- Obama Left With France as Ally in Syria Fight. France signaled it might act as the principal U.S. ally in a military strike against Syria, filling a hole left by Britain’s unexpected desertion of President Barack Obama late yesterday. Hours after British lawmakers pulled the U.K. out of a mission to punish Syria’s use of chemical weapons, French President Francois Hollande said he still favors delivering a targeted blow, bypassing a stalemated United Nations Security Council if necessary. “There are few countries with the capacity to mete out a sanction using appropriate means,” Hollande said in an interview with Le Monde newspaper published today. “France is among them and is ready.”
- European Stocks Decline as Stoxx 600 Erases Monthly Gain. European stocks fell, extending a weekly loss, as oil and gas companies dropped, outweighing better-than-expected euro-area economic confidence data. BP Plc and Royal Dutch Shell Plc each slipped at least 1 percent as crude declined after the U.K. parliament rejected a motion for military action against Syria. Royal KPN (KPN) NV slid 3.4 percent after America Movil SAB said it may withdraw its takeover bid if opposed by the company’s independent foundation. Hermes International SCA climbed 2.1 percent after reporting operating profit that surpassed analysts’ estimates. The Stoxx Europe 600 Index dropped 0.9 percent to 297.32 at the close of trading, its lowest level since July 17. The gauge fell 2.4 percent this week, its second weekly decline, for a 0.8 percent monthly loss, amid concern that the U.S. and its allies will take military action against Syria.
- Indian Growth Slows to Four-Year Low as Rupee Dims Outlook. India’s economy expanded at the weakest pace since 2009 last quarter, adding pressure on Prime Minister Manmohan Singh to stem a plunge in the rupee that led the central bank to raise interest rates. Gross domestic product rose 4.4 percent in the three months through June from a year earlier, compared with 4.8 percent in the prior quarter, the Statistics Ministry said in New Delhi today. The median of 44 estimates in a Bloomberg News survey was for a 4.7 percent gain.
- India’s 10-Year Bonds Poised for Third Monthly Drop on Rupee. India’s 10-year government bonds dropped for a third month, poised for the longest run of losses in three years, as the rupee’s plunge to a record stoked concern inflation will accelerate even as economic growth slows. The currency has tumbled 9.7 percent this month and touched an unprecedented 68.8450 per dollar on Aug. 28, increasing costs for the nation that imports about 80 percent of its oil. Wholesale prices rose 5.79 percent in July, compared with 4.86 percent the previous month, official data show. The yield on the 7.16 percent notes due May 2023 jumped 67 basis points this month, or 0.67 percentage point, data complied by Bloomberg show. The stretch of losses is the longest since August 2010. The rate touched 9.23 percent on Aug. 19, the highest for a benchmark 10-year note since August 2008. It rose seven basis points today to 8.84 percent as of 10:24 a.m. in Mumbai, prices from the central bank’s trading system show.
- Rupee Seen on Slippery Path as Volatility Highest: India Credit. India’s rupee is seen swinging the most among global currencies as Westpac Banking Corp. (WBC) and Credit Agricole CIB say government efforts to buoy the currency by boosting offshore borrowing are misguided. Three-month implied volatility, a measure of expected moves in the exchange rate used to price options, jumped 649 basis points this quarter to 19.14 percent, the highest among 48 global currencies tracked by Bloomberg. The rupee has plummeted 18 percent this year in Asia’s worst performance.
- Indonesia Faces Rupiah Test With Rate Move on Record Deficit. Indonesia’s surprise interest-rate increase yesterday boosted the rupiah, stemming the currency’s biggest monthly decline in almost five years. To drive a sustained revival, the government needs to curb the country’s record current-account gap.
- Aluminum Industry Seen by JPMorgan Unprofitable on LME Rule. Two-thirds of aluminum producers would be losing money because of lower premiums paid on top of exchange benchmarks if the world’s biggest metals bourse approves rules to cut waiting times at its warehouses, according to JPMorgan Chase & Co.
- Carney Says He’s Alert to Bubble Danger for House Prices. Bank of England Governor Mark Carney said policy makers will act if signs of a property bubble emerge as new data points to continuing strength in the housing market. “We are watching it closely and we will as appropriate make our views known in terms of the degree of this risk and the potential action that should be taken to address it,” Carney said in an interview with the Daily Mail published today.
- S&P 500 Extends Worst Month Since May 2012. U.S. stocks extended the worst monthly drop since May 2012 as investors weighed a smaller-than-forecast increase in consumer spending and prospects for military action against Syria. European shares dropped and Portuguese bond yields surged amid concern the nation will struggle to meet its deficit target. The Standard & Poor’s 500 Index lost 0.3 percent to 1,634.07 at 12:29 p.m. in New York to extend its loss for August to more than 3 percent. The Stoxx Europe 600 Index retreated 0.9 percent while the MSCI Emerging Markets Index gained 0.8 percent. Portuguese yields jumped to the highest level in more than a month. Ten-year Treasury yields were little changed at 2.75 percent, with the benchmark note poised for a fourth month of losses. West Texas Intermediate oil slipped 1.2 percent to $107.51 a barrel and silver and gold retreated.
- Nasdaq Says Succession of Errors Led to Three-Hour Stock Freeze. A confluence of computer mishaps culminating in the failure of Nasdaq OMX Group Inc. backup systems led to last week’s three-hour stock halt, the second- biggest U.S. exchange operator said. Exchange computers were flooded Aug. 22 with inaccurate data before flawed software disabled systems that should have prevented the malfunction from snowballing, according to a statement released yesterday. The challenges were “clearly within the control of Nasdaq OMX,” the company said. Thousands of stocks stopped trading around the country and officials from President Barack Obama to Treasury Secretary Jacob J. Lew were alerted as the exchange worked to address the breakdown. The disruption underscored how quickly the integrity of the U.S. market, which has a value of about $20 trillion, can be subverted as orders to buy and sell shares are matched on more than 50 exchanges and alternative electronic venues.
Fox News:
- Kerry says 'no doubt' Assad regime used chemical weapons, intel findings released. The Obama administration cranked up its call for intervention in Syria on Friday, releasing portions of an intelligence report on last week's chemical weapons attack as Secretary of State John Kerry said there's "no doubt" the Assad regime was behind this "crime against humanity." President Obama, shortly afterward, said he has not yet made a decision about military intervention but is considering a "limited" action. Kerry issued a robust call for action in Syria, despite British lawmakers voting a day earlier not to get involved. He cited the findings of an intelligence assessment that was released shortly after he began speaking, saying there's clear evidence chemical weapons were used by the Assad regime last week.
CNBC:
- After the crisis, new grads face rough jobs road. (video) Cashin: Comments from Fed's Lacker ‘hit me like a 2-by-4’. Art Cashin, director of floor operations at UBS Financial Services, told CNBC on Friday that several under-the-radar comments from the Federal Reserve on Thursday created anxiety in the market and investors shouldn't overlook the implications of what was said.
Business Insider:
New York Times:
- Forecast Darkens for Indian Economy. India’s economy slowed in early summer to its weakest pace since the bottom of the global economic downturn in 2009, government statistics released on Friday evening showed, and evidence is piling up that the economic performance as autumn approaches may be even worse.
StockTwits:
- NYSE Margin Debt near all-time high. (graph)
- Muni bonds sales turn in weakest August since 2000. Sales of U.S. municipal bonds saw their weakest August in more than a decade, as cities, states and authorities brought $20.57 billion of debt to market, according to preliminary Thomson Reuters estimates released on Friday. That was the smallest issuance for August since 2000, when borrowers only sold $16.59 billion in bonds, according to Thomson Reuters data.
- METALS-Copper falls on firm dollar, on Fed tapering concerns. Copper fell to a three-week low on Friday, pressured by a stronger dollar and expectations that U.S. stimulus would be withdrawn starting next month, which could hamper growth and crimp the flow of money invested in commodities. The metal closed the week down 3.5 percent, the biggest weekly loss since mid-June.
- Portuguese yields jump on blow to austerity drive. Portugal's bond yields jumped on Friday after its constitutional court rejected a labour bill that would have allowed public sector workers to be fired, in a blow to the austerity programme set out under Lisbon's bailout. The ruling raised concerns about Portugal's ability to meet conditions to receive its next aid tranche and alarmed investors by suggesting the court could throw out more of the government's planned savings measures. Short-dated bond yields rose faster than longer-dated ones, in a sign that investors were pricing in higher credit risk. This flattened the yield curve and narrowed the spread between the two to its tightest since July, when the country suffered a government crisis. "It raises the probability of the (next) tranche not being disbursed in time. It's not the baseline scenario but it raises the probability and hence you have to discount it into your bond pricing," Alessandro Tentori, global head of rates strategy at Citi said. Ten-year yields rose 15 basis points on the day to 6.82 percent, but were still some way off levels above 8 percent hit in July. Two-year yields rose 35 bps to 5.57 percent and five-year yields were 22 bps higher at 6.54 percent.
- Brazil to monitor prices as currency tumbles - Mantega. The Brazilian government will keep a close eye on inflation to make sure a sharp depreciation of the local currency is not stoking prices, Finance Minister Guido Mantega said on Friday.
- Canada's economy slows in 2nd quarter, shrinks in June. Canada's economy shifted into lower gear in the second quarter and contracted in June for the first time in six months, hurt by a Quebec construction strike and flooding in Alberta. Gross domestic product grew by 1.7 percent on an annualized basis in the quarter, Statistics Canada said on Friday. The growth was largely powered by consumer spending while business investment, inventories and exports dragged on growth. The expansion slowed from a 2.2 percent clip in the first quarter, revised down from the 2.5 percent rate initially reported.
- Investors pull $2 bln out of emerging market bond funds. Investors worldwide pulled $2 billion out of emerging market debt funds in the latest week, the 14th straight week of outflows and the biggest withdrawals since June, a Bank of America Merrill Lynch Global Research report said on Friday.
No comments:
Post a Comment