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Argentina Stocks Down On China Slide; Bonds Little Changed By Drew Benson Of DOW JONES NEWSWIRES BUENOS AIRES (Dow Jones)--Argentine stocks slid Monday, following a mild downturn in neighboring Brazil triggered by an 8% drop on China's Shanghai stock exchange. Meanwhile, locally traded bonds were little changed, while the peso continued to edge stronger against the dollar despite central bank intervention, closing at ARS3.025/dollar from ARS3.075 Friday. The stock exchange's benchmark Merval Index ended0.38% lower at 2,240.65 points, retreating slightly on profit-taking after hitting a record level on Friday. The broader General Index ended 0.28% lower at 119,665.79 points. Volume declined to 87.9 million pesos, with ARS74 million of that in local shares. Trading continued to be selective, with power transporter Transener (TRAN.BA) rising 3.14% to ARS1.97, while banking sector shares lost ground. Among these, Banco Macro (BMA) ended 2.29% lower at ARS10.65, while Grupo Financiero Galicia (GGAL) slid 1.22% to ARS3.23. In the local debt market, the Discount bond in pesos ended 0.03% higher at ARS152.1 in heavy trading, while the Par in pesos slid 0.09% to ARS58.30.

Jun 4 2007, 20:46 GMT

2007-06-04T20:32:00.000-07:00

New York Money Market Rate Indications

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New York Money Market Rate Indications Bankers acceptances at 4:30 p.m. New York time.
1M 5.29
2M 5.30
3M 5.31
6M 5.34
9M 5.38
1Y 5.39
Federal funds: days high 5.28; low 5.18; latest bid 5.25; offered 5.31; prime lending rate at major banks 8.25; broker call loan rate 7.00

Dealer-placed commercial paper
30 days 5.25
60 days 5.24
90 days 5.22

Treasury bills
30 days 4.69-68 dn .035
90 days 4.64-63 dn .010
180 days 4.76-75 dn .020

Moody's yield figures
AAA corps 5.62

Jun 4 2007, 20:41 GMT

2007-06-04T20:22:00.000-07:00

Nybot Equity & Currency Closing Estimated Volumes - Jun 4

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Nybot Equity & Currency Closing Estimated Volumes - Jun 4 Date: 6/4/2007
Floor Total
Futures Options

EQUITY
CONTINUOUS COMMODITY INDEX 2,360 0
REUTERS JEFFERIES CRB INDEX 0 0
REVISED COMPOSITE 0 0
RUSSELL 1000 823 514
RUSSELL 1000 MINI 0 0
RUSSELL 1000 MINI 0 0
RUSSELL 1000 GROWTH INDEX 0 0
RUSSELL 1000 VALUE INDEX 0 0
RUSSELL 2000 2 77
RUSSELL 2000 GROWTH INDEX 0 0
RUSSELL 2000 VALUE INDEX 0 0
RUSSELL 3000 0 0
EQUITY TOTAL 3,185 591
CURRENCY
USDX 5,229 13
Euro Currency Index 0 0
US$-CANADIAN 7 0
US$-SWISS FRANC 76 0
US$-STERLING 29 0
US$-YEN 0 0
US$-SWEDISH KRONA 34 0
US$-NORWEGIAN KRONE 128 0
US$-AUSTRALIAN 16 0
US$-NEW ZEALAND 582 0
US$-RAND 4 0
US$-HUNGARIAN FORINT 38 0
US$-CZECH KORUNA 8 0
POUND-SWISS 19 0
POUND-YEN 59 0
POUND- AUSTRALIAN $ 0 0
POUND- NEW ZEALAND $ 0 0
POUND- CANADIAN $ 0 0
POUND- NORWEGIAN KRONE 0 0
POUND- S. AFRICAN RAND 0 0
POUND- SWEDISH KRONA 0 0
AUSTRALIAN-CANADIAN $ 33 0
CANADIAN $-JAPANESE YEN 0 0
Small US$-YEN 59 0
Small US$-CANADIAN 7 0
Small US$-SWISS FRANC 4 0
Small POUND-US$ 56 0
EURO 163 0
EURO-US$ 44 0
EURO-AUSTRALIAN $ 5 0
EURO-CAN 73 0
EURO-STERLING 225 0
EURO-YEN 434 400
EURO-KRONA 46 0
EURO-SWISS 533 0
EURO-NORWEGIAN KRONE 69 0
EURO-HUNGARIAN FORINT 2 0
EURO-CZECH KORUNA 14 0
EURO- S. AFRICAN RAND 0 0
SWISS-YEN 37 0
AUSRALIAN$-YEN 39 0
AUSTRALIAN-NEW ZEALAND 437 0
NORWEGIAN KRONE-SWEDISH KRONA 51 0
NEW ZEALAND $- YEN 0 0
NORWEGIAN KRONE- YEN 0 0
SMALL AUSTRALIAN$-US$ 4 0
SMALL NEW ZEALAND $-US$ 2 0
Small POUND-YEN 4 0
SWEDISH KRONA- YEN 0 0
BRAZILIAN REAL - US$ 0 0
COLOMBIAN PESO - US$ 10 0
CURRENCY TOTAL 8,580 413

Jun 4 2007, 20:30 GMT

2007-06-04T20:20:00.000-07:00

ECOFIN: Juncker: No Medium-Term Risks To Price Stability -2

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ECOFIN: Juncker: No Medium-Term Risks To Price Stability -2 ECB President Jean-Claude Trichet attended the meeting of Euro Group finance ministers, but didn't appear at the press conference. Juncker said the finance ministers agreed that with the euro-zone economy experiencing its best period of growth since 2000 and tax revenues rising, governments should attempt to reduce their budget deficits further. He added that the Euro Group would propose to a wider meeting of finance ministers from the European Union Tuesday - known as Ecofin - that excessive deficit procedures against Germany and Greece should be concluded. "The improvement in the fiscal situation has been impressive," European Commissioner for Economic and Monetary Affairs Joaquin Almunia said of Germany. "Now the question is whether they can continue the consolidation." Almunia, who was speaking alongside Juncker at the press conference, was less effusive about Greece's progress, urging the government to do more to bring down its budget deficit. "In the case of Greece the discussion was not so easy," Almunia said. "The correction was not as large as in Germany." Almunia and Juncker said the Euro Group will discuss the new French government's budget plans at their next meeting in July. Recently elected President Nicolas Sarkozy has proposed some cuts to income taxes that are expected to reduce government tax revenues. Juncker said he had no doubt France would abide by the European Union's budget rules, while Almunia said he expected the new government to continue to reduce the public sector debt. "I assume ... France is standing by its commitment to reduce its debt," Almunia said. He added that Italy's finance minister had assured the Euro Group that his government would speed up its fiscal consolidation. Juncker said the finance ministers had not discussed the euro's exchange rate. The currency is at an all time high against the Japanese yen. It has weakened against the U.S. dollar in recent weeks, but remains strong by historic standards. Juncker also said the Euro Group had agreed to back the entry of Malta and Cyprus into the euro zone. Formal approval must be given by the wider Ecofin and E.U. heads of government, but the Euro Group's backing is a key step towards the two Mediterranean islands becoming members of the currency area in January 2008. "The discussion has been very easy," Almunia said.

Jun 4 2007, 20:09 GMT

2007-06-04T20:17:00.000-07:00

ECOFIN: Juncker: No Medium-Term Risks To Price Stability

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ECOFIN: Juncker: No Medium-Term Risks To Price Stability LUXEMBOURG -(Dow Jones)- There are no short- or medium-term risks to price stability in the euro zone, the head of the currency area's informal grouping of finance ministers said Monday. Speaking during a press conference following the conclusion of a meeting of the 13 finance ministers that are members of the Euro Group, Luxembourg Prime Minister and Finance Minister Jean-Claude Juncker also said growth prospects are favorable in the medium. "There are no short or medium term risks to price stability," Juncker said. "We feel that growth prospects in the medium term are favorable." Juncker's view of the inflation outlook isn't shared by the European Central Bank, which has warned that risks to the inflation outlook are on the upside. His comments likely serve as a hint to the ECB that finance ministers don't see the need for interest rates to rise much further. The ECB is expected to raise its key refinancing rate for the eighth time Wednesday, and is expected to hike again before the end of the year.

Jun 4 2007, 12:35 GMT

2007-06-04T11:52:00.000-07:00

ECB Foreign Exchange Reference Rates - Jun 4

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ECB Foreign Exchange Reference Rates - Jun 4
LONDON (Dow Jones)--Following are European Central Bank foreign exchange reference rates. All currencies are quoted against the euro.

US Dollar USD 1.3482
Japanese yen JPY 164.34
Bulgarian lev BGN 1.9558
Cyprus pound CYP 0.5832
Czech koruna CZK 28.323
Danish krone DKK 7.4491
Estonian kroon EEK 15.6466
British pound GBP 0.67795
Hungarian forint HUF 249.8
Lithuanian litas LTL 3.4528
Latvian lats LVL 0.6962
Maltese lira MTL 0.4293
Polish zloty PLN 3.7957
Romanian leu RON 3.2595
Swedish krona SEK 9.3243
Slovak koruna SKK 33.845
Swiss franc CHF 1.6504
Icelandic krona ISK 84.25
Norwegian krone NOK 8.1085
Croatian kuna HRK 7.3472
Russian ruble RUB 34.869
New Turkish lira TRY 1.767
Australian dollar AUD 1.6177
Canadian dollar CAD 1.4252
Chinese yuan CNY 10.3153
Hong Kong dollar HKD 10.5223
Indonesian rupiah IDR 11830.46
South Korean won KRW 1251.06
Malaysian ringgit MYR 4.5778
New Zealand dollar NZD 1.8071
Phillipines peso PHP 61.491
Singapore dollar SGD 2.0618
Thai baht THB 44.345
South African rand ZAR 9.608

The reference rates are based on the regular daily procedure between central banks within and outside the European System of Central Banks, which normally takes place at 1415 CET (1215 GMT)

Jun 4 2007, 12:15 GMT

2007-06-04T11:50:00.000-07:00

IMF sees Swiss economy heading for gentle slowdown

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LONDON (Thomson Financial) - The Swiss economy is seen heading for a gentle slowdown, with GDP growth of about 2.0 pct in 2007 from 2.7 pct in 2006, according to an IMF report.
The slowdown and the risks to this benign picture are largely due to external factors, the organisation said.
"While the outlook is favourable, the authorities need to remain vigilant to global economic and political developments that could affect the economy, including through oil prices, and to (mostly external) risks that could impact on Switzerlands large financial sector."
Inflation too is predicted to ease, from 1 pct last year to a little under that in 2007. The alpine nation is seen benefiting from among others, the opening of the labour market to EU workers, improved productivity, lower oil prices, higher domestic competition and rises in interest rates.
The IMF praised the Swiss authorities for their prudent economic management and sound policy frameworks, but added that the current favourable state of affairs should be used to strengthen potential economic growth further and to address long-term structural and fiscal issues, given population ageing.
Additionally, the IMF said monetary policy will need to remain flexible to respond appropriately to inflation signals. IMF directors also recommended a removal of the regulated link between interest rates and housing rents.
Carry trades which use the Swiss franc as a funding currency also need to be closely monitored, the IMF said.
"Carry-trades could be temporarily weakening the franc to a level below its equilibrium, and the present independent floating exchange rate regime is best to handle these uncertainties," the IMF said.
Countries in Eastern Europe, where the Swiss franc -- by virtue of its low volatility and the low Swiss interest rate -- is the currency of choice for loans -- are contributing to rapid credit expansion.
Developments in carry-trades could also imply important spillover risks for these countries, it added.

Jun 4 2007, 12:11 GMT

2007-06-04T11:48:00.000-07:00

German construction trade union calls for strike vote next week

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FRANKFURT (Thomson Financial) - The construction industry trade union IG Bau said it will call for a strike vote next week after employer representatives rejected a pay rise deal struck with the help of an arbitrator.
The employer groups in the regions of Lower Saxony and Schleswig-Holstein rejected the deal, which requires agreement from all regions to be effective.
Last month, IG Bau and employer representatives -- through the help of a labour arbitrator -- reached an agreement to increase wages in three stages over a 24-month period from June 1, with a 3.5 pct increase in the first stage.

Jun 4 2007, 11:33 GMT

2007-06-04T11:45:00.000-07:00

Shadow MPC narrowly votes to keep BoE repo rate on hold at 5.50 pct

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LONDON (Thomson Financial) - A shadow monetary policy committee has narrowly voted for the Bank of England to keep interest rates on hold at their six-year high of 5.50 pct when it meets later this week.
However the group, made up of economists from academia and the financial sector, were fairly divided in their views for what immediate BoE policy should be, with one member calling for a 50 basis point rise, three for a quarter point rise and the remaining five to leave rates unchanged.
The most hawkish comments came from Roger Bootle, economic adviser to Deloitte, who said the risk that inflation could get out of control is increasing.
"No-one should be fooled by the fall in inflation that will happen over the next few months; the issue is what will happen to inflation next year and beyond," he said.
Bootle argued that the MPC needs to take rates to a level which will have a real impact on borrowers and lenders, and this would best be done by shocking them with a 50 basis point rise.
"The stakes are too high to be pussy footing. It is time to take bold action," he concluded.
Three other members also believed rates should be raised, though only by a quarter point. These were Tim Congdon from the London School of Economics, Andrew Lilico from Europe Economics and David B Smith from the University of Derby.
Congdon and Lilco's main concerns were the rate of growth in the UK's broad money supply, while Smith cited the strength of the rate of growth in the UK economy, once the effect of the oil market is excluded.
Of the five remaining members who voted to keep rates on hold, two of them - Lloyds TSB economist Trevor Williams and Peter Spencer from the University of York - said they felt rates would probably need to be raised at some point in the coming months. This meant there was an overall bias on the committee for rates to rise in the near-future.
Finally three members - Peter Warburton, from Economic Perspectives, Patrick Minford and Kent Matthews, both from Cardiff Business School - voted for rates to stay on hold with a neutral bias going forward.
The real MPC is also expected to keep its key repo rate unchanged. Only 3 of the 32 economists polled by Thomson Financial News expect the MPC to lift borrowing costs a quarter point for the second month running.

Jun 4 2007, 11:32 GMT

2007-06-04T11:43:00.000-07:00

Forex - Canadian dollar finds added support from strong recent US data

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LONDON (Thomson Financial) - The Canadian dollar stayed well bid amid expectations that the Canadian economy will benefit from the recent strength in US data.
At 12.00 pm, the Canadian dollar was at 1.0566 against the greenback, down from well above 1.06 earlier today, and from above 1.10 a month ago.
In particular, stronger than expected US job creation figures and manufacturing activity on Friday helped the loonie notch good gains.
Analysts at BNP Paribas said the rebound of the US manufacturing sector now increases "Bank of Canada's comfort in hiking rates on July 10."
"The strong US labour market reading also suggests that the slowdown in US consumption and thereby the Canadian outlook would not be too weak," they added.
But talk of the loonie reaching parity with the US dollar may yet be premature and in the unlikely event that it happens, the gains are not seen sticking, said Steve Barrow of Bear Stearns.
He also expects the Bank of Canada would eventually make comments in the hope of tempering the Canadian dollar's gains, but without actually interfering in the market.
The Canadian dollar has risen consistently since March 20, when strong inflation figures for February were released, reversing the likelihood then of a possible rate cut by the Bank of Canada.
The central bank kept its key interest rate unchanged at 4.25 pct on May 29, for the eighth executive time over the past year, but added it could be necessary to raise it in the near future to allay inflationary pressures.
The bank had noted that economic growth and inflation in Canada during the first part of the year were stronger than the bank expected. The next meeting is on July 10.

Jun 4 2007, 11:27 GMT

2007-06-04T11:39:00.000-07:00

Foreign Exchanges - Continental Forward Rates

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LONDON (Thomson Financial) - Euro
1 Month 7.00 - 10.00 dis
2 Months 16.00 - 20.00 dis
3 Months 26.00 - 30.00 dis
6 Months 54.70 - 56.20 dis
12 Months 105.90 - 108.40 dis

Denmark
1 Month 21.0 - 6.0 prm
3 Months 53.0 - 28.0 prm

Norway
1 Month 20.0 - 4.0 prm
3 Months 45.0 - 24.0 prm

Sweden
1 Month 34.0 - 20.0 prm
3 Months 87.0 - 67.0 prm

Japan
1 Month 107.0 - 93.0 prm
3 Months 319.0 - 298.0 prm

Switzerland
1 Month 72.0 - 59.0 prm
3 Month 215.0 - 188.0 prm

Canada
1 Month 29.0 - 19.0 prm
3 Months 82.0 - 62.0 prm

Jun 4 2007, 11:24 GMT

2007-06-04T11:37:00.000-07:00

Dollar Forward Rates

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LONDON (Thomson Financial) - New York
1 mth 4.70 - 4.55 prm
3 mths 20.10 - 19.90 prm
6 mths 50.90 - 50.10 prm
12 mths 129.25 - 127.25 prm

Jun 4 2007, 11:23 GMT

2007-06-04T11:27:00.000-07:00

Afternoon Interbank Intercurrency

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LONDON (Thomson Financial) - Afternoon Interbank Intercurrency
(RATES SUPPLIED BY BARCLAYS INTL)

CANADA
TOM/NEXT 4.19 - 4.23
7 DAY 4.22 - 4.24
1 MTH 4.22 - 4.24
3 MTHS 4.35 - 4.38
6 MTHS 4.51 - 4.55
12 MTHS 4.73 - 4.77

JAPAN
TOM/NEXT 0.54 - 0.57
7 DAY 0.56 - 0.59
1 MTH 0.59 - 0.62
3 MTHS 0.65 - 0.68
6 MTHS 0.75 - 0.78
12 MTHS 0.89 - 0.92

STERLING
TOM/NEXT 5.54 - 5.57
7 DAY 5.57 - 5.61
1 MTH 5.62 - 5.65
3 MTHS 5.77 - 5.80
6 MTHS 5.92 - 5.95
12 MTHS 6.12 - 6.15

EURO
TOM/NEXT 3.75 - 3.77
7 DAY 3.76 - 3.79
1 MTH 4.01 - 4.04
3 MTHS 4.09 - 4.12
6 MTHS 4.22 - 4.25
12 MTHS 4.45 - 4.48

Jun 4 2007, 11:15 GMT

2007-06-04T11:24:00.000-07:00

Italy sees G8 final statement including currency, rate comments - diplomats

http://www.afxnews.com/
MILAN (Thomson Financial) - Italian prime minister Romano Prodi expects the G8 summit's final communique to include comments on exchange rates and monetary policy, said diplomatic sources close to Prodi.
Even though the issues are not on the meeting's agenda, state and government heads from the eight countries are expected to include conclusions in their final summit communique, they said.
The diplomats gave no further details.
Reports have said Prodi discussed the euro's strength against the dollar and Asian currencies at his recent meeting in Paris with French president Nicholas Sarkozy.

Jun 4 2007, 11:13 GMT

2007-06-04T11:22:00.000-07:00

UK housing market yet to absorb recent rate hikes - RICS

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LONDON (Thomson Financial) - The UK housing market, which is already showing signs of cooling off, is yet to fully absorb the impact of the Bank of England's recent tightening of monetary policy, a leading industry body said.
"The full impact of current rate hikes on the housing market should not start to appear until after the summer," economists at the Royal Institute of Chartered Surveyors said.
The housing market continues to grow strongly but recent surveys have given indications that the boom may be coming to an end.
The Land Registry survey for April showed prices are being buoyed by London, while house prices actually fell in four English regions. Meanwhile, figures from the Bank of England showed mortgage approvals fell for the third straight month in April.
Both of these indicators were compiled from data taken before the BoE's quarter-point hike in interest rates in May.
The central bank has raised rates four times since last August, to a six-year high of 5.50 pct, in an attempt to bring inflation back down to the 2 pct target. Many analysts believe at least one more rate hike is on the cards this year.

Jun 4 2007, 11:12 GMT

2007-06-04T11:19:00.000-07:00

Asian money markets summary

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BEIJING (XFN-ASIA) - Asian late money market rates (vs previous close):

-Hong Kong: 3-month HIBOR rate 4.67 pct (4.68)
overnight rate 3.90 pct (3.53)

-Jakarta: overnight rate 4.80614 (Closed)

-Kuala Lumpur: 3-mth KLIBOR bid/ask 3.55/58 pct (3.55/58)
overnight rate 3.49/52 pct (3.49/52)

-Manila: overnight rate 7.75 pct (8 pct)

-Seoul: 3-yr corporate bond yield 5.48 pct (5.47)
3-yr state bond yield 5.15 pct (5.14)

-Singapore: avg overnight rate 1.875 pct (4.5)
3-month SIBOR 2.43 pct (2.44)

-Sydney: 90-day bank bill rate 6.353 pct (6.360)

-Taipei: overnight rate 2.241 pct (1.880)

-Tokyo: unsecured overnight rate 0.504 pct (0.508)

3-month TIBOR 0.67417 pct (0.67250)

2007-06-04T11:07:00.000-07:00

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BREAKING FOREX NEWS - Jun 4, 2007

GBP/USD : Cable is still consolidating - Jun 4 2007, 11:08 GMT

Carry Still Top Currency Trading Strategy - ABN Amro - Jun 4 2007, 11:01 GMT

Slovak Ctrl Bker : Koruna Remains Key For Monetary Policy-2 - Jun 4 2007, 10:57 GMT

Indonesia threatened by global warming, rising sea levels - Jun 4 2007, 10:54 GMT

IEA calls on Germany to reconsider phase-out of nuclear power - Jun 4 2007, 10:33 GMT

Slovak Ctrl Bker : Koruna Remains Key For Monetary Policy - Jun 4 2007, 10:29 GMT

IMF : Hungary Needs Fundamental Changes To Reach Fiscal Goals-3 - Jun 4 2007, 10:26 GMT

Trichet says recent euro zone economic developments 'very encouraging' UPDATE - Jun 4 2007, 10:24 GMT

LIFFE announces re-opening times after suspended trading - Jun 4 2007, 10:24 GMT

Trading on LIFFE closed due to technical problems - Jun 4 2007, 10:19 GMT

IMF : Hungary Needs Fundamental Changes To Reach Fiscal Goals-2 - Jun 4 2007, 10:16 GMT

Dutch Q1 turnover in building sector up 14 pct yr-on-yr - CBS - Jun 4 2007, 10:03 GMT

Yuan ends at 7.6512 to US dollar vs 7.6473 in OTC trade - Jun 4 2007, 10:00 GMT

Oil eases as pipeline restart spurs hope of US gasoline tightness abating UPDATE - Jun 4 2007, 09:36 GMT

Trichet says recent euro zone economic developments 'very encouraging' - Jun 4 2007, 09:39 GMT

Metals - Gold dips from Friday's highs as Chinese equities weaken UPDATE - Jun 4 2007, 09:36 GMT

European business call for broad economic talks with Japan - Jun 4 2007, 09:33 GMT

Metals - Copper consolidates after Friday's strong gains - Jun 4 2007, 09:32 GMT

TEN NEWS BRIEFING : Macroeconomics hightlights to 10:10 BST - Jun 4 2007, 09:25 GMT

European govt bonds a bit higher as markets eye central banks later this week - Jun 4 2007, 09:18 GMT

Oil eases as pipeline restart spurs hope of US gasoline tightness abating - Jun 4 2007, 09:18 GMT

Euro zone April PPI up 0.4 pct vs March, up 2.4 pct yr-on-yr - Jun 4 2007, 09:15 GMT

UK May construction sector PMI falls to 58; input prices at 9-month high - Jun 4 2007, 09:15 GMT

Forex - Asia currency summary - Jun 4 2007, 09:15 GMT

DATA SNAP: Euro-Zone Factory-Gate Prices Picked Up In Apr - Jun 4 2007, 09:12 GMT

Hongkong Land Registry May deals value up 3.1 pct on-mth; up 35.3 pct on-yr - Jun 4 2007, 09:07 GMT

Metals - Gold dips from Friday's highs as Chinese equities weaken - Jun 4 2007, 09:02 GMT

Forex - Dollar steady, focus to fall on euro zone, UK rate decisions

Czech 1Q Average Nominal Wages Rose 7.8% On Year

Base metals prices set to remain high on demand from Asia - Xstrata CEO

UK inflation could hit 5 pct in the year ahead, leading economist warsns

Thailand's NESDB trims 2007 economic growth forecast to 4.0-4.5 pct

Hongkong to withstand China market turmoil - HKMA chief executive

Spain May jobless down 2.4 pct vs April, down 1.5 pct yr-on-yr

Japanese govt bonds close lower on upbeat data

ECB raises 2007 forecasts for euro zone growth, inflation - report

India Min : Ompact Of Rising Rupee On Exports Likely From July

Asian markets summary

Asian economic and corporate news summary

Forex - US Dollar mixed Sydney Afternoon ; Support form US Data

OUTLOOK Forecasts for US Economic Indicators to be released This Week

Japan Q1 survey results show corporate sector resillient

Oil Prices Lower in Asian Trade after key US Gasoline pipeline reopens

OUTLOOK Hightlights of US Economic indicators to be released this week

Japanese govt bonds end morning weaker on firmer stocks

OUTLOOK Euro zone economic data forecasts for the week ahead

Standard Chartered (China) Suzhou branch starts offering yuan services

Australian business confidence picks up - Dun & Bradstreet

Australia's ANZ May job ads jump 10.3 pct from April, up 40.8 pct yr-on-yr

China yuan central parity rate set at 7.6522 to dollar vx 7.6497

China yuan official Central Parity For Monday

China's AnSteel seeking 12.94 pct stake in Australia's Gindalbie Metals

Japan Q1 non-financial firms' capital investment up 13.6pct year-on-year

Forex - US dollar mixed in Sydney morning trade after solid US jobs data

Japan May monetary base falls 5.7 pct yr-on-yr, down for 15th straight month

BOJ Forecasts Y3.24 Tln Money Market Surplus in June

UPDATED NEWS TODAY from Bloomberg

Worldwide

Japan's Corporate Spending Rises 13.6% to a Record (Update 2)

Asian Stocks Rise to Record on U.S. Growth ; Toyota, BHP Advance

Australia's First-Quarter Company Profits Climb 7.6% ( Update 1)

South Korea to Invest 5.2 Trillion Won in Resoureces ( Update 1 )

Germany Beats Europe Emerging Markets, Emulating '60s Earnings

Vestas, Gamesa, Clipper Make Wind Top Energy Markets Investment

Currencies

Traders Bet Australian Dollar Will Rise Against Yen

Dollar Trades Near Four-Month High Before U.S Services Report

Currencies - Europe

UBS Hedge Fund Loss Ensnares Wuffli With Debacle Reprising LTCM

China's Africa Push to Boost Shilling, Cedi, Standard Bank Says

Euro May-Rise to 173 Yen, Mizuho Corporate Banks Fukui Says

Currencies - Asia

Australian Dollar Rises, Approaching 17-Year High, on Metals

Economy

Japan's Corporate Spending Rises 13.6% to a Record ( Update 4 )

Jun 4 2007, 11:08 GMT

2007-06-04T11:04:00.000-07:00

GBP/USD: Cable is still consolidating

http://www.fxstreet.com
FXstreet.com (Barcelona) - After a quiet trading day on Friday the GBP/USD continues with its steady trend, feeling almost no momentum. Ted Wilson, forex analyzer at iFOREX.bg says: "Next targets if bullish are the tops from 9 and 1 May - 1.9997 and 2.0073 respectively."Comparing the Cable to other currencies Nicole Elliott, Senior Technical Analyst at Mizuho Corporate Bank, expects "more work between 1.9800 and 1.9900 today, noting that the Australian, Canadian and New Zealand dollars are doing far better than Cable so there might be room to catch up."

Jun 4 2007, 11:01 GMT

2007-06-04T11:02:00.000-07:00

Carry Still Top Currency Trading Strategy - ABN Amro

http://www.djnewswires.com/eu
Carry Still Top Currency Trading Strategy - ABN Amro LONDON -(Dow Jones)- Currency trading strategies based on interest rates remained the most profitable core theme in the market in May, according to new data from ABN Amro NV (ABN). The bank's research, which was released Friday, offers an insight into the returns available to currency hedge funds. It shows that the so-called carry trade, where traders and investors buy currencies with high interest rates and sell those with lower rates, produced returns of +1.1% in May. That brings the strategy's year-to-date returns to +0.9%, and returns over the past 12 months to +3.6%. The bank said the carry trade's performance in May was consistent with the fall in volatility and the corresponding rise in investor risk appetite over the period. Key positions for the strategy include selling the Japanese yen, the Swiss franc and the Swedish krona. Among other key trading themes, the trend-following strategy continued its poor run, posting a loss of 1% in May. The bank said that low levels of volatility worked against this strategy. The trend-following strategy has lost 3.7% so far this year, and nearly 10% in the past 12 months. The value strategy, which trades based on long-term valuation models, also lost 1% in May. Long positions in the Japanese yen contributed heavily to the poor performance of this strategy, the bank said. So far this year, the valuation-based model has lost 2.6%. Over the last 12 months, the strategy has lost 5.6%. The short volatility strategy, which is based on selling currency options, also suffered from low levels of volatility in the market in May. The strategy produced returns of +0.5%, taking year-to-date returns to +0.3% and returns over the past 12 months to +3.2%. ABN Amro's data are designed to mirror the behavior of a medium-risk hedge fund.

Jun 4 2007, 10:57 GMT

2007-06-04T10:56:00.000-07:00

Slovak Ctrl Bker: Koruna Remains Key For Monetary Policy -2-

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Slovak Ctrl Bker: Koruna Remains Key For Monetary Policy -2- Last week the Slovak Central Bank decided to keep its headline two-week repurchase agreement rate at 4.25%, having eased the rate cumulatively by 50 basis points in the previous two months. The bank justified the interest rate cuts by citing waning inflationary pressures. The bank officials said that lower interest rates would help stave off demand for the koruna as Slovak interest levels neared those set by the European Central Bank. Sramko also said that the latest gross domestic product data, released last week, confirmed that breakneck economic growth of 6% remains non-inflationary as it is mostly driven by exports. At its late June monetary policy meeting, the bank will closely evaluate the fluctuations in the koruna exchange rate. "We'll also look at inflation factors but the koruna rate is dominant," he said.

Jun 4 2007, 10:54 GMT

2007-06-04T10:51:00.000-07:00

Indonesia threatened by global warming, rising sea levels

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JAKARTA (XFN-ASIA) - Indonesia is especially vulnerable to the impact of climate change as global warming threatens to raise sea levels and flood coastal farming areas, threatening food security, a report sponsored by the World Bank and Britain's Department for International Development said.
The report, released today, said global warming could increase temperatures, shorten the rainy season and intensify rainfall, leading to a significant fall in rice yields.
It said thousands of farmers in productive coastal areas would also have to look for other livelihoods if predictions of a rise in sea levels came true across the vast archipelago nation.
"Indonesia is vulnerable to the impact of climate change including prolonged droughts and floods raising serious food security and health threats while endangering the habitats and livelihoods of coastal communities," the report issued ahead of World Environment Day on Tuesday said.
Environment Minister Rachmat Witoelar warned in January Indonesia could lose 2,000 small islands by 2030 due to a rise in sea levels as a result of climate change.
The report also stressed that deforestation, degradation of peat land and forest fires had placed Indonesia among the world's top emitters of greenhouse gases.
Deforestation and land conversion, mostly by fires, accounted for 75 pct of carbon dioxide emissions in the Indonesian forestry sector, it said.
Rising temperatures due to global warming would further dry up the rainforest and peat swamps, increasing the risk of even more intense fires, the report said.
The government has outlawed land-clearing by fire, but weak enforcement means the ban is largely ignored.
Indonesia will host the UN climate change convention on the resort island of Bali later this year.
Jakarta signed the Kyoto Protocol on fighting climate change in 1998 and ratified it in 2004.

Jun 4 2007, 10:33 GMT

2007-06-04T10:47:00.000-07:00

IEA calls on Germany to reconsider phase-out of nuclear power

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LONDON (Thomson Financial) - The International Energy Agency has called on Germany to reconsider its phase-out of nuclear energy, saying that the risky strategy will increase reliance the country's reliance on imports and hamper its potential to reduce carbon emissions.
"Losing the nuclear option will have significant impacts on energy security, economic efficiency and environmental sustainability," the agency said in a statement.
"Without a doubt, a phase-out will limit Germany's full potential to reduce its emissions," it added. "The IEA urges the government to reconsider the decision to phase out nuclear power in light of these adverse consequences."
The IEA's position supports that of German economics minister Michael Glos, who earlier this year called for an "urgent and necessary" review of the country's position on nuclear energy.
Recent worries over gas supplies from Russia have reawakened fears over energy security, while an increasing focus on cutting greenhouse gas output have increased the attractiveness of low-emission nuclear energy.
Germany currently derives some 12 pct of its energy needs and 25 pct of its electricity generation from nuclear power, the IEA said.
The German government announced in 2000 its intention of phasing out nuclear power by 2020. Former German environment minister Jurgen Trittin said in a later interview that nuclear power was "not needed" to achieve the country's energy goals and that the use of nuclear power "is and will remain a global risk".
The IEA also called on Germany to introduce independent system operators to manage transportation assets in the electricity and natural gas markets, in order to challenge the dominance of large energy companies.

Jun 4 2007, 10:29 GMT

2007-06-04T10:44:00.000-07:00

Slovak Ctrl Bker: Koruna Remains Key For Monetary Policy

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Slovak Ctrl Bker: Koruna Remains Key For Monetary Policy BRATISLAVA (Dow Jones)--Slovak central bank Governor Ivan Sramko Monday said the country's monetary policy conditions are stable but the Slovak koruna's exchange rate remains a dominant factor for the bank's interest rate policy. "The exchange rate is a very strong tool for setting monetary conditions, unlike with the ECB (European Central Bank)," he said on the sidelines of an economic conference. Unlike the past two weeks when the Slovak koruna was stable and even slightly depreciated against the euro, the currency "no longer plays a restrictive role," Sramko said.

Jun 4 2007, 10:26 GMT

2007-06-04T10:41:00.000-07:00

IMF:Hungary Needs Fundamental Changes To Reach Fiscal Goals-3

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IMF:Hungary Needs Fundamental Changes To Reach Fiscal Goals-3 On monetary policy, Lipsky said that monetary policy authorities need to play a supportive role in the process of establishing long-term credibility in the country's fiscal and monetary policy framework. "The IMF recommends the inflation targeting system (which Hungary uses), which sets a clear goal, and allows authorities to use the tools at their disposal to ensure that this goal is met," Lipsky. "Other countries that have similar fundamentals as Hungary, have had success with the combination of inflation targeting and a flexible exchange rate system...I believe that a flexible exchange rate system is the way forward for Hungary," Lipsky said. The IMF has repeatedly recommended that Hungary abandon the forint's trading band against the euro. "A flexible exchange rate could mean a challenge when Hungary wants to join the euro zone but that's not an immediate concern," Lipsky added. The executive urged caution against plans to reduce Hungarian tax rates significantly. "The excessive complexity of the tax system breeds evasion and a tendency to look for tax favors and simplification is necessary but I would urge against significant tax cuts," Lipsky said. He added that the IMF would welcome the introduction of a broad-based property tax as planned by the government. Overall, the simplification of the tax system, the broadening of the tax base and the gradual easing of taxes levied on labor are necessary measures, Lipsky said. "Tax labor and you'll get less labor relative to other things; so the medium-term goal seems clear," Lipsky said.

Jun 4 2007, 10:25 GMT

2007-06-04T10:37:00.000-07:00

Trichet says recent euro zone economic developments 'very encouraging' UPDATE

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(Updates with comments on financial services, stability pact)
BRUSSELS (Thomson Financial) - European Central Bank president Jean-Claude Trichet said recent economic developments in the euro zone are "very encouraging" but warned that the bloc has no scope for complacency.
The euro zone has to implement further structural reforms if it is to reap the benefits of its single currency and to build on the current economic recovery, Trichet said in a speech here.
Such reforms would boost euro zone GDP by 0.5 pct as well as help the upturn broaden and become more durable, he said.
Trichet singled out the labour market as in particular need of an overhaul.
He also called for the "full integration" of the EU's measures to create a single market for financial services, saying the lack of progress to date has constrained the economic development in some sectors.
Financial integration would be one way of cushioning Europe from any future economic shocks, he said.
On fiscal policy, Trichet said it is "absolutely essential" euro zone countries to respect the stability and growth pact setting a deficit limit of 3 pct of GDP.
New French budget Eric Woerth called, shortly after his appointment last month, for a "pause" in France's deficit-reduction programme.

Jun 4 2007, 10:24 GMT

2007-06-04T10:35:00.000-07:00

LIFFE announces re-opening times after suspended trading

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LONDON (Thomson Financial) - The London International Financial Futures and Options exchange, or LIFFE, announced the re-opening times for those contracts where trading was suspended this morning for technical reasons.
Euribor and sterling futures will re-open at 1115 BST, while options on CAC40, FTSE 100, gilt and sterling futures will re-open at 1117.
London and Paris commodity futures will open at 1123 while commodity options will open at 1125. The opening for universal stock futures is due at 1127.

Jun 4 2007, 10:19 GMT

2007-06-04T10:33:00.000-07:00

Trading on LIFFE closed due to technical problems

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LONDON (Thomson Financial) - The London International Financial Futures and Options exchange, or LIFFE, said trading in some of its products was halted due to technical problems after opening briefly at 0700 BST.
The halt has affected futures but not options contracts.
All trades that occurred prior to market suspension will be invalidated, LIFFE said.
The re-opening time is yet to be announced

Jun 4 2007, 10:16 GMT

2007-06-04T10:29:00.000-07:00

IMF:Hungary Needs Fundamental Changes To Reach Fiscal Goals-2

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IMF:Hungary Needs Fundamental Changes To Reach Fiscal Goals-2 "Fiscal discipline is a key factor and if doubts arise (among investors) regarding commitment to the fiscal consolidation and reform process, Hungarian assets could come under pressure," Lipsky said. "Now is an unusually favorable moment of opportunity, given the strong international environment, for Hungary to carry out further reform measures and this shouldn't be missed," Lipsky added. He stressed that Hungary was facing a financial crisis last spring, before the government launched its fiscal tightening program, as markets lost patience with the repeated failure to meet fiscal targets and the very high budget deficit. "Although the fiscal consolidation program has been successful so far and the budget deficit is seen declining to 4.5% of gross domestic product in 2008, the budget deficit is still very high in Hungary," Lipsky said. He added that the government's fiscal targets beyond 2008 look doubtful and will require further reform measures. "Transparency in government expenditure is key, and when we talk about reducing expenditures this could mean restraining the growth of these expenditures and not necessarily reducing them," Lipsky said.

Jun 4 2007, 10:03 GMT

2007-06-04T10:20:00.000-07:00

Dutch Q1 turnover in building sector up 14 pct yr-on-yr - CBS

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AMSTERDAM (Thomson Financial) - Turnover in the Dutch building sector increased almost 14 pct when compared to the same period a year earlier, the Central Bureau of Statistics (CBS) said.
The CBS said the soft winter enabled extended construction and said the total number of working hours in the first-quarter was up 7 pct versus the same period in 2006.
Builders active in construction as well as water and road infrastructure saw the highest increase in turnover, 19.5 pct, according to CBS. Turnover in the rest of the sector increased by an average of 13 pct year on year.
2006 was a record year for the sector, with roughly 70 bln eur in revenues, according to the CBS.

Jun 4 2007, 10:00 GMT

2007-06-04T10:16:00.000-07:00

Yuan ends at 7.6512 to US dollar vs 7.6473 in OTC trade

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BEIJING (XFN-ASIA) - The yuan finished at 7.6512 to the dollar on the over-the-counter (OTC) market, down from 7.6473 on the previous trading day.
On the exchange-traded market, the yuan fell to 7.6503, compared to a close of 7.6460 on Friday, a Guangzhou-based trader with a foreign bank said.
The yuan traded between 7.6520-7.6480 on the OTC market and 7.6509-7.6475 in the exchange-traded market.
The central bank set the yuan central parity rate at 7.6522 to the dollar earlier this morning, compared with the midpoint of 7.6497 on Friday.
China's central bank has widened daily trading band of the yuan currency to 0.5 pct from 0.3 pct, effective from May 21.

Jun 4 2007, 09:56 GMT

2007-06-04T10:13:00.000-07:00

Oil eases as pipeline restart spurs hope of US gasoline tightness abating UPDATE

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(Updates prices, adds quotes, details)
LONDON (Thomson Financial) - Oil eased as news of a pipeline reopening spurred some hope of abating tight gasoline supplies in the US.
Crude oil futures rose sharply on Friday on continued concerns that US refineries are not producing enough gasoline to meet peak summer driving demand.
The restart on Sunday of a pipeline operated by Colonial Pipeline may have helped ease some of those supply worries, traders said.
On Friday, the company had said gasoline pipeline operations would be delayed, partly contributing to that day's big rise.
"Now that the Colonial Pipeline has restarted to supply products from the US Gulf Coast to the importing US East Coast, the crude oil futures market is dipping a bit," said Victor Shum, energy analyst with Purvin & Gertz in Singapore.
Elsewhere, traders also kept an eye on key crude producer Nigeria. A temporary truce was offered by main militant group Mend over the weekend, which vowed not to attack oil fields until at least the end of the month to allow time to engage in talks with the government.
"For the moment at least peace prevails and oil shall soon be moving from Nigeria in force," said Dennis Gartman, editor of The Gartman Letter -- a daily trading note. He added: "This cannot be bullish of crude oil generally."
Unrest in Nigeria, including a string of kidnappings of foreigners and pipeline attacks, have reduced oil output about 25 pct over the past year.
Fears of further refinery problems in the US and lingering worries of crude oil supply interruptions from Nigeria, despite a temporary truce, helped prices hold onto most of last week's gains, said Base Commodities trader, Christopher Bellew.
At 10.32 am in London, benchmark Brent crude contracts for July delivery were down 17 cents at 68.90 usd per barrel, while New York crude contracts for July delivery were down 47 cents at 64.61 usd per barrel.
Refinery troubles in the US have squeezed the gasoline market for months. Fears are heightening that any more problems could tighten the balance further, with the world's top consumer now into its peak-demand driving season.
Brent crude oil struck a nine month high of 71.80 usd on May 24, propelled by a combination of volatile geopolitical tensions in Nigeria and Iran, the world's fourth largest producer and as traders fretted about low levels of gas inventories ahead of the peak-demand driving season which kicked off late last month.
Gasoline stocks in the US are still "well below the lower end of the average range," according to the US Department of Energy.

Jun 4 2007, 09:39 GMT

2007-06-04T10:11:00.000-07:00

Trichet says recent euro zone economic developments 'very encouraging'

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BRUSSELS (Thomson Financial) - European Central Bank president Jean-Claude Trichet said recent economic developments in the euro zone are "very encouraging" but warned that the bloc has no scope for complacency.
The euro zone has to implement further structural reforms if it is to reap the benefits of its single currency and to build on the current economic recovery, Trichet said in a speech here.
Such reforms would help the upturn broaden and become more durable, he said, singling out the labour market as in particular need of an overhaul.

Jun 4 2007, 09:36 GMT

2007-06-04T10:08:00.000-07:00

Metals - Gold dips from Friday's highs as Chinese equities weaken UPDATE

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(Updating with full report)
LONDON (Thomson Financial) - Gold dipped in morning trade, falling back slightly from Friday's two-week high as investors sold off stocks of the metal to cover losses on the Chinese market this morning and on an absence of further bullish news.
At 10.20 am, spot gold was quoted at 669.75 usd an ounce, down slightly from the 671.30 usd level seen in late New York trade on Friday, when the precious metal hit a two-week high of 671.70 usd.
Gold dipped in Asian trade as investors sold off stocks of the precious metal to cover positions elsewhere as equities in mainland China slumped.
China's composite index recorded a decline of 8.26 pct this morning, the largest drop since late February's 8.8 pct, on ongoing fears the government will take more action to curb the speculative frenzy in mainland stocks, local dealers said.
Investors have liquidated gold stocks in an attempt to raise cash to cover positions on the equities markets.
But the dip is likely to be temporary, analysts said. "I don't think this is bad news for gold," said analyst James Moore of TheBullionDesk.com. "It really underpins gold's position as a safe haven."
Nonetheless investors are unconvinced Friday's prices are sustainable in light of a lack of further bullish factors, such as a likelihood of a drop in the US dollar against other currencies.
"There is nothing really out there to bring people back into the market," noted Michael Widmer, an analyst at Calyon.
However the precious metal remains near recent highs, hit after the European Central Bank said on Friday it did not intend to sell off any more of its reserves of the metal, supported by steady oil prices and ongoing geopolitical tensions, analysts said.
The metal is seen trading in a relatively narrow range going forward, analysts said, with the 665 usd resistance level now seen as the floor in prices.
"This area of previous resistance should now prove to be the immediate key support area and without the potential pressure of European Bank sales, at least until September, gold could receive a renewed boost and likely test higher, with an initial target of 680 usd, followed by 692 usd and 700 usd," said analysts at Standard Bank.
However, significant rises in the metal are not expected until the third and fourth quarters, after the typically quiet summer period is over.
Other precious metals dipped in sympathy, with platinum falling to 1,285 usd against 1,290 usd and palladium dipping to 365 usd against 370 usd.
Silver eased to 13.63 usd against 13.66 usd.

Jun 4 2007, 09:33 GMT

2007-06-04T10:05:00.000-07:00

European businesses call for broad economic talks with Japan

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TOKYO (XFN-ASIA) - European business leaders in Japan called on the European Commission and the Japanese government to begin talks on a broad economic agreement spanning trade, investment and other issues.
The European Business Council in Japan said in a statement the two sides should begin preliminary talks on issues such as regulatory convergence, climate change and energy security, in addition to trade and investment.
"Given the rapidly changing global circumstances, we believe that inaction on the part of Europe at this stage could compromise not only its current bilateral dialogue with Japan, but also its global trade position for the foreseeable future," the council warned.
It said broad discussions might help to ease the European Commission's reluctance to consider a bilateral deal that might overlap with the World Trade Organization's stalled global free trade negotiations.
Japan was initially slow to pursue bilateral free trade deals but has recently been seeking a larger number of agreements, mostly within Asia.
It has previously said an agreement with the EU would be difficult in light of sensitivities linked to agriculture.
The council represents more than 3,000 European companies and individuals who belong to European national chambers of commerce and business associations in Japan.

Jun 4 2007, 09:32 GMT

2007-06-04T10:02:00.000-07:00

Metals - Copper consolidates after Friday's strong gains

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LONDON (Thomson Financial) - Copper was flat as the market consolidated after posting strong gains Friday on falling global inventories.
Calyon analyst Michael Widmer said sentiment is relatively neutral today, with news of more sharp falls in LME inventories offset by expectations that demand in the western world will slow over the summer months.
At 10.12 am, LME copper for three-month delivery was flat at 7,450 usd a tonne.
The LME said in a report earlier that copper stocks held in its warehouses extended recent falls, dropping by a sharp 3,550 tonnes on the day to total 123,900 tonnes.
LME stocks have fallen from around 200,000 tonnes at the start of the year to under 130,000 tonnes.
In other metals, nickel was down at 47,400 usd a tonne against 47,500 usd, zinc was down at 3,720 usd against 3,770 usd, while lead fell to 2,340 usd against 2,367 usd.
Aluminium bucked the trend, edging up to 2,790 usd against 2,788 usd

Jun 4 2007, 09:25 GMT

2007-06-04T09:58:00.000-07:00

TFN NEWS BRIEFING: Macroeconomics highlights to 10:10 BST

http://www.afxnews.com/
2007-06-04 10:00:15
Euro zone April PPI up 0.4 pct vs March, up 2.4 pct yr-on-yr
BRUSSELS (Thomson Financial) - Euro zone producer prices rose 0.4 pct in
April from March, and were up 2.4 pct year-on-year, EU statistics office
Eurostat said.
2007-06-04 10:00:14
UK May construction sector PMI falls to 58.0; input prices at 9-month high
LONDON (Thomson Financial) - UK construction sector growth slowed in May
after hitting its highest level in almost three and a half years in April, but
remained strong, supported by ongoing demand for housing, the Chartered
Institute of Purchasing and Supply said.
2007-06-04 09:52:16
Hong Kong Land Registry May deals value up 3.1 pct on-mth; up 35.3 pct on-yr
HONG KONG (XFN-ASIA) - Property transactions registered at the Land Registry
of Hong Kong in May totaled 44.9 bln hkd in value terms, up 3.1 pct from the
preceding month, and up 35.3 pct year-on-year, the agency said in a statement.
2007-06-04 09:21:52
OUTLOOK EU finance ministers to agree Germany no longer breaches deficit rule
BRUSSELS (Thomson Fin - EU finance ministers are set to agree tomorrow that
Germany is no longer in breach of the stability and growth pact's deficit limit.
2007-06-04 08:56:11
Poland 5 mths budget deficit narrows to 14.5-15 pct of FY projection - minister
WARSAW (Thomson Financial) - Poland's cumulative budget deficit to the end
of May was 14.5-15 pct of the projection for the the whole of 2007, lower than
an earlier forecast of 16-17 pct, said Deputy Finance Minister Elzbieta
Suchocka-Roguska.
2007-06-04 08:51:34
Base metals prices set to remain high on demand from Asia - Xstrata CEO
ZURICH (Thomson Financial) - Base metals and other raw materials prices are
set to maintain their current highs amid huge demand from China and India,
Xstrata PLC chief executive Mick Davis said.
2007-06-04 08:47:40
UK inflation could hit 5 pct in the year ahead, leading economist warns
LONDON (Thomson Financial) - Inflation in the UK could rise to as high as 5
pct in the year ahead, a leading economist has warned, according to the Daily
Telegraph.
2007-06-04 08:30:59
Thailand's NESDB trims 2007 economic growth forecast to 4.0-4.5 pct
BANGKOK (XFN-ASIA) - The National Economic and Social Development Board
(NESDB) revised its growth projection for the economy for this year to 4.0-4.5
pct from a previous estimate of 4.0-5.0 pct, saying political uncertainty would
affect domestic consumption and investment.
2007-06-04 08:23:25
Hong Kong to withstand China market turmoil - HKMA chief executive
HONG KONG (XFN-ASIA) - Hong Kong can cope with any turbulence on the China
stock markets but investors should be prepared for increased volatility, said
Joseph Yam, chief executive of the Hong Kong Monetary Authority (HKMA).
2007-06-04 08:10:26
Spain May jobless down 2.4 pct vs April, down 1.5 pct yr-on-yr
MADRID (Thomson Financial) - The number of jobless fell by 49,893 people, or
2.4 pct, in May from April and was down 1.5 pct from a year earlier, the labour
ministry said.
2007-06-04 04:57:19
OUTLOOK Forecasts for US economic indicators to be released this week
WASHINGTON (Thomson Financial) - These are the consensus forecasts compiled
by Thomson IFR Markets for the major US economic indicators to be released in
the coming week.
2007-06-04 04:31:33
OUTLOOK Highlights of US economic indicators to be released this week
WASHINGTON (Thomson Financial) - Here are the highlights of US economic
indicators to be released this week. Thomson's IFR Markets provided the median
forecasts.
2007-06-04 04:21:13
OUTLOOK Euro zone economic data forecasts for the week ahead
LONDON (Thomson Financial) - The following are consensus forecasts for euro
zone economic indicators due this week.
2007-06-04 02:45:38
Australia Q1 company gross profits up 7.6 pct vs Q4 rise 2.5 pct
SYDNEY (XFN-ASIA) - Gross company profits rose a seasonally adjusted 7.6 pct
to 47.049 bln aud in the three months to March compared to the December quarter,
and were up 17.1 pct year-on-year, the Australian Bureau of Statistics said.
2007-06-04 02:44:52
Australian business confidence picks up - Dun & Bradstreet
SYDNEY (XFN-ASIA) - Dun & Bradstreet said its June survey of business
expectations shows Australian businesses are expecting a strong start to the new
financial year in Australia starting July 1.
2007-06-04 02:31:26
Australia's ANZ May job ads jump 10.3 pct from April, up 40.8 pct yr-on-yr
SYDNEY (XFN-ASIA) - Job advertisements in newspapers and on the Internet
during May averaged 251,998 per week, jumping 10.3 pct from April and up 40.8
pct from a year earlier, Australia and New Zealand Banking Group Ltd (ANZ) said.
2007-06-04 02:10:42
China reiterates to introduce fuel tax at right time; studying 'environment tax'
BEIJING (XFN-ASIA) - China has reiterated that it will introduce a fuel tax
at an "appropriate" time, adding that it is currently studying the feasibility
of an "environment tax" designed to encourage energy efficiency and pollutant
reduction, State Council documents show.
2007-06-04 01:19:19
Japan Q1 non-financial firms' capital investment up 13.6 pct year-on-year
TOKYO (XFN-ASIA) - The combined capital investment of non-financial
companies was 13.6 pct higher in the first quarter than a year before, growing
for the 16th straight quarter and growing at a double-digit rate for the fifth
straight quarter, the results of a government survey show.
2007-06-04 01:08:17
Japan May monetary base falls 5.7 pct yr-on-yr, down for 15th straight month
TOKYO (XFN-ASIA) - The monetary base in May fell 5.7 pct from a year before
to 88.787 trln yen, dropping for the 15th
consecutive month, preliminary data from the Bank of Japan showed.

Jun 4 2007, 09:18 GMT

2007-06-04T09:51:00.000-07:00

European govt bonds a bit higher as markets eye central banks later this week

http://www.afxnews.com/
LONDON (Thomson Financial) - European government bonds were slightly higher, although movements remained limited as investors' sights are fixed on central bank decisions later this week.
The European Central Bank is widely expected to raise interest rates to 4.00 pct on Wednesday, leaving markets' attention on the accompanying statement and any hints for future rate moves.
"The focus will be if (president) Trichet still indicates that monetary policy remains accomodative and also if he chooses to reiterate that the bank will 'monitor very closely' all developments to price stability," said Stuart Bennett at Calyon.
If the ECB's tone is similar to that in March, another hike will appear likely, although bond prices are unlikely to fall too much in this event as another hike is already priced in, said Bennett.
Today, the only data of note for the euro zone is the April producer prices data, seen rising by 0.4 pct from the previous month, bringing the annual rate down to 2.3 pct from 2.7 pct in March. This should be due to lower oil prices compared with last year.
In the UK, gilts also opened a bit higher, in line with global flows, although technical problems at the exchange caused the market for cash gilts to close down until further notice.
With little in the way of data, the Bank of England policy decision on Thursday will be the focus.
The BoE is widely expected to remain on hold this month, although financial markets are betting on a hike sometime in coming months.
"An interest rate hike in June is highly unlikely but May's Inflation Report and minutes indicate that further tightening will be required," said Geoff Dicks, economist at the Royal Bank of Scotland.
The minutes to the last meeting, when the key policy rate was raised by a quarter point to its current six-year high of 5.50 pct, showed nine of ten rate-setters voted for a hike, while the possibility of a 50-point move was also considered.
Because financial markets are pricing in about a 20 pct probability of a hike, a no change outcome would likely provide some support to gilts in the short-term, analysts said.

At Yield Change on

0935 BST pct previous close

June euribor future (Liffe) 95.84 unchanged

Sept euribor future (Liffe) 95.63 up 0.01

GERMANY
June bund future (Eurex) 111.81 up 0.10
3.75 pct Jan 2017 govt bond 94.69 4.44 up 0.07

FRANCE
3.75 pct Apr 2017 govt bond 94.21 4.49 up 0.10

ITALY
4.00 pct Feb 2017 govt bond 95.48 4.64 up 0.12

UK
June gilt future N/A N/A
4.00 pct Sept 2016 govt bond 90.73 5.27 up 0.07
June short sterling future N/A N/A
September short sterling future N/A N/

Jun 4 2007, 09:18 GMT

2007-06-04T09:45:00.000-07:00

Oil eases as pipeline restart spurs hope of US gasoline tightness abating

http://www.afxnews.com/
LONDON (Thomson Financial) - Oil eased as news of a pipeline reopening spurred some hope of abating tight gasoline supplies in the US.
Crude oil futures rose sharply on Friday on continued concerns that US refineries are not producing enough gasoline to meet peak summer driving demand.
The restart on Sunday of a pipeline operated by Colonial Pipeline may have helped ease some of those supply worries, traders said.
On Friday, the company had said gasoline pipeline operations would be delayed, partly contributing to that day's big rise.
"Now that the Colonial Pipeline has restarted to supply products from the US Gulf Coast to the importing US East Coast, the crude oil futures market is dipping a bit," said Victor Shum, energy analyst with Purvin & Gertz in Singapore.
Elsewhere, traders also kept an eye on key crude producer Nigeria. A temporary truce was offered by main militant group Mend over the weekend, which vowed not to attack oil fields until at least the end of the month to allow time to engage in talks with the government.
Fears of further refinery problems in the US and worries of crude oil supply interruptions from Nigeria helped prices hold onto most of last week's gains, said Base Commodities trader, Christopher Bellew.
At 9.49 am in London, benchmark Brent crude contracts for July delivery were down 15 cents at 68.92 usd per barrel, while New York crude contracts for July delivery were down 42 cents at 64.66 usd per barrel.
Refinery troubles in the US have squeezed the gasoline market for months. Fears are heightening that any more problems could tighten the balance further, with the world's top consumer now into its peak-demand driving season.

I

2007-06-04T03:54:00.000-07:00

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2007-06-04T03:51:00.000-07:00

Welcome to my Site. I Hope you can enjoy it..Thanks for all support..Hope Some Inputs and Critics From You All

OK..Enjoy Its...GOOD LUCK

BREAKING FOREX NEWS - Jun 4, 2007

Euro zone April PPI up 0.4 pct vs March, up 2.4 pct yr-on-yr - Jun 4 2007, 09:15 GMT

UK May construction sector PMI falls to 58; input prices at 9-month high - Jun 4 2007, 09:15 GMT

Forex - Asia currency summary - Jun 4 2007, 09:15 GMT

DATA SNAP: Euro-Zone Factory-Gate Prices Picked Up In Apr - Jun 4 2007, 09:12 GMT

Hongkong Land Registry May deals value up 3.1 pct on-mth; up 35.3 pct on-yr - Jun 4 2007, 09:07 GMT

Metals - Gold dips from Friday's highs as Chinese equities weaken - Jun 4 2007, 09:02 GMT

Forex - Dollar steady, focus to fall on euro zone, UK rate decisions

Czech 1Q Average Nominal Wages Rose 7.8% On Year

Base metals prices set to remain high on demand from Asia - Xstrata CEO

UK inflation could hit 5 pct in the year ahead, leading economist warsns

Thailand's NESDB trims 2007 economic growth forecast to 4.0-4.5 pct

Hongkong to withstand China market turmoil - HKMA chief executive

Spain May jobless down 2.4 pct vs April, down 1.5 pct yr-on-yr

Japanese govt bonds close lower on upbeat data

ECB raises 2007 forecasts for euro zone growth, inflation - report

India Min : Ompact Of Rising Rupee On Exports Likely From July

Asian markets summary

Asian economic and corporate news summary

Forex - US Dollar mixed Sydney Afternoon ; Support form US Data

OUTLOOK Forecasts for US Economic Indicators to be released This Week

Japan Q1 survey results show corporate sector resillient

Oil Prices Lower in Asian Trade after key US Gasoline pipeline reopens

OUTLOOK Hightlights of US Economic indicators to be released this week

Japanese govt bonds end morning weaker on firmer stocks

OUTLOOK Euro zone economic data forecasts for the week ahead

Standard Chartered (China) Suzhou branch starts offering yuan services

Australian business confidence picks up - Dun & Bradstreet

Australia's ANZ May job ads jump 10.3 pct from April, up 40.8 pct yr-on-yr

China yuan central parity rate set at 7.6522 to dollar vx 7.6497

China yuan official Central Parity For Monday

China's AnSteel seeking 12.94 pct stake in Australia's Gindalbie Metals

Japan Q1 non-financial firms' capital investment up 13.6pct year-on-year

Forex - US dollar mixed in Sydney morning trade after solid US jobs data

Japan May monetary base falls 5.7 pct yr-on-yr, down for 15th straight month

BOJ Forecasts Y3.24 Tln Money Market Surplus in June

UPDATED NEWS TODAY from Bloomberg

Worldwide

Japan's Corporate Spending Rises 13.6% to a Record (Update 2)

Asian Stocks Rise to Record on U.S. Growth ; Toyota, BHP Advance

Australia's First-Quarter Company Profits Climb 7.6% ( Update 1)

South Korea to Invest 5.2 Trillion Won in Resoureces ( Update 1 )

Germany Beats Europe Emerging Markets, Emulating '60s Earnings

Vestas, Gamesa, Clipper Make Wind Top Energy Markets Investment

Currencies

Traders Bet Australian Dollar Will Rise Against Yen

Dollar Trades Near Four-Month High Before U.S Services Report

Currencies - Europe

UBS Hedge Fund Loss Ensnares Wuffli With Debacle Reprising LTCM

China's Africa Push to Boost Shilling, Cedi, Standard Bank Says

Euro May-Rise to 173 Yen, Mizuho Corporate Banks Fukui Says

Currencies - Asia

Australian Dollar Rises, Approaching 17-Year High, on Metals

Economy

Japan's Corporate Spending Rises 13.6% to a Record ( Update 4 )

Jun 4 2007, 09:15 GMT

2007-06-04T02:38:00.000-07:00

Euro zone April PPI up 0.4 pct vs March, up 2.4 pct yr-on-yr

http://www.afxnews.com/
BRUSSELS (Thomson Financial) - Euro zone producer prices rose 0.4 pct in April from March, and were up 2.4 pct year-on-year, EU statistics office Eurostat said.
Economists polled by Thomson Financial News had forecast a rise of 0.4 pct and 2.3 pct respectively.

Jun 4 2007, 09:15 GMT

2007-06-04T02:31:00.000-07:00

UK May construction sector PMI falls to 58.0; input prices at 9-month high

http://www.afxnews.com/
LONDON (Thomson Financial) - UK construction sector growth slowed in May after hitting its highest level in almost three and a half years in April, but remained strong, supported by ongoing demand for housing, the Chartered Institute of Purchasing and Supply said.
The headline purchasing managers index fell to 58.0 in May from 59.8 in April, CIPS said.
A reading above 50 indicates expansion.
The breakdown of the survey revealed that output and new orders growth dropped slightly, but input price inflation jumped to a nine-month high of 70.2.
"Purchasing managers largely attributed this slower rate of growth to input price inflation climbing to a nine-month high," said Roy Ayliffe, Director of Professional Practice at CIPS.
However, he noted that the overall level of activity remained "considerably strong", as housing demand stayed very buoyant.
"Growing demand for UK housing, coupled with a large number of
successful bids for planning permission, helped push the overall construction
performance. In turn, this has helped boost sector activity expectation levels for the next year," he said.

June 4 2007, 09:15 GMT

2007-06-04T02:29:00.000-07:00

Forex - Asia currency summary

http://www.afxnews.com/
BEIJING (XFN-ASIA) - Asian currency rates against the US dollar at 0855 GMT (vs previous late levels):
-Australian dollar: 1.2013 (1.2069)
-Hong Kong dollar: 7.8039 (7.8098)
-Indian rupee: 40.492 (40.527)
-Indonesian rupiah: 8,785.0 (8,827.0)
-Japanese yen: 122.04 (121.94)
-Korean won:925.97 (926.72)
-Malaysian ringgit: 3.3955 (3.3998)
-Philippine peso: 45.615 (46.075)
-Singapore dollar: 1.5305 (1.5300)
-Taiwan dollar: 33.070 (33.105)
-Thai baht: 33.045 (32.925)

Jun 4 2007, 09:12 GMT

2007-06-04T02:24:00.000-07:00

DATA SNAP: Euro-Zone Factory-Gate Prices Picked Up In Apr

http://www.djnewswires.com/eu
DATA SNAP: Euro-Zone Factory-Gate Prices Picked Up In Apr By Paul Hannon Of DOW JONES NEWSWIRES
===============================================================
Euro Zone Producer Prices ! !
Apr Mar ! Consensus: +0.3% MM !
Month +0.4% +0.3% ! +2.3% YY !
Year +2.4% +2.8%r ! Actual: +0.4% MM !
r: revised ! +2.4% YY !
=============================================================== LONDON (Dow Jones)--Prices of goods leaving the euro zone's factory gates rose at a slightly more rapid pace than expected in April as prices of intermediate goods surged. Producer prices rose 0.4% from March and were up 2.4% on April 2006, data from the European Union statistics agency Eurostat showed Monday. The rise in prices was larger than expected, with economists surveyed by Dow Jones Newswires last week having estimated prices increased 0.3% on the month and 2.3% on the year.

Jun 4 2007, 09:07 GMT

2007-06-04T02:22:00.000-07:00

Hong Kong Land Registry May deals value up 3.1 pct on-mth; up 35.3 pct on-yr

http://www.afxnews.com/
HONG KONG (XFN-ASIA) - Property transactions registered at the Land Registry of Hong Kong in May totaled 44.9 bln hkd in value terms, up 3.1 pct from the preceding month, and up 35.3 pct year-on-year, the agency said in a statement.
In terms of the number of transactions, the deals were up 19.3 pct month-on-month at 13,090.
Of the total number of deals, 11,110 involved the sale and purchase of apartments, an increase of 16.6 pct over April and a rise of 42.2 pct compared with May last year.
The total consideration for the sale and purchase of apartments in May reached 38.2 bln hkd, down 3.2 pct over April, but up 63.4 pct compared with the amount recorded in May last year.
The Land Registry said the sales of residential units did not include those under the Home Ownership Scheme, the Private Sector Participation Scheme and the Tenants Purchase Scheme, except those undertaken after payment of the premium.
(1 usd = 7.8 hkd)

Jun 4 2007, 09:02 GMT

2007-06-04T02:17:00.000-07:00

Metals - Gold dips from Friday's highs as Chinese equities weaken

http://www.afxnews.com
LONDON (Thomson Financial) - Gold dipped in morning trade, falling back slightly from Friday's two-week high as investors sold off stocks of the metal to cover losses on the Chinese markets this morning.
At 9.42 am BST, spot gold was quoted at 668.90 usd an ounce, down slightly from the 671.30 usd level seen in late New York trade on Friday, when the precious metal hit a two-week high of 671.70 usd.
Gold dipped in Asian trade as investors sold off stocks of the precious metal to cover positions elsewhere as equities in mainland China weakened, according to analyst James Moore of TheBullionDesk.com.
"I don't think this is bad news for gold," he added. "It really underpins gold's position as a safe haven."
Investors are also unconvinced Friday's prices are sustainable in light of a lack of further bullish factors, such as a likelihood of a drop in the US dollar against other currencies.
"There is nothing really out there to bring people back into the market," noted Michael Widmer, an analyst at Calyon.
However the precious metal remains near recent highs, supported by steady oil prices and ongoing geopolitical tensions, analyst said.

Jun 4 2007, 08:49 GMT

2007-06-04T02:09:00.000-07:00

Forex - Dollar steady, focus to fall on euro zone, UK rate decisions

http://www.afxnews.com/
LONDON (Thomson Financial) - The dollar was steady against major currencies at the start of a week where focus will be on central bank rate decisions in Europe, and the UK.
Having firmed on Friday after strong US non-farm payroll figures and the ISM survey on manufacturing activity, the greenback fell back slightly against the euro in early Asian trade.
"The euro-dollar managed to stabilise fairly quickly after the sell-off seen following Friday's ISM release, with the prospect of Wednesday's European Central Bank meeting the most likely supporting factor (for the euro)," said Ian Gunner, head of research at Mellon Foreign Exchange.
The main US release out today are factory orders figures, expected to show a 0.8 pct rise in April from March.
Meanwhile the main event this week for currency markets is the European Central Bank's interest rate decision on Wednesday. The market has fully priced in expectations that the key refi rate will be hiked to 4.0 pct, however close attention will be paid to ECB president Jean-Claude Trichet's accompanying statement for any clues on where rates will peak.
"The ECB is likely to revise its growth and inflation projections higher, suggesting tighter monetary conditions, but the biggest impact will be whether the word 'accommodative' is removed from the statement," said analysts at BNP Paribas.
"In the case of the ECB continuing to describe monetary conditions as accommodative while simultaneously raising its growth and inflation projections the market will price in rates not topping out before 4.50 pct," they added.
The only data of note out today from Europe is the euro zone producer price index. April producer prices are seen rising by 0.4 pct from the previous month for a 2.3 pt annual increase.
Meanwhile the pound was steady against the dollar, and is expected to remain so with little data of any note out head of Thursday's interest rate decision.
Markets are expecting the Bank of England to keep its key repo rate unchanged at the six-year high of 5.50 pct. Only 3 of the 32 economists polled by Thomson Financial News expect the MPC to lift borrowing costs a quarter point for the second month running.
"With inflation on the retreat, activity numbers will have to be more punchy to encourage policymakers into an accelerated pace of tightening, with pound still vulnerable to any soft data given the hawkish stance of the market," said Daragh Maher, currency strategist at Calyon.
Today's release of the Construction purchasing managers' index for May is expected to show growth remained roughly level in May from April's reading of 59.8.

London 0824 GMT Sydney 0400 GMT

US dollar
yen 122.00 up from 121.99
sfr 1.2279 down from 1.2294

Euro
usd 1.3445 down from 1.3447
yen 164.07 up from 164.03
sfr 1.6514 down from 1.6530
stg 0.6777 down from 0.6784

Sterling
usd 1.9840 up from 1.9834
yen 242.04 up from 241.94
sfr 2.4364 down from 2.4380

Australian dollar
aud 0.8327 up from 0.8323
stg 0.4196 unchanged 0.4196
yen 101.60 up from 101.53

Jun 4 2007, 08:40 GMT

2007-06-04T01:42:00.000-07:00

Czech 1Q Average Nominal Wages Rose 7.8% On Year

http://www.djnewswires.com/eu
Czech 1Q Average Nominal Wages Rose 7.8% On Year PRAGUE (Dow Jones)--Czech average before-tax nominal wages rose 7.8% on the year in the first quarter, the steepest growth since early 2004, the Czech Statistics Office, or CSU, said Monday. The wage increase, fueled by a booming economy, is likely to bolster expectations of further interest rate tightening as early as July. Last week, the Czech central bank raised its headline repurchase agreement repurchase agreement rate by 25 basis points to 2.75%, citing rising inflationary pressures. The interest rate is still at the lowest level in the European Union. The first-quarter wage data show the average monthly nominal gross pay amounted to 20,399 koruna ($971) per person. Adjusted for inflation effects, average nominal wages rose 6.2% on the year in January through March. "The first-quarter wage data reflect solid and stable economic growth," Ales Michl, an analyst at Austria's Raiffeisenbank, wrote in a research note. According to Michl, an average Czech currently earns about 28% of the amount an average Austrian earns.

Jun 4 2007, 08:06 GMT

2007-06-04T01:38:00.000-07:00

Base metals prices set to remain high on demand from Asia - Xstrata CEO

http://www.afxnews.com/
ZURICH (Thomson Financial) - Base metals and other raw materials prices are set to maintain their current highs amid huge demand from China and India, Xstrata PLC chief executive Mick Davis said.
To meet rising demand from China alone, global copper output must double over the next eight years, Davis said in a speech at a symposium at the University of St Gallen, Switzerland.
However, the mining industry faces difficulties in supplying these markets, as the current boom had not been anticipated, he said.
With lower investment in personnel, exploration, research and development during less prosperous years, mining companies will have to consolidate to meet demand, he added.
Commenting on continuing consolidation in the mining industry, Davis said mining companies must reach "critical mass" to handle rising global demand.
Xstrata recently acquired Canadian copper and nickel producer Falconbridge in a deal worth 21 bln sfr.
However, Xstrata over the weekend said it will not match Norilsk Nickel's takeover bid for LionOre, while it has extended its current offer of 25 cad per share until June 15 2007.
Xstrata's offer has been trumped by Norilsk Nickel, which is offering 27.50 cad per LionOre share.

Jun 4 2007, 08:02 GMT

2007-06-04T01:33:00.000-07:00

UK inflation could hit 5 pct in the year ahead, leading economist warns

http://www.afxnews.com/
LONDON (Thomson Financial) - Inflation in the UK could rise to as high as 5 pct in the year ahead, a leading economist has warned, according to the Daily Telegraph.
Tim Congdon, the former adviser to Conservative Chancellor of the Exchequer Kenneth Clarke, warned that the Bank of England has lost control of prices and said it is foolhardy to assume that prices will only fall in the coming months.
Congdon said strong levels of money supply could prompt a major rise in the consumer price index, which currently stands at 2.8 pct.
"It has to be said that an inflation rate of 4 pct-5 pct in 2008 or 2009 would not be a surprising sequel to the burst of money growth seen since mid-2004," the newspaper quoted him as saying.
"As far as 2008 (and probably 2009) is concerned, the UK economy must either suffer a period of asset price weakness and beneath-trend growth or above-corridor inflation. That conclusion seems to me inescapable."

Jun 4 2007, 07:46 GMT

2007-06-04T01:29:00.000-07:00

Thailand's NESDB trims 2007 economic growth forecast to 4.0-4.5 pct

http://www.afxnews.com/
BANGKOK (XFN-ASIA) - The National Economic and Social Development Board (NESDB) revised its growth projection for the economy for this year to 4.0-4.5 pct from a previous estimate of 4.0-5.0 pct, saying political uncertainty would affect domestic consumption and investment.
The government think tank's step is in line with moves by the finance ministry and the Bank of Thailand, which both slashed their 2007 growth figures citing low consumer and business confidence because of political uncertainties since a coup here last year.
The NESDB's revision comes after last week's decision by senior Thai judges to dissolve the political party formed by ousted premier Thaksin Shinawatra, which sparked concerns of unrest.
"Consumer spending, which has declined since last year, is likely to remain weak for the rest of the year while private investment has remained under pressure," said Ampon Kittiampon, NESDB secretary general.
"It is important that the government improves understanding and restores the confidence of the general public as well as domestic and foreign investors."
The NESDB reported gross domestic product (GDP) growth in the first quarter of 2007 at 4.3 pct.
Despite warning of rising oil prices, the NESDB also cut its inflation forecast, estimating that price rises will ease to 2.0-2.5 pct in 2007, down from a previous forecast of 2.5-3.0 pct.
The agency revised up export growth for the year at a gain of 12.4 pct to top 144 bln usd, up sharply from the original forecast of 7.9 pct growth.
"Exports have been on a rising trend in many markets, such as China, India, Japan and ASEAN," the NESDB said.
It warned, however, that the strong baht and the global economic slowdown are likely to affect the nation's exports in the second half of the year.
The Thai currency averaged 35.54 baht to the dollar in the first quarter, up 9.5 pct over the same period of 2006.
Imports are set to rise 3.8 pct to 136.4 bln usd in 2007, lower than that 5.0 pct forecast earlier this year, to give a trade surplus of 7.7 bln usd, up from the earlier estimate of 2.3 bln usd.
The current account, the broadest measure of trade in goods and services, also looks better than expected at surplus of 8.5 bln usd, up from the earlier projected surplus of a 3.1 bln.

Jun 4 2007, 07:38 GMT

2007-06-04T01:25:00.000-07:00

Hong Kong to withstand China market turmoil - HKMA chief executive

http://www.afxnews.com/
HONG KONG (XFN-ASIA) - Hong Kong can cope with any turbulence on the China stock markets but investors should be prepared for increased volatility, said Joseph Yam, chief executive of the Hong Kong Monetary Authority (HKMA).
Yam said the local economy is still mainly influenced by the United States rather than the mainland and so it will be able to withstand the fallout from any measures China imposes to rein in its overheated stock markets.
"We have diversified our market players and we also have long-term investors, we have short-term speculators ... the market is more mature," Yam told the city's Legislative Council.
"But I feel that the chance of (increasing) volatility is quite high so everyone has to be psychologically prepared for it," he added.
His comments came after further sharp falls of more than 8.0 pct on the Chinese stock markets amid concerns Beijing will announce additional measures to cool a recent speculative frenzy that has pushed stocks to record highs.

Jun 4 2007, 07:25 GMT

2007-06-04T01:23:00.000-07:00

Spain May jobless down 2.4 pct vs April, down 1.5 pct yr-on-yr

http://www.afxnews.com/
MADRID (Thomson Financial) - The number of jobless fell by 49,893 people, or 2.4 pct, in May from April and was down 1.5 pct from a year earlier, the labour ministry said.
The total number of jobless was 1,973,231 in May, the first time the total number has fallen below 2.0 mln since June, 2006, the ministry said.

Jun 4 2007, 07:16 GMT

2007-06-04T01:20:00.000-07:00

Japanese govt bonds close lower on upbeat data

http://www.afxnews.com/
TOKYO (XFN-ASIA) - Japanese government bond prices ended lower as investors took profits following the release of data
which raised hopes that gross domestic product for the three months to March may be revised upward,
dealers said.
A survey by the Ministry of Finance showed that combined capital spending by non-financial firms jumped 13.6 pct year-on-year in the first quarter of the year, rising for the 16th consecutive quarter.
Economists said the data may lift GDP for the March quarter. Preliminary estimates released earlier
showed Japan's GDP expanded 0.6 pct in January-March compared to the previous three-month
period with annualized growth at 2.4 pct, about half the previous quarter's pace.
"Non-residential investment is most likely to be revised to show no change in the January-March period from the previous quarter," said Tetsuro Sawano, strategist at Mitsubishi UFJ Securities.
"This upward revision alone is most likely to push up overall GDP growth to an annualized figure of around 3.0 pct."
The government will release revised GDP data for the first quarter next Monday.
The yield on the benchmark 10-year bond climbed to 1.795 pct from 1.775 pct at the close Friday.
The yield on two-year bonds rose to 0.990 pct from 0.980 pct, while the yield on five-year bonds advanced to 1.390 pct from 1.370 pct.
The yield on the bellwether 20-year bonds rose to 2.180 pct from 2.155 pct while the yield on 30-year
debt edged up to 2.370 pct from 2.345 pct.
Bond prices move inversely to yields.
The price of the June futures contract for 10-year bonds dipped to 132.74 yen from 132.86 yen at the close Friday.
Naomi Hasegawa, senior strategist at Mitsubishi UFJ Securities, said the JGB market also tracked
the weakness in US Treasury prices on Friday and suffered from gains in Tokyo's shares.
The yield on the benchmark 10-year US Treasury note rose to 4.95 pct on Friday from 4.89 pct late Thursday following the release of stronger-than-expected employment data for May.
The benchmark Nikkei 225 Stock Average closed up 14.54 points or 0.08 pct at 17,973.42, its best level in three months, thanks to Wall Street's gains on Friday and the softer yen.
(1 usd = 121.01 yen)

Jun 4 2007, 06:35 GMT

2007-06-04T01:12:00.000-07:00

ECB raises 2007 forecasts for euro zone growth, inflation - report

http://www.afxnews.com/
FRANKFURT (Thomson Financial) - The European Central Bank has revised upward its 2007 forecasts for euro zone growth and inflation, according to Financial Times Deutschland, citing sources.
The newspaper did specify the revised levels but noted the changes mean there is a risk that the ECB will miss its 2007 target of keeping the inflation rate below the 2 pct level.
The previous forecast released last March was for euro zone inflation of 1.8 pct this year and 2.0 pct for next year while GDP growth was put at 2.5 pct and 2.4 pct, respectively.
The ECB, which publishes its forecasts every three months, is due to release the latest data on Wednesday, when its Governing Council is also scheduled to hold its interest rate policy meeting.

Jun 4 2007, 00:01 GMT

2007-06-04T00:54:00.000-07:00

BOJ Forecasts Y3.24 Tln Money Market Surplus In June

http://www.djnewswires.com/eu
BOJ Forecasts Y3.24 Tln Money Market Surplus In June TOKYO (Dow Jones)--Japan's money market faces a surplus of Y3.24 trillion in June, which is smaller than the Y8.40 trillion surplus for the same month a year ago, according to a forecast by the Bank of Japan released Monday. The central bank also said it expects the volume of banknotes to grow 1.2% at the end of June from the same month last year. The details of the forecast are as follows; June 2007 June 2006 Change
Total 3,240 8,404.3 -5,164.3
Banknotes -450 -608.3 158.3
Treasury funds and others 3,690 9,012.6 -5,322.6
Net JGBs and TBs 4,280 3,086.0 1,194.0
Net FBs -2,350 27.2 -2,377.2
Other items 1,760 5,899.4 -4,139.4
Figures are in billions of yen. Negative figures represent a shortage of funds. Net values show the difference between issuance and redemption of government bonds and treasury bills or financing bills. -Tokyo Bureau, Dow Jones Newswires; 813-5255-2929 (END) Dow Jones Newswires

Jun 4 2007, 05:30 GMT

2007-06-04T00:00:00.000-07:00

India Min:Impact Of Rising Rupee On Exports Likely From July

http://www.djnewswires.com/eu
India Min:Impact Of Rising Rupee On Exports Likely From July NEW DELHI -(Dow Jones)- The Indian rupee's strength against the U.S. dollar still remains a cause for concern and its impact on exports is likely to be felt from July, India's Commerce and Industry Minister Kamal Nath said Monday. "The realization (of export earning) is getting less," Nath told reporters on the sidelines of an industry event. However, he said the government was still confident of meeting its export target of $160 billion during the current fiscal year that started April 1. The Indian rupee touched a new nine-year high against the U.S. dollar last week on the back of strong foreign capital inflows in to the country. On May 28, the dollar fell to INR40.28, its lowest level against the Indian currency since May 1998.

Jun 4 2007, 05:27 GMT

2007-06-03T23:01:00.000-07:00

Asian markets summary

http://www.afxnews.com/
BEIJING (XFN-ASIA) - Asian markets at 0500 GMT:

Stocks:
-Bangkok: SET index 761.81 (up 7.88 pts)
-Bombay: BSE-30 index 14,666.10 (up 95.35 pts)
-Hong Kong: Hang Seng index 20,815.82 (up 212.95 pts)
-Jakarta: Composite index 2,110.502 (up 26.178 pts)
-Kuala Lumpur: Composite index 1,367.32 (up 7.25 pts)
-Manila: Composite index 3,622.94 (up 75.59 pts)
-Seoul: Composite index 1,732.29 (up 16.05 pts)
-Shanghai: A index 4,003.87 (down 193.22 pts)

B index 273.04 (down 9.29 pts)
-Singapore: Straits Times index 3,581.76 (up 33.44 pts)
-Sydney: All Ords 6,420.50 (up 57 pts)
-Taipei: Weighted index 8,292.21 (up 42.31 pts)
-Tokyo: Nikkei 225 index 18,034.43 (up 75.55 pts)

Gold: 668.95-669.45 usd (Hong Kong)

Dollar/yen: 122.04

Euro/dollar: 1.3452

Japanese govt bond 273: yielding 1.800 pct

Jun 4 2007, 05:15 GMT

2007-06-03T22:57:00.000-07:00

Asian economic and corporate news summary

http://www.afxnews.com/
BEIJING (XFN-ASIA) - A summary of Asian economic and corporate news at 0500 GMT:

JAPAN:
-Q1 non-financial firms' capital investment up 13.6 pct year-on-year
-May monetary base falls 5.7 pct year-on-year, down for 15th straight month
-Hitachi, Oracle expand IC tags to fight counterfeiting in China

SOUTH KOREA:
-GDP estimate for 2007 revised to 4.8 pct from 4.0 pct - Goldman Sachs
-Daewoo Shipbuilding wins 1.5 bln usd in foreign, domestic orders
-Korean Air confirms reported plan to launch new low-cost carrier

HONG KONG:
-Exchange Fund Q1 investment income 20.7 bln hkd
-United Laboratories Intl to raise up to 825 mln hkd in IPO
-Sunny Optical Technology (Group) to offer 270 mln shares at 3.0-3.82 hkd in IPO
-Wheelock & Co to raise stake in Wharf to 50 pct
-Wing On Travel to buy stake in mainland Chinese luxury trains operator
-Century City obtains a 30-year uranium mining license in Mongolia
-Kingdee Intl sells small stakes to IBM, Lehman Brothers
-ESun Hldgs names former Goldman Sachs official as executive director
-Tianjin Port Devt announces reallocation of 189 mln hkd expenditure

CHINA:
-Govt says US initiative is 'useful complement' to efforts on climate change
-Govt says developing world should not carry too much of climate change burden
-Positive stock market trend to continue after stamp duty hike - editorials
-Mainland markets should be open to Hong Kong, foreign stocks - regulator
-Govt reiterates that it will introduce fuel tax at right time; studying 'environment tax'
-Printer shipments in Q1 2.095 mln printers, up 3.4 pct year-on-year - Analysys
-China, US to sign non-grain biofuel cooperation agreement
-China Yangtze Power sells 2.5 bln yuan in one-year debt
-Foshan Huaxin Packaging to issue 420 mln yuan in 365-day debt
-CAMC Engineering wins 92.33 mln usd deal in Chad
-Trina Solar NY-listed ADS offering priced at 45 usd each
-PacificNet files form 10-Q report with SEC after audit
-Standard Chartered (China) Suzhou branch starts offering yuan services
-UTStarcom China chief executive resigns
-Kelly Services of US to enter mainland through P-Serv acquisition
-France's Societe Generale increases its stake in Fortune SGAM

TAIWAN:
-Central bank to auction 100 bln twd-worth of 364-day CDs June 8
-Taishin Intl Bank May pretax profit 608 mln twd vs 106 mln twd
-Taiwan Cooperative Bank, BNP Paribas Asset to jointly buy Sunrise Asset
-Taishin Intl Bank disposes of 1.30 bln twd in non-performing loans
-China Steel, Brazil's Samarco sign contract for procurement of iron ore pellets
-AU Optronics considers expanding 6th-, 7.5th-generation capacity

MALAYSIA:
-April trade surplus 6.006 bln rgt vs 6.627 bln rgt a year earlier

INDONESIA:
-Gajah Tunggal's proposed 95 mln usd bond issue rated 'B2' - Moody's
-Gajah Tunggal outlook revised to 'positive'; bond rated 'B' - S&P

PHILIPPINES:
-TKC Steel buys 90 pct of Zhangzhou Stronghold Steel
-Alliance Global prices stock offer at 5.759 pesos/share

AUSTRALIA & NEW ZEALAND:
-Australia Q1 company gross profits up 7.6 pct vs Q4 rise of 2.5 pct
-Australian business confidence picks up - Dun & Bradstreet
-ANZ Australia May job ads jump 10.3 pct from April, up 40.8 pct year-on-year
-AnSteel seeking 12.94 pct stake in Gindalbie Metals
-Coca-Cola Amatil signs research and production jv with Anadis
-Macquarie Airports not preparing to bid for Rome airport partner
-Mexico's Cemex wins acceptances for 41.57 pct of Rinker

Jun 4 2007, 00:23 GMT

2007-06-03T22:52:00.000-07:00

Japan May monetary base falls 5.7 pct yr-on-yr, down for 15th straight month

http://www.afxnews.com/
TOKYO (XFN-ASIA) - The monetary base in May fell 5.7 pct from a year before to 88.787 trln yen, dropping for the 15th
consecutive month, preliminary data from the Bank of Japan showed.
This was the first time in 13 months that the monetary base posted a single-digit decline, having
fallen by double-digit levels in the past.
In March 2006, the monetary base dropped for the first time in more than five years after the central bank abandoned its easy credit policy, which was designed to counter deflation, and has been shrinking since then as the central bank steadily drains surplus funds from short-term money markets.
The total amount that commercial banks keep in current accounts at the central bank declined 53.9 pct from a year before to 8.88 trln yen in May, falling for the 15th month in a row.
(1 usd = 121.03 yen)

Jun 4 2007, 00:32 GMT

2007-06-03T22:43:00.000-07:00

Forex - US dollar mixed in Sydney morning trade after solid US jobs data

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SYDNEY (XFN-ASIA) - The US dollar was slightly lower against the yen here and higher against the euro following the stronger-than-expected US non-farm payrolls report released on Friday which showed a 157,000 gain in May, dealers said.
The data was above the market consensus forecast for a 140,000 increase and the 88,000 rise in April. The jobless rate remained at 4.5 pct.
At 9:55 am Sydney (2355 GMT) the dollar was trading at 121.05 yen from 122.08 in late trading in
New York on Friday while the euro was at 1.3445 usd, down from 1.3449 in New York.
Dealers said the euro traded in a narrow range late Friday despite the stronger US data and a weaker euro zone manufacturing purchasing managers index for May, while the yen eased modestly against the US dollar.
The euro zone manufacturing PMI survey fell to 55.0 points in May from 55.4 in April and was against market forecasts of a slight rise to 55.5 points.
Dealers said the euro and sterling are likely to remain range-bound ahead of their respective central bank meetings this week.
The European Central Bank is widely expected to raise official rates by 25 basis points to 4.00 pct on Wednesday, while the Bank of England is tipped to announce interest rates will remain at 5.5 pct but indicate an upside risk to interest rates ahead.
Meanwhile, US Commerce Department data released on Friday showed a 2.0 pct year-on-year increase in April for the core measure of personal consumption expenditures. This was down from 2.0 pct over the year to March and moving within the Federal Reserve's comfort band of 1-2 pct.
Commonwealth Bank senior economist John Peters said the Federal Reserve may feel reassured by the second consecutive soft monthly outcome in the core PCE deflator, but it will require further easing of inflation pressures in the coming months before making any shift in its rhetoric.
"We still see the Federal funds rate on hold at 5.25 pct throughout 2007," he said.
Dealers said few key economic data releases are due tonight while US factory orders for April are forecast to show a smaller rise of 0.7 pct from the 3.5 pct surge in March.
Sydney 9.55 am (2355 GMT)
US dollar
122.05 yen
1.2297 sfr
Euro
1.3445 usd
164.06 yen
1.6532 sfr
0.6782 stg
Sterling
1.9825 usd
241.91 yen
2.4377 sfr
Australian dollar
0.8324 usd
0.4198 stg
101.57 yen
New Zealand dollar
0.7444 usd

Jun 4 2007, 00:34 GMT

2007-06-03T22:33:00.000-07:00

Japan Q1 non-financial firms' capital investment up 13.6 pct year-on-year

http://www.afxnews.com/
TOKYO (XFN-ASIA) - The combined capital investment of non-financial companies was 13.6 pct higher in the first quarter than a year before, growing for the 16th straight quarter and growing at a double-digit rate for the fifth straight quarter, the results of a government survey show.
The quarterly survey by the Ministry of Finance found that the combined current profit of non-financial firms at the parent level was 7.4 pct higher in the first quarter than a year before, rising for the 19th straight quarter.
The ministry surveyed 24,148 companies with capital exceeding 10 mln yen and received replies from 19,077. The results are the last data used in computing the revised GDP figures for the first quarter. In its preliminary estimate, released last month, the government said the economy had grown by 0.6 pct in real terms in the first quarter, or at an annual rate of 2.4 pct.
The ministry gave the following data for the first quarter, showing year-on-year changes, compared with the year-on-year changes in the fourth quarter of last year.
All non-financial firms:
Parent current profit - up 7.4 pct vs up 8.3 pct
Revenue - up 6.3 pct vs up 7.0 pct
Capital investment - up 13.6 pct vs up 16.8 pct
Manufacturers:
Parent current profit - up 7.2 pct vs up 14.8 pct
Revenue - up 2.4 pct vs up 7.0 pct
Capital investment - up 12.7 pct vs up 15.4 pct
Non-manufacturers:
Parent current profit - up 7.6 pct vs up 2.9 pct
Revenue - up 8.0 pct vs up 7.0 pct
Capital investment - up 14.1 pct vs up 17.5 pct
(1 usd = 122.03 yen)

Jun 4 2007, 00:42 GMT

2007-06-03T22:30:00.000-07:00

China's AnSteel seeking 12.94 pct stake in Australia's Gindalbie Metals

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SYDNEY (XFN-ASIA) - China's Anshan Iron & Steel Group Corp (AnSteel) is seeking a 12.94 pct stake in its Karara iron ore joint venture partner, Gindalbie Metals Ltd, Gindalbie said.
Last year, Gindalbie and AnSteel formed the 50/50 Karara joint venture which is developing iron ore deposits in the Mid West region of Western Australia near Murchison. The ore is to be transported to the port of Geraldton for export.
Gindalbie will issue 65 mln shares at 0.60 aud each to AnSteel's Hong Kong investment vehicle, Angang Group Hong Kong Co Ltd, to raise 39 mln aud.
Following completion of the share placement, AnSteel will become Gindalbie's second largest shareholder.
The share subscription agreement is conditional upon AnSteel receiving approval and sign-off from relevant Chinese regulatory authorities, which are expected to be received within two months.
After completing the placement, AnSteel will be invited to nominate a representative to join Gindalbie's board of directors.
Gindalbie chief executive Garret Dixon said the two parties have developed a very close and successful working relationship.
He added the joint venture is moving towards completion of the bankable feasibility study on the Karara Magnetite project by the end of August and will commence development of the Mungada hematite iron ore project within the next few months.
(1 usd = 1.20 aud)

Jun 4 2007, 01:18 GMT

2007-06-03T22:27:00.000-07:00

China Yuan Official Central Parity Rates For Monday

http://www.djnewswires.com/eu
China Yuan Official Central Parity Rates For Monday The China Foreign Exchange Trade System published the following official central parity rates for major currencies against the yuan Monday
Monday Friday
USD/CNY 7.6522 7.6497
HKD/CNY 0.97970 0.97930
JPY/CNY (per 100 yen) 6.2713 6.2826
EUR/CNY 10.2891 10.2904
GBP/CNY 15.1705 15.1380
The daily central parity rate for the yuan versus the U.S. dollar is the weighted average of prices given by market makers. The highest and lowest offers are excluded from the calculation. In each daily trading session, the central bank allows the dollar-yuan rate to move no more than 0.5% above or below the central parity rate. Other currency pairs are allowed to move as much as 3% above or below the central parity rate. Source: www.chinamoney.com.cn

Jun 4 2007, 01:41 GMT

2007-06-03T22:24:00.000-07:00

China yuan central parity rate set at 7.6522 to dollar vs 7.6497

http://www.afxnews.com/
BEIJING (XFN-ASIA) - The central bank has set the yuan central parity rate at 7.6522 to the dollar, according to the China Foreign Exchange Trading System.
The rate, published on the official Chinamoney website (www.chinamoney.com.cn), compares with the midpoint of 7.6497 set the previous trading day.
The People's Bank of China (PBoC) started setting a daily central parity rate on Jan 4, 2006.
On July 21, 2005, China freed the yuan from its long-standing peg to the dollar in favor of a trade-weighted basket of currencies, and allowed the local unit to appreciate by 2.1 pct. The PBoC allows a trading band of 0.5 pct on either side of the central parity rate.

Jun 4 2007, 01:46 GMT

2007-06-03T22:22:00.000-07:00

Australia's ANZ May job ads jump 10.3 pct from April, up 40.8 pct yr-on-yr

http://www.afxnews.com/
SYDNEY (XFN-ASIA) - Job advertisements in newspapers and on the Internet during May averaged 251,998 per week, jumping 10.3 pct from April and up 40.8 pct from a year earlier, Australia and New Zealand Banking Group Ltd (ANZ) said.
In April, the survey showed 3.5 pct more job ads than in March.
ANZ said the result of the latest monthly survey showed that the demand for labor is booming which, alongside a range of other partial economic indicators, show that the Australian economy entered 2007 with a great deal of momentum.
Internet job advertisements surged an adjusted 10.9 pct last month when compared to April to an average of 231,211 per week and were 46.2 pct higher than a year before.
Internet job ads were 4.0 pct higher in April from March.
Job advertisements in major metropolitan newspapers rose an adjusted 4.5 pct in May to an average of 20,787 per week. They were down 1.3 pct in April from March.
Over the year to May, newspaper advertisements were lower by 0.4 pct.
ANZ head of Australian economics Tony Pearson said employment growth has continued at a robust pace in recent months and his firm's job advertisements series suggests there is a likelihood of even stronger growth in employment over the months ahead.
He said with the unemployment rate already down to a 32-year low of 4.4 pct and given the very robust demand for new workers, there is now a good chance that the unemployment rate will fall again to new cyclic lows over coming months.
"In this environment, policy makers will remain alert to any signs of an inflationary acceleration in wages growth," Pearson added.

Jun 4 2007, 01:59 GMT

2007-06-03T22:19:00.000-07:00

Australian business confidence picks up - Dun & Bradstreet

http://www.afxnews.com/
SYDNEY (XFN-ASIA) - Dun & Bradstreet said its June survey of business expectations shows Australian businesses are expecting a strong start to the new financial year in Australia starting July 1.
The firm said the quarterly survey showed its D&B index for expected sales rose 13 points from the March survey to a reading of 15, with 37 pct of executives surveyed expecting an increase in sales and 22 pct expecting a decrease.
D&B said its profits index rose 12 points to eight points with 32 pct of executives expecting profits to rise and 24 pct expecting a fall.
Employment expectations were up eight points to an index reasing of six, with 18 pct expecting an increase in staff, and 12 pct expecting a reduction.
D&B said capital investment expectations rose 10 points from the previous survey to an index reading of 12, with 18 pct expecting an increase and six pct expecting to cut spending.
Inventories expectations rose six points to an index reading of two.
But the selling price index fell nine points to a reading of 49, with 55 pct of firms now expecting to raise prices and six pct expecting to decrease prices.
The survey covered 1,200 business owners and senior executives representing major industry sectors across Australia.
D&B Australia chief executive Christine Christian said the survey shows business leaders are feeling confident about the new financial year as gasoline price pressure eases and sales growth trends upwards.
Christian said business leaders are feeling more confident about managing the ongoing fluctuation in gasoline prices and consequently more confident about the impact on their businesses than they were five months when sentiment was being quite heavily impacted by high gasoline prices.
Then they were forecasting growth in selling prices and indicating that they would be cutting back on expenditures elsewhere.
Christian said business leaders are now feeling more confident about managing the ongoing fluctuation in gasoline prices and consequently more confident about the impact on their business.
"As we approach the new financial year executives are still watching the impact of petrol prices closely but are indicating they are planning to invest in both jobs and capital expenditure on the back of expected improved sales," she said.

Jun 4 2007, 02:10 GMT

2007-06-03T22:16:00.000-07:00

Standard Chartered (China) Suzhou branch starts offering yuan services

http://www.afxnews.com/
BEIJING (XFN-ASIA) - Standard Chartered Bank (China) Ltd said its branch in Suzhou, in eastern China's Jiangsu province, will start local currency services from today.
In a statement, Standard Chartered said the branch will offer yuan banking services for corporations, local residents and foreigners.
Standard Chartered will provide yuan services to local customers in 12 branches and sub-branches in Beijing, Shanghai, Shenzhen, Guangzhou and Suzhou.

Jun 4 2007, 03:36 GMT

2007-06-03T22:08:00.000-07:00

OUTLOOK Euro zone economic data forecasts for the week ahead

http://www.afxnews.com/
LONDON (Thomson Financial) - The following are consensus forecasts for euro zone economic indicators due this week.
The TFN consensus is the median of a range of forecasts gathered by Thomson Financial News from a broad sample of private sector economists.

TFN CONSENSUS PREVIOUS PERIOD

MON, JUNE 4 EURO ZONE

April PPI
month-on-month +0.4 +0.3
year-on-year +2.3 +2.7

TUES, JUNE 5 EURO ZONE

May services PMI +57.2 +57.0
April retail sales
month-on-month +0.9 +0.5

FRANCE
May services PMI +58.7 +58.7

GERMANY
May services PMI +57.8 +57.8

ITALY
May services PMI +54.2 +53.9
WEDS, JUNE 6

GERMANY
April manufacturing orders
month-on-month -0.8 +2.4
year-on-year +10.0 +9.9

FRI, JUNE 8

GERMANY
April industrial production
Month-on-month +0.5 -0.1
Year-on-year +6.4 +7.7
April trade balance (bln eur) +15.0 +18.4
April current a/c balance (bln eur) +12.2 +17.2

FRANCE
April trade balance (bln eur) -1.9 -1.6

ITALY
Q1 Final GDP
quarter-on-quarter +0.2 +0.2
year-on-year +2.3 +2.3

Jun 4 2007, 03:39 GMT

2007-06-03T22:02:00.000-07:00

Japanese govt bonds end morning weaker on firmer stocks

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TOKYO (XFN-ASIA) - Japanese government bond prices ended the morning session lower, mirroring losses on US Treasury bonds Friday, as investors trooped to stocks, dealers said.
At the midday break, the yield on the benchmark 10-year bond was at 1.800 pct, up from 1.775 pct at the close Friday.
The yield on two-year bonds rose to 0.995 pct from 0.980 pct, while the yield on five-year bonds advanced to 1.400 pct from 1.370 pct.
The yield on the bellwether 20-year bonds rose to 2.180 pct from 2.155 pct while the yield on 30-year debt edged up to 2.365 pct from 2.345 pct.
The price of the June futures contract for 10-year bonds dipped to 132.64 yen from 132.86 yen at the close Friday.
At the end of morning trade, the benchmark Nikkei 225 Stock Average was up 33.90 points or 0.19 pct at 17,992.78, while the TOPIX index of all first-section issues gained 4.82 points or 0.27 pct to 1,772.70.
Naomi Hasegawa, senior strategist at Mitsubishi UFJ Securities, said the JGB market tracked the weakness in US Treasury prices on Friday, and suffered from gains in Tokyo shares.
The yield on the benchmark 10-year US Treasury note rose to 4.95 pct on Friday from 4.89 pct late Thursday following the release of stronger-than-expected employment data for May.
"But there was some buying on dips as profit-taking trimmed gains in share prices," she added.
Dealers said investors are also waiting for the 10-year government bond auction tomorrow.
(1 usd = 121.80 yen)

Jun 4 2007, 03:46 GMT

2007-06-03T21:57:00.000-07:00

OUTLOOK Highlights of US economic indicators to be released this week

http://www.afxnews.com/
WASHINGTON (Thomson Financial) - Here are the highlights of US economic indicators to be released this week. Thomson's IFR Markets provided the median forecasts.

MONDAY, JUNE 4
April factory orders forecast at +0.8 pct and +0.9 pct ex-transport should add another piece of evidence for a second quarter pickup in the economy. Those are down from the unexpectedly large numbers in March, but along with the ISM manufacturing index jump out last week, BMO Capital Markets economist Sal Guatieri says, "This will go some ways to alleviating the Fed's concern that business investment might be flagging."

TUESDAY, JUNE 5
Still more steady growth in the services sector is the outlook for the May ISM Non-manufacturing index. It was 56 in April and economists are looking for another 56 reading.

WEDNESDAY, JUNE 6
Revised first quarter productivity and labour costs won't likely alleviate the Fed's concern about "resource utilization," their code for labour market inflation pressure. With the downward Q1 GDP revision comes a downward revision to productivity. The consensus is for a cut to +1.0 pct from the initial report of +1.7 pct.
For unit labour costs, the consensus is +1.4 pct, more than double the first estimate of +0.6 pct.
Economists at Global Insight say the new numbers "will do little" to answer the Fed's monetary policy questions: "how much of the slowdown is cyclical, how much is related to our inability to measure employment in the construction sector and how much is related to a slowdown in the rate of technological change?"

THURSDAY, JUNE 7
Weather and seasonal adjustment problems have been playing havoc with the weekly jobless claims report. This week, economists are looking for 310,000 initial claims, the same as the week before, suggesting the US labour market is at least steady.
There is also no change forecast for April wholesale inventory growth, another +0.3 pct as in March.

FRIDAY, JUNE 8
April's US trade deficit may be marginally lower. The forecast is -63.4 bln usd, half a billion less than March. "The ballooning trade deficit is a mere function of energy product imports," says IFR Markets economist Jeoff Hall. Higher prices will push that part of the import bill up but other imports seem to have been steady or falling. On the export side of the balance however, Daiwa Securities Mike Moran says "firm growth in foreign economies and a competitive currency should lead to moderate growth."

Jun 4 2007, 03:52 GMT

2007-06-03T21:53:00.000-07:00

Oil prices lower in Asian trade after key US gasoline pipeline reopens

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SINGAPORE (XFN-ASIA) - Oil prices fell in Asian trade as gasoline supply concerns eased after a key US pipeline reopened over the weekend, dealers said.
At 10.30 am (0230 GMT), New York's main contract, light sweet crude for July delivery was 40 cents lower at 64.68 usd a barrel from 65.08 usd in US trading Friday.
Brent North Sea for July delivery dropped 34 cents to 68.73 usd.
The reopening of a pipeline carrying gasoline supplies to the US east coast by the Colonial Pipeline Company Sunday was the main factor behind the price decline, dealers said.
"The pipeline restarted on Sunday and the pipeline is a main distribution pipeline to get gasoline to the east coast," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
"That is back on line and is reassuring because gasoline supply worries in the US have been driving up crude oil," he said.
US gasoline demand has entered its peak demand period as the US driving season gets underway with millions of Americans due to take to the nation's highways en route to summer holiday hot spots.
Gasoline supply concerns will remain a key factor influencing the market after the US Department of Energy showed reserves rose by 1.3 mln to 198 mln barrels in the week to May 25, lower than market expectations for an increase of 1.5 mln barrels.
US crude reserves fell 2.0 mln barrels to 342.2 mln barrels in the week ending May 25. That caught
many analysts, who had forecast an increase of 1.0 mln barrels, off guard.
Below-average stock levels of gasoline have forced retail gasoline prices higher across the United States.

Jun 4 2007, 04:01 GMT

2007-06-03T21:46:00.000-07:00

ROUNDUP - Japan Q1 survey results show corporate sector resilient

http://www.afxnews.

TOKYO (XFN-ASIA) - The results of the latest government survey of the corporate sector show capital investment was resilient in the first quarter, despite slower growth in profits and the risk that demand in the US will moderate, analysts said.
They said the results could mean that the revised figures for GDP for the first quarter will turn out to be higher than the preliminary estimates.
But analysts warned that corporate activity could slow because of inventory adjustments in the information technology sector and moderation in economic growth in the US.
The Ministry of Finance surveyed 24,148 companies with capital exceeding 10 mln yen and received replies from 19,077.
The survey found that combined corporate capital spending by non-financial firms was 13.6 pct higher in the first quarter than a year before, rising for the 16th straight quarter.
The government uses the results of the quarterly corporate survey to fine-tune the non-residential investment and private-sector inventory data used in calculating GDP. Non-residential investment is virtually equivalent to corporate capital spending.
In its preliminary estimate, released last month, the government said the economy had grown by 0.6 pct in real terms in the first quarter, or at an annual rate of 2.4 pct.
The preliminary estimate was that the non-residential investment was 0.9 pct lower in the first quarter than in the fourth quarter of last year, and that this subtracted 0.1 percentage point from overall GDP.
The government will release the revised real GDP data for first quarter on next Monday.
Tatsushi Shikano, senior economist at Mitsubishi UFJ Securities, said he expected the latest capital investment figures to mean that the revised GDP data for the first quarter would show annual growth of 3.0 pct.
The survey found that combined capital investment by manufacturers was 12.7 pct higher in the first quarter than a year before, having been 15.4 pct higher in the fourth quarter of last year than a year earlier.
In the non-manufacturing sector, the aggregate capital investment was 14.1 pct higher in the first quarter than a year before, having been 17.5 pct higher in the fourth quarter of last year than a year earlier.
"Given the relatively solid investment figures, non-residential investment may be revised to show no change in the January-March period from the previous quarter, rather than a sequential fall of 0.9 pct," Shikano said.
Taro Saito, senior economist at NLI Research Institute also said he expected the latest capital investment data to mean that the revised GDP figures for the first quarter would show annual growth of 3.0 pct.
"Given the slowdown in the growth pace in the US, we could say that Japan did well," Saito said.
But Junichi Makino, a senior economist at Daiwa Institute of Research, said he expected the latest capital investment data to mean that the revised GDP figures for the first quarter would show annual growth of only 2.5 pct, because the likely upward revision of the non-residential investment component would be canceled out by the effects of downward revisions of the private inventory and public sector outlays components.
Economists remarked on the further moderation of the growth of corporate profits.
The combined parent current profits of non-financial firms was just 7.4 pct higher in the first quarter than a year before, after increases of 8.3 pct in the fourth quarter of last year and 15.5 pct in the third.
Combined current profits were 0.5 pct lower in the first quarter than in the fourth, led by a drop of 5.5 pct drop in manufacturers' current profits.
"Given the sequential decline in corporate profits, which are a key leading indicator of capital investment, capital outlays may see a further and more outright slowdown in growth later this year, led by manufacturers," Makino said.
"And once manufacturers start seeing their profitability eroded, they tend to curtail sales, administration and general expenditure, which may thwart the investment plans of non-manufacturers," he said.
(1 usd = 121.93 yen)

Jun 4 2007, 04:12 GMT

2007-06-03T21:39:00.000-07:00

OUTLOOK Forecasts for US economic indicators to be released this week

WASHINGTON (Thomson Financial) - These are the consensus forecasts compiled by Thomson IFR Markets for the major US economic indicators to be released in the coming week.

Forecast Previous

MONDAY, JUNE 4
US April Factory Orders
monthly change (pct) +0.8 +3.1
US April Factory Orders Ex-transportation
monthly change (pct) +0.9 +1.9

TUESDAY, JUNE 5
Institute for Supply Management
May Non-manufacturing Index 56.0 56.0

WEDNESDAY, JUNE 6

US Q1 Productivity (revised)
quarterly change (pct) +1.0 +1.7
US Q1 Unit Labor Costs (revised)
quarterly change (pct) +1.4 +0.6

THURSDAY, JUNE 7
US First-time Jobless Claims
weekly level (thousands) 310 310
US Continuing Jobless Claims
weekly level (mln) 2.50 2.47
US April Wholesale Inventories
monthly change (pct) +0.3 +0.3
US April Wholesale Sales
monthly change (pct) +0.6 +1.8
US April Consumer Credit
monthly change (bln usd) +6.0 +13.5

FRIDAY, JUNE 8
US April International Trade Balance
monthly level (bln usd) -63.4 -63.9

June 4 2007, 04:29 GMT

2007-06-03T21:34:00.000-07:00

Forex - US dollar mixed Sydney afternoon; support from US data

Mon, Jun 4 2007, 04:29 GMT

http://www.afxnews.com/
SYDNEY (XFN-ASIA) - The US dollar was trading mixed against major currencies in a narrow range but was well-supported following data on Friday reinforcing the Federal Reserve's view that the economy continuing to recover despite the US housing downturn, dealers said.
They said the dollar is maintaining a firm tone helped by a rise in US bond yields although slipping slightly against the euro ahead of an expected rate hike by the European Central Bank (ECB) on Wednesday.
At 2:00 pm Sydney, (0400 GMT) the dollar was at 121.99 yen from 121.05 in mid morning trade here while the euro was at 1.3447 usd from 1.3445.
ANZ Banking Group senior currency strategist Tony Morriss said trading is relatively quiet with major currencies consolidating after Friday's movements which saw the dollar gain following stronger-than-expected May US jobs data.
The dollar's gains were capped by data on Friday showing inflation measured by the core personal consumption expenditure (PCE) to be tamer than expected in April.
The US non-farm payrolls report showed 157,000 jobs gained in May against a market consensus forecast increase of 140,000 increase while the April PCE was up 2.0 pct year-on-year versus a consensus forecast rise of 2.1 pct.
Morriss said the US dollar has failed to break through the 122.0 yen barrier but is finding support close to this level.
"It is not coming down anytime soon - I think it is finding support from higher US bond yields but the euro is also finding support above the 1.3400 usd level ahead of the ECB's expected rate move this week," he said.
Morriss said significant price action is not expected until European and US markets reopen after the weekend.
The ECB is widely expected to raise official rates by 25 basis points to 4.00 pct on Wednesday while the Bank of England is tipped to announce interest rates will remain at 5.5 pct while indicating an upside risk to interest rates ahead.
Morriss said the Australian dollar has moved lower after last week's strong gains on the back of merger and acquisition flows.
"I think there's a feeling it (the Australian dollar) went a little bit too far last week and also the interest rate differential seems to have moved a little bit more in the US dollar's favor," he said.
Sydney 2.00 pm (0400 GMT) vs 9.55 am

US dollar
yen 121.99 vs 122.05
sfr 1.2294 vs 1.2297

Euro
usd 1.3447 vs 1.3445
yen 164.03 vs 164.06
sfr 1.6530 vs 1.6532
stg 0.6784 vs 0.6782

Sterling
usd 1.9834 vs 1.9825
yen 241.94 vs 241.91
sfr 2.4380 vs 2.4377

Australian dollar
aud 0.8323 vs 0.8324
stg 0.4196 vs 0.4198
yen 101.53 101.57

New Zealand dollar
usd 0.7450 vs 0.7444

Japan's Corporate Spending - June,4

2007-06-03T20:43:00.000-07:00

Japan's Corporate Spending Rises 13.6% to a Record (Update4)
By Lily Nonomiya
June 4 (Bloomberg) -- Spending by Japan's largest companies rose to a record in the first quarter, indicating the world's second-largest economy probably grew at a faster pace than the 2.4 percent initially estimated by the government.
Capital spending climbed 13.6 percent in the three months ended March 31 from a year earlier, the Ministry of Finance said in Tokyo today. The pace was faster than the 10.1 percent median estimate of nine economists surveyed by Bloomberg News.
Sales and profit also surged to the highest ever as companies benefited from the economy's longest postwar expansion. The report is a key component in recalculating first-quarter gross domestic product scheduled for release June 11.
``Capital spending wasn't as weak as we initially thought,'' said Yasukazu Shimizu, a senior market economist at Mizuho Securities Co. in Tokyo. ``Capital spending strength reflects companies' optimism about demand.''
The yen traded at 121.96 per dollar at 12:20 p.m. in Tokyo from 122.08 before the report. The yield on Japan's benchmark 10-year bond rose 3 basis points to 1.8 percent.
Machinery makers, construction companies and transport equipment makers led the increase in spending, the report showed. Sales rose 6.3 percent and profit climbed 7.4 percent. Excluding spending on software, business investment rose 14.2 percent.
Revised GDP
The spending plans released by the Finance Ministry account for about 60 percent of the corporate outlays portion of revised GDP. The GDP report on May 17 showed corporate spending, which is measured by capital goods shipments in preliminary calculations, fell 0.9 percent from the fourth quarter. Inventories subtracted 0.1 percentage point from growth.
Kiichi Murashima, an economist at Nikko Citigroup Ltd., and Takuji Aida, chief economist at Barclays Capital in Tokyo, also said the report shows GDP growth was stronger than estimated.
The world's second-largest economy expanded an annualized 3.2 percent in the first quarter, according to the median estimate of five economists surveyed by Bloomberg News after today's survey, faster than the 2.4 percent initially reported.
From the previous quarter, the economy grew 0.9 percent in the three months ended March 31, more than the 0.6 percent the government reported last month, Shimizu said. Today's numbers exclude investment by financial and insurance companies, which are included in the GDP component, making it difficult to gauge how the report will affect GDP, he said.
TDK's Factory
TDK Corp., Japan's biggest maker of magnetic heads, said last month it will spend 50 billion yen ($410 million) to build an electronics component plant in Yurihonjo, northern Japan. Toyota Motor Kyushu Inc., a subsidiary of Japan's largest carmaker, said last week it will spend 16 billion yen to construct a parts factory in Kyushu, southwestern Japan.
Growth in spending moderated from the fourth quarter's record 16.8 percent. Spending by manufacturers climbed 12.7 percent, slowing from 15.4 percent. Investment by non- manufacturers rose 14.1 percent, slower than the 17.5 percent pace in the fourth quarter, the ministry said.
``Capital spending will keep growing steadily as companies are rightfully being cautious about overinvestment,'' said Akiyoshi Takumori, chief economist at Sumitomo Mitsui Asset Management Co. in Tokyo.
Both domestic and overseas demand may boost business investment in coming months. A report this week is expected to show that machinery orders, a key indicator of future spending plans, rose 5 percent in April, halting two months of declines.
The U.S. economy may be rebounding after growing at the slowest pace in four years last quarter. The trade deficit in Japan's largest export market probably narrowed in April, boosting manufacturing, according to economists surveyed by Bloomberg News. An index of non-manufacturing will show service industries expanded in May, economists said.
A recovery in spending by Japan's consumers may last. The jobless rate fell to 3.8 percent in April, the lowest level in nine years, and household spending rose for a fourth month, the longest winning streak in three years.

Australian Dollar Rises - June,4

2007-06-03T20:37:00.000-07:00

Australian Dollar Rises, Approaching 17-Year High, on Metals
By Fergus Maguire
June 4 (Bloomberg) -- The Australian dollar rose, approaching a 17-year high, as prices for metals exported by the nation including gold and copper climbed.
The currency has risen 5.5 percent this year as a measure of six metals on the London Metal Exchange gained 13.6 percent. Mining and energy exports account for half of Australia's shipments. A report today showed Australia's job-vacancy advertisements climbed to a record in May, adding to signs of rising employment that may boost consumer spending.
``The most potent support for the Australian dollar looks to have come from resources,'' Tony Morriss, a Sydney-based currency strategist at Australia & New Zealand Banking Group Ltd., said today in a note to clients. ``All of the commodity currencies received a boost from a surge in gold and metal prices.''
The Australian dollar rose 0.4 percent to 83.22 U.S. cents at 11:37 a.m. in Sydney. The currency traded as high as 83.92 cents on April 19, the most since August 1990.
Gold, Australia's third-biggest commodity export, rose by the most in three months in New York on June 1. Gold futures for August delivery gained $10.20, or 1.5 percent, to $676.90 an ounce. Silver rose 27 cents to $13.74 an ounce. Copper futures in New York had the first weekly gain in a month climbing 0.3 percent to $3.405 a pound.
Jobs advertised in major newspapers and on the Internet rose 10.3 percent from April to an average 251,998 a week, seasonally adjusted, according to an Australia & New Zealand Banking Group Ltd. report released in Melbourne today.
Traders are stepping up purchases of options to bet Australia's dollar will rally against the yen as a strengthening economy bolsters demand for the country's assets. The currency has risen 8.1 percent against the yen this year to 101.38.
`More Upside'
Company profits rose at the fastest pace in almost two years in the first quarter as earnings climbed at banks and retailers. Gross operating profits increased 7.6 percent from the fourth quarter, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey of 20 economists was for a 2.9 percent gain.
Speculators are wagering ``there is more upside room for the Australian dollar,'' said Neil Jones, head of European hedge fund sales at Mizuho Financial Group Inc. in London. ``There are still large amounts of money from Japan looking for high yields. Increasing demand for Australian dollar call'' options ``is set to continue.''
Demand is growing for call options granting the right to buy the Australian dollar versus the yen, relative to put options giving the right to sell.
The so-called risk-reversal rate measuring this demand was minus 1.1 percent today on a one-month maturity, compared with minus 2.0 percent reached in April, the lowest since October 2003. A higher risk-reversal rate shows greater demand for calls on the Australian dollar relative to puts.
Elsewhere, New Zealand's dollar was at 74.45 U.S. cents compared with 73.91 cents in late Asian trading June 1. The nation's markets are closed today for the Queen's Birthday public holiday.

**Original Source = Bloomberg.com**

Euro - June,4

2007-06-03T20:29:00.000-07:00

Euro May Rise to 173 Yen, Mizuho Corporate Bank's Fukui Says
By Kosuke Goto
June 4 (Bloomberg) -- The euro may strengthen to a record 173 yen this year as a strengthening economy and rising interest rates attract investment into the region's assets, said Masaki Fukui at Mizuho Corporate Bank Ltd. in Tokyo.
Europe's currency touched a record high of 164.29 yen May 29, on speculation European Central Bank officials this week will raise borrowing costs and signal they will keep rising. The euro has strengthened almost 14 percent against the yen in the past year as the rate differential between the two economies widened.
``The euro remains firm on prospects of further rate increases,'' Tokyo-based Fukui, a senior economist and currency analyst at a unit of Japan's second-largest lender, said in an interview today. ``I expect the ECB to raise rates three more times, including this week.''
The euro bought 164.01 yen at 10:40 a.m. in Tokyo from 164.14 June 1. It was at $1.3450 against the dollar from $1.3449.
Signs of a strengthening economy are encouraging traders to place bets on further rate increases by the ECB, while the Bank of Japan is unlikely to raise rates from 0.5 percent before August, Fukui said.
European policy makers meet to discuss borrowing costs on June 6. They are expected to raise rates a quarter point to 4 percent, economists unanimously predicted in a Bloomberg survey.
Euribor futures contracts show investors have increased bets ECB rates will rise by 75 basis points to 4.5 percent this year. The implied rate on the December contract has risen 20 basis points in the past month to 4.56 percent. The contracts settle to the three-month interbank offered rate for the euro, which has averaged about 16 basis points above the ECB's benchmark since 1999.
``We are looking for three further rate hikes this year,'' said Sue Trinh, a currency strategist at RBC Capital Markets in Sydney. ``One this week, one in September and one in December. That would put a bullish slant on the euro.''
The euro may rise to $1.36 by June 30 and $1.38 by year- end, Trinh said.

**Original Source = Bloomberg.com**

Jake Lee - June,4

2007-06-03T20:11:00.000-07:00

China's Africa Push to Boost Shilling, Cedi, Standard Bank Says
By Jake Lee
June 4 (Bloomberg) -- Kenya's shilling and Ghana's cedi will rise as China increases spending on oil fields, roads and telephone networks in Africa to secure raw material supplies, Standard Bank Group Ltd. said.
The shilling may appreciate 3 percent against the dollar by year-end, said Francis Beddington, the London-based head of Eastern Europe, Middle East and Africa research at Standard Bank, Africa's largest by assets. He attended the Tunis-based African Development Bank's annual meeting, held in China for the first time last month to help attract funds to the continent.
``We're bullish on the Kenyan shilling,'' Beddington said in an interview. ``China's growth and demand is particularly important on the commodity side for Africa's oil producers.''
The shilling, Nigeria's naira, the Zambian kwacha and Angola's kwanza have all gained this year as China sought to sustain the world's fastest-expanding major economy by strengthening ties with Africa. Improving African government finances, accelerating growth, and developing bond markets, are also making it more attractive to invest in the continent, said Beddington.
The Kenyan shilling may rise to 65 to the dollar by the end of the year, Beddington forecast, from 66.95 at the close of trade on June 1. Its 3.9 percent gain this year was the fifth- best among the 31 most-active currencies in Europe and Africa.
Kenya in April last year allowed China National Offshore Oil Corp., China's biggest offshore oil producer, to explore for oil, and accepted Chinese government funds for roads, education and food. The economy may expand as much as 6.5 percent this year from 6.1 percent in 2006, Planning Minister Henry Obwocha said May 28.
Scramble for Assets
China's scramble for assets in Africa was highlighted when President Hu Jintao toured the region in February.
The nation's $5 billion investment fund for the continent and its $3 billion provision of loans over the next three years will help Africa expand 5.9 percent this year, from a two-decade high of 5.5 percent last year, the African Development Bank said on May 13. The bank, set up by 77 nations to finance anti- poverty programs in the region, ended its annual general meeting in Shanghai on May 17.
Ghana, the second-largest gold producer on the continent, said on May 24 it plans to sell as much as $750 million in bonds globally to build roads and power plants. The cedi, which fell 0.7 percent this year to 9275.22 per dollar, is due for appreciation as it attracts investment, said Beddington at Johannesburg-based Standard Bank.
ZTE Corp., China's biggest publicly traded telecommunications equipment maker, signed contracts to build telephone networks in Ghana and Kenya in November.
Chinese investment in Africa stood at $11.7 billion by the end of 2006, with the bulk of the funds going to oil producers Angola, Nigeria and Sudan.
Nigerian Naira
Growth in Nigeria's economy, Africa's second-biggest after South Africa, will accelerate to 7 percent in 2007, from 5.3 percent last year, the African Development Bank estimates. Nigeria, a member of the Organization of Petroleum Exporting Countries, has built up $46 billion in foreign exchange reserves.
The naira will ``gradually appreciate,'' said Alex Garrard, emerging-market bond trader in London at UBS AG, Europe's largest bank by assets. ``Nigeria is the obvious entry point for Africa because of its size. China plays a huge role and its investments are a pervasive influence.''
The naira has risen almost 1 percent this year to 127.65 to the dollar. It has gained 4.5 percent over the past three years, according to data compiled by Bloomberg.
The kwanza of Angola, China's second-biggest supplier of oil after Saudi Arabia, has climbed 6.6 percent this year.
Zambian Kwacha
The Zambian kwacha has risen about 9 percent as China's Hu in February pledged $800 million to the nation, Africa's biggest copper producer, over the next three years. The kwacha traded at 3970 to the dollar on June 1. Gains this year add to the 32 percent appreciation in 2006.
South African President Thabo Mbeki in January warned there was a danger of Africa becoming little more than a supplier of raw materials to China and a market for its manufactured goods. China's central bank governor Zhou Xiaochuan tried to allay those concerns at the African Development Bank meeting, saying his nation's investment will help alleviate poverty and improve infrastructure in Africa.
``Capital inflows will lead to appreciation pressure on African currencies,'' said Stuart Culverhouse, chief economist at Exotix, the London-based emerging-market brokerage that deals in African debt. ``There's a growing influence by China and that's partly why sub-Saharan Africa is doing so well.''

**Original Source = Bloomberg.com**

UBS Hedge Fund Loss

2007-06-03T20:08:00.000-07:00

UBS Hedge Fund Loss Ensnares Wuffli With Debacle Reprising LTCM
By Christine Harper and Jacob Greber
June 4 (Bloomberg) -- UBS AG Chief Executive Officer Peter Wuffli spared no expense when he agreed two years ago to let John Costas, the top-ranking American at Switzerland's largest bank, start an internal hedge fund.
Wuffli gave Costas $3.5 billion, 80 top traders and 40 support staff for the Dillon Read Capital Management LLC venture. Costas hired another 130 people and leased space in London, Singapore, Tokyo, Connecticut and Manhattan, where his corner office on the 22nd floor has a view of St. Patrick's Cathedral. By the time he was done, Dillon Read's 250 employees received bonuses averaging $1 million a year, or almost three times the comparable payout at Goldman Sachs Group Inc.
Shareholders had no idea Dillon Read was anything but a success until May 3, when UBS suddenly pulled the plug. Although the unit made money for its first six quarters, Costas failed to raise capital fast enough after investors balked at his group's fees. Wuffli lost patience when Dillon Read stuck UBS with 150 million Swiss francs ($122 million) of first-quarter losses.
As Costas expanded Dillon Read, shares of UBS slipped behind Zurich-based rival Credit Suisse Group and profit fell for the first time in four years. Now, as Wuffli spends $300 million to shut down Dillon Read, the fallout threatens to approach the damage from Long-Term Capital Management LP, the hedge fund whose 1998 collapse cost UBS $700 million and paved the way for its takeover by Swiss Bank Corp.
``It's reputation that's the issue,'' said Dieter Buchholz, who helps oversee $107 billion, including UBS shares, at AIG Private Bank Ltd. ``The feeling here in Zurich is that it wasn't executed well.''
Keeping Traders
Wuffli, 49, declined to comment on Dillon Read beyond his statement last month that the project ``did not meet our expectations.'' Costas, who remains an adviser to UBS, said in an interview May 30 that he wants to run a ``big business'' and would stay if ``maybe the bank has a great project that shows up.''
UBS, whose 3.1 trillion francs in client assets make it the world's biggest money manager for the wealthy, promoted Dillon Read as a way to satisfy demand for alternatives to stocks and bonds. In practice, Costas used the venture as a carrot to keep traders, including Michael Hutchins and Kenneth Karl, from joining hedge funds, according to one person directly involved in the planning.
Karl, 48, declined to comment when reached at home. Hutchins, 51, didn't respond to a message left at his home.
Costas, 50, stepped down as head of the bank's securities division in June 2005 to start Dillon Read with traders led by Hutchins and $3.5 billion in investments. About $2 billion was in fixed-income markets, with the remainder bet on real estate and mortgages.
$1 Billion a Year
The proprietary trading group that went to Dillon Read was established in the late 1990s and produced an average of almost $1 billion a year in revenue for UBS, Costas said. Because the bank couldn't afford to give up such a cash cow, it struck an agreement with Costas: The securities division would continue to record Dillon Read's trading gains as its own and pay set fees as if the venture were outside the bank.
``They were trying to have their cake and eat it, trying to create a hedge fund and trying to keep the revenues in their investment bank,'' said Christopher Wheeler, an analyst at Bear Stearns Cos. in London.
While Costas gushed about the ``unstoppable trend'' of hedge funds and the opportunity they offered UBS, Wuffli saw the venture in more practical terms. He said it would ``extend the talent life cycle of some of our very successful traders and investment bankers.''
Phase of Transparency
Wuffli, an ex-reporter at Zurich's Neue Zuercher Zeitung and former McKinsey & Co. consultant, had first-hand experience with the risks of hedge fund investing. In 1998, three months after Swiss Bank's takeover of UBS, Chairman Mathis Cabiallavetta resigned over the losses from Long-Term Capital. CEO Marcel Ospel pledged to focus on traditional services such as investment banking and asset management.
To restore confidence in UBS, Ospel turned to Chief Financial Officer Wuffli, whose father resigned as president of Credit Suisse's executive board in 1977 amid losses at the bank's branch in Chiasso, Switzerland. Wuffli was promoted to president of UBS in 2001 and became CEO in 2003. Ospel, 57, is chairman.
``UBS went through a phase of commendable transparency from about 2000 onwards,'' said Derek Chambers, an analyst at Standard & Poor's Equity Research in London who rates UBS stock a ``hold.'' ``They seemed to get all their risk judgments right because they were chastened by what happened in the late 90s.''
Taking Risks
Costas, a former bond trader, was accustomed to taking risks. UBS hired the New Jersey native from Credit Suisse in 1996 to run U.S. fixed income and derivatives and within a year he was named global head. In 2001, Ospel picked Costas to challenge Goldman as chief of UBS Investment Bank, the securities unit derived from the former Dillon Read & Co., a Wall Street firm that Swiss Bank acquired in 1997, as well as Kidder Peabody & Co., S.G. Warburg & Co. and parts of PaineWebber Group Inc.
UBS revived the historic Dillon Read name for its new hedge fund and envisioned attracting as much as $15 billion in capital from institutions and individuals over a five-year period, according to the person familiar with the plans. While the bank would bear the start-up costs for Dillon Read, client fees eventually would pay for most expenses.
For all its wealth-management expertise, UBS failed to anticipate the pitfalls it would soon encounter.
Hedge Fund Pitfalls
The bank initially wanted to sell stakes in its existing trades and estimated that setting up the necessary channels would take no more than six months. Costas said he learned belatedly of regulatory requirements that made his plan infeasible. As a result, Dillon Read had to establish a new fund and install systems to prevent conflicts of interest between the UBS account and money managed for clients.
One investor who met with Costas and his deputies said it was clear Dillon Read's staff lacked hedge fund experience. The group was oblivious to the advantages they had as proprietary traders, including the ability to draw on the bank's capital when market declines made assets cheap, according to the investor, who declined to be identified because he now works for a hedge fund and isn't authorized to comment.
Fees posed another obstacle. While UBS paid Dillon Read 3 percent of assets and 35 percent of trading profits, prospective clients found the charges excessive. Most hedge funds levy a 2 percent management fee and pocket 20 percent of investment gains.
Cool Reception
The reception was so cool that within six weeks of starting the fundraising drive in 2006, Costas offered to manage the assets for nothing in exchange for a 40 percent performance fee. UBS remained subject to the original terms.
``I had never run a fund before,'' Costas said. ``We started out at 3 and 35, and we got some resistance.''
It wasn't until November, 16 months after forming Dillon Read, that Costas's team was able to start making trades for the second fund. Dillon Read Financial Products, as the vehicle was dubbed, drew $1.2 billion from 29 investors. That included $30 million to $40 million from UBS and more than $100 million from investment funds the bank managed for clients, Costas said.
While Dillon Read was working on putting more funds together, including one to invest in real estate and another to specialize in equities, it was slow going. Each new investment pool had to be walled off to ensure it wasn't influenced by decisions made for the UBS account, dimming Dillon Read's chances of raising $15 billion in five years.
Fundraising Constraints
``Where we should have gone quicker was getting out that second and third fund into the marketplace,'' Costas said. ``One of the things that we weren't successful at, given the constraints we were dealing with, was trying to roll out product quick enough.''
Meantime, UBS reported in October that third-quarter profit fell 21 percent, missing analysts' estimates and sending the bank's shares to their biggest decline in 2 1/2 years. Dillon Read, where trading revenue fell and expenses rose, was partly to blame for the shortfall.
UBS management began an internal review of Dillon Read, focusing on the slow pace of fundraising. With a staff of 250, Dillon Read was almost as large as Pequot Capital Management Inc., Arthur Samberg's $7.5 billion hedge fund, with only 60 percent as much assets under management.
Shareholders weren't told that Dillon Read was a concern or that Karl, one of the deputies Costas brought with him from UBS, quit in early March after bonuses had been paid out.
Final Straw
The final straw came later in March, when Dillon Read joined the list of investors burned by bets on the U.S. mortgage market. The UBS account hemorrhaged as defaults surged on so- called subprime home loans to people with poor credit histories or high debt burdens, forcing Dillon Read to mark down the value of its mortgage bonds. The losses more than obliterated the account's trading profits for January and February.
Costas said he immediately phoned John Fraser, chairman and CEO of UBS Global Asset Management, to report what happened, hopeful that UBS would tolerate a single month of losses after so many years of successful trading. Instead, Costas said UBS gave him two options: return the bank's capital and stay in business managing the fund for outside investors; or let UBS take over its account at Dillon Read and cash out clients with their gains intact. He chose the latter.
``If this other plan doesn't work I have to liquidate that portfolio,'' Costas said. ``Funds don't take well to liquidation.''
Winding up Dillon Read
Wuffli relieved Costas of responsibility for Dillon Read on May 3 and put Suneel Kamlani, chief of staff at UBS Investment Bank, in charge of the winding up the project by the third quarter. Huw Jenkins, who succeeded Costas as head of the securities division in 2005, told Dillon Read's employees the previous night that some might be rehired by UBS.
Hutchins left, and by last week Dillon Read had fired its team of about 20 equities traders.
Costas said he's bewildered that UBS shut Dillon Read after it made money for the bank every month until March. He said Dillon Read had the potential to grow into a firm as big as Fortress Investment Group LLC, the New York-based manager of hedge funds and private equity that went public in February and now has a market value of $11.2 billion.
``You know, between the loss, between the pace at which we were growing, I can't speculate on what was driving it,'' Costas said. ``Those traders made money every damn quarter for eight years.''
Wall Street's Dilemma
UBS's missteps underscore the dilemma of trying to compete with hedge funds for the best talent. No securities firm has gone as far to keep an entire trading desk intact. Even New York-based Goldman, the world's most profitable investment bank, let superstars such as Eric Mindich, Dinakar Singh and Hyder Ahmad leave for the lure of hedge-fund riches.
As UBS employees, Dillon Read's top moneymakers probably took home 8 percent to 12 percent of the trading profits they generated for the bank, said Gary Goldstein, a veteran Wall Street recruiter and CEO of the Whitney Group in New York. Working for a hedge fund, they stood to keep as much as 45 percent, he estimates.
Shutting down Dillon Read will require about $200 million in personnel costs, including severance pay and retention bonuses, Fraser said last month.
UBS shareholders have less to show for Wuffli's experiment.
``People used to have a default reflex that if you wanted a safe investment bank you went for UBS,'' said Chambers, the Standard & Poor's analyst. ``Perhaps people are questioning that.''

**Original Source = Bloomberg.com**

Dollar Trades today

2007-06-03T20:01:00.000-07:00

Dollar Trades Near Four-Month High Before U.S. Services Report
By Ron Harui and Kosuke Goto
June 4 (Bloomberg) -- The dollar traded near the highest against the yen in more than four months before a U.S. report tomorrow that will probably show service industries expanded.
The U.S. dollar may extend six weeks of gains as traders scale back bets the Federal Reserve will lower interest rates. Stronger demand for services such as banking and retailing may add to evidence the world's largest economy is rebounding from the slowest growth last quarter in more than four years.
``U.S. economic indicators look strong and there's nothing but to buy the dollar,'' said Yuji Saito, head of the foreign- exchange sales department at Societe Generale SA in Tokyo. ``With expectations of a rate cut dwindling, the dollar will head higher.''
The dollar traded at 121.92 yen as of 11:39 a.m. in Tokyo from 122.10 in New York on June 1, when it reached 122.14, the highest since Jan. 29. It traded at $1.3445 per euro, from $1.3449.
The U.S. currency may rise to a seven-week high against the euro as the Institute for Supply Management's non-manufacturing index is projected at 55.6 in May, according to a Bloomberg News survey. Readings greater than 50 signal growth. Interest-rate futures contracts showed the odds of a cut in the Fed's overnight lending rate between banks by September dropped to 5 percent from 19 percent on May 25.
Dollar gains may accelerate should it break through 122.20 yen, where traders have orders to buy, said Saito. Traders sometimes place orders to limit losses in case bets go the wrong way. The U.S. currency may rise to 122.40 yen today, he said.
U.S. 10-year Treasuries yield 3.18 percentage points more than Japan's 10-year government bonds, the highest since May 22. The extra yield Treasuries offer over similar-maturity German bunds was 0.49 percentage point, up from 0.47 a week earlier.
Capital Spending
Japan's currency may snap two days of losses against the euro after a report showed capital spending among large companies rose 13.6 percent in the three months ended March 31 from a year earlier, the Ministry of Finance said in Tokyo. The median estimate of nine economists surveyed by Bloomberg was for investment to rise 10.1 percent.
``The data were stronger than expected, damping fears over an economic slowdown,'' said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. ``The report has sparked some buying of the yen,'' which may advance to 121.60 against the dollar and 163.60 per euro today, he said.
Losses in the yen also may be limited as charts that some traders use to predict movements show the currency's slide is too rapid. The 10-day relative strength index for the New Zealand dollar against the yen was 72. A level above 70 indicates the yen's fall may reverse.
The New Zealand and Australian dollars, favorites for so- called yen carry trades in which investors borrow the currency to buy higher-yielding assets, gained 7.8 percent and 6.4 percent against the yen this quarter, respectively.
ECB's Trichet
New Zealand's dollar rose to 91.06 yen, the highest in almost 17 years, before trading at 90.74 from 90.98. Against South Korea's won, the yen traded at 7.61625, near a 9 1/2-year low, from 7.61205 late in Asia on June 1.
Losses in the euro may be limited by speculation European Central Bank President Jean-Claude Trichet will suggest the bank will keep raising interest rates after this week's meeting.
ECB policy makers, due to meet on June 6, are expected to increase borrowing costs by a quarter point to 4 percent, economists unanimously predicted in a Bloomberg survey.
``The euro remains firm on prospects of further rate increases,'' Masaki Fukui, a senior economist and currency analyst at Mizuho Corporate Bank Ltd. in Tokyo, said in an interview today. ``I expect the ECB to raise rates three more times, including this week.''
Record 173
Europe's single currency may advance to a record 173 yen this year as a strengthening economy and rising rates attract investment into the region's assets, Fukui said.
The euro was at 163.93 yen from 164.16 yen. It touched an all-time high of 164.29 yen on May 29.
Interest-rate futures show investors have increased bets the ECB will raise rates three times to 4.5 percent this year. The yield on the December contract was 4.56 percent on June 1, up from 4.49 percent a week earlier. The contracts settle to the three-month interbank offered rate for the euro, which has averaged 16 basis points above the ECB's benchmark since 1999.

**Original Source = Bloomberg.com**

Australian Dollar

2007-06-03T19:38:00.000-07:00

Traders Bet Australian Dollar Will Rise Against Yen (Update1)
By Liz Capo McCormick
June 4 (Bloomberg) -- Traders are stepping up purchases of options to bet Australia's dollar will rally against the yen as a strengthening Australian economy bolsters demand for the country's assets.
The Australian dollar set a 15-year high versus the yen after government data last week showed Australia's capital spending climbed 9.1 percent in the first quarter, more than double the median forecast. Australia's benchmark interest rate is at 6.25 percent, compared with 0.5 percent in Japan.
Speculators are wagering ``there is more upside room for the Australian dollar,'' said Neil Jones, head of European hedge fund sales at Mizuho Financial Group Inc. in London. ``There are still large amounts of money from Japan looking for high yields. Increasing demand for Australian dollar call'' options ``is set to continue.''
Australia's dollar has risen 8 percent this year to 101.44 yen at 10:20 a.m. in Tokyo. It touched 101.75 yen today, the highest since April 1992. The Australian dollar's gain is the fourth-biggest this year versus the yen among the world's 16 most-traded currencies, after the Brazilian real, and the Canadian and New Zealand dollars.
Demand is growing for call options granting the right to buy the Australian dollar versus the yen, relative to put options giving the right to sell.
The so-called risk-reversal rate measuring this demand was minus 1.1 percent today on a one-month maturity, compared with minus 2.0 percent reached in April, the lowest since October 2003. A higher risk-reversal rate shows greater demand for calls on the Australian dollar relative to puts.
Avoiding Stops
Options are the best way to wager the Australian dollar will gain versus the yen because these contracts allow an investor to hold on to a trade without the risk of having it extinguished by pre-set buy or sell orders, Jones said. In trader jargon, such orders are known as stops.
Australia's economy may grow 3.3 percent in 2008, which would be the economy's 17th straight year of expansion, the Organization for Economic Cooperation and Development said May 24.
Evidence of strength in the world's biggest economy is also boosting the outlook for Australia. A U.S. government report last week showed employers added 157,000 workers in May, compared with 80,000 in April.
``The Australia-dollar exchange rate has now broken the 100.00 level on a more assured basis and looks set to advance further,'' said Derek Halpenny, senior currency economist in London at Bank of Tokyo-Mitsubishi UFJ, Ltd. ``The U.S. payroll data have reinforced the risk appetite in the market. The Aussie dollar will do well as long as the global outlook is robust.''
Yield Difference
In a sign of quicker Australian export growth, the trade deficit of the world's largest exporter of iron ore and coal narrowed in April to A$962 million from A$1.63 billion, a government report showed last week.
At 6.08 percent, 10-year Australian government debt yields about 4.28 percentage points more than similar-maturity Japanese bonds. The yield premium reached 432 basis points on May 22, the widest in two years.
Australia's central bank may have to raise rates to quell inflation, the OECD said last month. The Reserve Bank of Australia has kept rates unchanged this year, after raising borrowing costs three times last year.
Gains in global stocks have also made investors more confident in the so-called carry-trade strategy, where they borrow in Japan to buy assets in higher-yielding currencies.
The U.S. Standard & Poor's 500 stock index reached a record high last week. The Morgan Stanley Capital International Asia Pacific Index of shares added 2.5 percent last week, the most since March, even after a tumble in Chinese shares.
`Increase in Confidence'
``Institutional investors and hedge funds overwhelmingly have an increase in confidence that the market can absorb bouts of increased risk aversion,'' Jones said. Mizuho forecasts Australia's dollar will appreciate as much as 8.5 percent to 110 yen in about seven weeks.
Falling volatility in currencies is encouraging investors to buy riskier assets.
A JPMorgan Chase & Co. index tracking three-month implied volatility on major currencies fell to 5.95 percent on May 31, the lowest since the index began in June 1992. Traders quote implied volatility, a measure of expected swings in exchange rates, as part of setting options prices.

**Original Source = Bloomberg.com**

Market Investment

2007-06-03T19:34:00.000-07:00

Vestas, Gamesa, Clipper Make Wind Top Energy Markets Investment
By Marianne Stigset and Stephen Voss
June 4 (Bloomberg) -- From General Electric Co. to Mitsubishi Heavy Industries Ltd. to E.ON AG, the world's largest companies are investing in wind power, the best-performing energy in the past year.
Led by Vestas Wind Systems A/S and Spain's Iberdrola SA, utilities and governments in the U.S., China and Europe will spend as much as $150 billion on wind projects in the next five years, according to CLSA Research Ltd., part of Credit Agricole SA. Lawmakers are providing financial incentives because windmills are non-polluting and cost less than solar projects.
``Wind has the biggest potential to meet renewable energy targets over the next decade compared with solar and biofuels,'' said Philippe de Weck, who started the Pictet Clean Energy fund last month for Geneva-based Pictet & Cie., which manages $301 billion overall.
The greatest returns so far are generated by equipment makers for farms that can have more than 400 windmills. Each has a tower as high as 135 meters (443 feet) and rotor blades with diameters that can reach 112 meters. Wind spins the blades, turning a shaft attached to gears and a generator that converts the motion into electricity.
The market value of Vestas, the world's biggest windmill maker, has more than doubled in the past year, and Gamesa Corporacion Tecnologica SA, Spain's turbine manufacturer, is up by more than two thirds. By comparison, Pacific Ethanol Inc., which has Microsoft Corp. Chairman Bill Gates as its largest shareholder, lost 54 percent.
`Less Risky'
``Wind energy is cheaper than solar, it's a less risky form of investment,'' said Michael McNamara, a London-based analyst at Jefferies International Ltd., which tracks solar and wind companies. ``The demand for quality wind turbines is so high, we won't see supply meet demand for several years.''
Electricity from wind is a little more than 1 percent of global power supplies. The leading country is Denmark, with 20 percent. Wind provides 9 percent of Spain's energy, while for Germany, it's 7 percent.
China's National Development and Reform Commission will almost double wind generation by 2008, partly to produce clean power for the Beijing Olympic Games, said Shi Lishan, head of renewable development at the commission, the nation's top economic policy planner.
`Exceed Targets'
Tokyo-based Mitsubishi Heavy said in a May 28 statement that China plans to expand wind power at an annual rate of about 2 gigawatts in the run-up to the Olympics. Windmill rotors will be built to generate 5 gigawatts, enough to supply more than 7 million homes, by 2010, Shi said. That will increase to 30 gigawatts by 2020.
``We can easily exceed the targets because of the policy incentives,'' Shi said in a May 30 telephone interview.
China and the U.S., the top producers of carbon emissions that contribute to global warming, are under pressure from European nations to reduce pollution. President George W. Bush on May 31 proposed a round of talks among industrialized nations to set targets for reducing so-called greenhouse gases.
In the U.S., the world's fastest-growth market for wind, Arizona, Texas, Wyoming and at least 18 other states require increases in the amount of renewable power. U.S. federally mandated production tax credits currently offer 1.9 cents per kilowatt hour for power produced by wind during the first 10 years of a project.
Coal to Wind
Congress this year will consider a law forcing utilities to buy more electricity from non-polluting sources. West Virginia, once the dominant producer of coal in the U.S., has a wind farm at Silver Lake and Dominion Resources Inc. and Royal Dutch Shell Plc plan to triple the amount of wind power in the state this year to 230 megawatts.
FPL Group Inc., owner of Florida's main utility, has the world's largest wind farm at Horse Hollow Wind Energy Center in Taylor County, Texas. The site's 421 turbines can generate 735 megawatts.
``The U.S. is the Saudi Arabia of wind,'' said McNamara. ``The American Midwest is windy, very flat, and with no natural beauty sites to speak of. The U.S. is a very strong wind market and it's booming.''
Utilities such as Iberdrola, the world's top producer of electricity from wind, and FPL, the leader in the U.S., helped boost capacity last year by 25 percent to 74 gigawatts, said the Brussels-based Global Wind Energy Council.
E.ON's Project
Dusseldorf-based E.ON, Germany's biggest utility, said May 31 it will spend 3 billion euros ($4 billion) on wind stations and other renewable energy projects. GE in February bought a 15 percent stake in Theolia SA, a French wind power company.
Duke Energy Corp., the No. 3 operator of coal-fired power plants in the U.S., on May 29 said it will buy wind units in states including Arizona, Texas and Wyoming. The next day, AES Corp. agreed to buy wind projects in Minnesota and Iowa.
``The demand for renewable energy, energy that has less carbon associated with it, has really skyrocketed,'' AES Chief Executive Officer Paul Hanrahan said May 31 by telephone while traveling to a hydroelectric dam the company is building in Panama. ``The capital costs of building a wind farm have come way down and when you put those together, it has really put wind in the lead for renewable needs.''
JPMorgan's Portfolio
JPMorgan Chase & Co., the third-largest U.S. bank, has a $1 billion portfolio of wind energy investments, including 26 wind farms in the U.S., with enough capacity to power 600,000 average U.S. homes.
``There are far greater opportunities to make good investments in wind at the moment compared with other renewable energies,'' said John Eber, a Chicago-based managing director responsible for JPMorgan's principal investments in energy. ``The market is much better developed.''
The rise in shares of wind equipment makers will continue at least through next year, said Bruce Jenkyn-Jones, a fund manager at Impax Group Plc in London.
Shares of Vestas are up 159 percent in the past year, while Gamesa, based in Zamudio, Spain, is 70 percent higher. London- based Clipper Windpower Plc, a maker of turbines for BP Plc, and FPL in Juno Beach, Florida, has more than doubled.
The Morgan Stanley Capital International World Industrials Index, which counts Vestas and Gamesa among its members, gained 24 percent in the past year, while the MSCI World Utilities Index climbed 35 percent.
The market value of the Bloomberg World Energy-Alternate Sources Index, which includes Clipper and Theolia, has more than doubled since crude oil prices in New York touched a record $78.40 a barrel on July 14. Oil has lost 7.5 percent in the past year and closed last week at $65.08 a barrel in New York.
Expensive Stocks
A price of ``$45 a barrel is the threshold at which we're competitive with crude oil,'' Peter Kruse, a spokesman for Vestas, said on the phone from Randers, Denmark, where the company is based. ``With wind, you know what the price of your fuel will be in the future. It will be zero.''
``Our favored stock is Vestas,'' said Jason Channell, an analyst with Goldman Sachs International in London. ``They're not just the biggest player by far, they also have the most diverse geographical footprint.''
The gains have made some wind power stocks more expensive than solar and ethanol producers. Clipper trades at 80 times expected earnings, while Pacific Ethanol costs 51 times, according to Bloomberg estimates. SunPower Corp., a U.S. maker of power-generating solar panels, trades at 51 times.
Jenkyn-Jones says he's undeterred, predicting annual returns of 20 percent.
Theolia Stake
``Investments in wind are likely to outperform solar and biofuels over the next three to five years,'' said Jenkyn-Jones, who helps manage $500 million in environmental stocks at Impax, where his largest holding is Vestas. ``I can't see much negative news coming out of wind energy compared with solar and biofuels.''
Demand for wind assets is driving up prices. India's Suzlon Energy Ltd. last month beat out Areva SA, the world's biggest builder of nuclear plants, for German wind-turbine maker Repower Systems AG with a 1.2 billion-euro offer. That was double the French reactor maker's initial proposal. Shares of Repower surged 37 percent since the first offer.
Shares of Theolia, an Aix-en-Provence, France-based maker of wind turbines, climbed 20 percent on Feb. 15 after GE agreed to buy its stake.
Fairfield, Connecticut-based GE entered the wind-turbine industry in 2002 with the purchase of the former Zond Corp. from a bankrupt Enron Corp. The company has expanded wind turbine manufacturing fivefold in the past three years, to 2,500 megawatts.
Iberdrola Invests
Iberdrola, based in Bilbao, in April completed the 12.4 billion-pound ($25 billion) acquisition of Scottish Power Plc. The transaction gave Iberdrola PPM Energy, a U.S. business that has more than 2,000 megawatts of wind energy in operation or under construction. Iberdrola ranks second to Endesa SA in Spain's power market.
Ethanol companies, meanwhile, have retreated as corn futures climbed to a 10-year high, crushing profits. VeraSun Energy Corp., the third-largest U.S. ethanol producer by capacity, reported a loss on May 8. Its shares have dropped 47 percent since June 2006.
Solar stocks slipped in the past three months amid higher prices for silicon, an ingredient in solar panels. Jiangsu, China-based Suntech Power Holdings Co., a maker of solar-power cells, has declined 6.5 percent since February.
Wind power has its detractors, even with the market-leading performance. Youri Vorobiev, who helps oversee Vontobel Asset Management Ltd.'s 250 million-euro Global Trend New Power Tech fund in Zurich, says that wind stocks ``are very expensive.''
Wind Opponents
Opponents of wind energy say rows of wind turbines are a blot on the landscape. Offshore windfarms can block shipping lanes and present a danger to birds.
Massachusetts environmental officials in March approved plans for the first U.S. offshore wind farm, a step in a project to build 130 windmills near Cape Cod. The plan was opposed by the state's Democratic Senators Edward Kennedy and John Kerry, and local groups said it will hurt fishing, kill birds and ruin ocean views.
Villagers in southeast England are trying to thwart the London Array wind development, a 1,000-megawatt project owned partly by Shell.
The U.K. government has countered by proposing legislation to speed up approval for large energy projects and help the country meet its clean energy targets.
``The world wants wind to work,'' Victor Abate, the director of GE's renewable energy unit, said in a May 31 phone interview from Schenectady, New York. ``We can't make them fast enough.''

**Original Source = Bloomberg.com**

Germany

2007-06-03T19:29:00.000-07:00

Germany Beats Europe Emerging Markets, Emulating '60s Earnings
By Andreas Hippin and Alexis Xydias
June 4 (Bloomberg) -- The best emerging market in Europe is Germany, and the country's publicly traded companies are getting cheaper by the day.
Not since the 1960s has industrial Germany looked so appealing to equity investors in search of earnings growth, acquisitions and rising consumer spending. Compared with Poland, where stocks are priced at 17.8 times profit, Germany is still the bargain, says Herbert Perus, who helps oversee about $58 billion as the head of equities at Raiffeisen Capital Management in Vienna.
The benchmark DAX Index has surged 21 percent in 2007, outperforming every major developed market in the world. German corporate profits are climbing faster than in the rest of the continent, led by exports of Volkswagen AG cars, MAN AG trucks and Siemens AG turbines. The boom marks a turnaround from the 1990s, when the nation struggled to integrate East Germany, and the recession of 2003.
``The sick man of Europe has become its muscle man,'' says Robert Halver, a Frankfurt-based strategist at Vontobel Investment Banking, a unit of Vontobel Holding AG. ``German companies are positioned better than ever.'' Zurich-based Vontobel oversees the equivalent of $58 billion.
The 30-stock DAX rose 3.2 percent to 7987.85 last week, leaving it less than 78 points short of a record reached on March 7, 2000. The index is beating the 13 percent rise in the Morgan Stanley Capital International Emerging Markets Index, a benchmark for 25 developing markets, this year for the first time since 2000.
`Still a Bargain'
It also returned more than 11 of the 12 countries that joined the European Union since 2004, including Poland, Hungary, Romania, Bulgaria, Slovakia, and the Czech Republic. Only Slovenia's stocks are doing better, with the Slovene Stock Exchange Index up 48 percent this year.
German shares are still cheaper relative to earnings than those in the U.S., Japan, France and Italy, with the DAX valued at 14.6 times its members' average profit. The benchmark was the cheapest this decade last month when weighed against the MSCI developing-markets gauge, which trades at 15.5 times earnings.
``Compared to emerging markets like Poland, Germany is still a bargain,'' said Raiffeisen's Perus. He expects the DAX to reach a record this year.
Labor laws that made it almost impossible to fire workers and the integration of East Germany after the fall of communism in 1989 were a drag on the world's third-largest economy at the start of the decade. The DAX slid 58 percent from 2000 through 2002 as the Internet bubble deflated, economic growth slowed and unemployment increased. The index did worse than the FTSE 100 Index in the U.K., which lost 43 percent, and France's CAC 40 Index, which plunged 49 percent.
Export Gains
German companies took advantage of the slowdown to reduce worker costs by moving jobs to other countries at the same time that global demand for exports increased.
Unit labor costs, a measure of employee compensation, dropped 0.7 percent between 2000 and 2006 as prices for goods rose, according to the Cologne-based IW research institute. Costs for Poland's non-government employers climbed 18 percent in the four years to 2004, according to the latest government data.
Sales abroad jumped 14 percent in 2006, almost double the pace of 2005, according to government figures. Revenue from exports is equivalent to 45 percent of Germany's gross domestic product, compared with 11 percent for the U.S. and 16 percent in Japan, the world's two largest economies, according to data from the EU's Eurostat agency.
`Things are Working'
Retail sales in April increased by the most since December, indicating German consumer spending is recovering from the government's value-added tax increase in January. The Organization for Economic Cooperation and Development last month raised its 2007 forecast for German economic expansion to 2.8 percent from 1.8 percent in November. That would match last year's pace, the fastest since 2000.
``Things are working in Germany now,'' said David Joy, who helps oversee $156 billion as chief market strategist in Minneapolis at RiverSource Investments LLC, a unit of Ameriprise Financial Inc. ``They're kind of a heavy equipment manufacturing base, and that's what the emerging world needs right now.''
Takeovers are also boosting German stocks. The pace of acquisitions this year involving listed German companies more than doubled to about $215 billion from the same time in 2006, according to data compiled by Bloomberg.
HeidelbergCement AG, Germany's largest cement maker, last month agreed to buy London-based Hanson Plc for 7.85 billion pounds ($15.6 billion) in the global building-materials industry's biggest-ever takeover. Shares of Heidelberg-based HeidelbergCement have gained 7.5 percent this quarter.
1960s Exports
Automobile, industrial, and chemical manufacturers are six of the 10 best performers in the DAX this year, the same type of companies that were driving the economy 40 years ago.
Exports from West Germany increased an average 11 percent annually during the 1960s and the economy grew as fast as 7.5 percent by the end of the decade, according to the Federal Statistical Office.
Siemens, Europe's biggest engineering company, Ludwigshafen-based BASF AG, the world's largest chemical maker, and steelmakers Thyssen and Krupp, which merged to form Dusseldorf-based ThyssenKrupp AG in 1999, became world leaders because of their engineering skill and exports to Western Europe and the U.S.
`Getting Skeptical'
The rally this year marks the best start since 1998, when the DAX climbed 31 percent in the first five months amid a global jump in technology and Internet shares. It may be ready to peter out, said Gerhard Grebe, head of German strategy for Zurich-based Julius Baer Holding AG, which oversees the equivalent of about $293 billion.
``I'm getting skeptical on the current level,'' Grebe said in an interview from Frankfurt. ``We've already seen the biggest gains this year.''
The DAX's 14-day relative strength index, a measure that calculates the degree by which gains outpace losses in a given time period, rose to 80.6 last week, Bloomberg data show. The RSI has been over 70 every day in the past two weeks, a level that suggests an index may be poised to fall. The 14-day RSI for the U.K.'s FTSE 100 Index ended last week at 66.3, while France's CAC 40 Index had a reading of 67.7.
Increasing earnings are making analysts even more bullish on Germany.
Analysts' average 2007 earnings growth estimates for German companies in Europe's Dow Jones Stoxx 600 Index have climbed to 9.3 percent from 5.5 percent in April, according to data compiled by FactSet Research Systems Inc. in London. The forecast for non-German companies in the European benchmark dropped to 5.9 percent from 6.3 percent.
MAN, Volkswagen
MAN, Europe's third-largest truckmaker behind Stuttgart- based DaimlerChrysler AG and Volvo AB in Gothenburg, Sweden, has surged 60 percent for the biggest advance in the DAX this year. The Munich-based company raised its 2007 sales and earnings forecasts last month after first-quarter profit beat analysts' estimates on orders for commercial vehicles in Eastern Europe.
The truckmaker is adding to production in Poland, where it estimates wages are less than a fifth of those in Germany.
Volkswagen, Europe's largest automaker, is seeking a three- way combination of MAN, Soedertaelje, Sweden-based Scania AB and its own commercial-vehicles unit. Volkswagen shares were also boosted as Stuttgart-based Porsche AG increased its stake in the company.
`Fantastic' Earnings
Wolfsburg, Germany-based Volkswagen rose 33 percent this year, the sixth-best in the DAX. The company said in April that first-quarter profit more than doubled, boosted by sales at Skoda Auto AS, the Czech unit purchased in 1990 that now accounts for 16 percent of operating profit.
Shares of Siemens added 31 percent in 2007. The Munich- based company posted a 36 percent rise in second-quarter profit, beating analysts' estimates, helped by Chief Executive Officer Klaus Kleinfeld's 7,000 job cuts and $12 billion of acquisitions since 2005.
Siemens last month named Peter Loescher, president of Whitehouse Station, New Jersey-based Merck & Co.'s global human health unit, as its CEO to succeed Kleinfeld, who resigned after less than three years because of a bribery investigation.
``The first-quarter news flow on these companies has been fantastic,'' said Michael Barakos, who helps oversee $75 billion at JPMorgan Asset Management in London. ``It's all about the rate of change we are seeing in the country.''
Brian Barish, who oversees $10 billion at Cambiar Investors LLC in Denver, is still finding German stocks attractive. His Cambiar Opportunity Fund, which has outperformed the Standard & Poor's 500 Index for eight straight years, had a 5.8 percent weighting in German stocks at the end of March.
``Germany is one gigantic restructuring story,'' said Barish, who holds shares of Munich-based Munich Re, the world's second-biggest reinsurer, and Siemens. ``We just kept finding good values there consistently.''

**Orignal Source = Bloomberg.com**

South Korea

2007-06-03T19:25:00.000-07:00

South Korea to Invest 5.2 Trillion Won in Resources (Update1)
By Meeyoung Song
June 4 (Bloomberg) -- South Korea, which imports almost all its energy and mineral needs, plans to invest 5.2 trillion won ($5.6 billion) developing resource projects overseas to secure supplies amid rising prices and competition.
Asia's third-largest economy will make the investment by 2011, the Ministry of Commerce, Industry and Energy said today in an e-mailed statement. The spending includes money for state-run companies such as Korea Resources Corp. and Korea National Oil Corp. as well as government loans to private companies.
South Korea is increasing overseas investments in oil fields and mines as prices surge and competition from China and Japan intensifies. China, the world's biggest consumer of coal, copper and iron ore, said in January it may use its $1 trillion foreign exchange reserves to buy ``strategic'' resources.
``It's positive that the government is making large investments, but they should have done it earlier, before prices rose so much,'' said Shin Yoon Shik, a metals analyst at Meritz Securities Co. in Seoul.
Crude oil prices have almost tripled since 2001, reaching a record $78.40 a barrel in July last year. Prices for copper on the London Metal Exchange have jumped more than fourfold in the past five years.
Korea Resources, the nation's state-run resource explorer, wants to build up stakes in overseas mineral projects to the equivalent to 40 percent of domestic demand by 2020 and will spend 1.6 trillion won to achieve this, the ministry said today.
Company Investment
South Korean companies may boost investments in overseas oil, gas and minerals this year by 81 percent to a record $3.8 billion, the ministry said in March.
Dubai ``crude oil prices have recently surpassed the $65 mark and uranium prices have risen 10-fold, causing concerns of a possible crisis regarding energy demand and supply,'' Lee Jae Hoon, vice minister at the Ministry of Commerce, said in today's statement. The government ``will actively support investment in overseas resources to overcome these concerns.''
SK Corp. and Korea National Oil are among South Korean companies that will invest in a total of 140 projects in 37 countries this year, the ministry said in March. Korea Resources is participating in 19 projects in eight countries.
China Stockpiles
The targets include coal, gold and copper projects in countries such as Australia, Indonesia and China, the ministry said in December. Companies also plan ventures in Kazakhstan, Russia and Myanmar.
China has already been stockpiling oil, and ministers have said that the country will also build up reserves of other metals, without giving details. China has completed a 3.7 billion yuan ($479 million) oil-storage tank in Zhenhai, and more tanks are under construction in Zhousan, Qingdao and Dalian. The facilities are set to be completed in 2008.
Finance Minister Jin Renqing said March 9 the government plans to set up an agency to help manage its reserves that will be modeled on Singapore's Temasek Holdings Pte., a state-managed company that holds stakes in local and overseas companies. The Chinese agency will manage at least $200 billion, Yu Yongding, an adviser to the People's Bank of China, has said.

**Original Source = Bloomberg.com**

Australia

2007-06-03T19:19:00.000-07:00

Australia's First-Quarter Company Profits Climb 7.6% (Update1)
By Hans van Leeuwen
June 4 (Bloomberg) -- Australian company profits rose at the fastest pace in almost two years in the first quarter as earnings climbed at banks and retailers including Westpac Banking Corp. and David Jones Ltd.
Gross operating profits increased 7.6 percent from the fourth quarter, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey of 20 economists was for a 2.9 percent gain.
Surging profits may prompt companies to expand and hire more workers, stoking economic growth. Record commodity prices and surging Asian demand have triggered a mining and energy boom. That's boosted consumer spending, buoying retailers' profits, and stoked investment and share prices, driving earnings at banks.
``The economy has accelerated and a range of industries such as retail and services have benefited,'' Su-Lin Ong, senior economist at RBC Capital Markets in Sydney, said before the report was released. ``Profitability may encourage a second wind in business investment that could drive faster growth.''
The Australian dollar rose to 83.18 U.S. cents at 11:33 a.m. in Sydney from 83.13 cents immediately before the report was released. The yield on the benchmark 10-year government bond rose 1 basis point to 6.09 percent. A basis point is 0.01 percentage point.
Inventories held by businesses climbed 1.4 percent in the first quarter. Economists had estimated a 0.2 percent increase.
Inventories
Business inventories decreased 0.5 percent and profits rose 17.1 percent from a year earlier. Company profits gained a revised 3 percent in the fourth quarter.
Gross operating profit measures earnings before tax, interest, depreciation and amortization. It excludes asset sales and foreign exchange gains or losses.
Australia's economy expanded 1 percent in the three months ended Dec. 31 from three months earlier, and economists expect the same pace in the first quarter. The government will release a report on first-quarter growth June 6 at 11:30 a.m. in Sydney.
Earnings at transport companies climbed 9.8 percent in the quarter, profits at retailers gained 5.5 percent and manufacturers' earnings rose 4.1 percent, today's report showed.
Miners are benefiting from record commodity prices and surging global demand, particularly from Asia. Minara Resources Ltd., Australia's second-largest nickel producer, in March reported a sevenfold surge in profit for the 12 months ended Dec. 31.
Miners Earn More
Australia's two largest mining companies, BHP Billiton Ltd. and Rio Tinto Group, reported 41 percent and 20 percent gains, respectively, in earnings for the six months to Dec. 31.
Companies servicing the mining industry or operating in mining regions are also experiencing earnings growth.
Orica Ltd., the world's largest explosives maker, said first- half profit jumped 70 percent on increased sales to mining companies.
``The record result from mining services underscores strong trading conditions in the global mining and resources market,'' the company said on April 30. ``We believe this trend will continue as customers in the resources sector strive to increase their volume of output, both from existing and new mines.''
West Australian Newspapers Ltd. posted a 33 percent gain in profit for the three months to March 31 as the state's commodities boom fuelled demand for real estate and job advertisements. The company publishes the only daily newspaper in Perth, the capital of the resource-rich region.
Business Lending
Resource companies' surging sales have boosted their investment, fueling a business lending pickup that has buoyed earnings at banks. Banks are also benefiting from rising share prices that have stoked earnings at their funds management units.
Australia & New Zealand Banking Group Ltd., the third-biggest Australian bank, reported profit in the six months to March 31 rose 16 percent to a record after it attracted more customers and boosted lending to individuals.
Westpac Banking Corp.'s profit in the same period climbed 12 percent to a record on corporate lending. St.George Bank Ltd., Australia's fifth biggest, said first-half profit rose 14 percent to a record on increased lending to companies and higher funds management earnings.
Macquarie Bank Ltd., Australia's largest securities firm, posted a 69 percent increase in profit for the six months ended March 31 from a year earlier, as it reaped higher fees from managing investment funds and arranging buyouts.
Retailers are benefiting from a pickup in consumer spending as the mining investment boom creates jobs at construction companies, driving the unemployment rate to a 32-year low and buoying confidence.
David Jones Ltd., Australia's second-biggest department store chain, in March said profit in the six months ended Jan. 27 surged 30 percent on demand for clothing and cosmetics.
Harvey Norman Holdings Ltd., Australia's biggest furniture and electronics retailer, said first-half profit rose 37 percent on demand for flat-panel televisions.
Flight Centre Ltd., Australia's biggest travel agent, said pretax profit rose 18 percent in the nine months ended March 31 compared with a year earlier.

**Original Source = Bloomberg.com**

Asian Stocks

2007-06-03T19:12:00.000-07:00

Asian Stocks Rise to Record on U.S. Growth; Toyota, BHP Advance
By Chen Shiyin and Stuart Kelly
June 4 (Bloomberg) -- Asian stocks rose to a third straight record after reports showed employment and manufacturing growth in the U.S. expanded more than expected and metals prices gained.
Toyota Motor Corp., which overtook General Motors Corp. as the world's biggest automaker by market value, climbed to a 10- week high on speculation demand in the region's largest export market will be sustained. BHP Billiton Ltd., the No. 1 mining company, climbed for a third day.
``The momentum, at least for the time being, is with stocks,'' said Atul Lele, who helps manage about $380 million at White Funds Management in Sydney. ``The U.S. economy is holding up better than many investors thought, as is the mining sector.''
The Morgan Stanley Capital International Asia-Pacific Index added 0.8 percent to 152.59 as of 10:25 a.m. in Tokyo, extending a two-day, 2 percent rally. Benchmarks in South Korea, Australia and Singapore climbed to new highs. Only China's CSI 300 Index dropped, losing 3.5 percent. New Zealand's market is closed for a holiday.
In Japan, the Nikkei 225 Stock Average added 0.5 percent to 18,040.37. Stocks also rose after a Ministry of Finance report showed the country's largest companies increased spending more than expected in the first quarter.
U.S. stocks rose on June 1, lifting the Standard & Poor's 500 Index to a record. Employers added 157,000 non-farm jobs in May after boosting payrolls by 80,000 in April, a government report showed on June 1. Economists surveyed by Bloomberg News had expected an increase of 132,000 jobs in May.
Turning Optimistic
The Institute for Supply Management's factory index rose to 55 in May, the highest in 13 months. Readings greater than 50 signal expansion. Economists expected the index to slip to 54, according to a Bloomberg survey.
Toyota, which generated more than a third of its fiscal 2006 revenue in North America, jumped 1.7 percent to 7,590 yen, the highest since March 29. The company also increased U.S. sales 14 percent in May on demand for fuel-efficient models, helping Asian companies boost their market share.
Samsung Electronics Co., Asia's largest maker of chips, flat screens and mobile phones, jumped 2.7 percent to 571,000 won. Samsung accounted for about 16 percent of South Korean exports last year. Hon Hai Precision Industry Co., the world's largest maker of electronics sold under other companies' brands, rose 1.4 percent to NT$246 in Taiwan.
``A lot of investors were worried about a slowdown in the U.S. economy but now they've turned more optimistic about a soft- landing scenario,'' said Kenji Tomida, who oversees $16 billion as chief fund manager at T&D Asset Management Co. in Tokyo. ``Companies that rely on overseas markets are the ones most likely to revise up their earnings.''
Rising Metals
BHP climbed 2.6 percent to A$33, poised for its first three- day advance since May 7. A measure of six metals traded on the London Metal Exchange rose 1.2 percent on June 1. Copper gained 1.2 percent and nickel jumped 3.3 percent.
Rio Tinto Group, the world's third-largest mining company, advanced 1.5 percent to A$97.30, a record. Sumitomo Metal Mining Co., Japan's second-biggest copper smelter and No. 1 nickel producer, added 2.4 percent to 2,980 yen.
Crude oil prices on June 1 rose 1.7 percent to $65.08 a barrel in New York, the third straight day of gains.
Woodside Petroleum Ltd., Australia's largest oil explorer after BHP, rose 0.9 percent to A$44.10. Santos Ltd., the third largest, added 1.5 percent to A$13.90.
Meanwhile, Japan's corporate investment increased 13.6 percent in the quarter ended March, a faster pace than a 10 percent gain forecast by economists in a Bloomberg survey.
Komatsu Ltd., the world's No. 2 maker of earth moving equipment, jumped 4 percent to 3,360 yen. Ishikawajima-Harima Heavy Industries Co., which makes ships, jet engines and industrial machinery, rose 2.8 percent to 439 yen.

**Original Source = Bloomberg.com**

japan

2007-06-03T19:07:00.000-07:00

Japan's Corporate Spending Rises 13.6% to a Record (Update2)
By Lily Nonomiya
June 4 (Bloomberg) -- Spending by Japan's largest companies rose to a record in the first quarter, indicating firms are confident the global economy will keep expanding.
Capital spending climbed 13.6 percent in the three months ended March 31 from a year earlier, the Ministry of Finance said in Tokyo today. The pace was faster than the 10.1 percent median estimate of nine economists surveyed by Bloomberg News.
Sales and profit also surged to the highest ever, as companies benefited from the economy's longest postwar expansion. Growth in spending may spread from manufacturers to service providers as unemployment at a nine-year low fuels consumer demand.
``Corporate profits and sales continue to be strong, thanks to the weak yen and low interest rates,'' said Takuji Aida, chief Japan economist at Barclays Capital in Tokyo. ``Capital spending will keep expanding steadily as non-manufacturers join manufacturers.''
Sales rose 6.3 percent and profit climbed 7.4 percent, the Finance Ministry said. Excluding spending on software, business investment rose 14.2 percent.
The yen traded at 122.01 per dollar at 9:50 a.m. in Tokyo, from 122.08 before the report. The yield on Japan's benchmark 10- year bond rose 3 basis points to 1.8 percent.
Revised GDP
Today's report means the economy grew at a faster pace than the government initially estimated last quarter, according to Yasukazu Shimizu, an economist at Mizuho Securities Co. in Tokyo.
The world's second-largest economy expanded 0.9 percent in the three months ended March 31 from the previous quarter, faster than the 0.6 percent reported by the government on May 17, Shimizu said. Today's survey will be the key component of the government's revised gross domestic product report on June 11.
Reports last week showed the jobless rate fell to 3.8 percent in April, the lowest level since March 1998, and household spending rose for a fourth month, the longest winning streak in three years.
TDK Corp., Japan's biggest maker of magnetic heads, said last month it will spend 50 billion yen ($410 million) to build an electronics component factory in Yurihonjo, northern Japan. The company makes chips used in mobile phones, computers and flat- panel televisions.
Growth in spending moderated from the fourth quarter, when companies increased investment a record 16.8 percent. Spending by manufacturers climbed 12.7 percent, slowing from 15.4 percent. Investment by non-manufacturers rose 14.1 percent, slower than the 17.5 percent pace in the fourth quarter, the ministry said.
Steady Growth
``Slower capital spending isn't negative for the economy,'' said Akiyoshi Takumori, chief economist at Sumitomo Mitsui Asset Management Co. in Tokyo. ``Capital spending will keep growing steadily as companies are rightfully being cautious about overinvestment.''
The spending plans released by the Finance Ministry account for about 60 percent of the corporate outlays portion of revised GDP. On an annualized basis, the preliminary GDP report showed the economy expanded 2.4 percent in the first quarter.
Last month's GDP report showed corporate spending, which is measured by capital goods shipments in preliminary calculations, fell 0.9 percent from the fourth quarter, when it grew 2.3 percent. Inventories subtracted 0.1 percentage point from growth.
A separate report this week is expected to show that machinery orders, a key indicator of future spending plans, rose 5 percent in April, halting two months of declines.
Today's numbers exclude spending by financial and insurance companies, which are included in the GDP component, making it difficult to gauge how the report will affect GDP, Mizuho's Shimizu said.

**Original Source = bloomberg.com**

H

2007-06-03T18:06:00.000-07:00

INDICATORS LIST - H

Heart Beat.mq4 (2.38 KB)

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Heiken Ashi BG.mq4 (3.67 KB)

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Heiken Ashi(05SEP05).mq4 (3.64 KB)

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HedgeTest.mq4 (4.98 KB)

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Heiken Ashi(23SEP05).mq4 (3.64 KB)

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Heiken Ashi.mq4 (3.64 KB)

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Heiken Ashi____.mq4 (3.64 KB)

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Heiken_Ashi.mq4 (3.64 KB)

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Heiken_Ashi_Mod(03SEP05).mq4 (3.57 KB)

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Heiken_Ashi_Mod.mq4 (3.57 KB)

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HeikenAshi_DM.mq4 (4.19 KB)

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HiFast_LoSlow LoFast_HiSlow LSMA Diverge.mq4 (2.92 KB)

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Hi_Low_Indicator.mq4 (2.09 KB)

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High_Low v2 (ZigZag)1(23SEP05).mq4 (3.10 KB)

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High_Low v2 (ZigZag)1.mq4 (3.03 KB)

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High_Low v2 (ZigZag)2.mq4 (3.03 KB)

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High_Low v2 (ZigZag)3.mq4 (3.03 KB)

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High_Low v2 (ZigZag)(08SEP05).mq4 (3.10 KB)

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High_Low v2 (ZigZag)(23SEP05).mq4 (3.10 KB)

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HighsLowsSignalAlert.mq4 (3.88 KB)

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High_Low v2 (ZigZag).mq4 (3.12 KB)

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HiLo Activator.mq4 (2.62 KB)

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Hi-Lo.mq4 (2.20 KB)

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HiLoBandsBug.mq4 (3.53 KB)

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HiLoBands.mq4 (3.68 KB)

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Hist_StepMA_Stoch_KV1_Ex_02.mq4 (5.65 KB)

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Hist_StepMA_Stoch_KV1_Ex_03.mq4 (6.50 KB)

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HL.mq4 (4.24 KB)

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HMA1.mq4 (2.63 KB)

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HMA_Color.mq4 (3.18 KB)

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HMA.mq4 (2.63 KB)

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HMA_Color_v02.mq4 (3.62 KB)

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HMA_Color_v02b.mq4 (3.62 KB)

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HMA_Color_v03.mq4 (2.73 KB)

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HMA_No_Solid.mq4 (2.59 KB)

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HMA_Russian_Color.mq4 (4.02 KB)

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HMA_Russian_Color_sep1.mq4 (4.02 KB)

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HMA_Russian_Color_sep.mq4 (4.02 KB)

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HMA_v02.mq4 (3.52 KB)

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HMA_v03.mq4 (3.63 KB)

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HMA_v04.mq4 (2.01 KB)

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HMA_v05.mq4 (2.21 KB)

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HMA_v06.mq4 (3.92 KB)

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HMA_v07.mq4 (2.35 KB)

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HMAb.mq4 (2.74 KB)

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HMAenv.mq4 (2.97 KB)

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HMA-High.mq4 (2.61 KB)

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HMAhigher.mq4 (2.61 KB)

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HMAlower.mq4 (2.61 KB)

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HMA-Open.mq4 (2.61 KB)

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Hull Trend1.mq4 (3.47 KB)

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Hull Trend.mq4 (3.47 KB)

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Hull-MA.mq4 (2.63 KB)

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G

2007-06-01T15:07:00.000-07:00

INDICATORS LIST - G

GentorCCI1.mq4 (3.48 KB)

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GannZigZag.mq4 (13.77 KB)

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GentorCCI.mq4 (3.48 KB)

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GentorCCI2.mq4 (3.48 KB)

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GetNewsFF_v02.mq4 (7.62 KB)

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GMMA Short.mq4 (2.49 KB)

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Good_Macd1.mq4 (3.10 KB)

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Good_Macd dark screen.mq4 (3.11 KB)

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Good_Macd.mq4 (3.10 KB)

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Grid Builder.mq4 (2.84 KB)

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Grid_v1_0.mq4 (5.96 KB)

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gStdPivots.mq4 (7.19 KB)

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GMMA Long.mq4 (2.64 KB)

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F

2007-06-01T14:56:00.000-07:00

INDICATORS LIST - F

FAMA.mq4 (3.74 KB)

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FAMAMrPip.mq4 (3.69 KB)

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Fib_Pivots_02.mq4 (4.78 KB)

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FATL.mq4 (6.37 KB)

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FATLs.mq4 (4.00 KB)

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fibocalc1.mq4 (10.05 KB)

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fibocalc.mq4 (10.07 KB)

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fibocalc_V3.mq4 (11.32 KB)

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fibocalc_V31.mq4 (11.26 KB)

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fibocalc[1].mq4 (10.07 KB)

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FiboPiv_v2.mq4 (4.62 KB)

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Firebird [i]1.mq4 (3.43 KB)

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Firebird [i].mq4 (3.43 KB)

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FiboRetracement3.mq4 (15.96 KB)

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Firebird.mq4 (3.33 KB)

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Fisher_exit.mq4 (2.43 KB)

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Fisher_org_v12.mq4 (2.46 KB)

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Fisher_Yur4ik_2.mq4 (2.26 KB)

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Five_MA_Crossover_Email_Alert.mq4 (7.80 KB)

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Flat Trend.mq4 (3.25 KB)

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Flat.mq4 (3.10 KB)

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Flat Trend RSI.mq4 (2.54 KB)

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FlatTrend1.mq4 (3.45 KB)

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FlatTrend V3.mq4 (5.62 KB)

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FlatTrend V2.mq4 (3.61 KB)

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FlatTrend V21.mq4 (3.61 KB)

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FlatTrend V31.mq4 (5.62 KB)

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FlatTrend SMC modified.mq4 (3.51 KB)

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FlatTrend w MACD.mq4 (3.34 KB)

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FlatTrend.mq4 (3.25 KB)

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FlatTrend_SMC_modified.mq4 (3.51 KB)

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FlatTrend_w_MACD.mq4 (3.34 KB)

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forecast osc-30M.mq4 (3.61 KB)

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Float.mq4 (8.25 KB)

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Forex Freeway_2.mq4 (53.31 KB)

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Forex Freeway_2-RSX.mq4 (53.22 KB)

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ForexOFFTrend1(23SEP05).mq4 (3.04 KB)

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Forex Freeway_2x.mq4 (53.26 KB)

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ForexOFFTrend1.mq4 (2.89 KB)

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Forex Freeway_21.mq4 (53.31 KB)

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ForexOFFTrend2.mq4 (3.04 KB)

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ForexOFFTrend3.mq4 (3.04 KB)

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ForexOFFTrend4(2).mq4 (4.15 KB)

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ForexOFFTrend4.mq4 (3.03 KB)

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ForexOFFTrend v1.01.mq4 (4.58 KB)

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ForexOFFTrend(4AUG05).mq4 (3.03 KB)

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ForexOFFTrend.mq4 (3.03 KB)

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ForexOFFTrend(23SEP05).mq4 (3.03 KB)

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ForexOffTrend_Alert.mq4 (4.58 KB)

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ForexOFFTrendCustom.mq4 (3.05 KB)

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Four_MA_Ind.mq4 (5.39 KB)

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FractalAMA_MBK.mq4 (3.25 KB)

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FractalChannel_v1.mq4 (4.07 KB)

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Fractals5+Signal.mq4 (3.05 KB)

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Freeway - All1.mq4 (3.49 KB)

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Freeway - All.mq4 (3.49 KB)

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Fruity Pebbles 11.1.mq4 (4.21 KB)

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Fruity Pebbles 1.1.mq4 (4.21 KB)

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FTLM_hist.mq4 (6.33 KB)

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FTLM_KG_hist.mq4 (9.82 KB)

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FTLM_STLM.mq4 (8.16 KB)

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FTLM-STLM.mq4 (8.20 KB)

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Full_Bar_w_Spread_Shadow.mq4 (2.62 KB)

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FX10Setup.mq4 (4.03 KB)

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FX Fish.mq4 (3.80 KB)

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FX Sniper's Chandelier.mq4 (3.08 KB)

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FX_FISH Mod1.mq4 (3.97 KB)

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FX_FISH Mod2.mq4 (3.97 KB)

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FX_FISH-mod.mq4 (3.98 KB)

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FX_FISH Mod.mq4 (3.97 KB)

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fxnewsbolttun.mq4 (3.28 KB)

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FxOverEasy.mq4 (3.63 KB)

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E

2007-06-01T12:29:00.000-07:00

INDICATORS LIST - E

Ehlers iTrend.mq4 (3.35 KB)

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EJ_CandleTime.mq4 (1.67 KB)

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Easy_iCustom_and_Alerts.mq4 (18.83 KB)

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EJ_CandleTime_Blue.mq4 (1.67 KB)

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EJ_Pivot_DWM.mq4 (13.18 KB)

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EJ_Trend.mq4 (2.88 KB)

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EldersSafeZone.mq4 (3.23 KB)

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Elliott Wave Oscillator.mq4 (1.80 KB)

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Elliott Wave Oscillator34.mq4 (1.80 KB)

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Elliott_Wave_Oscillator.mq4 (1.75 KB)

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EMA CROSSOVER SIGNAL.mq4 (3.65 KB)

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EMA_5_10_34_Signal.mq4 (4.05 KB)

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EMA_levels.mq4 (2.41 KB)

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EMA_Trend_Indicator.mq4 (2.95 KB)

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EMABands_v1.mq4 (2.65 KB)

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EMA-Crossover_Signal.mq4 (3.74 KB)

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Elliott Wave indic.mq4 (128.52 KB)

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EMAOsMA.mq4 (3.83 KB)

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Ergodic Oscillator.mq4 (2.68 KB)

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EMAPredictive2.mq4 (5.26 KB)

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Ergodic Signals.mq4 (2.92 KB)

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Ergodic.mq4 (3.06 KB)

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EVWMA.mq4 (2.41 KB)

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ew1.mq4 (4.08 KB)

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EWOCCI_Indicator.2.mq4 (3.97 KB)

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EWOCCI_Indicator.mq4 (3.95 KB)

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exoticwave.mq4 (3.09 KB)

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exoticwavein.mq4 (3.70 KB)

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2007-06-01T03:58:00.000-07:00

Welcome to my Site. I Hope you can enjoy it..Thanks for all support..Hope Some Inputs and Critics From You All

OK..Enjoy Its...GOOD LUCK

UPDATED NEWS TODAY from Bloomberg

Worldwide

BP May Lose License to $18 Billion Siberian Gas Field as Putin Cracks Down

European Manufacturing Growth Unexpectedly Slowed in May

European Stocks Advance; BHP Billiton, Vedanta, Infineon Gain

Dow Jones May Rise as Bancrofts Agree to Consider Murdoch Offer

Emission Permits Rise ; Bush Calls for Climate-Change Targets

Eton Park Raises $518.5 Million for New Emerging-Markets Fund

Athenahealth, Led by Bush's Cousing, to File for IPO, People Say

Currencies - USA

Dollar Trades Near Three-Month High Versus Yen Before U.S. Jobs

U.S. Hiring Probably Picked Up in May; Jobless Rate Unchanged

Currencies - Europe

U.K Pound Heads for Weekly Drop as House-Prise Inflation Cools

Standard Chartered Plans to Move London Jobs to Dubai (Update2)

Central Banks to Boost Euro Holdings, China's Wu Xiaoling Says

Currencies - Asia

Australian, N.Z. Dollars Surge Against Yen on Yield Adavantage

Vietnamese Dong Drops as Central Bank Raises Ratio; Bonds Gain

Asian Currencies: Taiwan Dollar Has Best Week Since December

Economy

Europe's Economy Grows 0,6%, Led by Investment Surge (Update 1)

European Manufacturing Growth Unexpectedly Slowed (Update 2)

U.S. Economy: First Quarter may Have Been Low Point (Update 3)

US Economy

2007-06-01T03:48:00.000-07:00

U.S. Economy: First Quarter May Have Been Low Point (Update3)
By Shobhana Chandra
May 31 (Bloomberg) -- The U.S. economy grew last quarter at the slowest pace in more than four years, a 0.6 percent annual rate that may prove to have been the low point of the expansion.
The gain in gross domestic product, announced by the Commerce Department today in Washington, was lower than the 0.8 percent rate economists had forecast, and less than the government's previous 1.3 percent estimate. A private report from Chicago today showed a jump in business activity, while figures since the end of March show a rebound in corporate spending and consumer confidence.
Traders further reduced bets that Federal Reserve Chairman Ben S. Bernanke will need to cut interest rates this year. The prospect of a recession, given a one-in-three chance by former Fed Chairman Alan Greenspan, looks less likely as business investment and manufacturing strengthen.
The reports ``signify a clearing of the decks for a better performance going forward,'' said Carl Tannenbaum, chief economist at LaSalle Bank in Chicago and president of the National Association for Business Economics.
The yield on the benchmark 10-year note increased 2 basis point from yesterday to 4.89 percent at 5 p.m. in New York. The yield rose as much as 4 basis points. The dollar pared its decline against the euro.
Jobs, Construction
Also today, a Labor Department report showed the number of Americans filing claims for jobless benefits unexpectedly fell last week. Meanwhile, the Commerce Department said construction spending rose 0.1 percent in April and was revised higher the prior month. Analysts had expected no change.
``The winter near-pause in the economy has given way to a rebound,'' said Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh.
The National Association of Purchasing Management-Chicago's business barometer rose to 61.7 in May, higher than economists forecast, from 52.9 the prior month. Readings greater than 50 signal expansion.
Analysts anticipated a 0.8 percent gain in GDP last quarter, according to the median of estimates in a Bloomberg News survey. Forecasts ranged from increases of 0.1 percent to 1.8 percent. The economy grew at a 2.5 percent pace in the final three months of last year.
`Sustained Growth'
``It's a good number for the Fed,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. ``We do have sustained growth, do have profit growth and inflation is still not high enough to get the Fed to move'' interest rates.
The Fed's preferred inflation measure, which is tied to consumer spending and strips out food and energy costs, rose at a 2.2 percent annual rate, the same as previously estimated.
Bernanke is among policy makers who have said a 1 percent to 2 percent range is preferable. In minutes of the central bank's May 9 meeting released yesterday, Fed officials continued to view inflation as the biggest risk to the economy.
Today's revisions to GDP reflected a bigger trade deficit and fewer inventories than the government estimated last month. The trade deficit widened to an annual pace of $611.8 billion, subtracting 1 percentage point from GDP, twice as much as previously estimated.
Companies reduced stockpiles at a $4.5 billion rate last quarter compared with initial estimates of a $14.8 billion gain. The figures subtracted another percentage point from growth.
Consumer Spending
A jump in consumer spending last quarter was one of the few things that kept the economy growing. The increase in spending, which accounts for about 70 percent of gross domestic product, was revised up to an annual rate of 4.4 percent, the biggest gain in a year, from an initial estimate of 3.8 percent.
A rebound in business investment is contributing to a more optimistic outlook for the second quarter even as consumer spending moderates, economists said. Orders for durable goods recorded a third straight gain last month, the longest streak in almost two years.
Housing was less of a drag last quarter than previously projected, subtracting 0.9 percentage point from growth, compared with the initial estimate of 1 percentage point. Home construction fell at an annual rate of 15.4 percent last quarter, after contracting by 19.8 percent in the previous three months.
Builder Pessimism
``The homebuilding environment remains difficult,'' Richard Dugas, chief executive officer of Pulte Homes Inc., said in a statement this week. Pulte, the third-largest U.S. homebuilder, plans to fire 16 percent of its staff after it reported a first- quarter loss.
Rising foreclosures and mortgage defaults by borrowers with poor or limited credit history are adding to concerns the housing recovery may take longer, economists said.
In minutes of their May 9 meeting, Fed officials acknowledged they underestimated the length of the housing recession. Still, they said the risks from the fallout of the subprime lending crisis and the previous slump in business investment ``were judged to have diminished slightly.''
Growth will accelerate to an annual pace of 2.2 percent this quarter, based on the median estimate of economists surveyed earlier this month by Bloomberg News.
Some have boosted their forecasts since then. Economists at Morgan Stanley today projected the economy will expand at a 3.4 percent pace, a percentage point more than they forecast at the beginning on the month. UBS Securities LLC's growth estimate has climbed to 2.3 percent from 1.8 percent.
Profits
Today's GDP report included a first look at corporate profits for the quarter. Earnings adjusted for the value of inventories and depreciation of capital expenditures, known as profits from current production, rose 1.2 percent to an annualized $1.67 trillion. For all of last year, profits were up 21 percent.
The government also issued updated income figures for the previous two quarters. Personal income was revised up by $31 billion for the fourth quarter of 2006, boosting the gain over the previous quarter to an annual rate of 5.9 percent from 4.7 percent.
The increase suggests either payrolls last quarter were undercounted or employees were paid more than previously estimated, economists said.

European Manufacturing

2007-06-01T03:44:00.000-07:00

European Manufacturing Growth Unexpectedly Slowed (Update2)
By Ben Sills
June 1 (Bloomberg) -- Manufacturing in the euro region expanded at the slowest pace in more than a year in May, signaling that economic growth may have peaked.
Royal Bank of Scotland Group Plc's index of manufacturing in the 13 euro nations unexpectedly fell to 55 from 55.4 in April, Reuters Plc reported. Economists forecast an increase to 55.5, according to the median of 38 estimates in a Bloomberg News survey. The index is based on a survey by NTC Economics Ltd. of 3,000 purchasing managers.
European growth may cool from the fastest pace in six years as rising interest rates and a U.S. slowdown curb demand for the continent's cars, machinery and appliances. Still, the European Commission forecasts the economy will expand 2.6 percent in 2007, close to last year's 2.7 percent pace and enough to prompt the European Central Bank to push rates higher.
``The momentum in manufacturing is beginning to ebb,'' Ken Wattret, chief European economist at BNP Paribas in London said. ``If this continues, which we would expect, that does raise some question marks about how far the ECB will go. We're pretty skeptical that they'll go beyond 4.25 percent.''
Euro Declines
The euro fell against the dollar and investors trimmed bets the ECB will push its benchmark 3.75 percent rate much higher, with the yield on the three-month euribor future for December delivery falling to 4.525 percent at 11:43 a.m. from 4.53 yesterday.
The contracts settle to the three-month inter-bank offered rate for the euro, which has averaged 16 basis points more than the ECB's benchmark rate since the currency's start in 1999.
The euro-zone economy grew more than expected in the first quarter, expanding 0.6 percent, while U.S. growth slowed to a four-year low of 0.3 percent.
German retail sales in April increased the most since December, a separate report showed today. Investor confidence in Germany jumped to an 11-month high in May as economists ratcheted up their growth forecasts for Europe's largest economy. The government increased its 2007 growth outlook to 2.3 percent from 1.7 percent in April.
European business and consumer confidence both rose in May to the highest level since 1991, a report showed yesterday.
Unemployment Falls
Manufacturing growth is also driving employment gains and fueling concern that wage increases will spark inflation and higher interest rates. The European jobless rate fell to 7.1 percent in April, the lowest since the start of region-wide data in 1993, The EU's Luxembourg-based statistics office said today.
The ECB is set to raise interest rates for the eighth time since the end of 2005 next week. Jean-Phillipe Cotis, chief economist at the Organization for Economic Cooperation and Development said yesterday he expects at least one additional move after the ECB lifts its benchmark rate to 4 percent this month.
DAF Trucks NV, the Dutch division of U.S. truckmaker Paccar Inc., said it plans to increase production at its main plant by about 5 percent next month as European freight transporters expand fleets to handle the increased flow of goods within Europe. MAN AG, Europe's no. 3 truckmaker, reported record earnings as sales increased in eastern Europe.
Retail Sales
There are other signs that the euro-region expansion may be cooling. Export growth slowed to 0.3 percent in the first quarter after 3.5 percent in the first. Retail sales in the euro area fell for the first month in three in May and French business confidence declined.
In manufacturing, new orders gained at the slowest pace since November 2005, with the index reading 55.4 after 55.8 in April, today's report said. Output growth slipped to 56.1 from 56.9, the least since February 2006. Employment growth maintained the fastest pace of growth in 6 1/2 years, with the index reading 53.3, the report said.
European growth will ease to an annual 2.2 percent pace by the fourth quarter from 3.1 percent in the first as slower U.S. growth trims global demand, according to the median of 16 estimates in a Bloomberg News Survey of economists.
``In the U.S. we expect the market's growth to be significantly lower in 2007 compared with 2006,'' Alexandre Saubot, chief executive officer of Haulotte Group, a French maker of cherry-picker trucks for roofers, said May 14.
Thales SA Chief Executive Officer Denis Ranque said orders at Europe's largest defense-electronics company peaked in the first quarter.
So far, faster economic growth in Asia is easing the effect of the U.S. slowdown. Alstom SA, the world's second-biggest train maker, said full-year profit more than doubled as China upgraded its rail network.

Europe's Economy

2007-06-01T03:39:00.000-07:00

Europe's Economy Grows 0.6%, Led by Investment Surge (Update1)
By Fergal O'Brien
June 1 (Bloomberg) -- Europe's economy grew at three times the pace of U.S. growth in the first quarter as investment by companies surged the most in a decade, countering a drop in consumer spending.
The economy of the 13 nations that share the euro expanded 0.6 percent from the fourth quarter, when it grew 0.9 percent, Eurostat, the European Union's Luxembourg-based statistics office, said today. Unemployment fell to a record low of 7.1 percent in April, according to a separate report.
Corporate investment helped the euro-area economy overcome the impact on household spending of an increase in Germany's value-added tax. With unemployment falling and business and household confidence at a six-year high, the expansion is being sustained in the current quarter, keeping Europe's economy on course to outperform the U.S. for the first time since 2001.
Europe ``came through the headwinds such as the VAT increase and some slowdown abroad at the start of the year,'' said Silvia Pepino, an economist at JPMorgan Chase & Co. in London. ``By continuing to spend, companies were looking through temporary factors. The impression is that growth remains robust.''
Growth in business investment spending accelerated to 2.5 percent in the first quarter, the fastest since the second quarter of 1997, from 1.5 percent in the fourth quarter, today's report showed. Consumer spending slipped 0.1 percent, its first decline since the last three months of 2001.
U.S. Expansion
Europe's growth compares with U.S. expansion of 0.2 percent in the first quarter from the prior quarter, according to Eurostat. From a year earlier, the euro-area economy expanded 3 percent in the first three months of 2007, revised from an earlier estimate of 3.1 percent.
Reports this week indicate that the euro area is maintaining its growth momentum. Business and consumer confidence unexpectedly rose last month to the highest since 2001, and unemployment in Germany, the region's biggest economy, held at a six-year low in April.
The European Commission today predicted that the euro-area economy will expand 0.6 percent this quarter and next, before growth eases to 0.5 percent in the final three months of the year. The economy grew 2.7 percent last year, the most since 2000, and the commission last month raised its 2007 forecast to 2.6 percent, saying it expects Europe to outpace the U.S. for the first time since 2001.
Euro, Bonds
The euro slipped 0.1 percent to $1.3438 today. Bonds were little changed, with the yield on the benchmark two-year German note down 1 basis point to 4.37 percent at 11:13 a.m. in Brussels. Still, the yield has risen 4 basis points this week. Bond yields move inversely to prices.
A slowdown in the pace of U.S. economic expansion may damp demand for European goods this year, curbing export growth. The world's largest economy grew at a 0.6 percent annual rate in the first quarter, the weakest in more than four years and less than the 1.3 percent pace initially estimated last month, the Commerce Department said yesterday.
Euro-area exports rose 0.3 percent in the first quarter, according to today's report, after growing 3.5 percent in the previous three months. While the euro's 4.1 percent gain since mid-January makes European goods less competitive, the currency has fallen 1.5 percent since reaching a record $1.3681 April 27.
Unemployment Rate
The 7.1 percent unemployment rate for April compares with 7.2 percent in March and is the lowest since the data series began in 1993. EU Monetary Affairs Commissioner Joaquin Almunia said yesterday the jobless rate could move below 7 percent by next year, further bolstering consumer spending.
D+S Europe AG, a German maker of software for call centers, said on May 15 it will add 600 new jobs this year. DAF Trucks NV, the Dutch division of U.S. truckmaker Paccar Inc., this week said it plans to increase daily production at its main plant by about 5 percent.
With growth showing few signs of slowing, the European Central Bank is concerned that companies will raise prices and wages as the economy of the 13 euro nations expands at close to the fastest pace in six years.
ECB council members Klaus Liebscher and Nicholas Garganas said this week that the bank should keep its options open even after the interest-rate increase policy makers have signaled for next week.
`Strong Vigilance'
``I belong to those that say that you shouldn't exclude anything in the future,'' Liebscher said yesterday. ``Strong vigilance is needed to ensure that risks to price stability do not'' materialize over the medium-term.
The central bank has increased its key lending rate seven times to 3.75 percent since late 2005 to slow inflation. Currently, the bank forecasts consumer-price growth to average about 1.8 percent this year, holding below its 2 percent limit for the first time since 1999, before accelerating to around 2 percent in 2008. It will publish revised growth and inflation projections at it next monetary policy meeting on June 7.
The commission presented its quarterly forecasts as ranges built around a mid-point. It predicted growth of 0.4 percent to 0.8 percent in the second quarter and the third, and growth of 0.2 percent to 0.8 percent in the fourth quarter.