Wednesday, April 06, 2011

Today's Headlines

  • Euro Rallies Before ECB Meeting; Dollar Declines to Record Against Aussie. The euro advanced to its highest level against the dollar in more than 14 months on speculation the European Central Bank will increase borrowing costs further after raising its target lending rate tomorrow. The greenback dropped to a record against the Australian dollar and the lowest level versus the Canadian currency in more than three years on the view the Federal Reserve will trail other central banks in boosting interest rates. The yen tumbled against all of its major counterparts on bets the Bank of Japan will expand economic stimulus as the nation recovers from its worst earthquake on record. “It’s a combination of the market expecting the ECB to hike tomorrow and the generally positive environment for risky assets,” said Aroop Chatterjee, a currency strategist at Barclays Plc in New York.
  • Portugal Finance Minister Calls for European Assistance, Negocios Reports. Portugal needs to ask the European Union for financial assistance, Portuguese newspaper Jornal de Negocios reported on its website, citing Finance Minister Fernando Teixeira dos Santos. “It’s necessary to resort to financing mechanisms available in the European framework in the appropriate terms for the current political situation,” Teixeira dos Santos said in a response to questions from the newspaper, Negocios reported today on its website. The comments mark the first time that the government has said it would need to seek aid.
  • Cuomo Repeats Threat to Dismiss 10,000 N.Y. State Workers. Governor Andrew Cuomo, who produced New York’s first on-time budget in five years last week, is standing by his threat to fire almost 10,000 workers unless they agree to provide the state with $450 million of savings. Labor contracts that increased state workers’ pay almost 14 percent over four years expired March 31, 10 days after formal negotiations with unions began. Cuomo has said he spoke with labor leaders about his goals before talks started. “Negotiations are ongoing and obviously if we don’t reach an agreement, we would need to proceed with layoffs,” said Joshua Vlasto, a spokesman for Cuomo, in a telephone interview today. Cuomo, a 53-year-old Democrat, reached agreement with top lawmakers March 27 to close a $10 billion gap in the $132.5 billion budget.

Wall Street Journal:
  • Budget Talks Head to Brink. Republicans and Democrats stumbled one day closer to a government shutdown on Friday, as the two parties escalated what has become a broader battle over Washington's role in the U.S. economy.
  • Gold, Oil Soar to Fresh Highs as Inflation Fears Mount. Gold hit record highs a second straight day Wednesday and oil soared to fresh 2-1/2 year highs, sparking fears of inflation that could hurt some of the world's most dependable economies. Price pressures were rising in Asia's emerging economies — which had been the catalyst for the world's recovery from the financial crisis — and were unlikely to subside soon, the Asian Development Bank cautioned. "High and volatile oil and food prices will, in particular, reverberate through the world economy, and they are likely to stay that way in 2011-2012,'' the ADB said. "They will thus be a significant source of global inflation, especially in developing countries where recovery is firmly under way,'' the Manila-based agency said in a report.
  • New Evidence Mortgage Market is Choking Housing Recovery.
Business Insider:
Zero Hedge:
NY Post:
  • Google's(GOOG) on Verge of Victory. Google is poised to win Department of Justice approval for its controversial $700 million acquisition of ITA Software, The Post has learned.
New York Times:
  • Portugal Sells Debt But At a Much Higher Rate. Portugal was forced to offer higher interest rates to sell short-term debt on Wednesday, underlining concerns among investors about the country’s ability to continue financing itself without an emergency European bailout. Portugal sold 455 million euros, or $650 million, of one-year Treasury bills at an average yield of 5.9 percent, the country’s debt management agency said. That was significantly higher than the 4.33 percent yield when Portugal last sold such bills on March 16. The auction attracted bids for 2.6 times the amount offered, compared with a bid-to-cover ratio of 2.2 two weeks earlier. The agency also sold 550 million euros of six-month bills at an average yield of 5.12 percent, compared with a yield of 2.98 percent at a previous auction of on March 2.
Rasmussen Reports:
  • Obama Reviews Names to Run Consumer Agency: White House. A source aware of the process told Reuters on Tuesday that the White House is considering Federal Reserve Governor Sarah Raskin and former Michigan Governor Jennifer Granholm to run the Consumer Financial Protection Bureau, set to open in July.
  • U.S. Stock Market Bulls Near 4-Month High. Bullish sentiment is often used as a contrarian indicator, with a high level of bullishness often interpreted to indicate an imminent fall in stock prices. U.S. stock market bulls rose to their highest level in nearly four months as equities continue to recover from their recent fall, according to a weekly survey of advisers by Investors Intelligence. Bullish advisers rose to 57.3 percent in the latest week compared to 51.6 percent in the previous week and a recent low of 50.6 percent just prior to that. The reading was the highest since the middle of December when it hit 58.8 percent. "At the end of last August's market lows the bulls were as few as 29.4 percent, suggesting a time to buy," said Investors Intelligence. "The latest reading suggests increased danger. At the October 2007 top, the bulls were 62 percent."
  • D.Boerse Will Not Raise NYSE(NYX) Bid - Source.
Financial Times Deutschland:
  • Several eurozone governments no longer rule out a reorganization of Greek debt, amid concern that Greece will be unable to borrow in capital markets net year, citing government officials. To increase the Greek aid package would be politically impossible and an alternative plan is therefore needed.
El Pais:
  • The situation in Portugal is "not as easy" as in Spain, and whether Portugal needs a bailout or not depends on markets, IMF Managing Director Dominique Strauss-Kahn said in an interview.
Valor Economico:
  • Brazil's central bank may continue to raise its benchmark interest rate after its April 19-20 policy meeting. Policy makers will raise rates as much as necessary to bring inflation within target in 2012.
  • China may raise the price of gasoline by 500 yuan a ton and the price of diesel by 400 yuan a ton.
China Business News:
  • BYD Co. sold 40,027 vehicles in March, a 41% decline from the same period a year ago, citing the company.

No comments: