund returned 2 percent in 2010 while the commodity fund shed 15 percent, Pickens said. That loss was little surprise given his long-held bullish view on natural gas, last year's worst-performing commodity. He declined to give a specific number for either fund so far in 2011, but described the performance of both as "very good indeed." FOCUS ON SPARE CAPACITY In 2008, oil soared to almost $150 a barrel as strong demand cut spare capacity in members of the Organization of the Petroleum Exporting Countries (OPEC). The oil minister of Saudi Arabia, the largest producer in OPEC, said on Monday the group's spare capacity was around 6 million bpd, with 4 million of that in the kingdom. But rising demand in emerging economies is expected to put pressure on the producer group to draw on that capacity this year, and some analysts have cast doubt on how much they have in reserve. BETTING ON GETTING OFF OIL Pickens is a long-term advocate of the United States switching to natural gas as a transportation fuel and reducing its reliance on imported oil, especially from the Middle East. From the oil deals that made his name as a legendary corporate raider two decades ago, he has increasingly focused publicly on his investments in renewable energy and his 'Pickens Plan' to "break America's addiction to foreign oil." But short term at least, the holdings of his equity fund filed with the SEC in November confirm he remains bullish on the outlook for crude, with 11 investments of more than $10 million in oil and oil services companies. His net worth rose to $3.5 billion in 2007 but was slashed by almost two-thirds by crashing commodity prices and stock markets in the second-half of 2008. It recovered by almost a third in 2009. HOW DOES $300 CRUDE SOUND? Pickens has frequently said the U.S. government lacks a long-term energy strategy, despite being the world's largest oil consumer, and cautioned oil prices could triple in the next 10 years without one. "Where else in the world doesn't have an energy plan," said Pickens, who has been in Washington over the past week in a bid to win support from the new Republican Congress for his energy plan to run more vehicles on natural gas. He said he was confident of seeing a deal this year with the support of Republican House Majority Leader Eric Cantor. "If we don't do something to reduce our reliance on imported oil, we could see $300 a barrel in the next decade." (Reporting by David Sheppard; editing by Jonathan Leff, Dale Hudson, Marguerita Choy and Lisa Shumaker) |
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krisluke
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29-Jan-2011 09:42
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Wall St Week Ahead: Focus will be on Egypt, earnings, jobs data
By Caroline Valetkevitch
NEW YORK, Jan 28 (Reuters) - U.S. stocks may struggle to return to firmer footing next week if anti-government riots in Egypt destabilize the Middle East, keeping investors on edge. Cautious trading could also come if earnings don't outperform and erode optimism about profits. The government's January jobs report on Friday will highlight the week's economic data, as investors look to see if the unemployment rate continues to fall as it did in December. Market volatility skyrocketed on Friday as indexes tumbled, with the VIX index, the market's fear gauge, up 24 percent, its biggest daily percentage jump since May 20. Worries that Egypt's unrest could spread to other countries in the Middle East, home to the world's top oil exporters, caused investors on Friday to pull out of stocks and into bonds and other safer assets. U.S. crude futures settled more than 4 percent higher on Friday. "As long as people are worried about political unrest in the Middle East, it will be weighing on the market," said David Kelly, chief market strategist for JPMorgan Funds in New York. "This story isn't just going to end overnight." But "it could well turn out to be a short-lived correction, and it would be dangerous to try and time this thing," Kelly said, noting that his longer-term outlook for stocks remains bullish. Analysts had been forecasting a pullback in the market for weeks, given the recent sharp gains, and said the Egypt news could be an excuse for some investors to sell. The Standard & Poor's 500 index is still up 18 percent since the start of September, roughly when the current rally began. The Dow Jones industrial average snapped an eight-week streak of gains with Friday's close, and the S&P 500 and Nasdaq also ended with losses for the week. The Nasdaq fell more than 2 percent on Friday while the S&P and Dow both were down more than 1 percent. SCOUTING BLUE CHIPS Monday could see a bounce-back after Friday's losses, followed by more consolidation, said Matt McCormick, portfolio manager at Cincinnati-based Bahl & Gaynor Inc, which has $3.2 billion in assets. "My recommendation for clients is that if you have profits, especially in lower-quality names that have benefited from QE2 (quantitative easing), now is the time to take profits and look at blue chip names that haven't gained as much," he said. Among key support levels traders are eyeing are 1,271 and 1,263 on the S&P 500, according to Craig Peskin, co-head of technical analysis research at MF Global in New York. Optimism about fourth-quarter earnings helped lift stocks in recent weeks, but the latest batch of reports disappointed investors, including Ford Motor Co and Amazon.com. The majority of companies continue to beat expectations, though, and analysts will watch to see if that trend holds. Of the 207 companies in the S&P 500 that have reported earnings, 71 percent have beaten analysts' expectations, according to Thomson Reuters data. Next week, 102 S&P 500 companies are expected to report, including Dow Chemical Company and United Parcel Service. "The earnings picture is still a good picture," Kelly said. "There were some disappointments today, but I don't think that really changes that." He sees stronger earnings and an improving economy as the main factors benefiting stocks in the longer term. The high U.S. unemployment rate has been the biggest problem for the economy. The rate fell in December to 9.4 percent from 9.8 percent the prior month, but economists see slow progress ahead for job gains. Nevertheless, the U.S. economy is growing more rapidly. The Commerce Department reported Friday that gross domestic product rose at a solid 3.2 percent annual rate in the final three months of 2010. But the bigger driver for stocks is likely to be Egypt, analysts said, given the uncertainty created in the market. "The perception is that risk is elevated. Who knows how this ultimately will play out," said Paul Herber, portfolio manager at Forward Frontier in San Francisco. "This is something that began in Tunisia and now spread to Egypt. There are other countries in a very similar position. So people are taking money off the table and going to safe areas," he said. (Addtional reporting by Manuela Badawy, Ryan Vlastelica and Rodrigo Campos; Editing by Kenneth Barry) |
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krisluke
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29-Jan-2011 09:33
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ArHHHHHHH.... Now is egypt.... BUY ON DIP :)
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zhixuen
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29-Jan-2011 01:48
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LONDON (AP) -- The growing street protests in Egypt sent stocks down Friday and gave the dollar a lift against the euro as investors fret about what could happen over the weekend. With Egyptian President Hosni Mubarak imposing a night curfew and the military ordered out onto the streets, the tensions across the Arab world's most populous state remain high. Following the upheavals that saw Tunisia's longtime president flee the country Jan. 14., nerves are frayed about how the uprising in Egypt will end and which regional government could be next to face the wrath of its people. There's nothing like uncertainty to get investors fidgety especially as the weekend approaches when trades are hanging for longer. Uncertainty can breed a flight out of riskier assets into supposedly safer ones. For now the losers tend to be stocks and the euro, the winners the dollar, the yen and gold. Simon Derrick, a senior analyst at Bank of New York Mellon, said investors are aware that in a crisis, events can move faster than anticipated. "This was true, for example, in September and October of 2008 in the aftermath of the collapse of Lehman Brothers and it was true in April and May of last year during the height of the Greek crisis," Derrick said. "It therefore appears sensible to note quite how swiftly the Tunisian revolt built and equally, how rapidly street protests emerged in the cities of Egypt." Fitch Ratings lowered the outlook for the country's credit rating to negative and warned of a possible downgrade to the credit rating itself if the unrest intensifies. Richard Fox, the head of the Middle East and Africa desk at Fitch said the move to a negative outlook was due to the "recent upsurge in political protests and the uncertainty this adds to the political and economic outlook ahead of September's elections." By late-afternoon London time, the euro, buoyant of late on hopes that Europe is finally getting a handle on its debt crisis, was down 0.7 percent at $1.3630. In stocks, the Dow Jones industrial average was down 114 points, or 1 percent, at 11,877 around midday New York time, while the broader Standard & Poor's 500 dropped around 12 points, or 0.9 percent to 11,287. In Europe, Germany's DAX closed down 52.78 points, or 0.7 percent, to 7,102.80 while the CAC-40 in France fell 57.25 points, or 1.4 percent, to 4,002.32. The FTSE 100 index of leading British shares ended 83.71 points, or 1.4 percent, lower at 5,881.37. With one eye, at least, on Egypt at least, the reaction to U.S. growth figures was underwhelming. The Commerce Department reported that the U.S. economy grew by an annualized rate of 3.2 percent in the fourth quarter. That was up on the previous quarter's 2.6 percent rate but below market expectations for a 3.5 percent increase. Analysts said the shortfall from expectations was due to a big swing in inventory buildup from $121 billion in the third quarter to just $7.2 billion in the fourth. Other components in the growth figures were relatively buoyant, particularly consumption growth. "The U.S. economy bounced back in Q4, and that's good news no matter how you slice it," said Jennifer Lee, senior economist at BMP Capital Markets. "It's not a boom time but it is becoming more self-sustaining." The fourth quarter figures also confirmed that the U.S. economy enjoyed its best year in five in 2010, growing by 2.9 percent. And the U.S. is also widely expected to be one of the fastest-growing major economies in 2011 given ongoing stimulus measures, which stand in contrast to the austerity measures being pursued elsewhere around the world, notably in Britain and in a number of countries that use the euro. Earlier, markets in Asia were rattled by the previous day's credit rating downgrade of Japan by Standard & Poor's. The rating given Japan on Thursday -- its first downgrade in almost nine years -- is the same rating given to China, Saudi Arabia and Kuwait. The news sent the dollar as high as 83.18 yen late Thursday from 82.20 yen. On Friday it was trading at 82.63. Japan's benchmark Nikkei 225 stock average dropped 1.1 percent to close at 10,360.34 as traders reacted to the downgrade for the first time -- markets had closed when S&P delivered its verdict. The dollar gave up its previous day's gains though, trading 0.6 percent lower at 82.34 yen. Elsewhere, Australia's S&P/ASX 200 closed down 0.7 percent at 4,774.90 as the first estimates of the economic cost of east coast flooding -- possibly the most expensive natural disaster in Australia's history -- were released. South Korea's Kospi declined 0.3 percent to 2,107.87 and Hong Kong's Hang Seng fell 0.7 percent to 23,617.02. Shares in Indonesia and Thailand were all lower. China's Shanghai Composite index gained 0.1 percent to 2,752.75. Benchmarks in Taiwan and New Zealand were also higher. Benchmark crude for March delivery rose $1.93 to $87.57 a barrel in electronic trading on the New York Mercantile Exchange, while an ounce of gold advanced $6.70 to $1,325.10. Carlo Piovano in London and Pamela Sampson in Bangkok contributed to this report. |
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krisluke
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28-Jan-2011 22:56
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next week hua geng hao. dj likely to close above 12000 points today. no much "shocker" from north south east west, since most already absorbed by broad based investors. looking year ahead... any how buy now also can win $$$, but not to be too greedy though... time to |
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krisluke
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28-Jan-2011 22:47
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Wall St opens near flat after GDP data
NEW YORK, Jan 28 (Reuters) - U.S. stocks opened nearly flat on Friday, but the Dow was on track to post its ninth straight week of gains as data showed the economic expansion gathered speed in the fourth quarter.
The Dow Jones industrial average was up 8.02 points, or 0.07 percent, at 11,997.85. The Standard & Poor's 500 Index was up 1.20 points, or 0.09 percent, at 1,300.74. The Nasdaq 100 tracking exchange-traded fund was down 0.03 percent at 57.16. |
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krisluke
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28-Jan-2011 22:45
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Bonds retreat as Q4 U.S. growth depletes bid
* U.S. growth depletes bid for safe-haven U.S. debt * U.S. economy gathers speed in fourth quarter * Biggest consumer spending gain in more than 4 years * Sell-off stalls ahead of Fed purchases (Adds comment, updates prices) By Ellen Freilich NEW YORK, Jan 28 (Reuters) - U.S. Treasury debt prices retreated on Friday as news that the U.S. economy gathered speed in the fourth quarter, aided by growth in exports and the biggest consumer spending gain in more than four years, weakened the bid for safe-haven U.S. debt. The news buoyed U.S. stock index futures, another sign that investors were willing to shoulder more risk, a shift that comes at the expense of U.S. Treasuries. "We don't think the Treasury market offers a lot of value to us," said Tom Atteberry, co-manager of First Pacific Advisors' New Income FUND, comprising $3.7 billion of First Pacific's $15 billion in assets under management. Analysts said strong exports offered one of the clearest signals yet that a sustainable recovery is under way. Meanwhile, consumer spending grew at a 4.4 percent rate. "The bond market didn't care for the economic releases this morning and drove 10 years down to test support," said Thomas di Galoma, head of fixed-income rates trading at Guggenheim Securities in New York. Benchmark 10-year Treasuries fell 10/32, their yields rising to 3.44 percent from 3.39 percent on Thursday. The curve steepened, with the difference between two- and 30-year yields widening to 401 basis points from 398 basis points late on Thursday. "We're going to have some bearish steepening of the curve," said Dan Genter, head of RNC Genter Capital Management in Los Angeles. "People expect some inflation. "The Fed is not only going to allow inflation to accelerate; they're going to encourage it," Genter said. "They realize we have to get north of 4 percent GDP growth to reduce unemployment and they will do what they need to do to accomplish that even if it means a 3 percent inflation rate." The core PCE price index's record low 0.4 percent pace in the fourth quarter underscored the Fed's concerns about low underlying inflation, analysts said. But Di Galoma said the bond market sell-off could stall due to purchases of Treasuries by the Federal Reserve later in the session, part of the Fed's program to spur economic growth. "Remember there is a 10-year buy-back today," he said. (Editing by Theodore d'Afflisio) |
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krisluke
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28-Jan-2011 17:53
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Euro rally falters, stocks eye U.S. GDP
* Bunds up; Italy auction due * U.S. Q4 GDP numbers eyed By Simon Jessop LONDON, Jan 28 (Reuters) -The euro's rally against the dollar faltered on Friday and stocks opened weaker ahead of U.S. fourth-quarter GDP numbers on profit taking, although both look set to end the week in the black. The euro was down 0.3 percent verses the dollar by 0846 GMT, also giving back some of its gains against the yen following Thursday's sell-off after Standard & Poors cut Japan's sovereign credit rating. More broadly, however, the single currency remains supported by the European Central Bank's hawkish tone on interest rates, Tom Levinson, currency strategist at ING, said, with markets pricing in more than one 25 basis point hike by year-end. "Barring a nasty return of sovereign-debt related concern (still likely at some point), the likelihood of the ECB leading the Fed by some distance in its tightening cycle suggests EUR/USD can rise further," he added. Elsewhere, the dollar gained slightly against a basket of major currencies, up 0.2 percent. Stocks also opened lower in Europe and by 0846 GMT, the benchmark FTSEurofirst 300 index of leading European shares was down 0.4 percent, led by mining stocks, although it remains up 0.2 percent on the week. "We expect equity markets to move into a consolidation phase in the next couple of months," said Tammo Greetfeld, equity strategist at UniCredit. "People are waiting for the U.S. GDP figures, but it would only move the market in a big way if the figures significantly deviate from the consensus." The weakness in European shares continued a broad-based sell-off in Asia overnight, with Japanese stocks hit by the previous day's S&P sovereign downgrade and other indices by inflation concerns. In Asia, Japan's Nikkei average ended down 1.1 percent, while the MSCI world equity index and Thomson Reuters global stock index were both trading down 0.4 percent by 0850 GMT. Emerging market stocks fared even worse, however, down 0.7 percent. The pace of economic recovery in the United States, efforts to stem the euro zone debt crisis and concerns about building inflationary pressures continue to guide markets across the region against the backdrop of the quarterly earnings season. Fourth quarter U.S. GDP numbers, due out at 1330 GMT, are expected to show the world's biggest economy posted the best quarterly growth since the first quarter of last year, although unemployment is seen stubbornly high. The data should provide direction across markets later in the session, after U.S. housing and factory data out on Thursday pointed to a steady economic recovery. BUNDS UP, ITALY EYED Bund futures rose in early trade, tracking U.S. Treasuries, with traders eyeing the U.S. GDP figures as well as an auction of Italian debt later in the session. Rome plans to auction up to 6.75 billion euros of 2- and 10-year notes later on Friday, and a healthy bid would reiterate the market's willingness to accept more peripheral euro zone debt. "Italian supply and U.S. GDP are the pick of the day today," a trader said. "Demand at the Italian auction should be reasonable. The market may get some concession built in but the bonds are pretty cheap in that part of the curve." U.S. Treasuries had traded steady overnight in Asia. Elsewhere, spot gold slumped to a four-month low as safe-haven flows waned in the face of the improving U.S. economic outlook, while benchmark crude oil traded flat. (Editing by Toby Chopra) |
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krisluke
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28-Jan-2011 17:19
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fste 100 remains weak after S& P cut japan credit rating weight on london financial... piigs issue time being out...
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SGG_SGG
Master |
28-Jan-2011 16:28
Yells: "karma karma karma chameleon" |
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Europe looks like a row of ang baos right now... | ||||
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risktaker
Supreme |
28-Jan-2011 16:17
Yells: "Sometimes you think you know, but in fact you dont" |
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ohh nooo ang mo keep selling jardine c&c. I expect a massive sell down today @ closing. my friend shorted some hehehe |
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krisluke
Supreme |
28-Jan-2011 16:15
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well. one hr to go before the bell... hsi 24000 pts, sse 2850 pts and sti 3250 pts... ? still left 1.5 days.. to achieve +400 pts for hsi, +100 pts for sse and 30 pts for sti would be high possible. let's huat togther |
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Laulan
Master |
28-Jan-2011 16:00
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Likewise for buying long, there will be someone waiting to sell you first and then push a few bits lower. That will explain why a seemingly strong buy turns to selling pressure.
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krisluke
Supreme |
28-Jan-2011 15:56
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S.Korean won up for 5th day, caution ahead of data
* Won hits over one-week high, up for fifth consecutive day
* Trading in narrow range ahead of key data releases * Bond prices edge down in slow trade (Updates to close) SEOUL, Jan 28 (Reuters) - The South Korean won edged higher to a more than one-week high against the dollar on Friday, ending local trade higher for a fifth consecutive session on optimism about the economy and fund inflows. The won <KRW=> <KRW=KFTC> moved in a narrow range on caution ahead of the release of key economic indicators next week immediately before a three-day public holiday. The won ended the local session at 1,113.8 against the dollar after hitting a session high of 1,112.5, its strongest since Jan. 19, compared with Thursday's domestic close of 1,114.4. "There was some selling (of the won) in early trading when stock prices fell, but purchases by exporters and recovering stock prices later sent the won slightly higher," said a foreign bank dealer. South Korea's government is due to release January inflation, January exports and December industrial output indicators during the first two days of next week. Markets are closed for the remaining three days of the week for the Lunar New Year holiday. The yen's <JPY=> weakening against major currencies after a ratings cut on Japan failed to affect the won, resulting in a rise in the South Korean currency's value against the yen <JPYKRW=R> from late Thursday. The yen was quoted at 13.4757/13.4883 won late on Friday, compared with 13.5527/13.5646 a day earlier. Seoul's main stock market index <.KS11> recovered from most of its early 0.9 percent decline to end the day down 0.3 percent. Treasury bond prices fell slightly on caution ahead of the release of economic indicators. The March-delivery futures on three-year treasury bonds <KTBc1> ended down 0.06 point at 102.39, reversing from early modest gains. Close Prev close Dollar/won 1,113.8 1,114.4 Yen/won 13.4757/883 13.5527/646 *KTB futures 102.39 102.45 5-yr treasury bonds 4.38 pct 4.36 pct 3-yr treasury bonds 3.88 pct 3.86 pct Average O/N call rate ~ 2.75 pct ^6-mth KORIBOR 3.27 pct 3.25 pct KOSPI 2,107.87 2,115.01 * Front-month futures on 3-year treasury bonds <KTBc1> ~ Not quoted ^ Korea interbank offered rate <KIKRW=> (Reporting by Yoo Choonsik; Editing y Chris Lewis) |
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krisluke
Supreme |
28-Jan-2011 15:48
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Yen better reflects fundamentals after rating cut-ADB
By Natsuko Waki
DAVOS, Switzerland, Jan 28 (Reuters) - The decline in the yen following Japan's credit rating downgrade is helping adjust the currency towards its fundamentals, Asian Development Bank President Haruhiko Kuroda said. The yen hit two-month lows against the euro and two-week troughs versus the dollar on Thursday after Standard & Poor's cut Japan's rating for the first time since 2002, saying Tokyo had no plan to deal with its mounting debt. Between 2007 and 2010, the yen has risen more than 50 percent against the dollar <JPY=>. It hit a 15-year high near 80 per dollar in October, despite Japan's yen-selling intervention the month before. "After the downgrade, bond prices did not move very much. But the yen did weaken. The yen was overvalued, having risen too much since 2008 against all currencies in the world," Kuroda told Reuters in an interview late on Thursday. "So the yen adjusted lower -- it's better reflecting fundamentals," added Kuroda, who is former vice finance minister for international affairs at Japan's Finance Ministry. Standard & Poor's cut Japan's long-term sovereign debt rating by a notch on Thursday to AA-minus, its fourth highest rating. It said an ageing population, persistent deflation and the government's loss of its upper house majority compounded the fiscal challenge. Politicians and ratings agencies have warned for years that Japan must cut its public debt, which is double the size of its $5 trillion economy -- by far the worst among rich nations. INFLATION DILEMMA Food inflation is at the top of the agenda for many policymakers, including Kuroda, with memories still fresh of the 2008 food crisis when soaring prices sparked riots in several countries, high inflation and in several cases deep trade deficits. Earlier this month, the UN's Food and Agriculture Organisation said global food prices reached their highest levels since its records began in 1990 and that grains prices could climb further as adverse weather patterns give cause for concern. Kuroda said food prices were yet to pose serious risks for Asia as rice prices remained under control, but robust growth in emerging economies underpinned real demand for food. "Inflation outside of China is more serious -- Pakistan, India, or Indonesia. But inflation is the biggest task for China," Kuroda said. "If China let the yuan appreciate more, that will help control imported inflation. There's more room for that. It's a plus for China's economy." Many Asian currencies with inflationary problems face a policy dilemma: higher interest rates will attract capital inflows, exacerbate asset bubbles. However, unless authorities act, inflation could get out of control. "It's a typical policy dilemma. Instead of raising interest rates, bank reserve requirements is one way to tighten liquidity," Kuroda said. He added Japan experienced a similar issue in the 1950-60s when real growth rate was 10 percent and inflation rate was 5 percent, while the exchange rate was fixed at 360 yen to the dollar. However, back then, the country ran a current account deficit. (Editing by Mike Nesbit) |
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