Thursday, September 10, 2015

Today's Headlines

Posted by Gary .....at 2:50 PM
Bloomberg:
  • APEC Ministers See Downside Growth Risks, Draft Statement Shows. Asia-Pacific Economic Cooperation finance ministers gathering in the Philippines this week are wary of risks to growth from financial-market turmoil, underscoring the faltering outlook that has led to economic forecasts being cut by ratings companies and analysts. “Disruptions in the financial markets and weaker long-term growth prospects are key challenges,” APEC finance ministers meeting in Cebu this week said in the draft of a statement obtained by Bloomberg News. Growth remains moderate and uneven, while risks remain on the downside “amidst uncertainties and financial market volatility,” the ministers said.  
  • Brazil Returns to Junk as Bonanza Ends and Crisis Traps Levy. (video) “The single largest accomplishment of the last 10 years was getting that investment grade,” said Wilbur Matthews, chief executive officer of Vaquero Global Investment LP in San Antonio, Texas, who oversees emerging-market debt. “You would have thought they would have fought harder” to keep it.
  • Hedge-Fund Bets Against Emerging Currencies Get Crowded. Hedge funds are piling into bets that the dollar will strengthen against emerging-market currencies, especially those vulnerable to falling commodity prices, according to a money manager who invests in the funds. The popularity of the trade will fuel volatility in those currencies should such funds adjust their positions, said Sam Diedrich, a director at Pacific Alternative Asset Management Co., which oversees about $9.5 billion in hedge-fund investments. “It’s become a crowded trade,” Diedrich, who is based in Irvine, California, said in a telephone interview. “Long term, I still think the trade works, but you could see some large swings.” A gauge of emerging-market currencies slumped to a record this week as China’s shock devaluation of the yuan on Aug. 11 triggered a rout in stocks around the world, sapping demand for higher-yielding assets. The currencies of developing nations -- from Malaysia to South Africa to Brazil -- were the worst performers against the greenback in the past month.
  • Dollar Bulls Have Reason to Smile Whether or Not Rout Deters Fed. All roads lead to a stronger dollar. That’s the view of Stephen Jen, co-founder of hedge fund SLJ Macro Partners LLP, who spent 13 years at Morgan Stanley where he helped develop a theory known as the “dollar smile.” He’s predicting gains versus emerging-market currencies in particular, whether or not the Federal Reserve succeeds in raising interest rates without sparking market turbulence. “What we have now is a very strange situation where the U.S. economy continues to grow but there’s elevated risk of a financial selloff, and it’s actually the most positive environment for the dollar,” London-based Jen said by phone Sept. 9. “The dollar should be supported in multiple scenarios.”
  • Japan Stocks Are Now Wilder Than Shanghai's. For the first time this year, Japan’s stock market is wilder than China’s. As the Topix index plunged 16 percent from mid-August through Tuesday, short-term volatility jumped to the highest since the aftermath of the 2011 earthquake. 
  • Europe Stocks Snap Three Days of Gains Amid Rate Rise Concern. European shares fell for the first time this week amid renewed investor concern that the global economy isn’t strong enough to withstand higher U.S. interest rates. The Stoxx Europe 600 Index slipped 1.2 percent to 359.34 at the close of trading.
  • Iran Said to Cut Pricing for All October Crude to Asia. Iran cut pricing for all its oil grades for sale to Asia next month, according to two people with knowledge of the decision, trimming the premium on its main Light crude over the comparable Saudi blend to the narrowest since the end of 2012.
  • An Energy Firm's Collapse Casts Ominous Sign Over Mortgage Bonds. A pair of office towers in Tulsa, Oklahoma, is giving commercial real estate investors more reason to worry that the collapse in oil prices is starting to infect their market. The biggest tenant, oil and gas producer Samson Resources Corp., vacated one of the more than a dozen floors it occupied, according to a report from the firm that services a $45 million mortgage on the buildings known as the Williams Center Towers. Samson, which is cutting its workforce as it prepares to file for bankruptcy protection this month, has indicated it will abandon another floor next year, and its lease gives it the right to withdraw from more space after that, according to the report.
  • Food Prices Drop Most in 7 Years on Grain Glut, China Rout. Gluts in foods from grains to milk and concern that China’s slowing economy will curb demand sent global prices down the most in almost seven years. An index of 73 food prices fell 5.2 percent in August, the most since December 2008, to 155.7, the United Nations’ Food & Agriculture Organization wrote in a report Thursday. The slide will cut the food bill for importers such as Egypt, said Abdolreza Abbassian, a senior economist at the FAO. Years of surplus production and record grain harvests swelled global food reserves and reduced prices by 35 percent since a record in 2011. “This is a deflationary period from a food point of view,” Abbassian said by phone from Rome. “In real terms, we’re not much higher than we were at the start of the century. Quite a striking divergence from what people were expecting a few years ago.” 
  • Fed Liftoff Has Futures and Economists at Odds for Next Week. Many economists are sticking to predictions the Federal Reserve will lift interest rates next week. Money-market derivative traders still need convincing. Thirty-eight of 78 economists surveyed by Bloomberg predict the central bank will increase its target when policy makers gather on Sept. 16-17, after holding it close to zero since 2008 to support the economy. Yet the probability of such a move as gauged by federal funds futures contracts, a bellwether for traders for decades, is 28 percent, signaling fewer people in that market are buying the argument that a tightening is just days away.
  • Spy Chief Warns About Hackers Disrupting Financial Markets. Hacking attacks designed to alter electronic data, rather than steal it, may grow more common as terrorists and criminals seek to undermine financial markets, the head of U.S. intelligence warned lawmakers. “I believe we’ll see more cyber operations that will change or manipulate electronic information to compromise its integrity,” Director of National Intelligence James Clapper said at a House intelligence committee hearing Thursday in Washington. Clapper’s warning is one of the starkest to date about a new and potentially debilitating form of hacking. U.S. authorities in August broke up an alleged insider trading ring that relied on hackers to steal corporate press announcements, which were then used to trade stocks on the information before it became public.
 Wall Street Journal:
  • OPEC Sees Weak Oil Prices Through 2015. Lowered expectations won’t change producer group’s strategy. The Organization of the Petroleum Exporting Countries has become more pessimistic about the future of oil prices this year amid plentiful supplies and softening demand from China, the group’s members said this week.
Dow Jones:
  • OPEC Could Increase Production Ceiling When Indonesia Joins. Could bring target close to 31m b/d, citing people familiar with the matter.
Telegraph:

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