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