NFP +103K
Friday, 7 October 2011
5 MIN LEFT THE HUGE SEP JOB REPORT
SEP JOB REPORT
key numbers to watch for
Total new non-farm payrolls +55K (prior: 0)
New private payrolls +90K (prior: 17K)
Unemployment rate 9.1% (prior: 9.1%)
New manufacturing jobs 0 (prior: -3K)
Average hourly earnings growth +0.2% (prior: -0.1%)
10 year note is down -.11%. may be good?
Euro Rumormill Disintegration Begins As Reality Returns: France, Germany Fail To Reach Agreement On EFSF | ZeroHedge
Euro Rumormill Disintegration Begins As Reality Returns: France, Germany Fail To Reach Agreement On EFSF | ZeroHedge:
In our previous post we warned, indirectly through the IMF, that the biggest risk for Europe is the inability to reach consensus over anything from the most complicated, to the simplest matter. As noted previously, one of the main initial drivers of the market surge which has since translated into yet another short covering rally of epic proportions was the belief that Europe can actually come together in agreement over the simplest thing - like its own survival. Alas, it appears even that is not the case. As Bloomberg reports, "Germany and France are at odds over whether the European Financial Stability Facility should have limits on government bond purchases, Handelsblatt reported, citing an unidentified high-ranking European Union diplomat. France doesn’t want to restrict the EFSF on how much of its funds it can use for such purchases, the newspaper said in a preview of an article to appear in tomorrow’s edition. Germany wants to limit the amount EFSF can spend for bonds per country and is also considering whether there should be a time limit for bond purchases, Handelsblatt said." Said otherwise, here comes the latest cause of discord within Europe. Unfortunately, it also means that any rumor, innuendo and speculation that Europe has finally reached a coherent union over its own bailout can be promptly discarded. As if there was ever any doubt in the first place.
From Handelsblatt:
In Berlin and Paris argue about EFSFExclusive The euro rescue package to buy bonds from future debts States. But with how much money? France wants to give the fund a free hand - for the rescue could not stay no longer enough to fear Germany.Brussels is a dispute between Germany and France erupted over the extent to which the euro rescue fund future EFSF may buy government bonds. France wanted to make the EFSF this respect no rules, told the Handelsblatt by a senior EU diplomat. This would theoretically mean that the EFSF could not use its entire volume of funding expended to buy bonds of a single Euro-state.EFSF has a total of 440 billion euros, has been a part of it, however, scheduled for the loan packages to Ireland and Portugal. The federal government wants to limit the amount used for bond purchases per euro government, it said in Brussels. Think Germany will also share in a time limit on bond purchases.The purchase of government bonds is one of three new instruments may have on the future of advanced EFSF. The design of these new instruments will be governed by guidelines to deal with the high officials of the euro finance ministers in Brussels at present.The guidelines must then be approved by the Budget Committee of the Bundestag. The German Parliament has made this a condition for agreeing to extended EFSF.
Cue the FT, Liesman, and/or some IMF guy we have never heard of with attempts to deny what is painfully obvious: Europe will never reach a consensus because the ultimate price of a European bailout is the absolutely certain suicide of the currently ruling political class. Alas, none of those bureaucrats wants to (or can) do anything else but "rule"...
And if the IMF advisor is right, Europe has less than a month to prove us wrong.
'via Blog this'
Redflag!
I sense it is going to be the same as last month's NFP. Why? DXY down, 10y yield up(bonds down). stocks green for few days. Time has ripe for profit taking and push DXY and 10y% down( bonds up).
I am sick so i am out of the market. for now. :D
I am sick so i am out of the market. for now. :D
World facing worst financial crisis in history, Bank of England Governor says
The world is facing the worst financial crisis since at least the 1930s “if not ever”, the Governor of the Bank of England said last night.
Sir Mervyn King was speaking after the decision by the Bank’s Monetary Policy
Committee to put £75billion of newly created money into the economy in a
desperate effort to stave off a new credit crisis and a UK recession.
Economists said the Bank’s decision to resume its quantitative easing [QE], or
asset purchase programme, showed it was increasingly fearful for the
economy, and predicted more such moves ahead.
Sir Mervyn said the Bank had been driven by growing signs of a global economic
disaster.
“This is the most serious financial crisis we’ve seen, at least since the
1930s, if not ever. We’re having to deal with very unusual circumstances,
but to act calmly to this and to do the right thing.”
Announcing its decision, the Bank said that the eurozone debt crisis was
creating “severe strains in bank funding markets and financial markets”
The Monetary Policy Committee [MPC] also said that the inflation-driven
“squeeze on households’ real incomes” and the Government’s programme of
spending cuts will “continue to weigh on domestic spending” for some time to
come.
The “deterioration in the outlook” meant more QE was justified, the Bank said.
Financial experts said the committee’s actions would be a “Titanic” disaster for pensioners, savers and workers approaching retirement. Sir Mervyn suggested that was a price worth paying to save the economy from recession.
Under QE, the Bank electronically creates new money which it then uses to buy assets such as government bonds, or gilts, from banks. In theory, the banks then use the cash they gain to increase their lending to businesses and individuals.
By increasing the demand for gilts, QE pushes down the interest rate yields paid to holders of these and other bonds. Critics of the policy say it pushes up inflation and drives down sterling.
The National Association of Pension Funds yesterday called for urgent talks with ministers to address the negative impact of lower gilt yields on pension funds. Joanne Segars, its chief executive, said QE makes it more expensive for employers to provide pensions and will weaken the funding of schemes as their deficits increase. “All this will put additional pressure on employers at a time when they are facing a bleak economic situation,” she said.
Ros Altman, of Saga, said the latest round of QE was “a Titanic disaster” that would increase pensioner poverty. As well as fuelling inflation, she said, falling bond yields would make annuities more expensive, “giving new retirees much less pension income for their money and leaving them permanently poorer in retirement”.
The MPC also voted to keep the Bank Rate at its historic low of 0.5 per cent, another decision that hurts savers. Yesterday, protesters outside the Bank’s headquarters smashed a giant piggy bank to symbolise the situation of pensioners and others forced to raid savings to keep up with the rising cost of living.
Asked about the plight of savers, Sir Mervyn said it was more important to support the wider economy than to support them. He suggested that savers would not be helped by deliberately pushing the British economy into recession. Yesterday’s decision was the first move on QE since 2009, during the global credit crisis, when the Bank injected £200 billion into the economy.
Some analysts believe that this round of QE could be less effective than the previous one, forcing the Bank to create even more money this time. Michael Saunders of Citigroup, forecast that there could be as much as £225 billion more QE by next year. “I think they will do lots more QE,” he said. “It’s both that the economy is weak but also that the MPC’s view is that QE is not a very powerful tool, or rather it takes a large amount of QE to have much effect on the economy.”
The Bank is supposed to keep inflation near a target of 2 per cent. Inflation now stands at 4.5 per cent, and the Bank admitted it is likely to hit 5 per cent as soon as this month. The Bank’s own research shows that as well as stimulating the economy, QE pushes up prices.
Sir Mervyn insisted that yesterday’s move was still consistent with the 2 per cent inflation target, saying that the slowing economy means inflation could actually fall below that mark “by the end of next year or in 2013”.
The Governor insisted that the MPC’s decisions had been the correct response to events. “The world economy has slowed, America has slowed, China has slowed, and of course particularly the European economy has slowed,” he said. “The world has changed and so has the right policy response.” City traders took heart from the Bank’s move to boost growth, with the FTSE 100 rising 3.7 per cent to 5,29, its biggest two-day gain since 2008.
The Bank’s decision came after mounting political pressure from ministers worried that Sir Mervyn was not reacting urgently enough to the darkening global economic outlook.
George Osborne, the Chancellor, welcomed the Bank’s move, saying: “The evidence shows that it [QE] will help keep interest rates down and boost demand and that will be a help for British families.”
source
The “deterioration in the outlook” meant more QE was justified, the Bank said.
Financial experts said the committee’s actions would be a “Titanic” disaster for pensioners, savers and workers approaching retirement. Sir Mervyn suggested that was a price worth paying to save the economy from recession.
Under QE, the Bank electronically creates new money which it then uses to buy assets such as government bonds, or gilts, from banks. In theory, the banks then use the cash they gain to increase their lending to businesses and individuals.
By increasing the demand for gilts, QE pushes down the interest rate yields paid to holders of these and other bonds. Critics of the policy say it pushes up inflation and drives down sterling.
The National Association of Pension Funds yesterday called for urgent talks with ministers to address the negative impact of lower gilt yields on pension funds. Joanne Segars, its chief executive, said QE makes it more expensive for employers to provide pensions and will weaken the funding of schemes as their deficits increase. “All this will put additional pressure on employers at a time when they are facing a bleak economic situation,” she said.
Ros Altman, of Saga, said the latest round of QE was “a Titanic disaster” that would increase pensioner poverty. As well as fuelling inflation, she said, falling bond yields would make annuities more expensive, “giving new retirees much less pension income for their money and leaving them permanently poorer in retirement”.
The MPC also voted to keep the Bank Rate at its historic low of 0.5 per cent, another decision that hurts savers. Yesterday, protesters outside the Bank’s headquarters smashed a giant piggy bank to symbolise the situation of pensioners and others forced to raid savings to keep up with the rising cost of living.
Asked about the plight of savers, Sir Mervyn said it was more important to support the wider economy than to support them. He suggested that savers would not be helped by deliberately pushing the British economy into recession. Yesterday’s decision was the first move on QE since 2009, during the global credit crisis, when the Bank injected £200 billion into the economy.
Some analysts believe that this round of QE could be less effective than the previous one, forcing the Bank to create even more money this time. Michael Saunders of Citigroup, forecast that there could be as much as £225 billion more QE by next year. “I think they will do lots more QE,” he said. “It’s both that the economy is weak but also that the MPC’s view is that QE is not a very powerful tool, or rather it takes a large amount of QE to have much effect on the economy.”
The Bank is supposed to keep inflation near a target of 2 per cent. Inflation now stands at 4.5 per cent, and the Bank admitted it is likely to hit 5 per cent as soon as this month. The Bank’s own research shows that as well as stimulating the economy, QE pushes up prices.
Sir Mervyn insisted that yesterday’s move was still consistent with the 2 per cent inflation target, saying that the slowing economy means inflation could actually fall below that mark “by the end of next year or in 2013”.
The Governor insisted that the MPC’s decisions had been the correct response to events. “The world economy has slowed, America has slowed, China has slowed, and of course particularly the European economy has slowed,” he said. “The world has changed and so has the right policy response.” City traders took heart from the Bank’s move to boost growth, with the FTSE 100 rising 3.7 per cent to 5,29, its biggest two-day gain since 2008.
The Bank’s decision came after mounting political pressure from ministers worried that Sir Mervyn was not reacting urgently enough to the darkening global economic outlook.
George Osborne, the Chancellor, welcomed the Bank’s move, saying: “The evidence shows that it [QE] will help keep interest rates down and boost demand and that will be a help for British families.”
source
(BN) ECB Buys Governments Time on Banks as Greece Moves Closer to Debt Default
Bloomberg News, sent from my iPad.
ECB Buys Governments Time on Banks as Greek Default Risk Looms
Oct. 6 (Bloomberg) -- The European Central Bank's move to keep euro-area banks afloat is buying governments more time to recapitalize them as Greece edges closer to default.
The ECB said today it will reintroduce year-long loans, giving banks access to unlimited cash through January 2013, and resume purchases of covered bonds to encourage lending. At the same time, the European Commission is pushing for a coordinated capital injection into banks and German Chancellor Angela Merkel said policy makers "shouldn't hesitate" if it turns out financial institutions are undercapitalized.
"Politicians, including Angela Merkel, have finally realized the urgency in protecting banks as a Greek default can no longer be ruled out and no-one wants a Lehman in Europe," said Christoph Kind, head of asset allocation at Frankfurt Trust, which manages $24 billion. "From its side, the ECB is making sure that banks won't face funding issues throughout that period."
Financial shares advanced after Merkel fed speculation that policy makers are working on plans to boost bank capital to stem the spread of the sovereign debt crisis. Europe's rescue fund, the European Financial Stability Facility, could be relied upon as a last resort to bolster banks if needed, she said, adding Germany is ready to discuss possible bank aid at this month's European Union summit.
Writedowns
Germany's Deutsche Bank AG on Oct. 4 scrapped its profit forecast and announced 500 job cuts and further writedowns on Greek bond holdings, while Belgium's Dexia SA is facing its second bailout in three years.
European leaders are under pressure from global counterparts to find a solution to the debt crisis as it threatens to tip the world economy back into recession. EU leaders hold a summit on Oct. 18 followed by a meeting of the Group of 20 on Nov. 3-4.
The ECB's measures buy banks "a lot of time as Europe is basically moving toward recapitalizing the sector," said Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc in London. "Where the ECB can and does contribute very aggressively is to breaking the nexus between the sovereigns and the banks."
The ECB will spend 40 billion euros ($53 billion) on covered bonds from next month and offer banks two additional unlimited loans of 12 and 13-month durations, President Trichet said at a press conference in Berlin after leaving the benchmark interest rate at 1.5 percent. The ECB will continue to lend banks as much money as they need in its regular refinancing operations at least until July 2012.
Old Tools
The ECB used the same measures during the global financial crisis to avert a credit crunch.
The 2.5 trillion-euro market for covered bonds -- assets backed by mortgages or public-sector loans -- underpins much of Europe's real estate lending, which almost ground to a halt in the wake of Lehman Brothers Holdings Inc.'s collapse in September 2008.
Banks' overnight deposits with the ECB jumped to the most in more than a year this week as concern about other institutions' sovereign debt holdings discouraged them from lending to each other.
"For the banking sector the focus is more on liquidity rather than capital," UniCredit SpA Chief Executive Officer Federico Ghizzoni said in an interview published today.
'Everything Necessary'
Policy makers are "determined to do everything necessary to ensure that Europe's banks are able to play their essential role in lending," commission President Jose Barroso told reporters in Brussels. "Close coordination at European level is essential."
Chairing his final rate-setting meeting before handing the reins to Italy's Mario Draghi at the end of the month, Trichet resisted calls to reverse two rate increases earlier this year even as the debt crisis threatens to tip Europe back into recession.
Klaus Baader, co-chief economist at Societe Generale SA in London, said the ECB's decision to focus on greasing the banking sector rather than cutting rates "is a completely appropriate reaction to the current conditions" as "the problem in the euro area is not an excessively high level of short term interest rates."
Risk to Growth
Still, the crisis has "started to infect the real economy," said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt.
The ECB in September cut its growth forecasts to 1.6 percent from 1.9 percent for 2011 and to 1.3 percent from 1.7 percent for 2012. Euro-area service and manufacturing industries last month contracted for the first time in more than two years.
Deutsche Bank Chief Executive Officer Josef Ackermann blamed the slowdown in Europe for his bank's troubles. About 42 percent of revenue from the bank's sales and trading operations came from Europe last year, Ackermann said on Oct 4.
The bank will write down its Greek sovereign debt holdings by about 250 million euros for the third quarter after a 155- million-euro value reduction at the end of the second quarter.
France's Natixis and BNP Paribas SA were among the biggest gainers on the 46-member Bloomberg Europe Banks and Financial Services Index today. Natixis climbed as much as 13 percent, while Paribas was up as much as 7.8 percent.
Trichet said European banks and supervisors including the European Banking Authority should do everything they can to address the need for recapitalization and banks shouldn't be reluctant to accept state help when needed.
"There finally seems to be a plan in Europe and what the ECB did certainly complemented that," said Gilles Moec, co- chief European economist at Deutsche Bank in London. "The ECB has always been ready to step up to the plate if governments show a willingness to shoulder responsibility. It wasn't always the case in the past, but it looks like it's coming together now."
To contact the reporters on this story: Gabi Thesing in London at gthesing@bloomberg.net Jeff Black in Frankfurt at Jblack25@bloomberg.net .
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
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(BN) Treasuries Decline on Speculation European Debt Turmoil Will Be Resolved
Bloomberg News, sent from my iPad.
Treasuries Drop on Speculation European Crisis Will Be Resolved
Treasuries Drop on Speculation European Crisis Will Be Resolved
Oct. 6 (Bloomberg) -- Treasuries fell for a third day as speculation European leaders are stepping up efforts to resolve the debt crisis reduced demand for the safest assets.
Yields on 30-year bonds extended their increase from a two-year low as a report before tomorrow's U.S. payrolls figures showed initial jobless claims rose less than forecast and Treasury Secretary Timothy F. Geithner said banks have strengthened. European Central Bank President Jean-Claude Trichet said the bank will resume covered-bond purchases and reintroduce year-long loans for financial institutions to avoid a freezing of money markets.
"With the slight optimism coming out of Europe, we are seeing some glimmers of what we could expect in the Treasury market if we get some type of reasonable policy response," said Kevin Flanagan, chief fixed-income strategist in Purchase, New York, at Morgan Stanley Smith Barney. "There is still a lot of global issues to be worked through."
Yields on 30-year bonds increased 10 basis points, or 0.10 percentage point, to 2.96 percent at 3:14 p.m. in New York, according to Bloomberg Bond Trader prices. The 3.75 percent securities maturing in August 2041 fell 2 1/4, or $22.50 per $1,000 face amount, to 115 22/32. Yields slid two days ago to 2.69 percent, the lowest level since January 2009.
Ten-year yields rose 10 basis points to 1.99 percent today, compared with a record low 1.6714 percent set on Sept. 23. Two-year yields were little changed at 0.26 percent.
'Bring In Sellers'
"The markets have been pricing in a double dip, and the possibility of us not going down that route will bring in sellers," said Jason Rogan, director of U.S. government trading in New York at Guggenheim Partners LLC, a brokerage for institutional investors.
The Standard & Poor's 500 Index advanced for a third day, rising 1.3 percent. Crude oil for November delivery increased 3.6 percent to $82.51 a barrel in New York.
Geithner told the Senate Banking Committee the nation's financial firms have strengthened and there's "absolutely" no chance of another collapse like the fall of Lehman Brothers Holdings Inc. in 2008.
U.S. government securities surged last quarter on speculation Greece was heading for a default and as the Fed announced its plan to replace shorter-term Treasuries in its portfolio with longer maturities to stem an economic slowdown.
Yields on 30-year bonds decreased 146 basis points in the third quarter, the most since falling 164 basis points in the last three months of December 2008.
Pimco Performance
Bill Gross's Pacific Investment Management Co. Total Return Fund, the world's biggest mutual fund, is trailing the Vanguard Intermediate Term Bond Fund, an index fund, as some of the top investors were blindsided by the bond rally.
The Fed said on Sept. 21 that it would buy $400 billion of U.S. debt with maturities of six to 30 years through June while selling an equal amount of securities due in three years or less. The central bank sold $8.87 billion of notes maturing from January to July 2012 today under the program known as Operation Twist.
The central bank has an "implicit target" for 10-year note yields of 1.50 percent or less, Dominic Konstam, global head of rates research at Deutsche Bank AG in New York, wrote in a report sent via e-mail yesterday.
Mortgage rates in the U.S. have fallen, sending longer-term borrowing costs below 4 percent for the first time on record. The average rate for a 30-year fixed loan dropped to 3.94 percent in the week ended today from 4.01 percent, Freddie Mac said in a statement. That's the lowest in the McLean, Virginia, company's records dating to 1971.
Jobless Claims
Applications for jobless benefits rose to 401,000 in the week ended Oct. 1 from a revised 395,000 in the previous week, the Labor Department reported. The median forecast of 50 economists in a Bloomberg News survey was for an increase to 410,000 from a previously reported 391,000.
Nonfarm payrolls climbed by 55,000 workers last month after zero growth in August, according to the median forecast of 91 economists in a Bloomberg News survey before tomorrow's report from the Labor Department.
"The big event of the week is going to be what we see in tomorrow's jobs data," said Ian Lyngen, a government bond strategist at CRT Capital Group LLC in Stamford, Connecticut. "The market doesn't seem to want to take any big bets before that."
The Treasury Department announced today it plans to sell $32 billion of three-year notes, $21 billion of 10-year debt and $13 billion of 30-year bonds in auctions next week.
Covered Bonds
The ECB will spend 40 billion euros ($53 billion) on covered bonds starting next month and will offer banks two additional unlimited loans of 12- and 13-month durations, Trichet said at a press conference in Berlin after policy makers left the benchmark interest rate at 1.50 percent. Trichet will be succeeded by Italy's Mario Draghi when his eight-year term expires Oct. 31.
The Bank of England's nine-member Monetary Policy Committee raised the ceiling for debt purchases known as quantitative easing to 275 billion pounds ($421 billion) from 200 billion pounds. That's the biggest expansion since the first round of stimulus in March 2009. The central bank last announced an increase in its bond program in November 2009, and the purchases ended in early 2010.
To contact the reporters on this story: Cordell Eddings in New York at ceddings@bloomberg.net Susanne Walker in New York at swalker33@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
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Thursday, 6 October 2011
Apple founder Steve Jobs dead | Herald Sun
Apple founder Steve Jobs dead | Herald Sun:
He resigned from Apple after an internal power struggle in 1985, but was brought back into the fold when Apple bought out his company NeXT.
UPDATE 11.21am: APPLE'S former CEO and co-founder Steve Jobs has died at the age of 56.
Jobs, who underwent an operation for pancreatic cancer in 2004 and a liver transplant in 2009, had remained with Apple as chairman of the board of directors.
Apple released a statement confirming Jobs' death.
"We are deeply saddened to announce that Steve Jobs passed away today," the statement said.
"Steve's brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve.
His greatest love was for his wife, Laurene, and his family. Our hearts go out to them and to all who were touched by his extraordinary gifts."
Jobs resigned as Apple CEO in August with Tim Cook named as his successor.
He resigned from Apple after an internal power struggle in 1985, but was brought back into the fold when Apple bought out his company NeXT.
Jobs was the co-founder, chairman, and former CEO of Apple, after helping design and develop one of the first ever succesful personal computers, the Apple II.
In August, Jobs was pictured looking almost skeletal with greying skin, and was held up by a friend, two days after ending as Apple's CEO.
'via Blog this'
This Year was the first time ever i bought apple product an iPad"2". I have previously not own any apple products. I saw his Stamford speech his documentary and decided to buy an apple product for myself. and jeez it is easy to use.
He is a legend. Respect! The man that helped change the world we live in. 5min silent ._.
(BN) Oral Sex Virus May Surpass Smoking as Cause of Throat Cancer
Bloomberg News, sent from my iPad.
Oral Sex Virus May Surpass Smoking as Cause of Throat Cancer
Oct. 4 (Bloomberg) -- A virus spread by oral sex may cause more cases of throat cancer in men than smoking, a finding that spurred calls for a new large-scale test of a drug used against the infection.
Researchers examined 271 throat-tumor samples collected over 20 years ending in 2004 and found that the percentage of oral cancer linked to the human papillomavirus, or HPV, surged to 72 percent from about 16 percent, according to a report released yesterday in the Journal of Clinical Oncology. By 2020, the virus-linked throat tumors -- which mostly affected men -- will become more common than HPV-caused cervical cancer, the report found.
HPV is known for infecting genitals. The finding that it can spread to the throat and cause cancer may increase pressure on Merck & Co., the second-largest U.S. drugmaker, to conduct large-scale trials to see if its vaccine Gardasil, which wards off cervical cancer in women, also prevents HPV throat infections.
"The burden of cancer caused by HPV is going to shift from women to men in this decade," Maura Gillison, an oncologist at Ohio State University and study senior author, said in a telephone interview. "What we believe is happening is that the number of sexual partners and exposure to HPV has risen over that same time period."
Gillison said she worked with researchers at Whitehouse Station, New Jersey-based Merck several years ago to design a study in men. After Merck acquired Schering-Plough Corp. in 2009, though, the trial "was canceled," she said.
No Further Study
Pamela Eisele, a spokeswoman for Merck, said the company decided not to move ahead with a big oral cancer study "due to competing research and business priorities." GlaxoSmithKline Plc has "no plans" to study the company's competing vaccine Cervarix outside of cervical cancer, Jennifer Armstrong, a company spokeswoman, said in an e-mail.
Gardasil is approved for preventing cervical, vaginal and anal cancers and genital warts, and is recommended for girls and women ages 9 through 26. It is also approved for preventing genital warts and anal cancer in boys and young men of the same ages. Glaxo's Cervarix is approved for preventing cervical cancer in females ages 9 through 25.
Both vaccines target the HPV strain linked to oral cancer, Gillison said.
HPV-linked throat cancers, or orophyaryngeal cancer, are increasing so rapidly that by 2020 there will be 8,700 U.S. cases, with 7,400 cases in men, versus 7,700 cases of cervical cancer, the study said. Male cases alone will outnumber cervical cancer cases soon after 2020, Gillison said. The Ohio State study is based on tumor samples from several U.S. states.
HPV Infections
Roughly 20 million Americans have genital HPV infections, according to the Atlanta-based Centers for Disease Control and Prevention. At least half of sexually active women and men get it at some point in their lives, the CDC says. Most of the time it doesn't cause health problems.
Until recently, head and neck cancer mainly occurred in older patients and was associated with tobacco and alcohol use. The HPV-linked head and neck cancers, usually of the tonsils, palate or tongue, hit men their 30s, 40s, and 50s, Gillison said. It is unclear why women are affected much less often than men, she said.
The decline in HPV-negative oral cancers mirrors the decline of smoking in the U.S., the study said.
Treatment involving chemotherapy, radiation and sometimes surgery, "is very nasty," said Gillison. "It can leave people with permanent physical disfigurement, difficulty with speech and swallowing and poor dental health."
Research Effort
Gillison started researching the oral cancer epidemic more than a decade ago as a fellow at Johns Hopkins University. Another researcher told her about a report from Europe of a case of oral cancer that was HPV positive, she said.
"I started working on it immediately," she said.
In a 2007 epidemiology study published in the New England Journal of Medicine, Gillison and her colleagues found that having a high number of oral or vaginal sex partners are risk factors for HPV-associated throat cancer. The cancer may also be spread by open-mouth kissing, Gillison said in the interview.
"Nobody paid attention to oral HPV infections until 2007," she said. "We are about 15 years behind in the research" compared with the data on cervical cancer and HPV, she said.
An editorial accompanying the study concluded that trials to see whether vaccines prevent oral cancer "are needed, given that prevention through vaccination will almost certainly be the ultimate solution" to HPV-positive oral cancers.
A key step would be to perform a natural history study that would follow people over a number of years and track in more detail how HPV-oral infections lead to cancer. This could help inform how to design a vaccine trial, Gillison said.
Both vaccines target the HPV strain linked to oral cancer, Gillison said.
To contact the reporter on this story: Robert Langreth in New York at rlangreth@bloomberg.net
To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net
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(BN) Stocks Gain, Commodities Reverse Drop as U.S. Economic Data Beat Forecasts
Bloomberg News, sent from my iPad.
Stocks Advance, Commodities Snap Three-Day Slump as Oil Rallies
Oct. 5 (Bloomberg) -- Stocks rose and commodities snapped a three-day slump as U.S. economic data topped estimates and optimism grew European leaders will recapitalize banks. Energy shares climbed as oil rallied on an unexpected drop in supplies.
The Standard & Poor's 500 Index climbed 1.3 percent to 1,138.23 at 2 p.m. in New York, adding to yesterday's 2.3 percent surge. The Stoxx Europe 600 Index climbed 3.1 percent, halting a three-day tumble. The S&P GSCI Index of commodities increased 2.6 percent as oil climbed 4.5 percent to $79.10 a barrel, rebounding from a 7.9 percent plunge over the previous three sessions. Treasuries fell, sending the 10-year note's yield up eight basis points to 1.91 percent.
Reports depicting faster-than-forecast growth in payrolls and service industries and rising fuel demand tempered concern the economic recovery was in jeopardy. European Union officials are working on plans to boost bank capital to contain the debt crisis, the International Monetary Fund said, a day after a Financial Times report describing the discussions triggered a 4.1 percent surge in the S&P 500 in the final hour of trading.
"Fuel demand has been holding up better than expected in recent weeks," said Kyle Cooper, director of research for IAF Advisors in Houston. "It does signal that demand it is holding up well and it doesn't signal a recession."
Producers of energy and raw materials led the S&P 500's gain today, with gauges of both groups rising at least 1.4 percent. Chevron Corp. climbed 2.7 percent and Freeport-McMoRan Copper & Gold Inc. surged 5.5 percent to pace the gains. Crude oil posted the biggest advance among commodities tracked by the S&P GSCI, with 20 of 24 raw materials rising.
Financial shares were down 0.3 percent as a group, after falling as much as 2.3 percent earlier and rallying 4.1 percent yesterday.
Economic Data
U.S. stock futures gained before the open of exchanges after companies in the U.S. added 91,000 jobs in September, according to data from ADP Employer Services, topping the median forecast of economists surveyed by Bloomberg News for an advance of 75,000. A Labor Department report in two days is forecast to show a 90,000 increase in private jobs and a net 60,000 gain in non-farm payrolls, according to the median economist estimates in a survey, with the unemployment rate projected to remain at 9.1 percent.
The Institute for Supply Management��s non-manufacturing index fell to 53 from 53.3 in August. The median forecast of 75 economists surveyed by Bloomberg News was for a drop to 52.8. A reading of 50 is the dividing line between expansion and contraction in services, which cover about 90 percent of the economy. Orders picked up, the report showed.
'Tortoise-Like'
"Those are positive," Abigail Huffman, who helps oversee $163 billion as director of research at Russell Investments in New York, said of today's economic data. "It's a slow moving economy that's moving forward and we're seeing good data points. With this tortoise-like economy the trends are positive but they're just not positive enough for the market to sustain an advance."
The S&P 500 closed 2.3 percent higher yesterday following the FT report. It was the 10th time since 1985 that the index posted a loss of 1 percent or more at 3 p.m. and was up when the market closed, according to data compiled by Bespoke Investment Group LLC in Harrison, New York. The measure declined the next day eight times, with losses averaging 1.3 percent, the data show.
Alcoa Inc., the largest U.S. aluminum producer, will mark the unofficial start of the earnings-reporting season when it reports results on Oct. 11. Third-quarter profits for S&P 500 companies are projected to have grown 13 percent, according to analyst forecast compiled by Bloomberg, down from an estimate of 17 percent when the index traded at a three-year high at the end of April.
'Surprise to the Upside'
Brian Belski, chief investment strategist at Oppenheimer & Co. in New York, predicted a "nice year-end rally" in stocks after profits come in higher than analysts' estimated.
"Earnings will surprise to the upside, earnings estimates have been slashed too much," Belski said on Bloomberg Television's "Inside Track With Deirdre Bolton and Erik Schatzker." "Corporate America has gone through so much structural reform in the last 10 or 12 years that they continue to be positioned to under-promise, over-deliver."
Banks in the Stoxx 600 climbed 4.6 percent as a group and contributed the most to the index's advance. Dexia SA, the Belgian lender that has slumped 59 percent this year, snapped a four-day plunge after France and Belgium said a "bad bank" will be set up to hold its troubled assets. The shares rose 1.3 percent, paring a rally of as much as 10 percent after two people with knowledge of the talks said the plan may leave Dexia holding the worst assets.
BNP Paribas, SocGen
BNP Paribas SA and Societe Generale SA, France's biggest lenders, climbed more than 8 percent. Rio Tinto Group led mining companies higher. European Aeronautic, Defence & Space Co. rose almost 6 percent after saying 2011 will be a "very good" year.
A measure of how much European banks pay to fund in dollars fell. The one-year cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, was at 72 basis points below the euro interbank offered rate as of 5 p.m. in London, down from 75 basis points yesterday. A basis point is 0.01 percentage point.
EU ministers have a "sense of urgency" and a "shared view" of the need for a "concerted, coordinated approach in Europe," EU Commissioner for Economic Affairs Olli Rehn said, according to the FT. "Capital positions of European banks must be reinforced to provide additional safety margins and thus reduce uncertainty," the newspaper quoted him as saying.
Rehn "doesn't speak of a concrete plan in hand," his spokesman, Amadeu Altafaj, told reporters in Brussels today. "He speaks of an initiative, of discussions in progress and he pleads for a European approach."
'Gut Feel'
"My gut feel is that the European situation still might need to get worse to provoke the type of response the market really wants but such a day is no doubt getting closer," Jim Reid, head of fundamental strategy at Deutsche Bank AG in London, wrote in a note to investors.
Ten-year Italian bond yields increased three basis points to 5.53 percent. Moody's Investors Service cut Italy's rating three levels to A2 from Aa2, with a negative outlook, and said other European countries rated below the top Aaa level may face downgrades. S&P lowered Italy's grade on Sept. 20 for the first time in five years.
Signs that the region's debt crisis is hampering growth have prompted speculation the ECB will lower borrowing costs at a policy meeting tomorrow. Eleven of 52 economists surveyed by Bloomberg said it will cut its benchmark interest rate by at least a quarter-percentage point from the current 1.5 percent. The others expect no change.
Dollar Index
The Dollar Index, which tracks the U.S. currency against those of six trading partners, fell 0.6 percent to halt a five day increase. The pound was 0.4 percent lower versus the dollar after a report showed U.K. economic growth slowed by more than initially estimated in the second quarter.
The MSCI Asia Pacific Index fell 0.3 percent and is down 6 percent in four days. Japan's Nikkei 225 Stock Average retreated 0.9 percent, paced by a 4 percent drop in Fast Retailing Co., after Asia's biggest apparel chain said same-store sales at its Uniqlo casual clothing stores in Japan fell 10.7 percent in September from a year earlier.
The MSCI Emerging Markets Index rose 0.5 percent.
To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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Wednesday, 5 October 2011
Tuesday, 4 October 2011
(BN) Stocks, Commodities Drop on Europe Concern; Bunds Gain, Dollar Strengthens
Bloomberg News, sent from my iPad.
Stocks, Commodities Drop on Europe Concern; Bunds, Dollar Rise
Oct. 4 (Bloomberg) -- Stocks dropped and an index of raw materials fell to a 10-month low as European leaders signaled they may renegotiate terms of Greece's bailout. U.S. index futures declined, while German bonds and the dollar gained.
The MSCI All Country World Index sank 1.3 percent at 6:40 a.m. in New York. S&P 500 futures slid 0.4 percent, signaling U.S. shares may extend a drop that left the gauge within 1 percent of levels commonly seen as a bear market. Nickel, copper and oil led the S&P GSCI index of 24 commodities 1 percent lower. The yield on the 10-year German bund decreased nine basis points, its fourth straight decline, while the Dollar Index advanced 0.3 percent.
European finance chiefs meeting yesterday considered "technical revisions" for a second Greek bailout, Luxembourg Prime Minister Jean-Claude Juncker said today, fueling concern bondholders may have to take bigger losses on the nation's debt. U.S. factory orders probably stalled in August, economists said before a Commerce Department report. Goldman Sachs Group Inc. cut its global growth forecasts and predicted recessions in Germany and France.
"The rot has spread to every corner of the global markets," said Bill Blain, co-head of strategy at Newedge Group, a London-based brokerage. "The taint of fear is dragging down most assets, with indecision running rife."
The Stoxx Europe 600 Index retreated 2.4 percent as all 19 industry groups declined. Germany's DAX Index dropped 3.2 percent, France's CAC 40 declined 2.5 percent and the U.K.'s FTSE 100 slipped 2.4 percent. Greece's ASE plunged 4.6 percent to the lowest since 1993.
Deutsche Bank, Dexia
Deutsche Bank AG slumped 6.8 percent after abandoning its 2011 profit forecast and announcing plans to eliminate 500 jobs, as market volatility and unexpected costs on an indirect tax position weighed on third-quarter earnings. Dexia SA, Belgium's biggest bank by assets, tumbled 19 percent after its board asked the company to solve its "structural problems."
The S&P 500 slumped 2.9 percent yesterday to 1,099.23, the lowest since September 2010 and the exact closing level as on the same day three years ago.
U.S. factory orders were little changed in August, after a 2.4 percent gain the prior month, according to the median of 68 economists' forecasts in a Bloomberg survey. Federal Reserve Chairman Ben S. Bernanke is scheduled to testify today to a congressional panel about the economic outlook. The 30-year Treasury yield increased five basis points to 2.78 percent.
The yield on the Greek two-year note jumped 207 basis points, with the 10-year yield climbing 49 basis points. That drove the difference in yield over benchmark bunds 58 basis points higher to 21.38 percentage points.
Private Sector Involvement
As far as private sector involvement in a bailout is concerned, "we have to take into account that we have experienced changes since the decision we have taken on July 21," Juncker told reporters today after chairing a meeting of euro finance chiefs in Luxembourg. "These are technical revisions we are discussing."
Italian 10-year debt yields fell four basis points, with two-year yields dropping five basis points. The European Central Bank bought Italian government securities today, according to three people with knowledge of the transactions. A spokeswoman for the ECB declined to comment.
Credit-default swaps on Germany increased 3.5 basis points to 121.5 basis points, an all-time high, according to CMA. Swaps on banks also soared, with the Markit iTraxx Financial Index jumping 17 basis points to 306, according to JPMorgan Chase & Co. The record is 314 basis points, set on Sept. 12.
The euro traded 0.1 percent weaker at $1.3192, after declining to the lowest level since January. The dollar gained against 11 of its 16 major peers.
Australia Rates
Australia's dollar slumped against all 16 most-traded peers tracked by Bloomberg, falling to the lowest level in more than a year versus the U.S. currency, after the nation's central bank signaled it has scope to lower its benchmark interest rate. Governor Glenn Stevens held the overnight cash rate target at 4.75 percent, matching the prediction of all 22 economists surveyed by Bloomberg News.
The GSCI index of 24 commodities fell as much as 1.3 percent to the lowest since Dec. 1. Nickel dropped 2.8 percent, copper declined 2 percent and oil in New York retreated 1.7 percent to $76.33 a barrel. Gold rose 0.4 percent to $1,668 an ounce.
The MSCI Emerging Market Index slid 2.1 percent, extending a decline from its May 2 high to 31 percent. South Korea's Kospi Index sank 3.6 percent after the market was closed yesterday for a holiday. The MSCI China Index slumped 3.5 percent. PKN Orlen, Poland's largest oil refiner, led the WIG20 Index down 3.1 percent after saying it will probably post losses of "several hundred million" zloty in the third quarter from revaluation of foreign-currency debt. Benchmark gauges in Russia, the Czech Republic, Thailand and Indonesia fell at least 2.4 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net Shiyin Chen in Singapore at schen37@bloomberg.net .
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
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(BN) Euro at Decade Low Versus Yen as Ministers Disagree About Fund Capacity
Bloomberg News, sent from my iPad.
Euro at Decade Low Versus Yen as Ministers Disagree on Fund
Oct. 3 (Bloomberg) -- The euro fell to more than a decade low against the yen as European finance ministers clashed about expanding the capacity of the European Financial Stability Facility.
The 17-nation currency slid to an eight-month low against the dollar as incoming European Central Bank President Mario Draghi said a lack of confidence may be among the reasons for lenders' "funding problems." The yen rose against all its major counterparts as Japan's biggest manufacturers remained below levels seen before a record earthquake in March. The U.S. dollar was the best performer after the yen as the Standard & Poor's 500 Index fell below its closing low for the year.
"The persistent debate within the European Union really undermines the possibility of some sort of concrete progress made on increasing the bailout funds for the region and preventing contagion," said Kathy Lien, director of currency research, with online currency trader GFT Forex, in New York. "The move you're seeing in the euro is a reflection of investors disappointment over lack of progress."
The euro decreased 1.9 percent to 101.14 yen, at 3:26 p.m. in New York, from 103.12. It reached 101.03, the weakest since June 2001. The euro depreciated 1.3 percent to $1.3211 per dollar, from $1.3387 on Sept. 30, after declining to $1.3192, its lowest level since Jan. 13.
The dollar slid 0.6 percent to 76.57 yen.
Death Cross
A so-called death-cross pattern is looming as the pair's 50-day moving average drops toward its 200-day moving average, according to data compiled by Bloomberg.
"A cross for technical momentum is another signal for potential downside risks," said Mark McCormick, a New York- based currency strategist at Brown Brothers Harriman & Co. "We could see the euro down in the $1.28 area by year-end."
Should the shorter-term moving average fall below the longer-dated one, the euro's depreciation may persist to $1.30, said Taso Anastasiou, a foreign-exchange technical strategist at UBS in Zurich.
The seven-day relative strength index for the euro fell to 25.8, staying below the 30 level for the second consecutive day. A reading below 30 indicates an asset's price may have fallen too fast and may be due for a rebound.
The difference in the number of wagers by hedge funds and other large speculators on a drop in the euro versus those on a gain -- so-called net shorts -- climbed to 82,473 in the week ended Sept. 30. That's up from 79,460 a week earlier, statistics from the Washington-based Commodity Futures Trading Commission showed Sept. 30.
Traders that expect the dollar to strengthen against the euro, yen, pound, Swiss franc and Mexican peso, as well as the Australian, Canadian and New Zealand dollars, surged to 128,155 contracts on Sept. 27, the most since June 2010, according to CFTC data as compiled by Bloomberg.
EU Moves
European finance ministers meet today in Luxembourg before the European Central Bank meets on Oct. 6.
Luxembourg Finance Minister Luc Frieden said the capacity of the EFSF is "sufficient" while speaking to reporters today in Luxembourg. Spanish Finance Minister Elena Salgado said that the facility needs more capacity. German Finance Minister Wolfgang Schaeuble said euro area countries should wait until changes to the EFSF are ratified before discussing an increase to its capacity.
"The market is in a wait-and-see mode, waiting to hear from European finance ministers so we will still have a headline driven market," said Brian Dolan, chief strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey. "This is a sell on rallies for the euro; it's a hard case to make to buy it."
Today was the original target date for approving an 8 billion-euro ($10.7 billion) loan payment to Greece, the sixth installment of the 110 billion-euro lifeline assembled in May 2010. That decision was pushed back until mid-October as Greek Prime Minister George Papandreou tries to close a deficit gap.
Yen Gains
The yen climbed against the dollar after the Bank of Japan said today its quarterly Tankan index of sentiment increased to 2 in September from minus 9 in June. The reading was below the reading of 6 in March, encouraging investors to take refuge in Japan's currency.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, gained 0.8 percent to 79.459, touching the highest level since Jan. 17. The gauge is weighted 57.6 percent to movements in the euro.
The Standard & Poor's 500 Index fell 2.4 percent, trading below the close of 1,119.46 on Aug. 8. Yields on Treasury 30- year bonds fell 16 basis points, or 0.16 percentage point to 2.76.
The pound fell against all its major counterparts excluding the South Korean won as traders judged a surprise increase in U.K. manufacturing as insufficient to keep the Bank of England from providing further stimulus for the economy.
Bank of England policy makers said in minutes of last month's policy meeting on Sept. 8 that it is becoming "increasingly probable" that another round of government-bond purchases may be needed to boost the economy.
The pound declined 0.8 percent to $1.5462, from $1.5584.
To contact the reporters on this story: Allison Bennett in New York at abennett23@bloomberg.net Keith Jenkins in London at kjenkins3@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
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(BN) U.S. Manufacturing Expands at a Faster Pace as ISM Index Increases to 51.6
Bloomberg News, sent from my iPad.
ISM Gauge of U.S. Manufacturing Unexpectedly Accelerated
Oct. 3 (Bloomberg) -- Manufacturing in the U.S. unexpectedly accelerated in September as production picked up, easing concern the world's largest economy is stalling.
The Institute for Supply Management's factory index climbed to 51.6 last month from 50.6 in August, the Tempe, Arizona-based group's data today. A level of 50 is the dividing line between growth and contraction. Economists forecast the measure to fall to 50.5, according to the median projection in a Bloomberg News survey.
A pickup in manufacturing that accounts for about 12 percent of the economy may have been helped by an easing of supply constraints following the earthquake in Japan earlier this year. In an effort to provide a boost for the recovery at the same time concerns of a European sovereign debt default roil financial markets, the Federal Reserve last month announced another round of unconventional policy.
"We're seeing the post-Japan rebound in auto production and auto sales," said Julia Coronado, chief economist for North America at BNP Paribas in New York, who projected a reading of 52. "That's pushing up the production index, but new orders remain relatively anemic. There is still some underlying weakness, but we're getting that post-Japan rebound."
Estimates for the manufacturing index from 82 economists ranged from 45 to 52. While 50 is the midway point between expansion and contraction in the industry, a reading above 42.5 generally indicates an expansion in the overall economy.
Stocks fell and commodities slipped on concern about Europe's debt crisis. The Standard & Poor's 500 Index dropped 0.5 percent to 1,125.55 at 10:48 a.m. in New York.
Construction spending rose 1.4 percent, reversing a 1.4 percent drop in July, Commerce Department figures showed today.
European Manufacturing
European manufacturing shrank for a second month in September, adding to signs the euro-area economy is close to recession. A factory gauge based on a survey of purchasing managers in the 17-nation euro region fell to 48.5 from 49 in August, London-based Markit Economics said today.
A Chinese manufacturing index advanced for a second month in September as a measure of new export orders rebounded to the highest level since May. The Purchasing Managers' Index was at 51.2, a four-month high, compared with 50.9 in August, the China Federation of Logistics and Purchasing said in a statement Oct. 1.
Today's ISM report on the U.S. showed the production index climbed to 51.2 in September from 48.6 in August. The new orders measure held at 49.6, while the gauge of order backlogs fell to 41.5, the lowest since April 2009 and indicating they contracted at a faster rate.
Backlogs Shrink
"If new orders don't pick up, then manufacturing will continue to work off its backlog," Brad Holcomb, chairman of the ISM survey, said in a teleconference from Dallas. "It is definitely a concern."
The index of prices paid rose to 56 from 55.5. A measure of supplier deliveries climbed to 51.4 from 50.6.
The inventory index fell to 52 from 52.3, while a gauge of customer stockpiles increased to 49 from 46.5.
The employment index rose to 53.8 from 51.8.
Today's report follows recently released surveys that provided a mixed picture of manufacturing. The Institute for Supply Management-Chicago Inc. last week said its U.S. business activity index rose in September to the highest level in three months. Business at New York-region factories shrank for a fourth straight month in September and manufacturing in the Philadelphia area contracted for a third time in four months, figures from the Fed showed.
'Significant Headwinds'
"Significant headwinds continue to challenge the broader recovery from the 2008 financial crisis," David Sylvester, chief financial officer at office equipment-maker Steelcase Inc., said on a Sept. 22 conference call with analysts. "We could feel these pressures again if companies choose to behave conservatively and pull back on spending because of the uncertain landscape."
Fed officials said last month at their policy meeting that they will replace $400 billion of short-term debt in its portfolio with longer-term Treasuries to help counter the risks of recession.
"There are significant downside risks to the economic outlook, including strains in global financial markets," the Fed's policy-setting committee said on Sept. 21. Economic growth "remains slow" even as "business investment in equipment and software continues to expand."
Business Equipment
Orders for capital equipment like computers and communications gear climbed in August by the most in three months, the Commerce Department's report on durable goods showed last week.
"We are not convinced a pullback in corporate spending is going to occur," said Sylvester of Grand Rapids, Michigan-based Steelcase. "Many corporate balance sheets are as strong as they have ever been."
Toyota Motor Corp. and Honda Motor Co.'s return to full production in September may have boosted U.S. auto sales back near the pace reached before the Japanese earthquake in March left many U.S. automakers with shortages of parts.
September vehicle sales, to be released today, probably rose to a 12.8 million seasonally adjusted annual rate, the average estimate of 14 analysts surveyed by Bloomberg. That would be the fastest pace since April, when lost output caused by Japan's tsunami crimped supplies of parts and finished cars.
To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
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Monday, 3 October 2011
RBA urged to change its tune on growth
Herald Sun
INFLATIONARY pressures that have loomed ominously over the economy are easing, according to new research, giving the Reserve Bank crucial breathing space to assess the impact of the global slowdown.
INFLATIONARY pressures that have loomed ominously over the economy are easing, according to new research, giving the Reserve Bank crucial breathing space to assess the impact of the global slowdown.
Analysts say the central bank is today likely to soften its rhetoric on the sharply polarised character of the economy in the wake of fresh evidence that core inflation is slowing.
Analysts believe the Reserve will keep the official interest rate on hold today at 4.75 per cent.
But, amid speculation that Australia is in the middle of a protracted rates freeze, they say the central bank's board is likely to give itself more "wriggle room" to act aggressively if the debt crisis spills across the world.
CommSec chief economist Craig James said it was time for the RBA to change from a position that assumed economic activity would lift along with inflation.
"The latest data shows that manufacturing continues to contract while inflationary pressures are easing, not growing," Mr James said. "In fact, apart from mining, the Australian economy more broadly continues to struggle. Housing activity is at decade lows and consumer spending is stagnant."
He said that while the RBA was unlikely to adopt an "easing bias", investors should look for "more dovish language" in the statement that would accompany today's decision.
"Interest rates clearly won't be rising any time soon. The main interest is whether the Reserve Bank softens its upbeat rhetoric on the economy in its monetary policy decision tomorrow," Mr James said.
His comments follow the release of TD Securities-Melbourne Institute monthly inflation gauge, showing core inflation was at a seven-year low in September.
Excluding volatile items such as petrol and fruit, prices were up just 1.2 per cent on a year ago. "It doesn't matter which way you cut the data, inflation is under control," he said.
According to 15 economists surveyed by AAP, the central bank will keep the cash rate at 4.75 per cent.
Westpac is maintaining its position - first articulated in July - that a rate cut is necessary before Christmas.
The bank's senior economist Matthew Hassan said a number of rate cuts would be needed to stimulate growth in the face of a weaker domestic economy coupled with deteriorating conditions abroad.
Nomura chief economist Stephen Roberts said he expected a single rate hike by the RBA in February next year as Europe's crisis settled and Australia powered ahead on the back of further strong growth in China.
"Providing that happens for the US and Europe then there's not too much to worry about with Asian growth," Mr Hassan said.
Do you think there will be more blood bath tonight NY opens?
Lets recall from this post EFSF. I reckon things will work out in the Europe for now. and a few months later for SHTF! When Greece runs out of money AGAIN and problem countries buys more CDS on Greece and pray for Greece to default to save themselves. IMO that's private sector participation in the bail out of other major Too Big to Fail euro countries.
Not much ideas from me now. But i reckon some Forex looks cheap to me.. like AUDUSD. with the DXY up so much. Plus political wise. Our Treasurer wants tax reform to path the way for the world first CARBON tax!
He hinted for a corporate tax cut. Which has been on the table for sometime. Perhaps that'd what holding up the AUDUSD
I seriously think Australia is too lucky. Or are we in one of those Housing Bubbles! That i have been warning some of my mates. House prices have dropped not on statistic about 5~10%.
From Memory: Australia Household debt was 155%.... US when the subprime crisis hits it was 133% per household!
Not much ideas from me now. But i reckon some Forex looks cheap to me.. like AUDUSD. with the DXY up so much. Plus political wise. Our Treasurer wants tax reform to path the way for the world first CARBON tax!
He hinted for a corporate tax cut. Which has been on the table for sometime. Perhaps that'd what holding up the AUDUSD
I seriously think Australia is too lucky. Or are we in one of those Housing Bubbles! That i have been warning some of my mates. House prices have dropped not on statistic about 5~10%.
From Memory: Australia Household debt was 155%.... US when the subprime crisis hits it was 133% per household!
IMF - economies likely to be in fragile mode for the next few years
From EYES: The outlook for now is gloomy. As Singapore finance minister said the world is one shock away from being into a resscession.
Advanced economies likely to remain Fragile.
Their answer to solve all these problems print money. Everyone is happy. Less gloomy when you have more money right?
Advanced economies likely to remain Fragile.
Their answer to solve all these problems print money. Everyone is happy. Less gloomy when you have more money right?
Mid Day update
ASX 200 Below 3900 hooray!
Dow futures 10838
S&P 500 1122.5
GOLD 1629.
Major currencies down. with DXY up 1.1 point is massive on ASIA session. Com'on Break 80 and SHTF!
Dow futures 10838
S&P 500 1122.5
GOLD 1629.
Major currencies down. with DXY up 1.1 point is massive on ASIA session. Com'on Break 80 and SHTF!
USD carry trade unwind - short term
From EYES: BOE should turn on the money printing press again and cut taxes!
What does this mean?
Cutting taxes = less revenue
How to replace revenue shortfall? Money Printing
= Devaluation of money! USD devalue, GBP devalue, EUR Devalue = Global massive inflation.
Maybe stock prices will remain the levels now, because so much money is being printed. The stocks are Intrinsically worth less.
Anyway as i have said many many post back. DXY has to go to 82~83 before it hit the very important point.
From my screen it is 79.6 now.... not too far away.. by the time EURO will be $1.25
GOLD of all the things might be $1500 level...
This represents the global unwind of USD carry trade.
When it hits too high. the QE comes along and inflate it again! The game just keeps going.
What does this mean?
Cutting taxes = less revenue
How to replace revenue shortfall? Money Printing
= Devaluation of money! USD devalue, GBP devalue, EUR Devalue = Global massive inflation.
Maybe stock prices will remain the levels now, because so much money is being printed. The stocks are Intrinsically worth less.
Anyway as i have said many many post back. DXY has to go to 82~83 before it hit the very important point.
From my screen it is 79.6 now.... not too far away.. by the time EURO will be $1.25
GOLD of all the things might be $1500 level...
This represents the global unwind of USD carry trade.
When it hits too high. the QE comes along and inflate it again! The game just keeps going.
ECRI Recession Call: ‘You Haven’t Seen Anything Yet’
By Kathleen Madigan
The U.S. is headed back into recession. That’s the word from the widely respected Economic Cycle Research Institute, which uses economic indicators to put together leading indexes.
On its Web site, ECRI said the U.S. economy is “indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off.” (Take that, Federal Reserve ChairmanBen Bernanke and President Barack Obama.)
The forecasting firm relies on dozens of specialized leading indexes to support the warning “If you think this is a bad economy, you haven’t seen anything yet.”
Consumers, however, aren’t so ready to throw in the towel. They expect some small ray of sunshine to peek through the gathering dark clouds.
Within Friday’s Thomson Reuters/University of Michigan consumer-sentiment survey, the index covering six-month expectations rose to 49.4 at the end of September from a preliminary reading of 47.0, while the current-sentiment index edged up only slightly.
The question is whether the slightly better outlook is based on positive trends consumers are experiencing now — or just wishful thinking. The Michigan survey suggests households may be viewing economic weakness as the new norm.
“When specifically asked how they expected the unemployment rate to change, 89% expected the unemployment rate to remain unchanged at its current high level or to increase during the year ahead,” the report says.
Households as a whole fell behind in August. Nominal personal income fell 0.1% last month as job growth and pay raises stalled. When prices and taxes are included, real disposable income dropped 0.3% in August following a 0.2% drop in July.
So far in the third quarter, real consumer spending is growing at a 1.4% annual rate. That’s up from second quarter’s 0.7%, but it could hardly be described as strong.
Clearly, the U.S. and global economies are at risk. The two key uncertainties are the protracted debate over the euro-zone sovereign debt problem and future U.S. job growth.
If either of those risks end with a positive outcome for growth (meaning an orderly resolution to debt or an acceleration in hiring), then the U.S. will avert a downturn. Until either occurs, the warning for ECRI remains on the table.
Asia open gap down as expected.
ASX 200 currently down 2% point lowest 3900
major Asia indices down more than 1.5% average
with HSI down 3.1% now.
(BN) China Manufacturing Gain Negates Hard Landing as Price Pressures Moderate
Bloomberg News, sent from my iPad.
China Manufacturing Stability May Ease 'Hard Landing' Concern
Oct. 3 (Bloomberg) -- Signs of stability in China's manufacturing industry in September may ease concern the world's second-largest economy will suffer a slump in economic expansion that escalates the risk of another global recession.
The Purchasing Managers' Index published Oct. 1 by the China Federation of Logistics and Purchasing rose for a second month, to 51.2, with new export orders gaining and an inflation measure -- factories' input costs -- moderating. A separate PMI from HSBC Holdings Plc and Markit Economics on Sept. 30 was unchanged from August, at 49.9. Readings above 50 signal expansion.
"That's a nice break in a grossly bearish environment," Dong Tao, a Hong Kong-based economist at Credit Suisse Group AG, said of the Oct. 1 PMI data. "I don't think that the Chinese economy is out of the woods, but any good news is great news."
The figures bolster the odds that Premier Wen Jiabao's government will succeed in defusing the fastest gains in consumer prices since 2008 without a collapse in China's growth, the strongest among the major economies. Twelve percent of global investors in a Bloomberg poll last week predicted a slowdown in Chinese gross domestic product gains to less than 5 percent within a year, a pace unseen in the past two decades.
Wen, on the eve of the weeklong National Day holiday that began Oct. 1, said the trend of relatively fast consumer price gains was "under control." The Oct. 1 manufacturing reading was the highest in four months, and exceeded the 51.1 median estimate in a Bloomberg News survey of 13 economists.
Stock Slide
The MSCI All-Country World Index of stocks posted its biggest quarterly loss since 2008 as concerns increased that Europe's debt crisis will trigger a global recession and the Federal Reserve said there are "significant downside risks" to the U.S. economy. The U.S. dollar strengthened as investors looked for a safe haven and oil fell to a one-year low.
In China, the benchmark Shanghai Composite Index fell Sept. 30 to its lowest close since April 2009 on heightened risks of recession in the U.S. and Europe and also on concerns that the government's campaign to curb inflation by tightening monetary policy will cause a deeper-than-anticipated slowdown in the Chinese economy.
China's economy is slowing gradually and the chances of a "hard landing" are small, Bank of America Corp. economist Lu Ting said. At the same time, investors "should also resist being too positive on this PMI reading as the reading of 51.2 might be slightly biased upwards by seasonality," he said.
September Pattern
Manufacturing in China tends to rise in September ahead of the weeklong National Day holiday, when factories close, and before the Christmas shopping season in the U.S. and Europe. The reading for September 2010 was the highest in four months, the same as it was this year, and in September 2009, the measure was the highest in 15 months.
Ken Peng, senior China economist at BNP Paribas SA, said the 0.3 percentage point gain in the September PMI from August was the smallest month-to-month increase for a September on record. The average increase was 2.3 for the month in the period from 2005 to 2010, he said.
The manufacturing index compiled by the logistics federation and National Bureau of Statistics is based on a survey of purchasing managers at more than 820 companies in 20 industries. It hasn't fallen below 50 since February 2009.
The index from HSBC Holdings Plc and Markit Economics, which reflects a survey of more than 400 companies, is weighted toward small businesses that have been hit harder by tightening measures, according to economists including Bank of America's Lu and Australia and New Zealand Banking Group Ltd.'s Liu Li-Gang. The official PMI has a greater focus on larger enterprises, they say.
Job Gains
The data released by the logistics federation and statistics bureau showed that the measure of new export orders rose to 50.9 from 48.3 in August. A gauge of input prices declined to 56.6 from 57.2 and the employment index gained to 51, the highest level since April.
"Stable PMI readings tend to alleviate the concerns policy makers have on slowing activity growth," said Song Yu, an economist for Goldman Sachs Group Inc. "We now see greater downside risks to the global outlook which if realized will put more downward pressure on China's growth and inflation."
The rout in global stocks in recent weeks forced Sany Heavy Industry Co., China's biggest machinery maker and run by the nation's richest person, to delay its $3.3 billion Hong Kong stock sale.
Korean Exports
Even with the deterioration in confidence in advanced economies, economic data indicate Asia will continue to expand, while at a slower pace. South Korea's exports climbed 19.6 percent from a year earlier in September, compared with a 25.9 percent gain in August, the country's Ministry of Knowledge Economy said two days ago. The median estimate in a Bloomberg News survey of 11 economists was for a 16.6 percent gain.
Moderation in growth may help dissipate consumer-price pressures that have prompted central banks from China and South Korea to Thailand, Malaysia and India to boost borrowing costs this year.
Inflation in China rose to a three-year high of 6.5 percent in July before easing in August to 6.2 percent. The People's Bank of China has raised interest rates five times and increased the reserve requirement nine times in the past 12 months.
The statistics bureau is scheduled to release inflation data for September on Oct. 14 and GDP figures for the third quarter on Oct. 18.
Fifty-nine percent of respondents in the quarterly Bloomberg Global Poll of investors, analysts and traders who are Bloomberg subscribers said economic growth in China may decline to less than 5 percent annually by 2016. Growth was 9.5 percent in the second quarter.
In the same survey, about three-quarters of respondents said they expect the euro-area economy to fall into recession in the next 12 months, with more than a third saying deteriorating European debt will derail the world economy over the next year.
China's PMI "is a very strong number in the context of the gloomy global outlook," ANZ Bank's Liu said.
To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net
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