Asian News

[Ichiro]

20jan-bloomberg--U.K. December Retail Sales Rise the Most in 18 Months (Update6)

By Jennifer Ryan

Jan. 19 (Bloomberg) --"" U.K. retail sales rose the most in 18 months in December as faster economic growth spurred shoppers to increase spending on laptops and on gifts over the Internet during the Christmas period.

Sales climbed 1.1 percent from November, the most since June 2005, the Office for National Statistics said today in London. Economists predicted an increase of 0.6 percent, according to the median forecast of 34 respondents to a Bloomberg News survey. On the year, sales rose 3.7 percent.

Evidence that growth in consumer spending survived two interest-rate increases last year, exceeding both the U.S. and Europe, may spur the Bank of England to raise borrowing costs again after a third move on Jan. 11. Inflation reached 3 percent in December, the highest in almost 10 years and a percentage point above the central bank's target.

``Consumer spending is still strong and this reinforces the possibility of another rate hike as soon as February,'' said Kenneth Broux, an economist at Lloyds TSB Group Plc in London.

Policy makers Andrew Sentance and Timothy Besley said this week concern about rising prices supported a surprise quarter- point increase in the benchmark interest rate Jan. 11 to 5.25 percent. The central bank forecast in November inflation would spike at the turn of the year and start declining from the second quarter as the effect of higher energy costs in 2006 wears off.

Rate Bets

Futures trading suggests investors expect one more rate increase this quarter. The implied rate on the March futures contract was unchanged at 5.77 percent as of 12:08 a.m. today in London. A basis point is 0.01 percentage point. ""

for info:

http://www.bloomberg.com/apps/news?pid=20601085&sid=ahQaELn9TiGA&refer=europe

 

[Ichiro]

20jan-bloomberg--BOJ Keeps Carry Trade Alive and Well -- for Now: William Pesek

By William Pesek

Jan. 19 (Bloomberg) --"" There has been another delay in the great yen rally that investors have been waiting for, and Bank of Japan policies are to blame.

By leaving its benchmark interest rate at 0.25 percent yesterday, the BOJ appeased politicians arguing the economy is too fragile to withstand higher borrowing costs. It also mollified investors who have borrowed cheaply in yen and parked those funds in higher-yielding assets overseas.

The upshot is that the BOJ may have provoked a new wave of so-called yen-carry trades that will add to distortions in the Japanese economy, as well as the global one.

In a recent report to clients, analysts at Bridgewater Associates Inc., a money-management firm in Westport, Connecticut, said they were ``getting queasy about the amount of money that's going into carry trades, driving down spreads and making these positions more risky.''

What worries observers is that declining market volatility and increased liquidity are encouraging investors to take on more leverage. ``Low yields and credit spreads have also created much lower expected returns and much higher price risk, further increasing the markets' riskiness,'' Bridgewater argued.

One wonders whether the BOJ's decision to leave interest rates alone will compound the risk by keeping the yen low.

``The BOJ's easy monetary policy will increase the volatility of the currency and, accordingly, the economy through the yen-carry trade,'' says Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. ``This is deja-vu from the late 1980s. The carry trade is creating a currency bubble this time.''

A New Bubble?

It has been a while since the word ``bubble'' has been used to describe Japan, and respected economists such as Kanno don't utter it flippantly. While it's rarely thought of in the context of BOJ rate decisions, the yen-carry trade is a growing risk to policy makers' control over the world's No. 2 economy.

Debates about the carry trade tend to focus on overseas markets. In recent years, yen borrowings have made their way into Shanghai and Mumbai real estate, Google Inc. shares, Zambian treasury bills, the Thai baht, bars of gold, you name it. If the yen suddenly shot higher and investors unwound their carry trades, the world economy would feel the pain.

Yen-carry trades have paid off handsomely for many investors. Borrowing for next to nothing in yen and parking the funds in, say, 10-year U.S. Treasuries can provide a twofold payoff through a yield difference of 3 percentage points or more and through the dollar's rise versus the yen. The latter dynamic boosts profits by the time they are converted back to yen.

Risks Abound

The trade can also go wrong -- very wrong. In late 1998, for example, Russia's debt default accelerated the implosion of Long- Term Capital Management LP and caused a panic in markets. Investors scaling back their positions drove the yen up 20 percent in less than two months.

While a replay might seem unlikely, a plunge in the dollar, major terrorist attacks or a bird-flu pandemic are but a few of the events that could blow up the yen-carry trade. And this time, the amount of yen-related leverage could be much greater than in 1998. There also are many more hedge funds now; some no doubt are highly leveraged and vulnerable to a yen rally.

It's all hard to quantify. If officials at the International Monetary Fund, U.S. Federal Reserve or Bank for International Settlements have a handle on the magnitude of the carry trade, they're not saying much. JPMorgan estimates the size to be about 40 trillion yen ($331 billion), which is bigger than Austria's economy. The trade may be much larger than that, and far more powerful when you factor in leveraging. ""

for info:

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=a4bOM8CWhADc

 

[Ichiro]

20jan-bloomberg--Fewer Yuan in Wallets Is China's Next Headache: Andy Mukherjee

By Andy Mukherjee

Jan. 18 (Bloomberg) --"" China's households are stashing fewer yuan under their pillows. And they aren't carrying as many of them in their wallets as they did in the 1990s.

According to a study by World Bank researchers in Beijing, the ratio of currency in circulation to bank deposits has halved over the past decade.

China's reserve money -- currency held by the public and funds kept by banks at the central bank -- mostly grew between 8 percent and 9 percent last year, monthly data show.

Expansion in M2, a broad measure of money supply that also includes all bank deposits, was about twice as fast as reserve- money growth.

What's going on?

In the language of economists, the money multiplier, which, crudely put, is M2 divided by reserve money, is rising.

It's now more than 5, compared with less than 4 at the start of the decade.

This happens when people prefer money in the bank to cash in hand, or when banks start keeping a lower share of depositors' money as reserves with the central bank.

Both these factors may be at work in today's China. ""

for info:

http://www.bloomberg.com/apps/news?pid=20601039&sid=a_zNCkPaHPQg&refer=columnist_mukherjee

 

[Ichiro]

20jan-dialy fx-- US Dollar Fails to Rally Despite Stronger CPI and Housing Data
Thursday January 18, 4:12 pm ET
By Kathy Lien, Chief Strategist strategist@dailyfx.com

• US Dollar Fails to Rally Despite Stronger CPI and Housing Data
• Canadian Dollar Rebounds as Strong Inflows Offsets Drop in Oil Prices

""Japanese Yen – The Bank of Japan delivered by a big surprise last night by keeping interest rates unchanged at 0.25 percent. Although the futures market was pricing in a 30 percent chance of a rate hike yesterday, the day prior, it was pricing in an 80 percent chance. For the first time since the last interest rate hike in July, the decision was not unanimous. Six out of the nine members voted for unchanged rates while 3 voted for a rate hike. Concerns about economic growth seem to be weighing on the central bank despite the potentially stimulative impact of a weak Yen. According to their monthly report, the “developments in the Japanese economy have deviated slightly downward” from their October report which can be backed up by the recent deterioration in economic data. Last night, leading indicators dropped from 20 percent to 18.2 percent while the tertiary activity index came out weaker than expected. The latest decision by the central bank keeps carry trades in play, but at the same time, it also pushes the market’s expectations for a rate hike out to February. Overnight index swaps are currently pricing in a 70 percent chance of a February hike. Whether or not the central bank delivers that will depend on how economic data fares over the next month. If the data does not reflect improvements in the economy, the central bank may have to delay a rate hike once again.""

for info:

http://biz.yahoo.com/fxcm/070118/1169158403445.html?.v=1

 

[Ichiro]

20jan-aily FX-Pound Sells Off as Retail Not Enough

By Boris Schlossberg, Senior Currency Strategist strategist@dailyfx.com

""After a tumultuous day yesterday following the BoJ decision to keep rates on hold, the currency market spend most of the night marking time as traders digested the news flow and prices consolidated in tight ranges. Many analysts have criticized the BoJ for caving in to political pressure, but the fact of the matter is that Japanese fundamentals provided little support for further tightening at this times as the Japanese consumer clearly went into a funk at the end of Q3. Furthermore, as many commentators have pointed out Japan’s financing costs of its federal debt – the largest in the industrialized world – now account for more than 25% of all tax revenues and that fact may have weighed on the banks decision to hold off on tightening until monetary officials were certain that Japanese economy could absorb the shock. With the rate news now behind us the pair is likely to range trade between 120-122 level until Japanese economic data provides a clearer picture on whether the bank will finally act in February or will be forced to hold off for yet another month. With the rest of the G-3 block still showing a tightening bias the yen has clearly become the weakest link in the chain and the unit’s movements going forward are likely to be inextricably tied to the performance of the Japanese consumer.



Meanwhile pound sold off as strong UK retail sales data was not enough to overcome a wave of profit taking. After rallying for 6 out of the last 7 days, cable ran in to a slew of offers at the 1.9770 level despite the fact that Retail Sales handily beat estimates printing at 1.1% versus 0.5%. However, the price correction in cable may well be short lived as UK data continues to impress and points to further rate hikes from the BoE going forward. The only danger to the pound bullish scenario would come from a marked slowdown in UK’s housing market. Next week brings the housing data from the Rightmove survey and traders will pay careful attention to this news given the surprising slip in RICS readings this week.""

for info:

http://biz.yahoo.com/fxcm/070119/1169207969988.html?.v=1

 

[Ichiro]

20jan- MarketWatch-Dollar little changed after U.S. consumer sentiment data

By Wanfeng Zhou

NEW YORK (MarketWatch) --""The dollar traded little changed against other major currencies Friday, climbing to session highs after a report showed U.S. consumer sentiment improved to a three-year high.


The consumer sentiment index rose to 98.0 in January from 91.7 in December, according to research at the University of Michigan released on Friday. The increase was well above the consensus forecast of economists polled by MarketWatch who had expected sentiment to rise to 92.0. The current conditions index rose to 112.5 in January, the highest since July 2005, while the expectations index rose to 88.7, the highest since December 2004.

"The much stronger than expected" sentiment data "matched the rumored number exactly," said Brian Dolan, director of research at Forex.com, a division of Gain Capital. "Lower oil prices, milder weather, strong labor market all point to a positive US consumer mindset, but it does not feel sufficient to jar the market out of the ranges we have established this week.""

fro info:

http://biz.yahoo.com/cbsm/070119/83afce0ccd4945c3ae7ebff4f1520b96.html?.v=4

 

[Ichiro]

20jan- AP-Japan Shares Retreat From 9-Month Highs

Japanese Shares Retreat From 9-Month Highs; Oil, Banks, Tech Stocks Drop

TOKYO (AP) -- ""Japanese stocks fell Friday as investors took a breather after the market hit a nine-month high the previous day. Bank, oil and electronics stocks declined.

The benchmark Nikkei 225 index slipped 60.49 points, or 0.35 percent, to 17,310.44 points on the Tokyo Stock Exchange.


Banks fell as investors readjusted expectations on loan spreads after the Bank of Japan kept rates steady overnight.

Sentiment was weighed down by weakness on Wall Street overnight and an unimpressive forecast from Apple Inc. that muted investors' enthusiasm for technology stocks.

Now that the central bank's January policy meeting is over, however, expectations are growing that the Nikkei will start adding gains toward the technically important 2006 high of 17,563 points, traders said.

"The market may hit a new high by February before the mood turns cautious before the BOJ's next policy board meeting" from Feb. 20, said Ichiyoshi Investment Management general manager Mitsushige Akino.""

for info:

http://biz.yahoo.com/ap/070119/japan_markets.html?.v=3

 

[Ichiro]

20jan-fs-LIQUIDITY AND THE GLOBAL
BULL MARKET OF 2007
by Clif Droke
January 3, 2007

""It may not be apparent yet, but the story of the next six months will be the improvement in monetary liquidity and the subsequent bull market in stocks that accompanies it.

The previous two years were notable for the decline in monetary liquidity as shown in the Federal Reserve money supply statistics. It almost seemed that the Fed wanted to bring the economy to the very brink of recession before priming the credit pump once again at the last possible minute. The Fed very nearly succeeded in bringing about a recession but thankfully this threat has now been averted. Listening to some mainstream economists and financial analysts talk, one gets the impression that the threat of a further economic slowdown is still a very real one. But such is not the case, a point we’ll try to make in this commentary. Indeed, monetary liquidity hasn’t looked this good in years.

Everyone knows that in the real estate business it’s all about “location, location, location.” One of the first lessons a trader or investor must learn is that when it comes to the financial markets, it’s all about “liquidity, liquidity, liquidity.” When liquidity expands it sooner or later translates into rising stock prices and a strong economy; when it contracts it eventually forces stock prices lower and, if the contraction continues long enough, it brings down the economy. The correlation between percentage changes in monetary liquidity and stock prices is so well documented it’s amazing there are even today detractors of this truism.
""
Not only is domestic liquidity on the rise, but global liquidity is still at record levels and looking for somewhere to go. The two most likely candidates (in fact, the only major candidates) for this excess money are the U.S. stock market and the major global equities markets. Both have been obvious beneficiaries of the gradual re-emergence of the stock investor and both should continue to experience its positive effects further into 2007.

The increase in the M2 and MZM money supply measures continues to be the big story that hardly anyone is talking about entering 2007. It’s one reason why growth stocks should make a comeback this year and why already growth stock mutual funds and ETFs have made quite a turnaround in the past few months. Speaking of growth stocks, the Russell 1000 Growth Index (RLG) closed Friday at a 5-year high of 568.25 and is picking up some upside momentum which is favorable for the interim outlook (see chart below).

Not only is money supply increasing but so is credit. An article in a recent edition of the Financial Times made mention of the surge in collateralized debt that is expected to prolong the “easy credit” boom. According to FT, the issuance of securities linked to debt portfolio debt “swelled dramatically” in 2006 and according to credit analysts is a trend that is expected to continue in 2007. FT noted that estimates of activity in this sector suggest that more than $2,500 billion of collateralized debt obligations (CDOs) were issued last year, more than six times higher than in 2004. FT noted that “The explosion of CDO issuance is fuelling demand for debt products, helping keep the cost of borrowing in markets relatively low.”

This low cost of borrowing and surge in credit will serve to extend the bull market in stocks in 2007. We’re already seeing an early taste of a more generous securities lending stance on the part of the Federal Reserve as recent securities lending actions have shown. There was a very substantial increase in securities lending between Dec. 28 and Jan. 3 that paved the way for the recent rally in the NASDAQ, the financial, the healthcare, and growth stock sectors we’ve seen thus far in early 2007.""

for info:

http://www.financialsense.com/editorials/droke/2007/0116.html

 

[Ichiro]

2feb-FOREX-Dollar holds ground ahead of payrolls data, G7 eyed

By Veronica Brown

LONDON, Feb 2 (Reuters) - ""The dollar steadied against major currencies on Friday, with investors reticent to take positions ahead of key U.S. data, while markets were alert for commentary on yen weakness ahead of next week's Group of Seven meeting.

January's U.S. non-farm payrolls report, due at 1330 GMT, will be scanned by investors for evidence to reinforce a solid growth outlook and the Federal Reserve's steady stance on interest rates.


Economists expect the data to show 149,000 jobs added in January after a rise of 167,000 the previous month.

But analysts will also look closely at University of Michigan sentiment data, following Thursday figures showing an unexpected slide in U.S. manufacturing activity last month.

The Institute for Supply Management's manufacturing index hit its lowest level since April 2003. The non-manufacturing ISM is due on Monday.""

for info:

http://yahoo.reuters.com/news/artic...2-02_09-08-10_L02841211&type=comktNews&rpc=44

 

[Ichiro]

2-feb-FTSE up in global rally, bid talk lifts Sainsbury
Fri Feb 2, 2007 3:55am ET140


By Rebekah Curtis

LONDON, Feb 2 (Reuters) - ""Britain's FTSE 100 .FTSE index pushed higher on Friday, with Sainsbury (SBRY.L: Quote, Profile , Research) soaring on bid talk and the market as a whole gaining after global stocks took heart from strong company results and optimism over the U.S. interest rate outlook.

Shares in Sainsbury leapt as much as 7 percent and hit a seven-year high as traders cited media reports of private equity interest in the UK supermarket.

Private equity firm CVC has recently been working on plans to take Britain's third-largest grocer private, The Times newspaper reported on Friday. Tracking Sainsbury's lead, Morrison (MRW.L: Quote, Profile , Research) added 2.4 percent.

By 0845 GMT the FTSE 100 was 12.2 points or 0.2 percent higher at 6,294.4, having ended up 1.3 percent in the previous session, with none of the index's stocks closing in negative territory.""

for info:

http://yahoo.reuters.com/news/artic...2-02_08-55-47_L02836808&type=comktNews&rpc=44

 

[Ichiro]

2 feb- AP
Japanese Stocks Climb; Dollar Up vs. Yen
Friday February 2, 2:08 am ET
Japanese Stocks Climb on Optimism About U.S. Growth; Dollar Higher Against Yen

TOKYO (AP) -- Japanese stocks ended higher Friday on optimism about U.S. growth. The dollar rose against the yen.

The benchmark Nikkei 225 index climbed 27.61 points, or 0.16 percent, to wrap up the week at 17,547.11 points on the Tokyo Stock Exchange. The Nikkei gave up some of the morning gains in the afternoon due to profit taking.


The broader Topix index, which includes all shares on the exchange's first section, was up 3.82 points, or 0.22 percent, at 1742.40.

Japanese stocks are getting a lift from surging shares on Wall Street, where the market rose for a third-straight session overnight. On Thursday, Japan's benchmark Nikkei 225 index climbed 0.78 percent to its highest close since April 7, 2006.

Renewed confidence that the U.S. economy remains solid and that inflation is in check bolstered optimism among investors in Japan, which relies on healthy U.S. growth to fuel the country's export-driven economy.

for info:

http://biz.yahoo.com/ap/070202/japan_markets.html?.v=2

 

[Ichiro]

2feb-Asian Stocks Rise to Nine-Month High on U.S. Spending, Earnings

By Chen Shiyin

Feb. 2 (Bloomberg) -- Asian stocks advanced to the highest in nine months as U.S. consumer spending climbed. Sony Corp. and Samsung Electronics Co. led gains by exporters.

``The U.S. economy is like Rasputin; you can try to poison him, stab him, and still he lives,'' said Elan Cohen, a Singapore-based fund manager with JPMorgan Private Bank, which has $350 billion in assets. ``The strength of the U.S. consumer is really driving the economy and that's spurring growth in the rest of the world.''

Lenovo Group Ltd. and Hyundai Heavy Industries Co. rose after reporting an increase in profits. China's stocks had their worst weekly plunge in five years on concern new offerings will divert funds from existing shares. China Vanke Co. declined.

The Morgan Stanley Capital International Asia-Pacific Index added 0.4 percent to 142.84 at 6:30 p.m. in Tokyo, the highest since May 9. For the week, the regional gauge added 1.5 percent, its third consecutive advance.

South Korea's Kospi index jumped 2.2 percent. Kookmin Bank, the nation's largest lender, led gains after Korea Exchange Bank said it will pay its first dividend in 10 years.

Japan's Nikkei 225 Stock Average added 0.2 percent to 17,547.11. Indexes advanced elsewhere in the region, with those in Australia, India and Singapore climbing to all-time highs.

The Dow Jones Industrial Average rose to its fifth record this year after the Commerce Department said U.S. consumer spending gained 0.7 percent in December, the most in five months. Personal spending accounts for more than two-thirds of the U.S. economy. The U.S. is Asia's biggest export market.

for info:

http://www.bloomberg.com/apps/news?pid=20601080&sid=aNvkty8sRAYQ&refer=asia

 

[Ichiro]

2feb-China's Stocks Fall, Capping Biggest Weekly Drop in Five Years

By Zhang Shidong

Feb. 2 (Bloomberg) -- China's stocks fell, rounding off the Shanghai Composite Index's biggest weekly drop in five years.

Lawmaker Cheng Siwei and Haitong Securities Co., China's fourth largest brokerage by assets, in the last two days said the market is overvalued, and share sales by companies including Ping An Insurance (Group) Co. and Industrial Bank Co. are fanning concern that investor demand will dry up. China Vanke Co. and China Minsheng Banking Corp. led the decline.

``Share sales are making investors even more jittery, adding to fears that the market is too high,'' said Zhang Shuntai, who oversees the equivalent of $127 million at Zhonghai Fund Management Co. in Shanghai. ``Undoubtedly, a correction is now in full swing.''

The Shanghai and Shenzhen 300 Index, which tracks yuan- denominated A shares listed on China's two exchanges, dropped 97.17, or 4.1 percent, to close at 2298.00. The measure plunged 8.6 percent this week, the biggest slide since it was introduced in April 2005. The Shanghai Composite's 7.3 percent weekly drop was the largest since January 2002.

China Vanke, the nation's biggest property developer, fell 1.23 yuan, or 7.9 percent, to 14.42 today. China Minsheng, the first privately controlled bank, dropped 0.78 yuan, or 6.4 percent, to 11.51.

Citic Securities Co., the biggest publicly traded brokerage, lost 2.61 yuan, or 7.3 percent, to 33.16. Baoshan Iron & Steel Co., China's No. 1 steelmaker, declined 0.61 yuan, or 6.5 percent, to 8.81.

fro info:

http://www.bloomberg.com/apps/news?pid=20601080&sid=aeC6zLI5lsd0&refer=asia

 

[Ichiro]

2feb-Why Abe Won't Be Japan's Answer to Ronald Reagan: William Pesek

By William Pesek

Jan. 31 (Bloomberg) -- Shinzo Abe seems to be channeling the spirit of Ronald Reagan. Japan's prime minister is championing Reagan-like policies such as restoring national pride and deregulating a rigid economy.

Given Abe's focus in his first four months, it's not surprising that pundits are buzzing about ``Morning in Japan.'' It's a not-so-subtle reference to the U.S. president's 1984 re- election campaign. Reagan ran on a platform of the U.S. being ``prouder, stronger, better'' after his first four years.

Many credit Reagan, who died in 2004, with restoring U.S. power and prosperity after a period of economic hardship and national soul-searching. It's not unlike what many of Japan's 127 million people have entrusted Abe to do.

They are likely to be disappointed.

Abe's predecessor, Junichiro Koizumi, unleashed a bit of Reaganomics on Asia's biggest economy in his five years in power. He worked to push through spending cuts, tax reductions for the wealthy, privatization and deregulation. Koizumi had to move gingerly, given Japan's preference for consensus over conflict. Yet his direction was clear enough.

The idea always was for Koizumi's successor to build on his achievements, no matter how incomplete. Abe's charge was to bring Japan's recovery to the next level, encouraging companies and households to spend more and making an over-regulated economy more efficient.

Abe is also focused on ``building a beautiful country,'' something that seems quite Reaganesque. It's not about planting trees or cleaning up the streets -- it's about boosting national pride, instilling patriotism in youngsters and, ultimately, creating a bigger global role for the nation.

for info:http://www.bloomberg.com/apps/news?pid=20601039&sid=aDaC_FYt6HGM&refer=columnist_pesek

 

[Ichiro]

2feb-anuary U.S. Payrolls Rise 111,000; Jobless Rate Rises to 4.6%

By Joe Richter

Feb. 2 (Bloomberg) -- Employers in the U.S. added a smaller- than-forecast 111,000 workers to payrolls in January and the unemployment rate rose, evidence of an economy growing at the moderate pace predicted by the Federal Reserve.

The gain in employment followed a 206,000 rise in December that was larger than previously estimated, the Labor Department reported today in Washington. The jobless rate rose to 4.6 percent, the first increase in three months.

Modest job gains suggest wage gains won't accelerate, lessening the risk that inflation will flare. The Fed this week kept interest rates unchanged and said that, while inflation was ``likely to moderate,'' risks remained. The report may soothe some central bankers who had voiced concern a too-tight labor market had the potential to boost wages and prices.

``Businesses aren't in a bunker mentality, but there appears to be some tempering of expectation on growth,'' Richard DeKaser, chief economist at National City Corp. in Cleveland, said before the report. ``The Fed is on track to get the kind of moderation in the labor market that's necessary to prevent inflation pressures from intensifying.''

Economists projected payrolls would rise by 150,000 following a previously reported 167,000 December increase, according to the median estimate of 82 forecasts in a Bloomberg News survey. Estimates ranged from increases of 20,000 to 225,000. November and December payrolls were revised up by a combined 81,000.

Economists also projected a 4.5 percent unemployment rate.

Wage Gains Moderate

for info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=ayK3KowLVux8&refer=home

 

[Ichiro]

2feb-U.S. Treasuries Rise as Economy Adds Fewer Jobs Than Forecast

By Daniel Kruger

Feb. 2 (Bloomberg) -- U.S. Treasuries rose after a government report showed the economy created fewer jobs last month than economists forecast.

U.S. employers added 111,000 workers in January, after a revised 206,000 increase in December, the Labor Department said. The median forecast of 82 economists surveyed by Bloomberg News was for an increase of 150,000 jobs. The unemployment rate rose to 4.6 percent.

``The market's going to rally,'' said Kris Kowal, who helps manage $5.6 billion in fixed-income assets at DuPont Capital Management Corp. in Wilmington, Delaware, before the report. ``Maybe the economy's not that strong.''

The yield on the benchmark 10-year note fell 2 basis points, or 0.02 percentage point, to 4.82 percent at 8:31 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of the 4 5/8 percent security due November 2016 rose 5/32, or $1.56 per $1,000 face amount, to 98 1/2.

The U.S. economy grew at the fastest pace in a year last quarter as declining energy costs helped power consumer spending and contain inflation. Gross domestic product increased at an annual pace of 3.5 percent, the Commerce Department said in Washington on Jan. 31.

A lower-than-expected payrolls number ``would definitely be bullish,'' said Jason Stipanov, an interest-rate strategist in New York at Morgan Stanley, before the report. Yet it may take two or three more months of slowing job growth ``before eases are a reasonable possibility,'' he said, referring to the likelihood the Federal Reserve will cut borrowing costs this year.

A private labor survey released Jan. 31 showed companies in the U.S. added 152,000 jobs in January, after a drop of 40,000 in December, the first decline since April 2003, according to an ADP Employer Services report that was based on data from 307,000 businesses.

Traders and investors had expected U.S. employers added 182,800 nonfarm workers in January, according to an auction of economic derivatives by the Chicago Mercantile Exchange tied to U.S. nonfarm payrolls. The CME released the auction figures on its Web site.

for info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJRZqOWZz3qI&refer=home

 

[Ichiro]

2feb-Bond Market Rediscovers Reasons to Be Concerned: Mark Gilbert

By Mark Gilbert

Feb. 2 (Bloomberg) -- After rising in tandem for much of 2006, bonds and equities are starting to diverge, to the detriment of some sections of the fixed-income markets in the first month of the year. It might not last.

In January, the Standard & Poor's 500 Index of U.S. stocks eked out a 1.4 percent gain, while Europe's Dow Jones Stoxx 600 Index climbed 2 percent. Fixed-income returns, meantime, are a sea of red, with U.K. bonds maturing in more than a year losing 1.5 percent. Euro-area debt has fallen 0.4 percent and the U.S. futures contract on long-dated bonds more than a point.

The bond market is rediscovering reasons to be concerned. U.S. consumers haven't taken fright at the parlous state of the housing market and fled screaming from the shopping malls. The Federal Reserve isn't about to start cutting interest rates. So far, the inverted yield curve, with two-year note yields higher than 10-year levels, doesn't seem to be a harbinger of recession.

The U.S. economy grew at a not-so-shabby annual pace of 3.5 percent in the fourth quarter, according to figures this week, faster than the 3 percent anticipated by economists and up from the third quarter's 2 percent pace.

``The battle between bonds and equities to decide which asset class better reflects the U.S. growth outlook appears to be swinging decisively toward equities,'' Tim Drayson, an economist at ABN Amro Holding NV in London, said in a note this week.

The Fed sweetened its assessment of the economy at this week's policy meeting, describing ``somewhat firmer economic growth.'' That was a change from ``economic growth has slowed over the course of the year'' outlined in December. It certainly doesn't sound like a central bank about to ratify economists' expectations for a bond-bolstering rate cut.

for info:

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_gilbert&sid=aMyiYHGEvrFA

 

[Ichiro]

3feb- AP
Dollar Rises Against Major Currencies
Friday February 2, 4:15 pm ET
Dollar Rises Against Major Currencies Following U.S. Employment Report

NEW YORK (AP) -- The dollar rose against other major currencies Friday as the markets focused on upward revisions to past jobs gains in a mostly disappointing employment report.

The euro bought $1.2967 in afternoon New York trading, down from $1.3021 in New York late Thursday. The British pound also slipped to $1.9673 from $1.9677.

AThe dollar strengthened against the Japanese currency, rising to 121.07 Japanese yen from 120.66 yen late Thursday.

The Labor Department reported Friday that unemployment in January rose to 4.6 percent and job growth was unexpectedly subdued -- fitting with expectations that growth in the economy will moderate this year.

The tally of new jobs added last month, 111,000, fell short of economists' expectations for a gain of around 150,000 positions. They also had forecast that the jobless rate would hold steady at its December level of 4.5 percent.

for info:

http://biz.yahoo.com/ap/070202/dollar.html?.v=2

 

[Ichiro]

3feb-Dow retreats from record-Tech stocks gain but blue chips struggle; oil, earnings and employment report also factor.

By Jessica Dickler and Alexandra Twin, CNNMoney.com staff writers
February 2 2007: 4:10 PM EST

NEW YORK (CNNMoney.com) -- Stocks were mixed Friday, as the Dow Jones Industrial average struggled a day after ending at an all-time high and the Nasdaq composite edged higher.

The Dow (down 21.55 to 12,652.13, Charts) lost 0.2 percent, one day after closing at a record high. The broader S&P 500 (up 2.65 to 1,448.59, Charts) index added nearly 0.2 percent after ending the previous session at the highest point since September 2000.

The tech-heavy Nasdaq composite (up 6.96 to 2,475.34, Charts) gained 0.3 percent.

The Dow, S&P 500 and Nasdaq all ended higher for the week.
Jobs gain misses target, but ...

Stocks rallied Thursday on a mix of lower oil prices and some relief about the economic outlook.

The sense of relief was mostly reinforced by Friday's economic news, including a stronger-than-forecast reading on December factory orders and by the January jobs report.

But fluctuating energy prices and a selloff in commodity stocks such as silver and gold kept stocks in mixed territory. Additionally, investors showed a little caution after lifting the Dow to a record the day before.

for info:

http://money.cnn.com/2007/02/02/markets/markets_0405/index.htm?source=yahoo_quote

 

[Ichiro]

4feb-Yen Gains Versus Dollar; Japan's Currency Called Undervalued

By Bo Nielsen and Ye Xie

Feb. 3 (Bloomberg) -- The yen rebounded from a four-year low versus the dollar this week as European officials said Japan's currency is undervalued.

The currency had its first weekly gain versus the dollar in about a month as U.S. Treasury Secretary Henry Paulson said he was watching the yen ``very carefully.'' Investors bought yen before next week's Group of Seven meeting on speculation members would discuss the currency's recent decline. The Japanese currency has weakened 1.7 percent against the dollar this year.

``Investors pared back their extreme short yen positions ahead of the G-7 meeting,'' said Brian Garvey, senior currency strategist with State Street Global Markets in Boston, one of the world's largest custodians of investor assets with $10.7 trillion. The yen also ``gained partly because foreign investors started buying Japanese equities fairly aggressively.''

The yen strengthened to 121.13 per dollar yesterday from 121.54 on Jan. 26, and 157.01 per euro from 156.99. The dollar traded at $1.2961 per euro from $1.2916. The Japanese currency gained 0.3 percent this week against the dollar.

The Brazilian real this week was the best performing major currency tracked by Bloomberg, gaining 1.6 percent versus the U.S. dollar. New Zealand's dollar was the worst performer, declining 2.2 percent.

The Nikkei 225 Index rose 0.7 percent this week to 17,547.11.

Officials from France and Germany this week said the yen's value doesn't reflect economic fundamentals, suggesting they'll seek a stronger currency at the Feb. 9-10 meeting of the G-7.

European Central Bank board member Christian Noyer said the yen's value doesn't reflect the strength of the Japanese economy, the Nikkei newspaper reported.

for info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=awCjnCxQbRms&refer=home