forex for us

0935196766

2006-11-21T18:41:00.000-08:00

UK lowers interest rates
Phuong, 0935196766
Britain recently became the first developed country in two years to lower interest rates, guiding its repo rate downward to 4.5%. However, representatives from the Central Bank effectively dismissed speculation that other rate cuts would follow, calling the move “economic fine-tuning.” They will continue to target inflation, which is likely to resurface once Britain’s economy resumes its expansion. Many analysts believe policy-makers in other developed regions will soon follow suit, ushering in a period of tight monetary policy. Those analysts may be forced to wait, however. The Financial Times reports:
The European Central Bank maintained its main interest rate at 2 per cent. Recently, evidence from business surveys appeared to back its view that conditions in the eurozone were improving

0903930134 SG

2006-11-21T18:37:00.000-08:00

Hedge Funds play currency markets
0903930134 Huong SG
As the number of new hedge funds grows, existing funds have found themselves in a continuous search for new investments. The latest fad among hedge funds is currency trading. The forex markets are the largest and most liquid in the world, and are largely unregulated. Because the ability to buy and sell multi-million dollar positions is paramount, hedge funds have piled into the markets. Industry experts now feel hedge funds moving in tandem are able to single-handedly defend or move currencies, which is a scary thought for those who though currency markets were immune to manipulation. Hedge funds, however, have argued that they function as a positive force in the markets. The Globe and Mail reports:
“I think that the more players that are out there, it's going to improve liquidity and lead to less misalignments because there should be more money on both sides of the markets.”

0907657139 SG

2006-11-21T18:35:00.000-08:00

Will UK continue to lower rates?

0907657139 Phuong SG

Last week, the UK Central Bank voted to lower interest rates for the first time in two years, to 4.5%. Economists and analysts are already mooting the possibility of another decline before year-end, in anticipation of lower-than-expected UK economic growth. Several UK policy makers, however, are reluctant to lower rates any further, lest they incite another housing bubble. Rising home prices have already fuelled excessive borrowing and a proportionate rise in consumer spending. Officials, however, are worried that these spending levels have reached dangerous levels, rising twice as fast as wage growth statistics would seem to imply. The upshot is a very low likelihood of continued rate cuts. The Economist reports:
It is unlikely that Britons are in for a series of interest-rate cuts. The Bank of England knows that no good will come of re-inflating the housing bubble, which would only result in worse pain down the road, as more consumers fall into the trap of too much debt.

0914.401.609 Nhật

2006-11-21T18:23:00.000-08:00

Currency options gain popularity
0914.401.609 Nhật
Derivatives have always been an important part of forex trading. As if 200:1 leverage isn’t enough, many traders enjoy speculating on currencies through the long and short purchases of derivatives (forwards, futures, options, and swaps). Most popular among retail forex traders are currency options, in which one pays for the right to purchase or sell a currency at a fixed exchange rate at some point in the future. In fact, one firm recently introduced a new type of options trading designed in an intuitive way for forex traders. The vehicle is known as a box option and allows traders to graphically select support and resistance levels for a particular currency pair, in the shape of a box. The return depends on if and by how much the theorized levels are actually breached. Business Wire reports:
This is the first and only product of its kind in the financial marketplace. "BoxOption provides…investors with a powerful new derivative for which they can do any number of things, from hedging exchange rate risk and currency positions, to direct investing in the movement of the currency markets."

0983985653

2006-11-21T18:20:00.000-08:00

Canadian Dollar linked to Oil
Oanh 0983985653
It seems Canadian exchange rates are highly correlated with the price of oil. This is not surprising, as resource-rich Canada has the second largest proven oil reserves in the world. In short, as oil has soared to record highs, the Canadian Dollar has also risen. At this point, a play on the Canadian Dollar is tantamount to betting the price of oil will continue to surge. A general rise in commodity prices has also made Canadian natural resource companies more profitable and hence, more valuable. Foreign investors have poured money into Canadian resource stocks, some of which may soon be acquired by foreign firms. These investments necessitate foreign currency conversion into Canadian Dollars, which has further boosted the currency. If this were not enough, Canada’s economy is strong, its trade surplus is growing, and its Central Bank may soon raise interest rates. Bloomberg news reports:
“Oil, equities and general U.S. dollar selling” is supporting the Canadian dollar, said a chief foreign-exchange strategist. The Canadian dollar may also benefit from being included in China's currency basket as investors speculate about “the Chinese putting more of their money into Canada.”

0904652378

2006-11-21T18:19:00.000-08:00

Euro buoyed by economic data
Trang 0904652378
It seems the dog days of summer have set it. Capital markets are trading sideways, amid a veritable absence of new developments. It is in this climate that the release of European portfolio data is enough to light a spark in currency markets. According to reports, foreigners poured $140 Billion into European capital markets, in June alone. Many traders are confident that these portfolio inflows and the recent strong performance of European equities will provide a floor for the Euro currency. Others are counting on Asian Central Banks to prop up the Euro, by continuing to diversify their vast foreign exchange holdings.
With the eurozone equity market continuing to perform strongly and suggestions that July’s Chinese revaluation may precipitate further reserve diversification into the euro, “global capital flows should be supportive of the euro through the second half of 2005.”

0916318072

2006-11-21T18:17:00.000-08:00

‘RedTower’ deemed most accurate currency forecaster
Hạnh 0916318072
According to Bloomberg news, RedTower, a small Scottish money manager, was the most accurate currency forecaster last year. In a survey conducted among institutional forex traders, RedTower correctly predicted the Euro would fall to $1.22, while the most other analysts forecasted a prolonged period of appreciation. RedTower claims its prediction was largely based on international disparities in the price of beer, proving that inspiration can come from the most unexpected places. In the same survey, however, RedTower managers forecasted the price of oil would not reach $45 by year-end. So much for clairvoyance… Bloomberg news reports:
It was the first time Redtower topped the ranking for currency forecasts, according to Bloomberg data. Bank of Tokyo Mitsubishi, HBOS Plc and Credit Suisse First Boston came second, third and fourth, respectively.

0986199909

2006-11-21T18:15:00.000-08:00

China reveals composition of currency basket
Phuong 0986199909
In a move that was uncharacteristically transparency, China has divulged the composition of the currency basket that is tied to the Yuan. According to senior Chinese officials, the basket is composed of USD, Euros, Japanese Yen, and Korean Won, as well as the currencies of Singapore, Britain, Malaysia, Russia, Australia, Thailand and Canada. While China failed to disclose the exact proportions, it hinted the composition would be trade-weighted, leading economists to speculate the USD would be most important, followed by the Euro and Japanese Yen. The basket’s broad make-up will succeed in minimizing the Yuan’s volatility, for large fluctuations in component currencies will be spread across the entire basket. The Economist reports:
Using a weighted average of China’s trade and FDI, [one economist] guesses that the dollar has a weight of 43%, the yen 18% and the euro 14%. This incorporates a higher dollar weight to reflect the importance of Hong Kong and Taiwan.

0984 520 620

2006-11-21T18:12:00.000-08:00

0984 520 620 Thúy KV Hoàng Quốc Việt

Renewed Faith in Euro
Forex markets are arguably the least predictable of all capital markets. Traders and investors must reconcile technical analysis with economic indicators with fundamental considerations, which frequently paint vastly different pictures. This week, it seems forex traders have had a collective change of heart, abandoning the USD and embracing the Euro. Traders bullish on the Euro argue that a host of economic indicators and political developments reveal the EU economy is improving as politicians prepare to enact much-need structural reforms. Additionally, money managers are now touting the Euro as a ‘defensive play,’ due in part to rising natural resource price. The Financial Times reports:
Mounting international confidence in the prospects for the eurozone was neatly encapsulated by portfolio flows data released earlier in the week, which showed the eurozone attracted net inflows into its equity and bond markets.

0904138446

2006-11-21T18:10:00.000-08:00

Loan:0904138446
Indonesia to mitigate currency crisis
Supported by booming economies, most Southeast Asian currencies have soared in recent years. Indonesia’s currency, the Rupiah, unfortunately has not fared well, declining recently to a 45-month low against the USD. The cause is not economic malaise, but rather the rising price of oil. For whatever reason, Indonesia expends a great deal of effort and money on artificially lowering the cost of fuel, typically by meting out fuel subsidies to consumers and businesses. As the price of oil has risen, so have Indonesian fuel subsidies, which now consume nearly 1/3 of Indonesia’s budget. This has exerted a tremendous strain on Indonesia’s money supply and credit markets, to the point where economists now reckon the Central Bank needs to raise interest rates by 100 basis points (1 percentage point) in order to prevent a full-scale currency crisis. The Financial Times reports:
Should the currency slide further and remain below Rp11,000-12,000 to the dollar for a quarter, they say, it would lead to corporate defaults and put pressure on the banking system.

0914688908

2006-11-21T18:09:00.000-08:00

Ha Giang 0914688908

Currency trading based on deficit losing steam?
Currency trading based on the trade deficit MAY be losing steam (but, I wouldn't hold my breath). According to FXStreet.com:
"People have grown tired of the deficit issue and are looking for something else to trade on, like interest rates," said Toshihiro Azuma, forex manager at Sumitomo Trust and Banking. "But, if the trade data is worse than expected, dollar selling could resume."
He added that even if the data is within expectations, the dollar could push down to around 102 yen -- a level last seen at the end of last year -- given that a round of dollar short-covering by hedge funds appeared to have been completed

0912534244

2006-11-21T18:08:00.000-08:00

0912534244. Thủy

China's forex reserves soar to record US$609.9 billion in 2004

BEIJING : China's foreign reserves in 2004 soared to a record 609.9 billion dollars from 403.3 billion dollars in 2003 on the back of strong fund inflows and a burgeoning trade surplus, state press reported. The official National Business Daily, a newspaper owned by party mouthpiece the Liberation Daily, reported the record 206.6-billion-dollar increase, citing unnamed officials at China's central bank. In 2003, China's reserves rose by a then-record 160 billion dollars. The mainland holds the world's second highest foreign currency reserves after Japan, which in December hit a record 844.54 billion dollars. The sharp rise in China's 2004 reserves highlights the seriousness of the speculation on the currency, Yi Xianrong, a researcher at the Chinese Academy of Social Sciences, was quoted as saying by the newspaper. Yi estimated that "hot money" or speculative cash coming into the mainland to bet that the yuan would be revalued probably accounted for about 120 billion dollars. At the same time, China's booming economy pushed its 2004 trade surplus up 25.6 percent to 32 billion dollars, the highest level in six years. - AFP

0915.979.142

2006-11-18T04:15:00.000-08:00

0915.979.142 Hanh

Malaysia's 10-Year Bonds Decline as Ringgit Slump Hurts Demand
By David Yong
Nov. 17 (Bloomberg) -- Malaysian government bonds fell for a fourth day on speculation a slump in the nation's currency will hurt overseas demand for local assets.
Ten-year notes snapped a two-week advance that pushed yields to the lowest since July 2003 this week as futures contracts showed traders reduced bets the ringgit will advance in the next 12 months. Bank Negara Malaysia Governor Zeti Akhtar Aziz yesterday said interest rates are at an appropriate level to support growth, damping rate-cut expectations.
``The ringgit has weakened a bit and the market is facing a correction,'' said Chue Soon Hoe, a treasury manager at Affin Investment Bank Bhd. in Kuala Lumpur. ``The central bank may want to keep rates steady this year pending more data on economic performance.''
The yield on the 4.262 percent note due September 2016 rose 4 basis points, or 0.04 percentage point, to 3.91 percent at 11:45 a.m. in Kuala Lumpur, according to central bank pricing. The price dropped 0.3, or 3 ringgit per 1,000 ringgit face amount, to 102.85.
The ringgit traded at 3.6585 per dollar, extending a 0.5 percent decline this week, making it fifth-worst performer this week among major Asia Pacific currencies tracked by Bloomberg. It will rise to 3.5795 in 12 months, compared with bets for 3.5588 on Nov. 13, according to non-deliverables futures contracts.
Bank Negara has kept its overnight lending rate between banks at 3.5 percent in the past four meetings, saying inflation has peaked. The central bank will hold its next monetary policy meeting on Nov. 24, a day after it reports on third-quarter economic performance.
Slower growth may fuel speculation of a rate cut as early as first quarter next year ``but a lackluster ringgit should prevent it,'' Standard Chartered Plc said in a note to clients yesterday. Malaysia will hold its rates until the third quarter of next year, it said.

0986199909

2006-11-18T04:07:00.000-08:00

Phuong 0986199909

Japan's Bonds Have Weekly Drop on Faster Growth Before Auction

By Keiko Ujikane

Nov. 18 (Bloomberg) -- Japan's 20-year bonds had the first weekly drop in a month on speculation traders sold to protect against possible losses at an 800 billion yen ($6.8 billion) debt issue next week amid a strengthening economy.

Brokerages that bid at auctions often cut holdings in case prices drop before they can pass on the debt to investors. Twenty-year bonds ended three weeks of gains after a government report showed the economy grew at twice the pace expected in the third quarter.

``The growth report restored confidence among investors on Japan's economy, which was a driver for this week's decline in bonds,'' said Susumu Kato, chief strategist at Calyon Securities, one of the 25 primary dealers that are required to bid at auctions. ``Twenty-year bonds also were weak as brokers prepared for the auction.''

The yield on the 2.3 percent bond due in September 2026 rose 2.5 basis points to 2.165 percent this week, according to Japan Bond Trading Co., the nation's largest interdealer debt broker. A basis point is 0.01 percentage point.

The benchmark 10-year bond also slumped, ending a three- week advance. The yield on the 1.8 percent bond due in September 2016 climbed 3.5 basis points to 1.71 percent.

The Ministry of Finance's 20-year bond auction will be on Nov. 21. Market yields suggest the government will set a 2.2 percent coupon, lower than the 2.3 percent rate on the debt sold last month. The prior sale on Oct. 24 drew bids worth 4.17 times the amount of debt sold, the most since May 2005.

``There should be some adjustments ahead of the auction, putting the longer bonds under pressure to fall,'' said Tatsuo Ichikawa, a fixed-income strategist at ABN Amro Securities Japan Ltd., another primary dealer. ``A 2.2 percent coupon on new debt is less attractive.''

Fukui Comments

Prices on three-month Euroyen futures, the most sensitive to a change in interest-rate expectations, gained yesterday after Bank of Japan Governor Toshihiko Fukui suggested a rate increase by the bank in December isn't likely.

``Our policy judgment won't be restricted'' by the build up of inventories at electronics and high-technology companies, Fukui told reporters in Melbourne yesterday. ``That doesn't necessarily mean the chances for a December rate increase is particularly high.''

The central bank hasn't ruled out any time for increasing rates, Fukui said Nov. 16 after policy makers voted unanimously to keep the key overnight lending rate at 0.25 percent.

``The market was a little bit ahead of itself in pricing in the possibility of a December rate hike,'' said Takashi Fujiwara, at Resona Bank Ltd., a unit of Resona Holdings Inc., Japan's fourth-biggest lender by assets.

Yields on three-month Euroyen futures for December delivery fell to 0.565 percent yesterday, down from 0.59 percent before Fukui's comments on Nov. 16.

Rate Outlook

Of 16 economists surveyed by Bloomberg News, 10 said the central bank will lift the key rate in the first quarter. Four said an increase could come at the next two-day policy meeting ending Dec. 19.

The central bank raised its target for overnight lending rates to 0.25 percent from near zero percent in July for the first time in six years.

Longer-maturity debt dropped and short-term notes gained yesterday, causing the so-called yield curve to steepen.

The gap in yields between two- and 20-year debt widened to about 1.37 percentage points yesterday after reaching 1.35 percentage points a day earlier, the narrowest since May 31.

``Twenty-year bonds have become expensive relative to shorter debt,'' said Calyon's Kato. ``There were some unwinding of the flattening positions'' that had bought longer debt and sold shorter notes.

Economic Growth

Bonds also dropped on speculation demand for exports will increase after a U.S. report showed manufacturing in the Philadelphia area expanded for the first time in three months.

Faster growth in the U.S. may help extend Japan's longest postwar expansion. Exports account for a 10th of the Japanese economy. The Federal Reserve Bank of Philadelphia's general economic index rose to 5.1 this month from minus 0.7 in October, a report showed on Nov. 16.

``The U.S. economy may achieve a soft landing, meaning there's no need for the Fed to cut rates,'' said Naruki Nakamura, who helps manage the equivalent of about $3.4 billion of bonds in Tokyo at Fischer Francis Trees & Watts, which is partly owned by BNP Paribas SA, France's largest bank. ``That may provide fewer obstacles for the BOJ to raise rates.''

Japan's economy grew at an annual 2 percent pace in the third quarter, the government said on Nov. 14, double the 1 percent median forecast of economists surveyed by Bloomberg News.

0984 520 620

2006-11-18T04:04:00.000-08:00

0984 520 620 Thúy KV Hoàng Quốc Việt

British Airways Debt Rating May Rise, Credit-Default Swaps Show
By Hamish Risk
Nov. 17 (Bloomberg) -- British Airways Plc, Europe's third- biggest airline, may have its debt rating raised to investment grade after announcing plans to reduce its pension shortfall, according to traders betting on the creditworthiness of companies in the credit-default swap market.
The perceived risk of owning British Airways 350 million pounds ($660 million) of bonds had its biggest weekly drop in a year, according to data compiled by Bloomberg. Credit-default swaps are financial instruments based on corporate bonds and loans that are used to speculate on a company's ability to repay debt.
The prospect for a higher credit rating increased after the London-based company said this week that it had agreed to a 10- year plan to eliminate a 2.1 billion-pound deficit in its employee pension fund. Standard & Poor's had identified the shortfall as an obstacle to obtain a higher rating.
``With a final agreement now highly probable, an upgrade should occur by May next year,'' Pierre Bergeron a credit analyst at Societe Generale SA in Paris. ``Pension resolution was one of the key points for Standard & Poor's in terms of a possible upgrade to investment grade.''
British Airways has a high-risk, high-yield, or junk, ranking of BB+ from S&P, which has a positive outlook on the company's debt rating. Moody's Investors Service rates the airline's debt a level lower at Ba2. Bonds rated below BBB- by S&P and Baa3 at Moody's are considered non-investment grade.
Credit Quality
Credit-default swaps on 10 million euros British Airways bonds fell to 85,000 euros from 96,000 euros on Nov 10, Bloomberg data show. A decline in the cost of the contracts indicates an improvement in credit quality; an increase suggests deterioration.
Investors who buy the contracts, sold by financial firms such as New York-based JPMorgan Chase & Co. and HSBC Holdings Plc in London, are paid 10 million euros in exchange for the notes should the company fail to adhere to debt agreements during the next five years.
``Given the levels where Lufthansa and Air France are trading, credit-default swaps on British Airways look very attractive,'' Bergeron said. He said the British Airways contracts could trade at between 40,000 euros and 50,000 euros within the next six months.
Credit-default swaps on Cologne, Germany-based Deutsche Lufthansa AG, Europe's second-biggest airline, which is rated two levels higher than its British competitor, are currently trading at 35,000 euros, according to Bloomberg data.
British Airways spokeswoman Kate Gay declined to comment on the likelihood of a higher credit rating.
Crossover Index
The perception of European credit quality as measured by the iTraxx Crossover Index improved today. The index, which includes 45 companies with investment-grade and non-investment grade ratings, fell to 236,000 euros from 237,000 euros yesterday. The average daily fluctuation of the index is 1.5 percent, according to Bloomberg calculations.
The iTraxx Europe Index, which includes 125 companies with investment-grade ratings, was little changed at 24,000 euros from yesterday. The index reached a record low of 22,750 euros on Monday.
Credit-default swaps are the fastest growing market for derivatives, financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates.

Hương 0912230103

2006-11-18T04:03:00.000-08:00

Hương 0912230103
Bond Strategists: Dresdner Kleinwort Says Cut Corporate Bonds

By Cecile Gutscher

Nov. 17 (Bloomberg) -- Investors should cut holdings of corporate bonds as evidence mounts that a slowing U.S. economy will unsettle markets, analysts at Dresdner Kleinwort said.

Dresdner lowered its recommendation for company bonds to ``underweight,'' meaning investors should hold less than their benchmarks recommend. The yield premium, or spread, that investors demand to hold European corporate debt rather than similar-maturity government bonds, is set to rise by ``at least 15 basis points'' before the end of next year, Dresdner said.

``Fundamentals for credit are deteriorating,'' London-based credit analysts Willem Sels and Natalie Wilson wrote in a report yesterday. ``The evidence for a consumer-led slowdown in the U.S. is now accumulating. We have arrived at the stage where volatility should gradually pick up, and we think it is time to go underweight on credit.''

The U.S. economy will probably grow by 1.5 percent for two consecutive quarters, ``which would likely lead spreads to follow the bearish case scenario,'' the Dresdner analysts wrote. Growth in the U.S. was 1.6 percent in the third quarter, down from 2.6 percent in the second and 5.6 percent in the first three months.

A 47-month bull market in corporate bonds has kept borrowing costs low and encouraged European companies to issue a record $1.6 trillion of bonds so far this year, Bloomberg data show.

Corporate bond spreads narrowed to about 110 basis points this year, from an average 162 basis points in the previous five years, according to a Merrill Lynch index of investment-grade and non-investment grade securities. A basis point is 0.01 percentage point

0914.401.609

2006-11-18T04:00:00.000-08:00

0914.401.609 Nhật

European Bonds Log Weekly Drop on ECB Interest Rate Outlook

By Gavin Finch

Nov. 18 (Bloomberg) -- European two-year government bonds posted their biggest weekly drop in more than a month on speculation the European Central Bank will keep raising interest rates into 2007.

Benchmark debt fell, pushing yields to near a four-year high, on concern the risk of inflation will prompt the ECB to keep lifting lending rates. Bonds fell yesterday after ECB officials Klaus Liebscher and Lucas Papademos said inflation persisted in the region and the bank will do what's needed to stabilize prices next year.

``The ECB is clearly still worried about inflation and so may raise rates again next year,'' said Nick Stamenkovic, a fixed-income strategist at RIA Capital Markets Ltd. in Edinburgh. ``This will keep shorter dated bunds under pressure.''

The yield on the benchmark two-year note, more sensitive to changes in interest rate expectations than longer dated debt, rose 3 basis points in the week to 3.70 percent in London. The price of the 3.5 percent security due September 2008 fell 0.04, or 40 euro cents per 1,000 euro ($1,279) face amount in the week, to 99.64. Bond yields move inversely to prices.

Fellow ECB council members joined Liebscher and Papademos in voicing their concern this week that lending rates are too low and indicating further increases may prove necessary to curb inflation in the $10 trillion economy.

ECB policy makers Nicholas Garganas and Jose Manuel Gonzalez-Paramo both referred to the need for ``strong vigilance,'' a phrase that's been used to signal an imminent rate increase. Debt has fallen since ECB President Jean-Claude Trichet on Nov. 2 pledged ``strong vigilance'' on inflation.

`Hawkish Stance'

``We anticipate the ECB will maintain its hawkish stance even after its meeting in December,'' said Michael Rottmann, head of fixed-income and currency research at UniCredit Markets and Investment Banking in Munich, part of UniCredit SpA, Italy's largest lender. ``Trichet will hint at further rate increases.''

Two-year yields this week rose above those on 10-year debt for only the second time in more than six years as traders bet the central bank will crimp inflation as it lifts interest rates.

The spread, or gap, between two- and 10-year German securities inverted for the first time since August 2000 on Nov. 9, narrowing from 69 basis points at the start of December.

The narrowing of the yield spread has occurred as traders bet the ECB will keep raising rates, pushing shorter-dated yields higher. Ten-year yields haven't risen as sharply, on expectations higher borrowing costs will contain inflation in the euro region.

Traders have fully discounted two more rate increases by March with one more increase by year-end to 3.5 percent, futures prices show. The yield on the three-month Euribor futures contract for December was at 3.71 percent yesterday.

The contract settles to the three-month interbank offered rate for the euro, which has averaged about 16 basis points above the ECB's benchmark rate since 1999.

(0904577628)

2006-11-18T03:59:00.000-08:00

phuong linh(0904577628)
Treasuries Rise the Most in Almost 3 Weeks as Housing Slumps

By Deborah Finestone and Elizabeth Stanton

Nov. 17 (Bloomberg) -- Treasuries rose the most in almost three weeks after a government report showed U.S. housing starts declined in October to the lowest in more than six years.

The decline suggests home construction will slow economic growth in the fourth quarter. The Federal Reserve has kept interest rates steady at its last three policy meetings, citing a weaker housing market.

``It supports the Fed's view that housing is closer to the trough than the top,'' said T.J. Marta, a fixed-income strategist at RBC Capital Markets in New York. ``It's moderately bullish.''

Yields on benchmark 10-year notes fell 7 basis points, or 0.07 percentage point, to 4.60 percent at 4:28 p.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of the 4 5/8 percent note due in November 2016 rose 17/32, or $5.31 per $1,000 face amount, to 100 5/32. For the week, the yield rose 1 basis point. Yields move inversely to prices.

Speculation that a hedge fund may have large losses bolstered the safe haven appeal of Treasuries, said traders and strategists including John Jansen, director of fixed-income sales at New York-based investment firm CastleOak Securities.

Builders broke ground on 1.486 million new homes at an annual rate, down 14.6 percent from September's 1.74 million pace, the Commerce Department said today. Building permits dropped to a 1.535 million pace, a record ninth straight decline and the lowest since December 1997.

Economists polled by Bloomberg News forecast starts would fall to a 1.68 million unit pace from an originally reported 1.772 million rate in September, according to the median of 68 estimates, which ranged from 1.58 million to 1.78 million.

Weak Housing

Traders who had bet bonds would fall, so-called short positions, had to reverse those bets after the yield fell below 4.63 percent, said Rick Klingman, a Treasury and interest-rate swaps trader at ABN Amro Inc. in New York.

``Once prices moved above where they broke down yesterday, we had some short covering come in,'' Klingman said.

Interest-rate futures suggest traders see a 34 percent chance policy makers will cut their target rate for overnight loans to 5 percent from 5.25 percent in March. The odds were 11 percent yesterday.

St. Louis Fed President William Poole this week said policy makers are paying ``special attention'' to housing, and that he is concerned about the number of would-be purchases being canceled.

Inflation Expectations

Gains may be limited without signs of further weakness in the economy and Fed officials focusing on keeping prices from accelerating, investors said.

``The bond market's already priced for a weak housing market, so there's a limit to how much you can rally on weak housing numbers,'' said Jay Mueller, who manages about $3 billion at Wells Capital Management in Milwaukee, Wisconsin.

Yields on 10-year notes touched 4.54 percent on Nov. 14. They fell to 4.53 percent on Sept. 25, a level not reached since February.

``We have no tolerance for continued inflation above 2 percent,'' Dallas Fed President Richard Fisher said at a conference in Frankfurt.

Minutes of the central banks policy meeting on Oct. 24-25, released Nov. 15, said ``all members agreed that the risks to achieving the anticipated reduction in inflation remained the greatest concern.''

The consumer price index declined 0.5 percent last month, matching September's drop, the Labor Department said yesterday. Economists expected the index to decrease 0.3 percent, according to the median forecast in a Bloomberg survey.

``The Fed will stay on hold for a while, another three to six months, because they're still worried about inflation,'' said Nasri Toutoungi, who oversees $23 billion of bonds at Hartford Investment Management Co. in Hartford, Connecticut. ``That's one reason we're not penetrating to lower yield levels.''

0915191169

2006-11-18T03:53:00.000-08:00

Nhi - 0915191169
Derivatives Trading Soars to $370 Trillion, BIS Says (Update5)

By Hamish Risk

Nov. 17 (Bloomberg) -- The use of derivatives grew at the fastest pace in eight years during the first half of 2006, boosting earnings at securities firms and reducing costs for investors.

The face value of derivatives based on corporate bonds, currencies, interest rates, commodities and stocks jumped 24 percent to $370 trillion, according to the Bank for International Settlements. It was the biggest percentage rise since the bank began keeping records in 1998.

Trading in credit-default swaps, the fastest-growing derivatives market, helped spur record earnings for banks including New York-based Morgan Stanley and Goldman Sachs Group Inc. At London-based Barclays Capital derivatives accounted for more than 60 percent of revenue and profit, Chief Executive Officer Bob Diamond said in May.

``The pace of growth is going to have continued unabated in the second half of the year,'' said Kit Juckes, head of fixed-income research in London at Royal Bank of Scotland Group Plc.

The amount of outstanding credit-default swap contracts jumped to $20.3 trillion from $13.9 trillion at the end of last year, the Basel, Switzerland-based bank said on its Web site today. The securities are financial instruments based on bonds and loans that are used to bet on an increase or decrease in indebtedness.

Investors who buy the contracts are paid the face value of the underlying debt in exchange for the defaulted notes should the company fail to adhere to debt agreements. A decline in the cost of the contracts indicates an improvement in the perception of credit quality; an increase signals deterioration.

Contracts Cheaper

Banks and hedge funds say it's cheaper and easier to use the contracts than buying or selling the underlying securities. Derivatives based on the debt of more than 3,000 companies are actively traded, according to Markit, a London-based provider of prices. Estimates on the size of the market are based on the assets underlying the contracts.

Within the credit derivatives market, trading on indexes based on groups of companies soared as much as 86 percent, the report said.

``Greater standardization, deeper liquidity and more efficient pricing'' is helping to boost trading, said Sunil Hirani, chief executive officer of New York-based Creditex Group Inc., one of the brokers that matches buyers and sellers in the market. ``The number of participants will continue to grow.''

Greenspan Comments

Alan Greenspan, the former chairman of the Federal Reserve, has been saying since 2002 that derivatives reduce risks by making financial markets resilient to shocks. In May he told a Bond Market Association gathering in New York that derivatives are the most significant change on Wall Street ``in decades.''

The rapid growth of derivatives is also raising concerns that their ease of use may lead to market abuse such as insider trading related to leveraged buyouts, after unusual price changes occurred prior to the announcement of takeovers in the U.S.

Derivatives are financial obligations derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates.

Trading in derivatives overall grew 24 percent in the first six months, compared with 5 percent in the second half of 2005, the BIS said.

Interest-rate swaps, which make up 70 percent of the derivatives market, rose the most in Europe, growing 27 percent in the first half compared with 18 percent in the U.S., the report said.

The BIS, formed in 1930, monitors financial markets and regulates banks. The bank polled 62 institutions for its semiannual report.

T*

The outstanding amounts of derivatives (All numbers in $trillion).

End-June 2005 End-Dec 2005 End-June 2006

Interest rates 204.7 211.97 262.3

Credit 10.2 13.9 20.3

Equity 4.5 5.7 6.7

Commodities 2.9 5.4 6.4

Foreign Exchange 31 31.3 38.1

Unallocated 27.9 29.1 36

0902232397

2006-11-18T03:52:00.000-08:00

0902232397 Quỳnh

NYSE Gains Approval to Trade Unlisted Corporate Bonds (Update3)

By Edgar Ortega

Nov. 17 (Bloomberg) -- NYSE Group Inc. gained regulatory approval to trade unlisted corporate bonds, paving the way for the operator of the world's biggest stock exchange to expand into the $5 trillion market.

The U.S. Securities and Exchange Commission's decision today broadens the number of fixed-income securities that can change hands on the NYSE Group's electronic market to more than 6,000 from about 1,000, the company said in a statement.

``This represents a major step in our goal of creating the world's leading multi-asset class marketplace offering the broadest array of products and services under one umbrella,'' NYSE Group Chief Executive Officer John Thain said in the statement.

NYSE Group is awaiting regulatory approval to start a new fixed-income trading system that will initially target individual investors. The company expanded beyond equities into trading options after it was formed with the New York Stock Exchange's purchase of Archipelago Holdings Inc. in March. NYSE Group now wants to expand into futures and European stocks with its planned purchase of Paris-based Euronext NV.

Bond trading at the NYSE has slowed to fewer than 50 transactions a day as companies avoid the expense of listing their securities with the exchange. Unlike stocks, corporate debt is predominantly traded privately among brokerages, which don't require companies to list their bonds with an exchange.

Turned to Technology

NYSE asked the SEC in May 2005 to scrap the listing requirement and has added bond information to its Web site. The Big Board has also turned to technology developed by Archipelago to replace the Automated Bond System, which was developed in 1977. NYSE Group, home to shares of Ford Motor Co. and International Business Machines Corp., will now be able to trade any bond from its almost 2,700 listed companies.

``Our goal is to make the fixed-income market more efficient and more transparent, which will increase trading,'' John Holman, a NYSE Group vice president and former managing director of fixed income at Piper Jaffray Cos., said in an interview today. The NYSE Bonds system will focus on retail investors at first and seek to draw brokerages as trading grows, Holman said.

NYSE Group is expanding into the corporate bond market as trading commissions at brokerages shrink. The introduction by the NASD in 2002 of a price reporting system called Trace has narrowed by half the difference between bids to buy and offers to sell bonds, according to a study commissioned by NASD this year. The NASD is the largest private regulator of brokerages.

NYSE Bonds may allow brokerages to reach a broader base of investors and compete for more trades, Holman said.

``We think the market is clamoring for something like this,'' said Holman. ``They have never had someone who is as neutral as the NYSE, with the brand or the size of the NYSE do this.''

Shares of NYSE Group fell 6 cents to $93.72 at 4:24 p.m. in composite trading in New York. The stock has gained 46 percent since its debut March 8.

0913944628

2006-11-18T03:50:00.000-08:00

Binh 0913944628

Conor, Ditech, Force, PPG, U.S. Steel: U.S. Equity Movers Final

By Eric Martin

Nov. 17 (Bloomberg) -- The following is a list of companies whose shares are having unusual price changes in U.S. exchanges. Stock symbols are in parentheses after company names. Share prices are as of 2:50 p.m. New York time.

Shares of some U.S. steelmakers rose on speculation U.S. Steel Corp. (X US) is a takeover target, after a Russian newspaper said OAO Severstal may make a bid and Brazil's Cia. Siderurgica Nacional SA made a rival offer for Corus Group Plc. A spokesman for U.S. Steel declined to comment on the report.

U.S. Steel, the biggest U.S. steelmaker, rose $6.02, or 9.3 percent, to $69.95 and traded as high as $71.94. Nucor Corp. (NUE US), the second largest, increased $1.92, or 3.5 percent, to $57.11. AK Steel Holding Corp. (AKS US) rose 66 cents, or 4.7 percent, to $14.64. Steel Dynamics Inc. (STLD US) added $2.79, or 4.9 percent, to $60.09. Chaparral Steel Co. (CHAP US) jumped $2.98, or 7.2 percent, to $44.45.

Corus Group Plc. American depositary receipts (CGA US), each representing two shares, rose $1.23, or 7 percent, to $18.91. CSN ADRs (SID US), each representing one share, fell $1.40, or 4.5 percent, to $29.90.

Advanced Magnetics Inc. (AMAG US) jumped $13.10, or 30 percent, to $57. The maker of contrast solutions for diagnostic medical scans said its iron replacement therapy for kidney disease patients was safe and effective in a study.

AnnTaylor Stores Corp. (ANN US) fell $3.11, or 7.8 percent, to $36.57. The clothing retailer for women ages 25 to 55 said in a statement per-share profit for the year ending in January will be about $2.07 to $2.12. The average estimate of 18 analysts surveyed by Thomson Financial is $2.16.

Autodesk Inc. (ADSK US) rose $3.55, or 9.6 percent, to $40.55. The maker of design software used in architecture, engineering and movie-making said it expects revenue of as much as $500 million in the fourth quarter. Analysts surveyed by Thomson had estimated $496 million, on average. Thomson declined to disclose the parameters for the estimates in its survey.

Avanir Pharmaceuticals (AVNR US) rose 23 cents, or 8.1 percent, to $3.08. The drug developer will be added to the Nasdaq Biotechnology Index at the market's open on Nov. 20, the company said in a statement. The index is the basis for an exchange-traded fund, iShares Nasdaq Biotechnology Index Fund, which will need to buy shares.

Citi Trends Inc. (CTRN US) gained $1.98, or 4.6 percent, to $44.70. The retailer of urban fashion apparel said in a statement that it expects profit for the year of as much as $1.47 a share. That's more than the average estimate of $1.41 from six analysts surveyed by Thomson. The company also said it expects 2007 profit of $1.73 to $1.77. The average Thomson estimate is $1.72.

Conor Medsystems Inc. (CONR US) rose $5.16, or 19 percent, to $32.68. Johnson & Johnson (JNJ US) agreed to buy the cardiac- device maker for about $1.4 billion in cash to gain a type of drug-coated heart stent that may reduce the risk of blood clots. Conor's shareholders will get $33.50 for each of its 42.7 million shares outstanding, J&J said. That's 22 percent more than Conor's closing price yesterday.

SurModics Inc. (SRDX US), which makes the technology used in coating the stents, rose $2.49, or 7.8 percent, to $34.49.

Cost Plus Inc. (CPWM US) fell $1.37, or 10 percent, to $12.03. The seller of international-themed food and casual furnishings said fourth-quarter profit will be as much as $1.03 a share. Analysts surveyed by Thomson had estimated $1.09, on average. The shares were cut to ``underperform'' from ``market perform'' at Raymond James.

Ditech Communications Corp. (DITC US) fell $1.41, or 16 percent, to $7.38. The designer of fiber-optic network gear said that, excluding some items, it earned 7 cents a share in the fiscal second quarter. A Thomson survey of five analysts had an average estimate of 9 cents.

Dynavax Technologies Corp. (DVAX US) rose $1.10, or 17 percent, to $7.68. Shares of the drugmaker were raised to ``outperform'' from ``peerperform'' by analyst Akhtar Samad at Bear Stearns & Co., who said that Dynavax will deliver positive results from trials on its drug candidates including Tolamba.

Eagle Test Systems Inc. (EGLT US) fell $1.29, or 7.9 percent, to $14.66. The maker of testing equipment for the semiconductor industry forecast revenue of as much as $25 million in the fiscal first quarter. Four analysts expected $34.5 million, the average estimate in a survey by Thomson.

First Solar Inc. (FSLR US) climbed $4.74, or 24 percent, to $24.74 on the first day of trading. The maker of thin-film solar-power modules raised $400 million in an initial public offering by selling 20 million shares at $20 each.

Force Protection Inc. (FRPT US) rose for a second day, adding $1.57, or 15 percent, to $11.83. The maker of mine- protected vehicles said in a Business Wire statement that General Dynamics Inc., the largest maker of armored vehicles for the U.S. military, agreed to assist it in making Cougar transports used in Iraq and Afghanistan. The company won a $214 million contract this month from the Marine Corps for more vehicles, including 200 Cougars.

H.B. Fuller Co. (FUL US) gained $1.78, or 7 percent, to $27.06. The maker of adhesives and paints was boosted to ``overweight'' from ``neutral'' by J.P. Morgan Securities Inc. analyst Jeffrey J. Zekauskas, who said its free cash flow is ``high'' and falling raw materials costs will help earnings.

Hibbett Sporting Goods, Inc. (HIBB US) rose $3.19, or 11 percent, to $32.81. The sporting-goods chain said in a statement that net income in the quarter ended Oct. 28 rose 22 percent from a year earlier to $9.9 million as sales rose 17 percent to $129.7 million. It said it would earn 34 to 38 cents a share in the quarter ending Feb. 3, meeting or exceeding the 34 cent-a- share average estimate of analysts surveyed by Thomson.

Intuit Inc. (INTU US) fell $2.35, or 6.8 percent, to $32.46. The maker of TurboTax software programs said its net loss expanded to $58.9 million, or 17 cents a share, from $45.8 million, or 13 cents, a year earlier, when the company had a one-time gain from discontinued operations. Sales rose to $362.1 million from $304.1 million.

Medco Health Solutions Inc. (MHS US) fell $3.21, or 6.2 percent, to $48.45. Shares of biggest U.S. drug-benefits manager dropped after Wal-Mart Stores Inc. (WMT US) added to the list of discounted generic drugs.

Express Scripts Inc. (ESRX US), the third-biggest U.S. manager of drug benefits, lost $2.38, or 3.4 percent, to $67.66.

Newfield Exploration Co. (NFX US) rose $2.77, or 6.4 percent, to $46.41. Shares of the U.S. oil and natural-gas producer were raised to ``strong buy'' from ``outperform'' by analyst John Freeman at Raymond James.

Nymex Holdings Inc. (NMX US) surged $73.99, or more than doubled, to $132.99 on its first day of trading. The owner of the world's largest energy exchange and its shareholders sold 6.5 million shares for $59 each, raising $384 million after investor demand prompted the company to increase the price range by more than 10 percent this week.

Intercontinental Exchange Inc. (ICE US), owner of Europe's largest energy market, jumped $6.60, or 7 percent, to $101.20.

Omniture Inc. (OMTR US) rose 93 cents, or 8.6 percent, to $11.80. The software provider was rated ``buy'' in new coverage by analyst John Mark Duncan at Pacific Growth Equities.

PPG Industries Inc. (PPG US) dropped $3.52, or 5.1 percent, to $65.63. North America's third-largest maker of chlorine and caustic soda said fourth-quarter profit from the chemicals will drop as much as $40 million from the third quarter because of falling sales and prices.

Olin Corp. (OLN US), a chlor-alkali producer, fell 76 cents, or 4.3 percent, to $16.81. Westlake Chemical Corp. (WLK US), which uses chlorine fell $2.06, or 5.8 percent to $33.20.

Sanmina-SCI Corp. (SANM US) fell 41 cents, or 9.7 percent, to $3.80. The world's second-largest maker of electronics for other companies said it expects to earn as much as 20 cents a share this year. Analysts anticipated 28 cents, on average, according to Thomson. The shares were cut to ``underperform'' from ``neutral'' by analyst Michael R. Walker at Credit Suisse, who expects the shares to reach $3 within 12 months.

Smart Modular Technologies Inc. (SMOD US) rose 81 cents, or 7.7 percent, to $11.35. The maker of computer memory cards and monitor control boards boosted its forecast, saying it expects fiscal first-quarter profit of between 21 to 22 cents a share. That's more than the average estimate of 20 cents from five analysts surveyed by Thomson.

Starbucks Corp. (SBUX US) fell $2.01, or 5.1 percent, to $37.42. The world's biggest coffee-shop chain said fourth- quarter profit dropped to 15 cents a share on costs to open new stores and lower sales at existing stores. The average estimate from analysts in a Thomson survey was 17 cents.

United Retail Group Inc. (URGI US) fell $3.53, or 18 percent, to $16.23. The retailer of large-size women's apparel and accessories said third-quarter profit declined to 8 cents a share. Analyst Paula Kalandiak at First Albany Corp. had expected the company to earn 11 cents.

White Mountains Insurance Group Ltd. (WTM) rose $30.44, or 5.3 percent, to $601.98. The insurer and reinsurer said it plans to repurchase 1 million shares.

0914609597

2006-11-18T03:46:00.000-08:00

Van 0914609597
New Zealand Dollar Rises to Seven-Month High on Rates Outlook

Nov. 2 (Bloomberg) -- New Zealand's dollar rose to the highest in more than seven months as investors were attracted to the nation's high bond yields amid signs that the Federal Reserve may start to cut interest rates next year.
New Zealand's three-year government bonds yield 1.98 percentage points more than the equivalent U.S. maturity, the widest spread in a month. The local dollar has gained 8.6 percent the past three months, making it the world's best-performing major currency tracked by Bloomberg.
``Yield is still a key driver of currency markets,'' said Sean Comber, markets economist at ANZ National Bank Ltd. in Wellington. ``U.S. markets have shifted to price in a chance of a rate cut, while the rest of the world is still on the tightening bandwagon.''
The New Zealand dollar bought 67.39 U.S. cents at 9:05 a.m. in Wellington from 67.23 cents in late Asian trading yesterday. Earlier, the currency rose to 67.52 cents, the highest since Feb. 16.
Reserve Bank Governor Alan Bollard on Oct. 26 kept the nation's benchmark interest rate unchanged at a record 7.25 percent and said he couldn't rule out a rate rise because inflation is faster than the 1 percent-to-3 percent range he targets.
Another rate increase in new Zealand ``is a 50:50 bet but still with an upwards bias to rates,'' said Comber, who expects the currency could reach 67.70 cents this week.
There is a 44 percent likelihood of a quarter-point rise in New Zealand's official cash rate on Dec. 7, when the central bank next reviews borrowing costs, according to an indicator calculated by Credit Suisse, based on trading in overnight interest-rate swaps.
Still, just one of 12 economists surveyed by Bloomberg News expected a rate rise at the next review. Eleven expect no change in rates until Bollard begins lowering borrowing costs next year.
New Zealand's benchmark is 2 percentage points more than the Federal Reserve's target.
Interest-rate futures contracts show traders see a 20 percent chance the Fed will cut the rate a quarter-percentage point to 5 percent in January. At the start of last week, futures showed traders saw a 10 percent chance the Fed would lift rates in January. Traders now see a 100 percent chance of a cut by March.

0902023031

2006-11-18T03:41:00.000-08:00

Derivatives market hits $370,000bn

The global derivatives market surged by almost a quarter to $370,000bn in the first half of this year as bankers, investors and companies turned to these complex instruments to manage their risks or place speculative bets on markets.

0902023031 Ly

090614936

2006-11-18T03:37:00.000-08:00

090614936 Nhi

ECB statement boosts the euro
By Peter Garnham

Published: November 2 2006 11:59 Last updated: November 2 2006 17:38

The euro advanced on Thursday after the European Central Bank all but confirmed a further rise in eurozone interest rates next month.

The ECB, as expected, left rates on hold at 3.25 per cent after its policy-setting meeting. However, But Jean-Claude Trichet, ECB president, used the magic words “strong vigilance” right at the start of his post-decision press conference – a phrase that has prefaced all five of the interest rates rises in the current ECB tightening cycle.

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If any further proof were needed, as to the ECB’s intentions, Mr Trichet rammed the point home by stating that saying he would do nothing to alter current market expectations towards the path of interest rates this year. Markets were fully pricing in a December move.

Howard Archer, economist at Global Insight, said that while Mr Trichet could not have made it more obvious that interest rates will rise by a further 25 basis points to 3.5 per cent in December, he remained careful only to give the market guidance on the path of interest rates through to the end of 2006. For 2007, he limited himself to saying that the ECB would do what was necessary to deliver price stability.

“We have a sneaking suspicion from the tone of the minutes that the ECB feels that it may well have at least a little more work to do in 2007 after December’s interest rate hike,” said Mr Archer.

Madeleine de Villiers, European economist at Capital Economics, concurred, saying that robust eurozone manufacturing data released earlier in yesterday’s session suggested that the region’s industrial sector was still expanding strongly.

“The continued buoyancy of industrial surveys and the improvement in labour market conditions support our view that a December rise in eurozone interest rates will be followed by another early next year,” she said.

By mid-afternoon in New York, the euro was up 0.2 per cent against the dollar, sterling and the yen at $1.2770, £0.6695 and Y149.50 respectively. It was a different story earlier on,in the session when the euro lost ground against the yen, dropping as low as Y148.86, while the dollar eased 0.1 per cent to Y116.90 following after bullish remarks from both Japan’s central bank and Ministry of Finance.

Toshihiko Fukui, Bank of Japan governor, told the Japan’s parliament that the central bank planned to raise interest rates if the economy moved as expected. Analysts said that these remarks suggested that Japanese rate rises would take place happen , even though recent gains in Japanese inflation had been modest.

Meanwhile,Hiroshi Watanabe, Japan’s vice minister for international affairs, said economic fundamentals provided no reason for the yen to weaken, given that the Japan’s economy was recovering.

Ashraf Laidi, chief foreign exchange analysts at CMC markets, said the comments were especially positive for the yen, given recent speculation that Japanese officials had become preoccupied with a rapid appreciation of the currency if the large levels of short yen positions that currently exist in the market were unwound.

Figures last week revealed that short yen positions on the Chicago Mercantile Exchange had hit all-time highs. But However,Mr Laidi said he expected those positions to have been trimmed this week as investors continued to see signs of an increasingly dovish Fed eral Reserve and an increasingly hawkish BoJ.

“I see further unwinding of these positions especially as the major central banks ready for transitions in their monetary policies,” he said.

Elsewhere, the Australian dollar fell lost ground, dropping 0.2 per cent to $0.7735 against its US counterpart, following after the release of a weaker-than-expected retail sales report for September.

Neil Mellor, strategist at Bank of New York, said while expectations that the Reserve Bank of Australia would deliver a 25 basis point rate rise to 6.25 per cent on November 7 were unlikely to change, the report would inevitably stoke speculation that this move might be the last for some time.

0904256831

2006-11-18T03:34:00.000-08:00

BPU and Lombarda defend decision to become a mutual
By Adrian Michaels in Milan

Published: November 15 2006 09:50 Last updated: November 15 2006 09:50

The two latest Italian banks to announce a merger on Tuesday defended their decision to become a mutual bank with restricted shareholder voting rights in spite of one of the banks being an ordinary public company.

Banche Popolari Unite and Banca Lombarda e Piemontese plan to create what will be one of Italy’s largest banks with a market capitalisation of €13.5bn ($17.2bn).

0904256831 Quynh

0902480886

2006-11-18T03:32:00.000-08:00

0902480886
LINH

UAE's forex reserves to reach $29b
BY ISAAC JOHN (Chief Business Reporter)

29 October 2006

DUBAI — The UAE Central Bank's foreign exchange reserves are poised to record the steepest increase in the GCC at 17.5 per cent this year to $24.8 billion from $21.1 billion in 2005, according to the International Monetary Fund.

The gross official reserves of the UAE, the second largest in the GCC after Saudi Arabia, are projected to surge further in 2007 by 16.9 per cent to $29 billion, underscoring the country's sustained economic buoyancy and growing current account surplus fuelled by the oil revenue.

With the dirham pegged to the dollar, UAE Central Bank's foreign exchange reserves are held entirely in dollars. Recently, the Central Bank Governor Sultan Nasser Al Suweidi said reserve diversification was still on the agenda of the bank, which is looking to convert five per cent of its holdings into euros.

According to IMF's Regional Economic Outlook for the Middle East and Central Asia, while foreign reserves of Saudi Arabia will grow eight per cent to $165.5 billion this year from $153.2 billion, Kuwait's reserves will increase to $11.8 billion from $9.5 billion a year ago. Qatar Central bank reserves will grow to $5.5 billion from $4.6 billion, Oman's from $4.4 billion to $7.1 billion while Bahrain's reserves will remain unchanged at $1.9 billion. IMF report said while Saudi reserves are projected to swell to $224.8 billion next year, other Gulf countries are expected to record modest increases in their reserves.

It said Middle East and Central Asia region's gross official reserves — which include only the amounts held by central banks and do not include foreign assets of governments held in special funds — will rise 20 per cent, from $453 billion in 2005 to $566 billion this year.

"These increases reflect a sharp improvement in current account positions in some countries, and higher foreign investments and other capital inflows in other countries," IMF said. The report noted that the combined gross official reserves of the region's countries have more than doubled since 2002. "All country groupings registered increases in reserves, with those of oil exporters up by about $300 billion since end-2002.

The report said the combined reserves of the 15 oil exporting countries in the region will rise to $476.9 billion this year from $375.4 billion in 2005. In 2007, these reserves are poised to surge to $629 billion, it added.

The report said with oil prices soaring over the past three years, oil exporters' fiscal position moved to a surplus of about 12.5 per cent of the GDP

0915802862

2006-11-18T03:28:00.000-08:00

Nhi 0915802862

China's reserve plans keep forex market on edge
By Steven C. Johnson
NEW YORK (Reuters) - China may or may not be speeding up plans to shift its $1 trillion in foreign exchange reserves away from dollars, but investors aren't taking any chances.
Traders unloaded the greenback as soon as People's Bank of China Governor Zhou Xiaochuan said Thursday the bank will keep diversifying its dollar-heavy portfolio, a catalyst that may spark a sustained dollar decline.
Though Zhou said this was consistent with long-standing Chinese policy, his comments came shortly after central banks in Russia and Switzerland announced similar reserve shifts, bringing diversification away from dollars into sharper focus.

"Plainly, there's a lot of sensitivity on this issue, and as an investor, one has to respect the market's reaction," said Alan Ruskin, chief global strategist at RBS Greenwich Capital in Greenwich, Connecticut.
With U.S. growth cooling, overseas interest rates rising and chances that the Federal Reserve's next move may be a rate cut already weighing on the dollar, Bank of New York strategist Michael Woolfolk said the China news could push the euro above $1.30 by year end, a level it hasn't breached since mid-2005.
The euro was last changing hands at $1.2860, near the upper end of a broad $1.2450-$1.2970 range that's held since May.
"The thought that China may be shifting out of the dollar and redistributing its $1 trillion in reserves, well, there's a lot of potential for dollar selling there," he said.

0909470071

2006-11-18T03:26:00.000-08:00

S Korea pursues Lone Star chiefs
By Song Jung-a and Anna Fifield in Seoul

Published: November 16 2006 13:20 Last updated: November 16 2006 13:20

South Korean prosecutors finally succeeded on Thursday in winning warrants to arrest two American executives at Lone Star, the US private equity fund, bowing to increasing pressure to allow them to begin extradition proceedings against the men.

In a move that will further alarm current and potential foreign investors in South Korea, the Seoul Central District Court approved prosecutors’ third request to issue warrants to arrest Ellis Short, Lone Star’s global vice-chairman, and Mike Thomson, its legal adviser.

0909470071 Trang

0903946431

2006-11-18T03:24:00.000-08:00

Nationwide predicts end of free banking
By Jane Croft, Retail Banking Correspondent

Published: November 16 2006 19:31 Last updated: November 16 2006 19:31

Nationwide, the country’s biggest building society, said the UK was “moving towards the end of free banking”, although it had no current plans to start charging customers.

Philip Williamson, chief executive, said moves by regulators such as the Office of Fair Trading to “fiddle around” with pricing mechanisms in areas such as current accounts represented a fundamental market shift.
0903946431 Hang

0983985653

2006-11-18T03:23:00.000-08:00

Oanh 0983985653

Banks aid buy-out of Clear Channel
By James Politi in New York

Published: November 16 2006 14:23 Last updated: November 16 2006 20:25

Two buy-out groups and five Wall Street banks on Thursday combined to buy Clear Channel Communications for $18.7bn, taking the largest US radio station chain private after a short but dramatic auction.

The deal, led by Bain Capital and Thomas H. Lee Partners, marks the latest and biggest effort by cash-rich private equity firms to refashion chunks of the traditional media industry challenged by the digital age.

The two firms will control a large outdoor advertising business and 1,200 radio stations accumulated in 30 years of deals by members of the Mays family, who founded Clear Channel in 1972 and will continue to run the company under its new owners.

JCDecaux, the French outdoor advertising company, said it was interested in buying Clear Channel Outdoor and the buyers “are aware of our interest”. Analysts have speculated that any buyer of the radio group would sell the outdoor advertising business to help finance the transaction.

The offer by T.H. Lee and Bain, already joint owners of Warner Music, surprisingly edged out a competing bid by Providence Equity Partners, Blackstone and Kohlberg Kravis Roberts, which had been discussing a deal for months before the company was put up for sale in October.

The chances of Bain and T.H. Lee emerging with the winning bid appeared to be further reduced this week when Texas Pacific Group, a third member of their consortium, pulled out.

But in a sign of how some of the largest banks are aching to participate in the private equity boom, Morgan Stanley, Citigroup, Credit Suisse, Deutsche Bank and Royal Bank of Scotland agreed to contribute about a third of the equity cheque, estimated at more than $5bn, as well as to finance the debt package of more than $21bn.

The deal could attract regulatory scrutiny, given the rising presence of private equity groups in the media industry. The Federal Communications Commission is reviewing whether to loosen media ownership limits.

The Clear Channel auction was controversial because of its short time-frame, which critics saw as preventing the board from attracting the highest offer, and the large pay-out that the Mays family will receive in the deal.

The Texas-based company responded by allowing the board to solicit higher offers until December 7. In addition, the Mays family agreed to reduce the incentives it was entitled to in a “change of control”.

Clear Channel shareholders will receive $37.60 per share, or $18.7bn, in the buy-out. This values the company at about 12 times next year’s estimated ebitda. The buyers will be taking on about $8bn of its debt.

0903787781

2006-11-18T03:20:00.000-08:00

Citigroup wins $3.1bn deal for China’s GDB By Sundeep Tucker in Hong Kong and Mure Dickie in Beijing
Published: November 16 2006 13:28 Last updated: November 17 2006 04:43
A Citigroup-led consortium was on Thursday confirmed as the preferred bidder for Guangdong Development Bank, a struggling lender in southern China which has been subject to a prolonged bidding war.
Citigroup and its partners will pay Rmb24.2bn ($3.1bn) for an 85.6 per cent stake in GDB, which operates 500 branches across China.
Trinh 0903787781

0912.073.683

2006-11-18T03:17:00.000-08:00

Bank of China’s Hong Kong IPO set for delay
By Francesco Guerrera in Hong Kong
Published: May 11 2005 22:19 Last updated: May 11 2005 22:19
The $3bn-$4bn overseas listing of Bank of China is set to slip into next year - the latest delay in the landmark offering and one that will deepen investment banks' fears of a sharp fall in equity deals and commission fees in Asia this year.
The restructuring of BoC, one of the country's troubled Big Four lenders, and its search for a foreign partner has yet to be completed, making an initial public offering in 2005 extremely unlikely, according to people close to the situation.
Loan 0912.073.683

0913.300.646

2006-11-18T03:12:00.000-08:00

Vân 0913.300.646
French PM sparks fall in euro
By Neil Dennis and Peter Garnham

The threat of political interference in eurozone exchange rate policy spooked the currency markets on Tuesday, sending the euro tumbling against the dollar.
Dominique de Villepin, the French prime minister, called for greater collaboration among eurozone monetary authorities on managing the euro’s exchange rate – comments which were interpreted as a call for a weaker euro.
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“We cannot allow the European Central Bank to act alone on rates,” Mr de Villepin said at a meeting with subcontractors for Airbus, the troubled French aircraft maker, which has this year reported that the strong euro has put it at a competitive disadvantage over Boeing of the US.
Gavin Friend, strategist at Commerzbank, said he was surprised at the size of the currency market’s reaction, given that there was little Mr Villepin could do about the strength of the euro other than lobby the ECB. “This is a matter for the ECB and it won’t see the current level of the euro as a problem,” he said. “I expect this move to unwind quickly.”
In a volatile session, the euro fell over half a cent against the dollar after Mr Villepin’s comments, having only just struck its session high of $1.2871 following data that showed US producer prices falling more sharply than expected.
Core producer prices, which exclude food and energy, fell 0.9 per cent month-on-month in October, the biggest monthly drop since August 1993. This took the core annual rate to 0.6 per cent.
Retail sales numbers, meanwhile, showed a headline fall of 0.4 per cent in October, and a sharp downward revision to the September number also initially weighed.
But on examination of the detail, the falls strongly reflected falling sales of building and garden equipment and petrol. “Overall the impact of the US housing slowdown is very visible in these data,” a trader said.
The euro gained some additional support from the release of Germany’s ZEW index of investor sentiment for November. The current conditions component reached a new high of 53.0 after October’s reading of 42.9.
The euro gave back its early gains to finish the session little changed against the dollar at $1.2809.
The euro climbed 0.4 per cent against sterling to £0.6760 as the pound came under pressure after the UK consumer price index unexpectedly stabilised at 2.4 per cent in October, against consensus forecasts for a rise to 2.6 per cent.
Howard Archer, economist at Global Insight, said the figures were very good news for the Bank of England and obviously reduced the likelihood of another UK interest rate rise early in 2007. “On balance, the data reinforce our belief that interest rates are set to stay at 5 per cent for some considerable time,” he said. The pound eased 0.2 per cent against the dollar to $1.8970.
The yen gained after data showed Japan’s economy expanded at a faster rate than forecast in the third quarter, raising expectations that the Bank of Japan may lift interest rates before the end of this financial year.
Japanese real gross domestic product GDP grew at an annualised 2 per cent in the third quarter after an upwardly revised increase of 1.5 per cent in the second quarter, beating expectations.
Investors were waiting to see if Toshihiko Fukui, BoJ governor, would signal his intentions for future policy decisions at a two-day Bank meeting. While no interest rate move is expected this week, speculation is rising that it could be December.
“Although we still expect that the first quarter of 2007 is the more likely timing for the next rate move, the risk for a December move has clearly increased,” said Robert Lynch at HSBC.
By midday in New York, the yen was 0.4 per cent stronger versus the dollar at Y117.70. Against the euro, the Japanese currency rose 0.3 per cent to Y150.68.
Copyright The Financial Times Limited 2006

Learn Forex Trading

2006-09-01T07:40:00.000-07:00

Forex Trading
Forex trading online, the process of trading foreign currencies via the internet, though a relatively new form of investing, has quickly become one of today's largest growing investment markets. Due to its high level of liquidity, simple execution, low transaction fees, and the fact that it is open year-round, 24 hours a day, the foreign currency trading market, otherwise known as forex trading, is extremely attractive to investors. Free of barriers to trade, forex trading offers the most equitable trading arena for all levels of customer. As you begin forex trading it is important to understand that, like all other forms of trading, there is risk involved with investments.
Forex Trading Basics.
Foreign Exchange trading, better known as Forex trading, is the concurrent buying of one currency while selling another. Forex trading is based on the movements of a set of currencies that are sold in currency pairs, where one currency is the base and one is the counter or quote currency. It also puts the currencies in terms of one currency's supply compared to the other currency’s demand. The gains or loss on a trade are based on the relative movements of the currencies within each currency pair. Pips or points are the numerical way in which the movements of currencies are quoted, positive movements being gains, negative movements reflecting losses. There are countless tools, and strategies associated with currency trading, and when first beginning, it is important to understand these tools before implementing any of them in trading strategies. Here is a list of the more popularly usedForex Trading Tools.
Technical and Fundamental Analysis.
In basic terms, there are two ways to analyze a currency trade. Reading and being well acquainted with political and financial news in terms of interest rate adjustments, international trade, and the general economic welfare of countries (GDP), are associated with what is called fundamental analysis, and are something for all traders to consider. The second type of trading is the technical analysis approach, which incorporates mathematical time charts and graphs that utilize historical currency movements to make predictions in the future. After determining whether fundamental trading, technical trading, or a combination of the two is appropriate, novice traders should test them on a forex demo account. This allow you to see the results of your strategies without risking your investments. From there it is easier to determine how risk-adverse a trader you are, and where you should place your stop/limit orders. Stops and limit orders are prearranged prices indicating positions, maximums and minimums, when traders would want to exit the markets, to hedge against massive losses. But above all, traders must realize that what they are willing to risk should also be what they are willing to lose.
The Establishment of Exchange Rates
Developing global currency values and the rates that they are traded are a result of many events, both concrete and psychological. Speculative foreign exchange in the 1970’s made up only 20% of total global foreign exchange transactions. Today it represents over 95% of current transactions. Currency trading has lead to huge amounts of money being changing hands on a daily basis as investors buy and sell currencies against each other. Many factors affect the value of a country’s currency including business cycles, political events, governmental and central bank monetary policies, stock market fluctuations, and international investment patterns.
Online Currency Trading
Since Forex trading is easily done through several means of communication, on-line trading being the most popular to date, it makes for lower transaction costs compared to other forms of trading such as equities or futures. Forex prices are also extremely transparent, due largely to the creation of the online trading platform. Both the transparency and low transaction fees make for even greater profit opportunities in currency trading. Traders have the ability to jump in and out of the forex market with great ease and large amounts of capital are not required to start forex trading. Currency prices are also not as volatile and usually move in strong trends thus reducing the risk that investors bear. Its size, liquidity, reliability, and tendency to move in strong trends make risk management easy for forex traders, enticing more and more people to trade currency. To trade forex you need an FX Trading Platform. Use an established and regulated company to make your trades with

Make money online with Forex trading

2006-09-01T07:39:00.000-07:00

Now, you can make money online with Forex trading in the global Forex trading market which is the world's largest, most profitable, most powerful and most persistent trading market.For those who do not know it yet, FOREX an abbreviation for "FOReign EXchange" or "foreign currency exchange". Foreign exchange is the purchase or sale of a currency against sale or purchase of another. The FOREX market is the global interbank market where all currencies are traded.This blog will help you to become one of the top "Forex Traders" with our basic information on forex trading, in addition to other forex articles, forex tools, best forex books in the market, latest up-to-date forex trading news. Also, we will provide you with the best forex trading systems and forex brokers who are responsive to your individual needs as a forex trader.

Forex Fundamental Analysis

One of the two major strategies when trading foreign currency is through the use of what is known as fundamental analysis. Loosely defined, it is the approach based on studying current events, political and financial policy trends, and overall economic movement. In general traders using this technique are usually interested in long-term trades when trying to create returns. Economic conditions and environments are the major factor in determining the potential movements or upcoming trends that fundamental traders will use to not only predict future valuations of currencies, but also correct present values as well. Unfortunately one of the downfalls of fundamental trading is that during periods of little activity, and quite markets it is hard to find any useful data. Fundamental analysis itself is broken down into two broad subcategories, capital flows, and trade flows.
Tracking Balance of Payments
These study the demand of a currency over a given period of time, which is also known as the balance of payments. Capital flows are the net amount of currency being bought or sold through capital investments, which can include anything from foreign direct investments, joint ventures, third party licensing agreements, equity market investments, and fixed income market investments. The first three types of investments mentioned are physical flows of capital that can reflect the financial stability and economic growth of a country and its currency. The latter two are the flow of more common portfolio investments and international government bonds.
Trade Flows
The second type of fundamental analysis is trade flows, measuring imports and exports of a nation and its impact on the valuation of its currency. International trade plays a large role in the forex market, since importers must sell currency in order to purchase foreign goods or services. It is a one of the first ways used to understand the changes in exchange rates, and still among the most predictable ways to study the value of currencies. Net importers, or countries that run trade deficits traditionally experience devaluation of their currency, while those that run trade surpluses increase the value of theirs. The balance between trading partner and their affect on international trade transfer to the balance of payments and capital flows.
Monitoring Global Events
Fundamental traders follow global events, and their impacts on international investments. This makes both political relations, as well as financial status important to the trade process. Any changes in the relationship of one country’s government with another’s can effect the pricing of any currency pair in the forex market. Thus when using fundamental analysis it is important to stay abreast of current breaking news in order to produce profits.

What is FOREX?

2006-09-01T07:36:00.000-07:00

Foreign Exchange (ForEex) trading is simply the exchanging of one currency for another - Each Forex trade can theoretically be viewed as a 'spread ' trade where to buy one currency you must sell another. Convention dictates that currencies are measured in units per 1 USD. For example, 1 USD is worth approximately 125 JPY (Japanese Yen) or 1 USD is worth approximately 1.5000 CHF (Swiss Francs). As a result, when USD/JPY appreciates in value, it is the USD that has appreciated in value relative to the JPY and not vice-versa. Position-wise, to own or be 'Long' USDJPY means that you are long the USD and concurrently short the JPY. USD, therefore, is the default 'lead' currencyAbout Foreign Exchange Market
The Foreign Exchange market, also referred to as the "Forex" or "FX" market, is the largest financial market in the world, with a daily average turnover of well over US$1 trillion -- 30 times larger than the combined volume of all U.S. equity markets. "Foreign Exchange" is the simultaneous buying of one currency and selling of another. There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is trading for profit, or speculation. For speculators, the best trading opportunities are with the most commonly traded (and therefore most liquid) currencies, called "the Majors." Today, more than 85% of all daily transactions involve trading of the Majors, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night. The FX market is considered an Over The Counter (OTC) or 'interbank' market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network. Forex Trading is not centralized on an exchange, as with the stock and futures markets.The foreign exchange market is not a "market" in the traditional sense. There is no centralized location for trading as there is in futures or stocks. Trading occurs over the telephone and on computer terminals at thousands of locations worldwide. Foreign Exchange is also the world's largest and deepest market. Daily market turnover has skyrocketed from approximately 5 billion USD in 1977 to a staggering 1.5 trillion US dollars today; even more on an active day. Most foreign exchange activity consists of the spot business between the US dollar and the six major currencies (Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar) The FOREX market is so large and is controlled by so many participants that no one player, governments included, can directly control the direction of the market, which is why the FOREX market is the most exciting market in the world. Central banks, private banks, international corporations, money managers and speculators all deal in FOREX trading.