Swedish current account surplus narrows in Q2

The Swedish current account surplus declined to SEK38.8 billion in the second quarter from SEK77.6 billion recorded in the first quarter, the latest report from the Statistics Sweden showed Friday.

According to the statistical office, the decline in the current account surplus was due to the negative return on capital. The capital account showed a deficit of SEK0.9 billion in the second quarter, the same as in the first three months of the year. In the second quarter, the trade in goods fell to SEK 32.4 billion, while trade in services was up by SEK 5.2 billion over the previous year and totaled SEK27.4 billion. Meanwhile, the financial account surplus was at SEK12.7 billion in the second quarter compared to an SEK8.4 billion deficit in the previous quarter. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Israeli shekel falls to 15-day low against US dollar

Against the US dollar, the Israeli shekel edged down during early deals on Friday. At about 2:30 am Eastern Time, the shekel touched 3.5941 per dollar, compared to 3.5837 hit late New York Thursday. This set a 15-day low for the local currency. If the Israeli currency moves further down, it may test support around the 3.61 level. The pair is now worth 3.5920.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Chinese Yuan Drops Against Dollar And Euro

During early deals on Friday, the Chinese yuan traded lower against the currencies of US and Europe. The Chinese yuan dropped against the European single currency in early trading on Friday and hit a low of 10.0947 at 1:05 am ET.

The immediate support for the Chinese yuan is seen around the 10.11 level. The euro-yuan pair closed Thursday's New York session at 10.0449.

In early trading on Friday, the Chinese currency edged down against the US dollar. At about 12:40 am ET, the yuan touched a low of 6.8427 per dollar, compared to Thursday's North American session close of 6.8301. The next downside target level for the yuan is seen around 6.86.

The People's Bank of China has set today's central parity rate of the euro-yuan and the dollar-yuan pairs at 10.0522 and 6.8345, respectively.

Investors now look forward to the Italian retail sales and CPI, Euro-zone unemployment rate, CPI, business and consumer confidence reports, which are expected to drive deals in the upcoming hours.

Turning to the US, the PCE deflator, personal income and spending, Chicago PMI and the University of Michigan's consumer confidence report are scheduled for release. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

US dollar climbs to 2-day high against Malaysian ringgit

Against the Malaysian ringgit, the US dollar showed strength during early Asian deals on Friday.

At about 8:45 pm ET, the dollar-ringgit pair hit a 2-day high of 3.3980, compared to Thursday's closing value of 3.3875. The pair is currently quoted at 3.3941. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

 

Oil Rallies As Gustav Approaches Gulf

Crude prices touched above $120 on Thursday morning amid concerns Tropical Storm Gustav could cause problems in the Gulf of Mexico's oil region. Light sweet crude for October delivery moved to $119.53, up $1.38 on the session.

Oil hit as high as $120.50 in the early going. Gustav is expected to become a hurricane again later today. Gustav is predicted to reach the Gulf of Mexico over Labor Day weekend, leading to concerns the oil supplies from the region could be disrupted. As a hurricane, Gustav reached landfall in Haiti on Tuesday afternoon, causing killer landslides. Crude oil gained for a third straight session on Wednesday, closing up $1.88 on the session. Traders considered the Department of Energy's mixed bag inventory report. Crude oil inventories decreased by about 170,000 barrels in the week ended Aug. 24. Analysts were expecting to see a build of about 1 million barrels. At 305.8 million barrels, U.S. crude oil inventories are in the middle of the average range for this time of year. Meanwhile, gasoline inventories decreased by 1.2 million barrels last week, and are below the lower boundary of the average range. Market players were expecting a drop of about 2.8 million barrels. Oil prices surged on Tuesday, adding $1.16 for the session. Prices had dropped as low as $112.36 in electronic trading, but later climbed as high as $117.89. Traders also considered a Department of Energy report that revealed lower year-over-year demand for crude oil in the month of June. On the economic front in the U.S., a Department of Commerce report showed that gross domestic product increased at an annual rate of 3.3 percent in the second quarter compared to the advance estimate of 1.9 percent growth. Economists had been expecting GDP growth for the quarter to be revised up to 2.7 percent. Also Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended August 23rd, showing that jobless claims fell to 425,000 from the previous week's revised figure of 435,000. Economists had expected jobless claims to fall to 425,000 from the 432,000 originally reported for the previous week. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Indian rupee slightly higher versus dollar as India's inflation declines to 12.40%

The Indian rupee gains a bit of ground versus the US dollar on Thursday morning in New York, following a government report showed that India's inflation, based on the wholesale price index fell to 12.40% during the week ended August 16 from 12.63% recorded during the week ended August 9.

Economists had expected the wholesale price index to grow 12.82% for the week under review. The Indian rupee that traded as low as 43.835 against the US dollar in early trading advanced to 43.445 by 8:45 am ET Thursday. As of now, the pair is trading near 43.73. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Weekly Jobless Claims Slip To 425,000

Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended August 23rd, showing that jobless claims fell in line with economist estimates compared to an upwardly revised reading for the previous week.

The report showed that jobless claims fell to 425,000 from the previous week's revised figure of 435,000. Economists had expected jobless claims to fall to 425,000 from the 432,000 originally reported for the previous week. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Dollar ticks up versus other majors following Q2 GDP, jobless claims reports

The US dollar gained ground against its major opponents in the early New York session on Thursday, following the release of second quarter GDP and weekly jobless claims reports. As of 8:35 am ET, the dollar was worth 1.0941 against the franc, 109.52 against the yen, 1.8329 against the pound and 1.4737 against the euro.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Indian market plunges ahead of release of key economic data

Thursday, the Indian market plunged following intense selling in bank stocks and Reliance Industries in late trading. After opening flat, the market drifted down into negative territory within a few minutes.

Trading remained choppy for the next few hours in the early session. Subdued opening of the European markets and intense selling in select index heavyweights dragged the indexes sharply down in the afternoon. The rebound in the price of crude oil to above $119 a barrel in Asian trading affected investor sentiment. The price of oil rose led by reports that the Tropical Storm Gustav could head towards the Gulf of Mexico region, which if it does, will affect about 85% of the US offshore oil and gas production installations. Traders remained cautious ahead of the release of wholesale inflation data and the GDP report for the 1st quarter. Analysts' reports that predicted a decline in the first quarter GDP growth rate weighed on market movement. Investors were hesitant to make purchases ahead of the release of the GDP report on Friday. Meanwhile, traders were also cautious ahead of the release of wholesale inflation data in the evening. The wholesale price index is forecast to have risen to a fresh 16-year high for the week ended August 16th. On the BSE, stocks across sectors ended in the red. Oil/gas, capital goods, public sector and metal companies were among the major losers. The market breadth was extremely negative, with only 898 stocks gaining compared to 1721 stocks that declined. After opening at 14,290, the BSE Sensex rose to an intra-day high of 14,347 in the early session. Towards closing of the day, the benchmark drifted to an intra-day low of 14,002, before finishing slightly better at 14,048, down 248 points or 1.74% over Wednesday's close. The small-cap index ended down 1.13%, the mid-cap index declined 1.36% and the broad-based BSE 500 index plummeted 1.51%. Meanwhile, the S&P CNX Nifty settled at 4,214, down 78 points or 1.82%. Reliance (down 3.45%), Reliance Infrastructure (down 3.15%), BHEL (down 3.12%), TCS (down 3.05%), Reliance Communication (down 2.98%), Larsen & Toubro (down 2.98%), Larsen & Toubro (down 2.91%), Wipro (down 2.67%), ICICI Bank (down 2.30%), Hindustan Unilever (down 2.17%), DLF India (down 2.08%), HDFC (down 1.97%), Tata Steel (down 1.65%), State Bank of India (down 1.61%), Mahindra & Mahindra (down 1.53%), HDFC Bank (down 1.46%), Tata Motors9down 1.22%) and ACC (down 1.12%) were among the major decliners. Only 6 out of 30 Sensex stocks, namely Maruti Suzuki, Satyam Computers, Ranbaxy Laboratories, Tata Power and ITC finished in positive territory. The Apollo Hospitals rose 1.66% after the company reportedly said it is in talks to acquire a 30 percent stake in a hospital in Nigeria for about Rs.52 crore. Tata Motors declined 1.22% following reports that work at its plant in Singur came to a halt as workers couldn't turn up for duty following threatening by the activists from the Trinamool Congress party. Sterlite Technologies declined 0.82% even as the company bagged four new orders worth Rs. 278 crore for supply of power conductors. Asian Tea & Exports gained 4.99% after the company's board recommended a stock split in the ratio of 10-for-1 for its shareholders. Apollo Sindhoori Capital surged up 9.55% after the board of directors of Aditya Birla Nuvo approved the acquisition of a 56% stake in the company. Reliance Industries lost 2.88% after the company confirmed media reports that it is planning to transfer 80% of its participatory interest (PI) in the D6 block in the Krishna Godavari (KG) basin to four unlisted subsidiaries. Mahindra & Mahindra fell 2.76% following reports that the company is in talks with Italian motorcycle and scooter maker Malaguti Moto for a possible takeover. Pyramid Saimira Theatre added 2.61% on reports the company is close to acquiring UK's oldest theatre chain Reel Cinemas, earlier Associated British Cinemas or ABC, for around Rs.200 crore. Oriental Bank Of Commerce declined 1.42% following an upward revision of 25 basis points in its prime-lending rate. Ram Kaashyap Investment shed 4.98% following the company's proposal to enhance its authorized capital to Rs.50 crore from the current Rs.25 crore. The company proposed to re-classify it existing capital by converting 4,00,000 (a part of) un-issued preference shares of Rs.100 each to 40,00,000 equity shares of Rs.10 each. Markets across the Asia-Pacific region finished mixed. Hong Kong's Hang Seng index plunged 2.29% and South Korea's KOSPI Composite index declined 1.32%, while Japan's Nikkei 225 index added 0.12% and China's Shanghai Composite index rose 0.34%. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Dollar Eases Versus Euro; Q2 GDP, Jobless Claims On Tap

The dollar lost ground versus the euro and extended its run of choppy dealing versus the yen Thursday morning as traders braced for the release of a preliminary reading on second quarter GDP.

In the wake of yesterday's hawkish comments from European Central Bank officials, the dollar eased to 1.4775 versus the euro. With the retreat the dollar pulled further away from Tuesday's 6-month high of 1.4629. Even with the Euro zone economy seen slowing in the second half of 2008, Bundesbank President Axel Weber told Bloomberg that talk of a rate cut was premature. Weber instead opened the door for more rate hikes next year, insisting that "the inflation outlook has not improved." The number of unemployed in Germany fell 40,000 in August from July after seasonal adjustments, the Federal Employment Agency reported Thursday. The dollar was steady versus the sterling Thursday morning, staying within a penny of yesterday's 2-year high of 1.8285. The Nationwide Building Society said Thursday that house prices in the UK declined 10.5% year-on-year in August, severe than the 8.1% fall in July. House prices fell more than the 9.6% expected by economists. The dollar continue to show a lack of direction versus the yen, slipping to 108.80 before rebounding back to 109.35. The pair has been bouncing back and forth between 108 and 110 since hitting a 7-month high of 110.65 two weeks ago. At 8:30 am ET, the Commerce Department will release its preliminary report on second quarter GDP, which is the broadest measure of economic activity. "Second quarter growth will probably be revised up sharply - to about a 2.9 percent annual rate from the already respectable 1.9 percent originally reported," predict the analysts at UBS. At the same time, the Labor Department will release its weekly jobless claims data. Analysts are expecting initial jobless claims to slip to 425,000 from the previous week's reading of 432,000. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

New Zealand Market Closes Higher

The New Zealand stock market closed higher on Thursday after a volatile trading session. The market opened slightly higher, boosted by overnight gains on Wall Street, but lost ground as crude oil continued to rise for a fourth day.

However, the major averages staged a recovery in the afternoon session and moved into positive terrain. The benchmark NZX 50 index closed up 6.27 points or 0.19% at 3,324.80, ending a two-day losing streak. Meanwhile, the NZX All Capital Index rose 10.28 points or 0.31% to finish at 3,369.86, extending gains for a second trading session. Wall Street posted modest gains on the back of better-than-expected durable goods data. The Dow closed up 0.8% at 11,502, the Nasdaq advanced 0.9% to end at 2,382 and the broader S&P 500 climbed 0.8% to finish at 1,281. Crude oil continued to rise for a fourth day Thursday on fears about Tropical Storm Gustav entering the Gulf of Mexico as a powerful hurricane and disrupting oil and natural gas production. By 00:08 a.m. ET, oil was quoted at US$118.97, up 82 cents, after the contract for October settlement gained $1.88 to settle at $118.15 on the New York Mercantile Exchange. In the currency market, the New Zealand dollar closed stronger against the U.S. dollar. The kiwi gained after the U.S. dollar slipped from its recent highs and following a recovery in business confidence reported by the National Bank of New Zealand on Wednesday. The local unit finished the session at US$0.7056 compared to US$0.7025 late Wednesday. On the economic front, the Reserve Bank of New Zealand reported that M3, the broadest measure of monetary aggregate, increased at a faster pace of 7.6% year-on-year in July compared to 7.4% in June. However, money supply rose less than the 9.4% growth reported in the prior year. Money supply amounted to NZ$203.66 billion in July. Top stock Telecom advanced 0.6% and Fletcher Building, the third best stock, added 0.4%, while second-ranked Contact Energy lost 0.5%. In the retail sector, Hallenstein Glasson gained 1.8% and Pumpkin Patch surged 5.8%, while Jewelry retailer Michel Hill fell 1.1% and The Warehouse Group declined 0.9%. In the energy sector Vector plunged 3.0% after surging 2.6% Wednesday on the back of robust results reported by the company. TrustPower climbed 1.2%. ANZ edged up 0.3% after the country's largest bank reported a 10% increase in after-tax earnings to NZ$870 million for the nine months to June. The increase came, despite a three-fold rise in bad debt provisions to NZ$167 million. Nuplex rose 1.6% after the resins maker reported an 84% jump in after-tax earnings to NZ$48.3 million for the year to June. The company also provided a confident view of future prospects. Among other major gainers, AMP surged 3.8%, Fisher & Paykel Healthcare advanced 1.7%, Auckland International Airport rose 1.5%, Infratil climbed 1.8%, The New Zealand Refining Co added 1.0%, Pike River Coal jumped 2.2%, SkyCity Entertainment soared 3.5%, Tourism Holdings gained 2.8%, and Westpac Banking Group moved up 3.6%. Losers also included Rakon 2.1%, Property For Industry 2.6%, NZX 2.3%, Methven and Kiwi Income Property Trust 1.8% each, Lion Nathan 1.9%, ING Property Trust 2.5%, Guinness Peat Group 2.8%, Goodman Property Trust 2.6%, and Goodman Fielder and Fisher & Paykel Appliances 1.7% each. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Indian market volatile in opening session

After opening flat, the Indian market is currently trading in negative territory. Trading remains range bound and analysts expect more volatility during the day ahead of the expiry of August series derivatives contract and the release of wholesale inflation data in the evening.

As of Wednesday, marketwise rollover of positions from August to September series reportedly stood at 62%, while that of Nifty was seen at 56%. The rollovers were in-line with those in previous month, but the premium on futures is considerably reduced. The market is volatile and is trading in a very narrow range amid alternate bouts of buying and selling. Realty, public sector and metal companies are leading the decliners, while consumer goods and auto stocks are showing notable gains. After trading in a narrow range of 14,347- 14,279, the BSE Sensex is currently at 14,244, down 53 points or 0.37%. The S&P CNX Nifty is trading at 4,274, down 0.41%. On the BSE, the mid-cap index is down 0.27%, the small-cap index is declining 0.13% and the broad-based BSE 500 index is down 0.28%. The market breath is slightly negative, with 748 stocks advancing compared to 787 stocks that are declining. Sterlite Industries (up 1.48%), Maruti Suzuki (up 1.21%), Tata Motors (up 0.88%), Reliance Communication (up 0.86%), Satyam Computers (up 0.83%), Jaiprakash Associates (up 0.80%) and ICICI Bank (up 0.74%) are among the major gainers. Meanwhile, DLF India (down 1.21%), Grasim Industries (down 0.70%), ONGC (down 0.58%) and ITC (down 0.54%) are the major decliners. Sun Pharmaceutical is up 0.16% after the company won a case in an Israel Court filed against it by Taro Pharmaceutical. Vishal Retail is adding 0.40% after the company said it has opened four new showrooms during the last week. Marksans Pharma is rising 4.90% after the company decided to acquire the entire shareholding of UK's leading generic pharma company M/s. Relonchem Marksans Pharma. BAG Films is up 0.63% after the board of directors allotted 46,00,000 equity shares of Rs.2/- each, by conversion of 46,00,000 warrants, to Anu Films and Communications Pvt. of New Delhi, at a price of Rs.13 per shares (including a premium of Rs.11 per shares). Sundaram Fasteners is up 1.49% after the company acquired a 52.94% equity share capital of Sundaram Non- conventional Energy Systems Ltd (SNES). Choksh Infotech is up 3.19% after the company said its board will meet on August 30th to consider the acquisition of a software company. K Sera Sera Productions is declining 0.24% after the company said its board would meet on August 28th to consider the issue of equity-linked instruments. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Euro Open: EZ Consumer Confidence to Remain at 5-Year Low

Written by Ilya Spivak, Currency Analyst

The Euro moved higher overnight, testing above the 1.48 level. Sterling retraced some of the heavy losses seen in US hours, rising to re-test the 1.84 level. Australian Private Capital Expenditure surprised to the upside, printing at 5.7% in the second quarter versus 2.0% expected. Tonight's calendar is laden with Euro Zone economic data releases, though forex traders are unlikely to see them produce substantial deviations from established themes. Interestingly, recent weeks have seen the Euro under pressure even though monetary easing seems far from imminent. This could suggest that price action is attempting to guide the ECB, acting as if the bank will soon be compelled to cut rates sooner.

Indian rupee falls from 2-day high against US dollar

The Indian rupee that showed strength in early Thursday's Asian trading against the US dollar reversed direction after hitting a 2-day high of 43.4250 by about 8:10 pm ET.

The dollar-rupee pair is currently worth 43.80, compared to 43.7450 hit Wednesday in New York. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

US dollar off 2-day low against South Korean won

The US dollar that hit a 2-day low of 1078.05 against the South Korean won at about 8:05 pm ET Wednesday strengthened thereafter.

The dollar-won pair that closed yesterday's New York deals at 1083.70 is currently quoted at 1082.25. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved.

JAKARTA (Thomson Financial) - Indonesian shares are expected to open higher on Thursday, supported by Wall Street's advance overnight as fresh data indicated the U.S. economy could be stronger than some investors thought.

The Dow Jones Industrial Average gained 0.8 percent on Wednesday as investors cheered the bigger-than-expected increase in orders for big-ticket manufactured goods.

Commodity stocks are likely to lead the advance on the back of a rebound in some commodity prices such as crude palm oil and nickel in line with a rise in crude oil.

'I see a good chance for the market to go up today. The rise in commodity prices such as CPO and nickel should revive interest in commodity stocks,' Recapital Securites analyst Poltak Hotradero said.

Oil prices surged Wednesday as tropical storm Gustav appeared headed for the Gulf of Mexico and its oil and gas installations. New York's main contract, light sweet crude for delivery in October,

climbed 1.88 dollars to close at $118.15 a barrel.

On Wednesday, the Jakarta composite index closed up 23.52 points or 1.1 percent at 2,131.63.

roffie.kurniawan@thomsonreuters.com

New Zealand July M3 Money Supply Growth Improves

Thursday, the Reserve Bank of New Zealand reported that M3, the broadest measure of monetary aggregate, increased at a faster pace of 7.6% year-on-year in July compared to 7.4% in June.

However, money supply rose less than the 9.4% growth reported in the prior year. Money supply amounted to NZ$203.66 billion in July. The central bank said M3, excluding funds from non-residents, moved up 9.8% annually, the same as in June. Meanwhile, M3, excluding repurchase agreements climbed 7.9%, following a 7.8% rise in June. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved.

New Zealand July M3 Money Supply Growth Improves

Thursday, the Reserve Bank of New Zealand reported that M3, the broadest measure of monetary aggregate, increased at a faster pace of 7.6% year-on-year in July compared to 7.4% in June.

However, money supply rose less than the 9.4% growth reported in the prior year. Money supply amounted to NZ$203.66 billion in July. The central bank said M3, excluding funds from non-residents, moved up 9.8% annually, the same as in June. Meanwhile, M3, excluding repurchase agreements climbed 7.9%, following a 7.8% rise in June. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved.

Euro soars to 4 1/2-month high against UK's sterling

Thursday in Asia, the European currency showed strength against its major counterparts. The euro thus rose to a 4 1/2 - month high against the British pound, 3-day highs against the currencies of US and Japan and a 2-day high versus its Swiss counterpart.

Against the US dollar, the European single currency traded higher during early Asian deals on Thursday. At about 10:10 pm Eastern Time, the euro hit a 3-day high of 1.4793, compared to 1.4728 hit late New York Wednesday. The European currency rose to a 4 1/2-month high of 0.8062 against the British pound at about 9:55 pm ET Wednesday. The euro-pound pair that closed yesterday's North American session at 0.8025 is now worth 0.8053. Against its Swiss counterpart, the euro gained ground after hitting a low of 1.6147 at about 7:30 pm ET Wednesday. The euro-franc pair is currently trading at a 2-day high of 1.6178, compared to yesterday's closing value of 1.6166. The single currency showed strength against the Japanese yen during early Asian deals on Thursday. At about 10:00 pm Eastern Time, the euro- yen pair reached 162.04, up from Wednesday's close of 161.28. This set a 3-day high for the pair. As of now, the pair is worth 161.76. Traders will have a busy European session today, in which German ILO Unemployment Rate, Italian Producer Price Index for July and the Euro -Zone Consumer Confidence for August are expected. Across the Atlantic, the US Q2 GDP is expected to influence trading in the New York morning. Data released since the advance (first) estimate of Q2 GDP has implied stronger growth in the quarter. We look for GDP to be revised up 1.0pp to 2.9 percent q-o-q ar, predict the economists at Lehman Brothers. The majority of the upward revision should be in trade and inventory, leaving domestic final sales unchanged at 1.3 percent. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserv

Look For Small Changes in GDP: Lehman Brothers

Data released since the advance (first) estimate of Q2 GDP has implied stronger growth in the quarter. We look for GDP to be revised up 1.0pp to 2.9 percent q-o-q ar, predict the economists at Lehman Brothers.

The majority of the upward revision should be in trade and inventory, leaving domestic final sales unchanged at 1.3 percent. The trade deficit narrowed considerably more than expected in June, suggesting an even bigger contribution from trade of 3.4pp versus previously reported 2.4pp. The monthly inventory data imply a slightly smaller drop in inventories which should bring the drag to GDP to a still-high 1.7pp.

 
 

Elsewhere, we expect a few small revisions. Most notably, consumption is likely to be revised slightly higher while non-residential investment in structures looks likely to be revised lower.

 
 

A significant contribution from trade was the main driver of growth in the second quarter. However, looking ahead to the next few quarters, we expect the contribution from trade to fade as the dollar strengthens and the global economy weakens.

 
 

In addition, we expect even weaker domestic demand with an outright decline in consumption in the second half of the year.

 
 

Corporate profits, which will also be released with the Q2 GDP revisions, are expected to have declined by 6 percent q-o-q ar, or 6.2 percent y-o-y. Operating earnings were actually up slightly for S&P 500 companies on the quarter, but we believe smaller and non-public firms will keep economy-wide profit growth in negative territory.

 
 

 Initial jobless claims likely fell to 420,000 in the week ending August 22, down from 432,000 in the previous week. The distortion to claims from the recently enacted extension of unemployment insurance benefits appears to be gradually fading. We expect claims to gradually drift down to around 400,000 over the next two to three weeks. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Philippines Q2 GDP +4.6 on Year

The economy of the Philippines increased by 4.6 percent in the second quarter compared to the previous quarter, the National Statistics Office said on Thursday. That's down sharply from the 5.2 percent annual expansion in the previous quarter, and it also came in below the wide range or forecasts that predicted an increase of between 5 and 5.9 percent on year.

Agricultural output in the Philippines, which makes up about 40 percent of total GDP, climbed 5.4 percent on year in the second quarter as production of the country's main rice crop was boosted by early rains. Overseas remittances were up 17 percent on year in the first half, with annual remittances in June alone climbing a record 30 percent. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved.

APD Chief Economist Says Slowing Growth Overseas Poses Biggest Risk To US Economy

The chief economist for industrial giant Air Products & Chemicals (APD) said Wednesday that the primary external risk to the U.S. economy was faltering growth overseas.

Speaking at an Economic Outlook Conference at Georgia State University in Atlanta, Duncan Meldrum also noted possible risks from inflation throughout the world, global credit contraction and political risks such as Russia's recent invasion of its neighboring nation of Georgia.

Meldrum said the growth outside the U.S. was slowing more than had been previously thought. As examples, he noted that Spain was "at risk" and Ireland was probably in a recession.

Meldrum stated that over recent years, the economic growth outside the U.S. has been substantially higher than domestic growth - with the gap between the two of a size not seen since at least 1995.

This stronger overseas growth has provided a boost to U.S. exports, which has helped to mitigate the impact of the decline in the housing industry.

On inflation, Meldrum said that increases in Asia were more worrisome than elsewhere in the world, as the inflation increase seems to be moving into wages.

The uptick in inflation in the European Union is less a source of concern, the economist said, largely as the result of high confidence in the European Central Bank to maintain price stability. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Franc advances to multi-day high versus yen

Extending its recent uptrend, the Swiss franc advanced to a multi-day high of 100.01 against the Japanese yen by 8:40 am ET. This may be compared to the previous session's low of 99.37. As of now, the franc-yen pair was worth 99.93.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Yen shows weakness versus other majors

Extending its recent losses, the Japanese yen declined further versus the other major currencies during early New York trading on Wednesday. By 8:05 am ET, the yen drifted lower to 161.07 against the euro, 109.14 against the U.S. dollar and 99.90 against the Swiss franc.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Taylor Wimpey Do Not Expect UK Housing Market Recovery In Short Term

Wednesday, the UK's largest homebuilder Taylor Wimpey said the current operating condition in the UK housing market is very challenging. The company does not anticipate any recovery in the short term and expects conditions to possibly remain tough in the UK as well as US housing markets.

Taylor Wimpey said margins in the second half are expected to be considerably affected by pricing pressures. During this tough time, the company said its focus is on cash management, cost reduction and sales rates that are helping to retain its momentum. The homebuilder noted that the US housing markets remain weak, though it was more stable than in 2007. Taylor Wimpey now anticipates no material recovery until 2009 at the earliest. Further, Taylor Wimpey said its housing business in Canada remained comparatively stable, adding that the economy has not experienced the same levels of house price inflation as in the U.S. and UK. However, the company said it remains convinced of the fundamental value of the business over the medium and long term. Taylor Wimpey expects both the UK and North American housing markets to remain attractive in the medium and long-term due to the positive demographic trends in both markets. Constrained land supply is expected to underpin the UK housing market, while the company's ability in an improved market is expected to help increase volumes profitably in the U.S. According to the Group Chief Executive, Pete Redfern, Taylor Wimpey's experience of the downturn in the US housing market has enabled it to identify the early signs of market weakness in the UK and act swiftly to position its UK housing business for a difficult trading environment. The company also said it experienced very challenging conditions across Spain along with UK and U.S. markets in the first half. Though the company views the market in Mallorca as more stable, it said the housing market in Spain remained weak on the mainland. Additionally, the company announced that it is planning to exit its business in Gibraltar, which is expected to be completed in 2009. While stating that its liquidity position is currently strong, Taylor Wimpey said it would possibly breach its existing interest cover covenants when tested for the full year. The company also revealed that they are in discussions with the relevant lenders on amendments to certain of its existing borrowing agreements and hopes to reach a satisfactory conclusion. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Japanese market closes lower, led by property stocks and exporters

The Japanese market closed lower on Wednesday, extending Tuesday's losses. Investors remained cautious ahead of a series of key economic data scheduled for release on Thursday and Friday in the U.S. and Japan.

The market traded weak in the morning session after Wall Street provided a mixed lead, but recovered some ground in the afternoon session. The benchmark Nikkei 225 index closed down 25.75 points or 0.2% at 12,752.96 and the broader Topix index slipped 5.66 points or 0.5% to finish at 1,223.69. In the currency market, the dollar fell to lower 109-yen levels in late Tokyo deals from mid 109-yen levels in early trade and upper 109-yen levels late Tuesday. On the economic front, traders had little economic data to digest on Wednesday. In the U.S., traders await durable goods orders and GDP numbers on Thursday and Friday respectively, while Japan will announce its July consumer price index, jobless rate, household spending and other data on Friday. Property stocks fell after home builder Sohken Homes said Tuesday that it had filed for court protection and exporters declined as the yen strenghtened agains the dollar. Sohken Homes tumbled 12. 4 %, Nomura Real Estate Holdings lost 2.8%, Mitsubishi Estate dropped 2.1% and Sumitomo Realty & Development plunged 2.9%. Among exporters, Toyota Motor fell 2.7%, Nissan Motor plummeted 4.7%, Minebea lost 1.0%, Komatsu lost 2.6%, Sony gave away 1.4% and Canon slipped 0.2%. In the financial sector, Mitsubishi UFJ Financial Group declined 0.4%, Mizuho Financial Group lost 0.7%, and Sumitomo Mitsui Financial Group dropped 0.8%. Top brokerage Nomura Holdings closed unchanged, while Daiwa Securities Group gave away 2.2%. Sompo Japan Insurance gained 1.5% and Mitsui Sumitomo Insurance surged 3.9%. Oil and gas miner, Inpex Holdings advanced 1.2%, Nippon Mining Holdings gained 1.6% and Nippon Oil added 0.3% on higher oil prices. In the tech sector, Advantest closed flat, Fanuc gained 1.0%, and Kyocera edged up 0.3%, while Matsushita Electrical Industrial dropped 1.6% and NEC fell 1.6%. Mitsubishi Electric gained 0.8% after a Nikkei report said that Japan's third-largest integrated maker of electronics products plans to invest more than 10 billion yen and nearly triple its production capacity for highly efficient solar cells by the end of March 2012. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Australian market closes slightly higher; Macquarie Group plunges nearly 10%

The Australian stock market closed slightly higher on Wednesday after posting marginal losses on Tuesday. Wall Street provided a mixed lead, as an increase in oil prices offset positive sentiment from better than expected numbers on U.S. consumer confidence.

Energy stocks gained on higher oil prices, but financial stocks were weak on credit crunch concerns. The benchmark S&P/ASX 200 index closed up 3.7 points or 0.07% at 5,011.2 after losing 0.2% on Tuesday. The broader All Ordinaries index lost 5.5 points or 0.11% to finish 5,087.8. In the currency market, the Australian dollar closed higher after dropping to an eleven-month low during offshore trading. The Aussie finished the local session at US$0.8580-0.8582, up from Tuesday's close of US$0.8559-0.8563. In the U.S., the Dow Industrials rose 0.23% and the broader S&P 500 advanced 0.37%, while the tech-heavy Nasdaq fell 0.15% on Tuesday. Oil prices rose Tuesday on concerns that Hurricane Gustav could cause problems for the Gulf of Mexico's oil region. Light sweet crude for October delivery closed at $116.27 a barrel, up $1.16. Oil continued to rise in the Asian session Wednesday and was gaining 33 cents to $116.60 a barrel by 2:23 a.m. ET. On the economic front, the Australian Bureau of Statistics said that the value of total construction work done in Australia fell 2.6% in volume terms in the second quarter of 2008. The total construction work done for the quarter was valued at A$30.137 billion, compared to an upwardly revised A$30.947 billion in the March quarter. On a seasonally adjusted basis, total value of building work done in the June quarter rose to A$16.797 billion from an upwardly revised A$16.756 billion in the March quarter. Among banking stocks, Commonwealth Bank lost 1.7%, ANZ Banking Group slipped 0.3% and Westpac and National Australia Bank declined 0.2% each. St. George bank dropped 1.0%, while investment bank Macquarie Group slumped 9.6% after broker UBS downgraded its recommendation on the stock to "Neutral" from "Buy". In the resources sector, index leader BHP Billiton added 0.3% and Rio Tinto rose 0.8% after the miner reported a 55% increase in first-half underlying net profit on Tuesday, beating analysts' forecasts. Gold miner Lihir Gold surged 3.1%, while Newcrest Mining closed unchanged. Energy stocks were higher, with Woodside Petroleum and Oil Search jumping 3.4% each and Santos gaining 3.1%. Woodside posted an 86% jump in first-half underlying earnings, on the back of record crude prices during the period, and reiterated its production outlook. In the retail sector, David Jones advanced 1.4%, Coles owner Wesfarmers gained 2.1%, and Woolworths jumped 2.7%. Westfield Group, the world's largest shopping mall owner, fell 3.4% on concerns about a weak U.S. economic outlook though the group reported a 10% rise in first-half operating earnings, which was in line with expectations. Centro Properties tumbled 8.6% on ongoing concerns about its ability to refinance its debt and Toll road investor Transurban Group fell 2.4% as the company reiterated that it would halve its distribution in fiscal 2009 to shore up its balance sheet after reporting a 19% rise in full-year underlying earnings. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

US dollar bounces back against Indian rupee

The US dollar bounced back against the Indian rupee after being down during Wednesday's early Asian trading. The dollar-rupee pair is now worth 43.8150, moving up from its early Asian session low of 43.5450.

The dollar closed Tuesday's trading at 43.7650 against the Indian currency. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

New Zealand dollar extends uptrend against majors

The New Zealand dollar extended Wednesday's Asian session uptrend against its major counterparts during early European deals also. The NZ dollar rose to 2-day highs against the Aussie and the euro.

The latest monthly business outlook survey from the National Bank of New Zealand, or NBNZ said today that New Zealand's business confidence balance improved to minus 20.5 in August from minus 43.2 reported in July. The balance of activity outlook recovered in August to 4.7 from minus 8.2 in the prior month.

The kiwi hit highs of 0.7035 against the US dollar and 76.79 against the Japanese yen by about 2:30 am ET Wednesday, compared to previous day's closing values of 0.6977 and 76.48, respectively.

At about 11:10 pm ET Tuesday's, the NZ dollar hit a 2-day high of 1.2226 against the Australian currency, which may be compared to Tuesday's New York session closing value of 1.2277.

In trading against its European counterpart, the New Zealand kiwi showed strength during Wednesday's early trading. At about 2:35 am ET, the kiwi climbed to a 2-day high of 2.0903 against the euro, up from Tuesday's closing value of 2.1008.

The Federal Statistical Office announced that the German import price inflation rose to 9.3% year-on-year in July from 8.9% recorded in June. This was the fastest growth since November 2000, when import prices climbed 10.6%. Economists were expecting an annual increase of 9.2% in July. Compared to June, import prices were up 0.6%, faster than the 0.5% growth expected.

Apart from the release of the Italian August consumer confidence index at 3:30 am ET, the traders have nothing to digest in today's European session. From US, the July durable goods orders and Federal Reserve board member Lockhart's speech on Inflation at Georgia State are scheduled in the New York session. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Soybean prices fall on stronger dollar

NEW YORK (AP) - Soybean prices fell slightly Tuesday, dropping below $13.45 a bushel after the dollar gained against the euro and weakened demand for commodities as an inflation hedge.

Soybeans for November delivery fell 2.5 cents to settle at $13.445 a bushel on the Chicago Board of Trade.

A stronger dollar usually encourages investors to sell commodities, which are often bought as hedges against inflation or weakness in the U.S. currency.

Greenback ticks down versus loonie

The greenback edged lower versus its Canadian counterpart in the early Asian session on Wednesday. By 8:20 pm ET Tuesday, the dollar fell to 1.0460 versus the loonie.

 This may be compared to yesterday's close of 1.0484. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Canadian dollar sets fresh multi-month highs versus euro and Aussie

In trading against its major counterparts, the Canadian dollar staged a sharp rise on Tuesday morning in New York as oil prices inched higher on concerns over Hurricane Gustav.

The loonie surged to new multi-month highs versus the Australian dollar and the euro. At the same time, the Canadian dollar rose to near a 3-week high versus the greenback and a 25-day high versus its Japanese counterpart in the mid-morning trading on Tuesday. Light sweet crude for October delivery added $2.29 to reach $117.40 a barrel on Tuesday morning. Prices had dropped as low as $112.36 in electronic trading. The oil prices climbed on concern that Gustav strengthened to a Category 3 hurricane as it headed towards Haiti on Tuesday morning. Some forecasts see the storm heading into the Gulf of Mexico, which could threaten the oil region. The Canadian dollar advanced to near a 3-week high of 1.0415 against the US dollar by 10:15 am ET. This may be compared to the previous session's 5-day high of 1.0564 that hit around 5:40 am. The greenback-loonie pair is currently quoted at 1.0431. According to a latest report from the U.S, the S&P/Case-Shiller national home price index dropped a record 15.4% in the second quarter compared to the same period last year. The Case-Shiller 10-city posted a record year over year decline of 17% and 20-city indexes were down 15.9%. Economists were expecting the second quarter home price index to drop 16.2%. At the same time, the Department of Commerce released its report on new home sales in July, showing that new home sales surged up 2.4% to an annual rate of 515,000 in July from the revised June rate of 503,000. Economists had expected sales to fall to a rate of 525,000 from the rate of 530,000 originally reported for June. Meanwhile, the US Conference Board said today that its consumer confidence index jumped to 56.9 in August from an unrevised 51.9 in July. The increase came in well above the expectations of economists, who had expected the index to edge up to 53.0. Against the yen, the Canadian loonie edged up to a 25-day high of 105.46 by 10:40 am ET. This may be compared to today's early Asian session low of 103.76. As of now, the loonie-yen pair is worth 105.36. The Bank of Japan said today that the corporate service price index, which measures corporate prices of communications, transportation and advertising, climbed 1.3% on year in July. The figure fell slightly below analysts expectations that were looking for an increase of 1.4% on year and it was up from the 1.2% annual increase in June. On month, the index eased 0.1%. The Canadian dollar surged to a 5-1/2 month high of 1.5267 versus the euro by 10:35 am ET, compared to today's early European session low of 1.5428. The pair traded as German business confidence declined to 94.8 in August from 97.5 in July. Economists had expected the index to fall to 97.2. As of now, the euro-loonie pair is trading at 1.5308. Traders also weighed a detailed report from the Federal Statistical Office that the German economy contracted 0.5% sequentially in the second quarter, after expanding 1.3% in the first quarter. Against the Aussie, the loonie ticked up to a 6-1/2 month high of 0.8925 by 10:15 am ET. The Aussie-loonie pair that closed yesterday's trading at 0.9074 is currently quoted at 0.8945. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

FOREX-Dollar extends gains on consumer confidence data

(Updates with latest market moves, adds reaction to U.S. consumer confidence report for August)

NEW YORK, Aug 26 (Reuters) - The U.S. dollar extended gains on Tuesday after a report showed U.S. consumer confidence was higher than expected in August.

The euro was last trading at $1.4637 <EUR=> compared with 1.4645 before the report. The dollar was last trading at 109.50 yen, up 0.2 percent on the day, from 109.40 yen <JPY=> before the release of the data. (Reporting by Nick Olivari; Editing by James Dalgleish)

Europe Round Up - German Economic Outlook Turns Gloomier

Tuesday, several key data released during the day added to the gloomier outlook for the German economy. Business confidence in the largest Eurozone economy fell to a three-year low, while consumer confidence declined further.

Further, the contraction in the economy during the second quarter was confirmed. Eurozone The German business confidence deteriorated more than expected in August, reaching the lowest level in three years, as the economy experiences a more difficult situation. Firms have assessed the current business situation as clearly unfavorable and projected further negative development in the coming half year. The business survey results released by the Munich-based Ifo research institute revealed that the business confidence index fell to 94.8 in August, declining for three consecutive months. Economists had expected the index to fall to just 97.2 from July's 97.5. Elsewhere, a monthly survey from the GfK Group showed that German consumer confidence, which was depressed by subdued economic outlook reached the weakest level since 2003. Consumer confidence for September dropped to 1.5 points from August's 1.9 points. A detail report from the statistical office showed that the German economy shrank in the second quarter for the first time in almost four years on reduced investment in construction as well as machinery and equipment. The economy contracted 0.5% sequentially in the second quarter, after expanding 1.3% in the first quarter. On a yearly basis, the economic growth stood at 3.1%, larger than the 1.8% in the first quarter. The calendar adjusted Gross Domestic Product, or GDP rose 1.7% compared with 2.6% in the prior quarter. France's Ministry of Ecology and Sustainable Planning and Development said in a report that housing starts declined 11.8% in the three-month period to July. This was slower compared to a 28.2% fall recorded in the three-month to June. Meanwhile, housing permits dipped at a faster pace of 16.6%, compared to a 15.3% decline seen during three-month period to June. Spain's National Statistics Institute lowered its gross domestic product, or GDP growth for 2007 to 3.7% from initially reported 3.8%. At the same time, the statistical office kept the growth figures for 2004, 2005 and 2006 unchanged. According to the statistical office, weak contribution of domestic demand led to a downward revision of growth. The Statistics Finland announced that the country's unemployment rate dropped to 5.2% in July from 6.8% recorded in June. The rate also eased from the 5.9% recorded in the previous year. Economists were looking for a jobless rate of 5.3% for July. The number of jobless stood at 144,000 in July, smaller than the 161,000 in previous year. Rest of Europe The British Bankers' Association said mortgages approved for house purchase continued to be low in July, indicating that the housing market is unlikely to start recovering in the near term. The number of mortgages approved in the UK for house purchases rose to 22,448 in July from 22,369 in June. Approvals for house purchase fell 65% over the previous year. The Swiss UBS consumption indicator decreased significantly in July after recording a temporary increase in June. According to a report from the investment bank UBS, the consumption indicator fell to 1.85 in July, marking the largest correction seen during a single month for just under a year. The indicator fell from 2.22 in June, revised from 2.25 reported earlier. At its current level, the UBS consumption indicator signals that Swiss consumer spending remains healthy, though the outlook is deteriorating. UBS expects real private consumption to grow 1.8% in 2008. However, the UBS said the recent hike in inflation coupled with the economic downturn tarnished this outlook. Denmark's finance ministry lowered its economic growth outlook for 2008 and 2009, citing higher commodity prices fueling inflationary pressures. The ministry projects the economy to grow 1.1% in 2008, down from 1.2% estimated in May. The economic growth is forecast to decrease to 0.5% in 2009, revised from 0.7% initially predicted. At the same time, the government hiked inflation forecast for the current year to 3.5% from 3.3% due mainly to higher prices for energy and food. However, the rate of inflation is expected to slow to 2.7% in 2009. Inflation outlook for 2009 was raised from an earlier prediction of 2.6%. The Statistics Sweden reported that the Producer Price Index or PPI rose 3.3% year-on-year in July, quicker than the 3% rise recorded in June. Economists expected the rate to remain unchanged at 3% for July. On a monthly basis, producer prices rose 0.7% in July, following a monthly growth of 0.5% in June. The consensus forecast was for a monthly increase of 0.4%. The Central Statistical Office announced that the Poland's unemployment rate dropped to 9.4% in July from 9.6% recorded in prior month. A year ago, the rate was 12.1%. The jobless rate declined for the sixth month in a row, falling from 11.7% in January. The jobless number stood at 1.42 million persons, down from 1.46 million recorded in June. The jobless number fell 32,400 from June. The statistical office also reported that Poland's retail sales rose 14.3% year-on-year in July, a notch higher than the 14.2% rise recorded in June. Economists had expected the growth to decline to 14% for July. Month-on-month, overall retail sales increased 1.8% in July versus 2.4% rise seen in the previous month. The rate stood well below the 2.1% rise expected by the economists. In a widely expected move, the National Bank of Slovakia maintained its two-week repo tender limit rate at 4.25%. The central bank also retained its overnight sterilization rate at 2.25% and the overnight refinancing rate at 5.75%. This is for the 16th consecutive month the central bank is holding its rates. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Consumer Confidence Index Jumps To 56.9 In August

Consumer confidence increased by much more than anticipated in the month of August, according to a report released by the Conference Board on Tuesday, with the improvement reflecting a notable increase in confidence in the outlook for the next six months.

The Conference Board said its consumer confidence index jumped to 56.9 in August from an unrevised 51.9 in July. The increase came in well above the expectations of economists, who had expected the index to edge up to 53.0. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Dollar erases early gains versus loonie as oil rebounds

The dollar fell sharply versus the loonie Tuesday morning in New York, moving well off its early highs after the price of oil jumped back above $115. The dollar slipped to 1.0486 from an early high of 1.0560.

With the mid-morning plunge, the dollar moved back toward last Friday's multi-week low of 1.0420. The dollar eased across the board following the release of the latest S&P/Case Shiller Home Price Index for June, which showed that nationwide home prices dropped 15.4 percent in June. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

U.S. S&P/Case-Shiller Home Price Index Drops 15.9% in July Yr-on-Yr

Slovak Central Bank Holds Rates at 4.25% Ahead of Euro Adoption in January 2009

(CEP News) - As expected, the Slovakian Central Bank held its benchmark interest rate unchanged at 4.25% on Tuesday, in line with the European Central Bank's main refinancing rate and ahead of Slovakia's adoption of the euro on Jan. 1, 2009. The moves comes as the country experiences an annual 4.8% inflation rate - 4.4% when harmonized with the euro zone - and a preliminary 7.6% annual growth rate in Q2 2008. Should the European Central Bank continue to hold rates as expected by both markets and economists, it is unlikely the Slovak Central Bank will deviate from the ECB until its adoption of the euro. By Erik Kevin Franco, This email address is being protected from spam bots, you need Javascript enabled to view it, edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it CEP Newswires - CEP News © 2008. All Rights Reserved.

Euro Breaks 1.4600 After German IFO Disappointment, Will U.S. Data Keep Dollar Rally Going?

Previous Articles

• Aug 26 - Euro Breaks 1.4600 After German IFO Disappointment, Will U.S. Data Keep Dollar Rally Going?
  
• Aug 26 - Euro Open: German Economy to Shrink, Threatening Recession
  
• Aug 25 - British Pound Speculative Shorts (COT) Highest on Record
  
• Aug 25 - Forex Forecast: 5 Key Events for the Market This Week 08-25-08
  
• Aug 22 - Forex Trading Weekly Forecast - 08.25.08
  
• Aug 22 - British Pound Vulnerable to Sharp Pullback Next Week
  
• Aug 22 - Pound Plummets As Growth Stalls, Euro Follows Suit
  
• Aug 22 - Euro Open: UK Gross Domestic Product to Print at 15-Year Low
  
• Aug 21 - Forex Emerging Markets Weekly - August 21, 2008
  
• Aug 21 - Forex Trading Forecast: US Dollar to Weaken Before Further Rallies
  
• Aug 21 - Euro Open: Will Switzerland Follow the EU into Recession?
  
• Aug 21 - Pound Reverses Despite U.K. Retail Sales Rebound, Euro Heavy As PMI Remains In Contraction
  
• Aug 20 - Can Chinese Demand Keep Japan Out of Recession?
  
• Aug 20 - Dollar May Drop Without Action From The Fed
  
• Aug 20 - Australian Dollar Could Fall Like a Rock
  
• Aug 20 - BoE Voted 7-1-1 to Leave Rates Unchanged, Besley Votes For Hike.
  
• Aug 20 - Euro Open: Is The Bank of England Closer to Cutting Interest Rates?
  
• Aug 19 - Forex Seasonality Update: We Forecast USDCAD Declines
  
• Aug 19 - Euro Falls As German ZEW Shows Current Conditions Worsening
  
• Aug 19 - A Drop in U.S. Housing Starts Would Validate EURUSD Technical Outlook
  

Written by John Rivera, Currency Analyst

The Euro broke below 1.4600 after the German IFO Survey fell to a three year low. German business confidence fell to 94.8 from 97.5 in July and far below the expected 97.2. The EURUSD was already trading heavy having fallen over 100 points in Asian trading ahead of the German GDP report which showed the country's economy contracted 0.5% in the second quarter.

Talking Points   
•    Japanese Yen: Back Above 109.80
•    Swiss Franc: Consumption Lowest In  Almost A Year
•    Euro:  German Growth Contracts As Business Confidence Falls To 3 Year Low
•    British Pound: Falls On Declining European Outlook
•    US Dollar: Housing Data and U.S. Consumer Confidence On Tap

Euro Breaks 1.4600 After German IFO Disappointment, Will U.S. Data Keep Dollar Rally Going? .

The Euro broke below 1.4600 after the German IFO Survey fell to a three year low. German business confidence fell to 94.8 from 97.5 in July and far below the expected 97.2. The EURUSD was already trading heavy have fallen over 100 points in Asian trading ahead of the German GDP report which showed the country's economy contracted 0.5% in the second quarter. The outlook for Europe's largest economy is now expected to continue to decline in 3Q, which was evident by the fall in the expectations component of the IFO indicator to 87.0 from 90.0, which was the lowest since February, 1993. Additionally, consumer confidence in the country fell to 1.5, the lowest in five years, declining the prospects of domestic growth.

The German economy shrinking for the first time in four years may be a clear sign for the ECB, that a more accommodative monetary policy is needed to prevent the region from falling into a recession. German efficiency and emerging market demand helped it withstand the head winds from the U.S. longer than expected, but the subprime crisis's impact on global growth has finally taken its toll. The central bank's decision to raise credit costs in July has only accelerated the decline and may have brought the region to the brink of a recession, as German growth has masked weakness in other European leaders like Spain and Italy.

The Pound fell to a 25 month low of 1.8368 on the German news, as its prospects for growth declined with its major trading partner's economy heading for a recession. The outlook for the U.K. economy has become bleaker as it is contending with a housing slump in addition to slowing global growth. Although the BBA report showed home loans increasing to 22,448, it was a minor improvement from the lowest on record reading of 22,369 in July. Despite inflation well above their 3% threshold at 4.4%, the BoE may be forced to consider a rate reduction by year's end as export demand and domestic growth continue to slow. 
 
The U.S. calendar is full of releases today with housing, manufacturing and sentiment data on tap. The S&P Case/Schiller housing report is expected to show that home prices fell another 16.2% in June, which is expected to cause new home sales to decline another 0.9%. Although yesterday's existing home sales report showed a rebound, the gain was mainly due to foreclosure, short sales and price reductions, signaling the housing woes are far from over. Nevertheless, as the European and Asian economies continue to slow, the U.S. economy has become increasingly more attractive for investors which should continue to contribute to the dollar's recent strength. An expected improvement in the U.S. consumer confidence report and the Richmond Fed Manufacturing Index will also add bullish sentiment.

Euro Plummets To Fresh Multi-month Lows Against Dollar and yen

During early deals on Tuesday, the Euro plunged to new multi-month lows against the US dollar and the Japanese yen on disappointing economic reports released from German economy today.

The euro also declined to multi-day lows against the British pound and the Swiss franc. German business confidence declined to 94.8 in August from 97.5 in July, the Munich-based Ifo research institute showed. Economists had expected the index to fall to 97.2. The index that measures current situation in the largest Eurozone economy fell to 103.2. The indicator stood below July's revised 105.6 and 104.5 expected by economists. Further, the expectations index came in at 87 in August, below the expected reading of 90.5. German consumer confidence for September dropped to 1.5 points from August's revised 1.9 points, a monthly survey from the GfK Group revealed. The indicator last marked a comparable reading in summer 2003. The index stood below the expected reading of 1.9% for September. The German economy contracted 0.5% sequentially in the second quarter, after expanding 1.3% in the first quarter, a detailed report from the Federal Statistical Office showed. The economy shrank for the first time in almost four years. On a yearly basis, the economic growth stood at 3.1%, faster than the 1.8% growth in the first quarter. The German economy shrinking for the first time in four years may be a clear sign for the ECB, that a more accommodative monetary policy is needed to prevent the region from falling into a recession. The European Central Bank left its interest rates unchanged at 4.25% on August 7. The central bank had maintained the rate at a six-year high of 4% since June last year, before hiking it last month over inflation concerns. The interest rate on the marginal lending facility was held at 5.25%, while the interest rate on the deposit facility was retained at 3.25%. Citing prevailing downside risks to growth, Trichet said in his post-ECB-decision press conference that current information has underlined the reasons for the 25 basis point hike delivered in July. During his speech, Trichet added that inflation would remain at high levels for a protracted period of time. With regard to the future direction of interest rates, Trichet reiterated that policymakers had no bias and never pre commit. He asserted that policymakers would do what is needed to fight inflationary pressures. He expressed "very strong concern" over price and wage-setting behavior in the 15-nation economy. The European currency declined to a new multi-month low of 1.4586 against the US dollar during early deals on Tuesday. If the euro-dollar pair weakens further, it may test support around the 1.444 level. The pair closed Monday's trading at 1.4755. The euro reversed direction against the dollar after hitting a record low of 1.6040 on July 15. The euro extended its downtrend in early August and rose beyond the 1.50 level on August 10 for the first time since late February. Since then, the euro has depreciated 9% against the dollar. In early trading on Tuesday, the European currency touched a 3 1/2 month low of 160.07 against the Japanese yen, compared to Monday's closing value of 161.29. The next downside target level for the euro is seen around 158.6 against the yen. The yen strengthened today as the weakness in stocks prompted investors to sell higher-yielding assets funded in Japan. The euro-yen pair has been in a downward channel since July 23 when it reached a record high of 170.00. Since July 23, the euro has lost around 6% against the yen. In economic news from Japan, the corporate service price index climbed 1.3 percent on year in July the Bank of Japan said today. That came in slightly below analyst expectations that were looking for an increase of 1.4 percent on year, and it was up from the 1.2 percent annual increase in June. The data also represented the 24th straight month of increase for the index. On month, the index eased 0.1 percent. The euro-pound pair fell to a 4-day low of 0.7941 by about 4:05 am ET Tuesday and this may be compared to yesterday's close of 0.7965. On the downside, the euro-pound pair is likely to target the 0.785 level. The pound gained as the number of mortgages approved in the UK for house purchases rose to 22,448 in July from 22,369 in June, the British Bankers' Association, or BBA, announced today. However, mortgage approvals recorded a decline of 65% on an annual basis. Approvals for re-mortgaging dropped around 21% from the prior year to 54,232 in July. The euro gained around 9% against the pound earlier this year to hit a record high of 0.8101 on April 16. Thereafter, the euro-pound pair weakened but rebounded in early May, and since then the pair has been moving between 0.784 and 0.804. Against the Swiss franc, the euro slumped to a 5-day low during early trading on Tuesday. At about 4:05 am ET, the pair reached 1.6153, down from yesterday's New York session close of 1.6172. If the euro-franc pair slips further, 1.610 is seen as the next target level. The Swiss UBS consumption indicator decreased significantly in July falling to 1.85, marking the largest correction seen during a single month for just under a year. The indicator fell from 2.22 in June, revised from 2.25 reported earlier. Further, the UBS said the July reading fell below the average for the past 12 months though the indicator showed a decreasing trend since February. Investors now look forward to the New York session, in which the US consumer confidence, Richmond Fed manufacturing index and the new home sales report are expected to influence trading. At 2:00 pm ET, the Federal Reserve is scheduled to release the minutes of its August 5th meeting. As expected, the Fed left the fed funds target rate unchanged at 2% at its August meeting. Dallas Fed President Richard Fisher cast the only dissenting vote against the decision to pause. The post-meeting policy statement relayed a balanced outlook on growth and inflation, but it did not provide much clarity on the future rate outlook. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Euro Slumps To Fresh Multi-month Low Against Dollar

The Euro trended lower against the dollar during early deals on Tuesday and hit a new multi-month low of 1.4598 at 4:05 am ET. If the euro-dollar pair weakens further, it may test support around the 1.444 level. The pair closed Monday's trading at 1.4755.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Canadian dollar hits new multi-month high against euro

Against the European single currency, the Canadian dollar staged a sharp rise at about 4:00 am Eastern Time Tuesday. The loonie reached a new multi-month high of 1.5389 against the euro, compared to 1.5515 hit late New York Monday.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Euro mixed against majors amid German GDP data

The German Q2 GDP data was released at 2:00 am ET. Amid the release, the euro showed weakness against the dollar, the pound and the yen but was higher versus franc. At about 2:05 am ET, the euro traded at 1.4688 against the dollar and 0.7966 against the pound. Against the yen and the franc, the euro was worth 161.10 and 1.6164, respectively.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

German Q2 GDP Expected To Match Flash Estimate

Tuesday, Germany's Federal Statistical Office is slated to release the detailed national accounts report for the second quarter at 2.00 am ET.

According to the preliminary report released on August 14, the German economic growth had fallen a seasonally and calendar-adjusted 0.5% in the second quarter from the prior quarter. The last time the German economy recorded a decrease was in the third quarter of 2004. At the same time, the statistical office had revised the first quarter GDP sequential growth to 1.3% from an initial estimate of 1.5%.

Further, the preliminary report had shown that the GDP growth on a yearly basis eased to 3.1% in the second quarter from 1.8% in the first quarter. At the same time, the calendar adjusted GDP rose 1.7% compared with 2.6% in the prior quarter.

Economists are expecting the German GDP figures to match preliminary estimates. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Euro Open: German Economy to Shrink, Threatening Recession

The Euro reversed US session gains overnight, falling to challenge the 1.47 level, while the British Pound dipped below 1.85 once again. A busy calendar awaits in the forthcoming European session. Most notably, Germany's economy is expected to shrink in the second quarter, putting the metric at the worst in three years and taking the Euro Zone's biggest economy within 3 months of recession.

South korean won drops to new multi-week low against Japanese yen

The South Korean won showed weakness against its Japanese counterpart during early deals on Tuesday. At about 10:50 pm Eastern Time, the won declined to a new multi-week low of 9.9275, compared to 9.8545 hit late New York Monday.

The yen-won pair is currently trading at 9.9215. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

House Prices Still Falling, Says Lehman Brothers

The S&P Case-Shiller June report will contain Q2 home prices for the 10- and 20-city composites as well as a national index. The composite measures are released on a monthly basis, but since the data are calculated using a three-month average, the June index represents the average for Q2.

Home price depreciation likely accelerated on a y-o-y basis but slowed on a q-o-q basis relative to Q1, note the analysts at Lehman Brothers. We expect the national composite to decline 14.5 percent q-o-q annualized, considerably slower than the 26.9 percent decline in Q1. This should translate to a 16.4 percent decline on a y-o-y basis. We expect the 20-city composite to fall 16.3 percent y-o-y or 12.4 percent q-o-q annualized and the 10-city composite to fall 16.5 percent y-o-y or 14.7 percent q-o-q annualized. We advise some caution when interpreting the quarterly pattern since the data are not seasonally adjusted and typically homes are priced higher in the spring. Our forecast for Q2 home prices would bring national prices down 19 percent from the peak in summer 2006 and back to mid-2004 levels. We judge it likely that home prices still have further to fall, likely not finding a bottom until the end of next year. We expect between a 25 percent and 30 percent peak-to-trough decline in national home prices. The Office of Federal Housing Enterprise Oversight (OFHEO) will release its home price measures for Q2. The data are based on homes with conforming mortgages, thereby largely excluding the jumbo and subprime markets. As such, OFHEO home prices have witnessed a much smaller decline than other measures, such as S&P Case-Shiller, National Association of Realtors or Radar Logic. We expect the all-transactions index, which includes data from home sales and appraisals for refinancing, to decline 0.5 percent q-o-q which would turn the y-o-y rate slightly negative. The seasonally adjusted purchase-only index is likely to fall 2.1 percent q-o-q or 5.6 percent y-o-y. In addition to the national aggregates, OFHEO releases home prices at the state and MSA level. We expect new home sales to fall about 2 percent to 520,000 in July. Builders have reported feeble demand with a record low print on the NAHB buyer traffic index. Mortgage rates have increased over the past few months and, according to the latest Federal Reserve Senior Loan Officer Survey, banks have continued to tighten lending standards for virtually all types of mortgages. Home sales have already fallen 62 percent from the peak and are at the lowest level since 1991. In response to weak demand, builders have pared back aggressively, successfully reducing inventory. Inventory of homes for sale have fallen 22 percent from the peak last spring, but are still too high relative to the dismal sales pace. We expect consumer confidence to improve slightly to 55 in August from 51.9 in July. While economic conditions are still bleak, with rising unemployment and falling home values, the drop in energy prices should provide some comfort to consumers. Other more timely measures of consumer confidence, such as the University of Michigan sentiment and IBD/TIPP index, have ticked higher in August. Attention will be on the conference board's measure on labor conditions which should show that jobs are becoming increasingly difficult to find. The statement from the 5 August FOMC meeting gave a balanced assessment of conditions with no indication of the potential future path of policy. Moreover, only one member, Dallas Fed president Fisher, dissented. The FOMC minutes should provide some insight into whether the revisions to the statement and the fewer-than-expected dissents reflect a new-found consensus or an uneasy compromise - and thereby some possible insight into the likely path of policy over the next few quarters. There are two possible ways a consensus may have arisen among the FOMC members in early August. One would involve some of the more hawkish voting members (specifically Philadelphia Fed president Plosser and Minneapolis Fed president Stern) conceding to the majority's more balanced view, in light of both the relative worsening in the growth outlook and the marginal improvement in inflation expectation measures since the June meeting. In this case, we expect that the near-term balanced set of risks is likely to give way to a preference for easing should the labor market worsen more quickly than the committee currently projects (as we forecast), or additional dislocations occur in financial markets. We view this case as most likely. A second possible way a consensus could have arisen would be if the majority shifted in a slightly more hawkish direction, implicitly conceding a bias towards hikes to insure against high headline inflation becoming embedded in expectations. Subsequent recent speeches by several of the more hawkish committee members, however, suggest a general acceptance of the view that inflation should soon peak and then decline, which would eliminate most of the rationale for rate hikes in the near future. Alternatively, neither might budge, and the statement would then be revealed as an uneasy compromise in an extremely uncertain economic environment. This scenario carries with it a greater chance of (multiple) future dissents, but also would mean that the majority view of roughly balanced risks should dominate the next several policy decisions. In our opinion, the majority has no desire to raise rates for the foreseeable future, barring a significant (but unlikely) deterioration of the projected inflation outlook. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Philippines June Trade Deficit $791 Million

The Philippines posted a trade deficit of $791 million for June, according to information released Tuesday. The government said imports to the Philippines increased 12.7 percent from one year earlier. Imports of electronics parts, assembled into finished products for export, fell 20.3 percent on year in June.

The decrease for May was revised to 15.5 percent. The government said lower purchases of electronics parts were offset by the rising costs of imported fertilizer, rice and fuel. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Claymore Launches First Shipping ETF (SEA)

First ETF to Provide Investors Access to 30 Companies in Fast Growing Shipping Sector

LISLE, Ill., Aug 25, 2008 (BUSINESS WIRE) -- Claymore Securities, Inc., the third-fastest growing exchange-traded fund provider in 2007*, today announced the launch of the Claymore/Delta Global Shipping Index ETF (NYSE Arca: SEA) on NYSE Arca. SEA is the first shipping ETF that provides investors with a cost-efficient means of accessing the rapidly growing global shipping sector.

"Maritime shipping is the primary means of international transportation for raw materials and finished goods, and we are pleased to be the first ETF provider to offer investors access to a global portfolio of 30 maritime shipping stocks with a current combined market cap near $50 billion," said Christian Magoon, President of Claymore Securities, Inc. "As the latest in our series of industry firsts, SEA exemplifies the innovation Claymore strives to deliver to the marketplace."

The ETF will seek to replicate the Delta Global Shipping Index (Index Ticker: DGAGSI), which was developed and is maintained by Delta Global Indices, LLC, a wholly-owned subsidiary of Delta Global Advisors, Inc. The Delta Global Shipping Index includes companies that derive at least 80% of their revenues from the seaborne transport of goods or the operating and/or leasing of ships. Additionally, constituents must have market capitalizations of at least $250 million and a 30-day average daily trading volume of at least $2 million.

"The maritime shipping industry has been growing exponentially thanks to increased participation in global trade by emerging economies like China, India and Brazil," said Chip Hanlon, Chairman and Chief Executive Officer of Delta Global Indices, LLC. "With approximately 80% of all shipments being transported by water, the increase in demand has pushed shipping activity up considerably and gained significant interest among investors."

SEA is listed on NYSE Arca and trades the same way as shares of a publicly traded company. SEA and other Claymore ETFs can be purchased through most brokerage accounts. They can be bought and sold throughout the day on NYSE Arca or the American Stock Exchange, depending on the ETF listing, during normal trading hours. The Fund issues and redeems Shares at NAV only in large blocks of 80,000 of Shares (each block of Shares called a "Creation Unit") or multiples thereof. Only broker-dealers or large institutional investors with creation and redemption agreements and called Authorized Participants ("APs") can purchase or redeem these Creation Units.

*Source: Claymore Securities, Inc., Bloomberg 2007 ETF data

Major Averages Set Fresh Intraday Lows

Stocks are seeing additional selling pressure in late morning trading on Monday after posting substantial gains in the previous session. Weakness in the financial markets is once again fueling the sell off, as investors have shrugged off a better than expected report on existing home sales.

Bank and brokerage stocks are seeing significant selling pressure after Fitch Ratings put AIG's (AIG) credit ratings on negative watch. The S&P Bank Index is down 2.4 percent, while the Amex Securities Broker/Dealer Index is falling 2.3 percent. Health insurance, steel and disk drive stocks are lower as well. The Morgan Stanley Healthcare Payor Index is down 2.7 percent, the Amex Steel Index is down 2.4 percent and the Amex Disk Drive Index is down 2.1 percent. The major averages have continued to show weakness in recent trading, falling to fresh intraday lows in the past few minutes. The Dow is currently down 140.04 at 11,488.02, the Nasdaq is down 39.58 at 2,375.13 and the S&P 500 is down 16.14 at 1,276.06. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved