Precious Metals Prices 10.22 p.m. Eastern Time

Gold Price Futures   3 months    US$   1,360.54

Silver Price Futures  3 months    US$       23.03

U.S.-backed Free Syrian Army fight a three-front war, Assad forces,Hezbollah and international jihadists

According to an article published today in the Wall Street Journal,Western backed rebel opposittion forces, fighting Assad's regime are facing a three front war:

"An al Qaeda spinoff operating near Aleppo, Syria's largest city, last week began a new battle campaign it dubbed "Expunging Filth."

The target wasn't their avowed enemy, the Syrian government. Instead, it was their nominal ally, the U.S.-backed Free Syrian Army.

Across northern and eastern Syria, units of the jihadist group known as ISIS are seizing territory—on the battlefield and behind the front lines—from Western-backed rebels.

Some FSA fighters now consider the extremists to be as big a threat to their survival as the forces of President Bashar al-Assad.                                                                             "It's a three-front war," a U.S. official said of the FSA rebels' fight: They face the Assad regime, forces from its Lebanese ally Hezbollah, and now the multinational jihadist ranks of ISIS.

Brigade leaders of the FSA say that ISIS, an Iraqi al Qaeda outfit whose formal name is the Islamic State of Iraq and al-Sham, has dragged them into a battle they are ill-equipped to fight.

In recent months, ISIS has become a magnet for foreign jihadists who view the war in Syria not primarily as a means to overthrow the Assad regime but rather as a historic battleground for a larger Sunni holy war. According to centuries-old Islamic prophecy they espouse, they must establish an Islamic state in Syria as a step to achieving a global one".

China exploring ways to ease overcapacity

China has this week ordered 58 companies, ranging from steel, coke and cement producers, to cut excess production capacity by the end of the year, in the latest attempt to ease overcapacity in bloated sectors.

This is the third batch of enterprises required by the Ministry of Industry and Information Technology to cut overcapacity by the end of 2013, following more than 1,400 companies in July and another 67 earlier this month.

The orders came as China struggles to digest production gluts from an investment boom and generous subsidies in the past few years that saw producers in "favored" sectors expand rapidly with little regard to real market demand.

The average utilization rate in oversupplied sectors such as steel is below 75 percent, far lower than the international average, and around 22 percent of production capacity in China's major industrial companies sat idle in the first half of the year.

According to Zheng Xinli, executive deputy director of China Center for International Economic Exchanges, the government is looking to boost domestic demand, encourage producers to go global, push mergers and acquisitions, as well as setting higher environment threshold to reduce overcapacity.

"The administrative orders are short-term cures, the key to a balanced economy is to allow the market play a larger role," urged Gary Liu, executive director of CEIBS Lujiazui Institute of International Finance in Shanghai.

Source: Xinhua

China: Air defense sirens sounded on Wednesday morning across China to observe the 82nd anniversary of the Japanese invasion.

Air defense sirens sounded on Wednesday morning across China to observe the 82nd anniversary of the Japanese invasion.

Sirens began sounding at 9:18 a.m. and lasted for three minutes in Shenyang, capital of northeast China's Liaoning Province, where the Japanese army began its assault.

Meanwhile, cars on nine roads, 18 streets and other areas in the city stopped and drivers blew their horns.

It was the 18th time sirens and horns sounded in the city to remind people of the national humiliation, a routine that began in 1995.

People also gathered in front of the "9.18 Historical Museum" to attend a ceremony in which a bell was struck to warn people not to forget the past and be vigilant in times of peace.

"I will remember today and the September 18 incident for the rest of my life," said Sun Xiu, a university student who observed the ceremony.

"We commemorate the war anniversary in pursuit of peace," said Wang Jianxue, deputy head of China Association of Historians Studying Modern Chinese Historical Materials.

Similar commemorations were staged in other cities across China. Sirens sounded in 13 other cities in Liaoning. In the east China city of Hefei, an air defense drill was organized among local residents after the siren.

On Sept. 18, 1931, Japanese troops blew up a section of the railway under its control near Shenyang, then accused Chinese troops of sabotage as a pretext for attack. They bombarded barracks near Shenyang the same evening, beginning a large-scale armed invasion of northeast China.

The incident was followed by Japan's full-scale invasion of China and the rest of Asia, triggering a 14-year war of resistance against Japanese aggression.

China's volunteers announced on the special day that they will offer 1,500 medals to veterans who fought the Japanese invaders as a sign of their respect for the veterans.

Source: Xinhua

Japan plans to provide 10,000 yen to low-income earners

The Japanese government plans to provide 10,000 yen in cash benefits per person to low-income earners to help ease the impact of the planned consumption tax increase in April 2014, informed sources said.

The one-time payments, set to cover members of families that are exempted from local residential tax, are estimated to cost the government some 240 billion yen, the sources said. The government plans to finance the program under a supplementary budget for fiscal 2013 ending in March.Prime Minister Shinzo Abe is set to make his final decision early next month on whether to raise the 5 pct consumption tax to 8 pct in April 2014 as planned.

Vacant Japan homes show holes in Abe's push for housing growth

Broken wood pieces dangle and sway like autumn leaves from the window frames of vacant homes in Inariyato, part of Yokosuka in the greater-Tokyo urban area, where taped-over mailbox slots tell a story of abandonment.

More than 50 houses and apartments, almost 20 percent of the quaint residential neighborhood of narrow streets and stairway paths leading into green hills, are empty here, an hour's train ride south of Tokyo and 1,000 yards (900 meters) from the Yokosuka naval base, home of the U.S. Seventh Fleet. That hasn't stopped developers from building at least eight new apartment blocks in the same city in the past two years. Prime Minister Shinzo Abe's plan to boost the economy in part by reviving the housing market and encouraging new home construction is in conflict with Japan's demographics. Rural, suburban and less-desirable urban areas are becoming littered with empty homes as younger people moving to cities combines with one of the world's fastest-aging populations. At the same time, tax breaks on mortgages favoring new-home purchases, recently extended to 2017 and increased to 50 million yen from 30 million yen, are spurring demand for new properties. "Even when the number of vacant homes is on the rise, more and more new homes are being built," said Hidetaka Yoneyama, a senior researcher at Fujitsu Research Institute in Tokyo who has written at least five books on Japan's housing market. "That's absurd." Home vacancy in Japan, estimated at about 18 percent of housing nationwide, may reach 24 percent by 2028, he said.

NewsOnJapan

Sharp to raise Y166 bil. from share sales

Sharp Corp., a supplier of screens to Apple Inc., will raise as much as ¥166.4 billion in share sales in an effort to rebuild its balance sheet after record annual losses.

Japan's largest maker of liquid-crystal displays will sell as much as ¥149 billion of shares to the public, the Osaka-based company said in a statement Wednesday. The company also will make allotments to Makita Corp., Denso Corp. and Lixil Group Corp., with proceeds to be used for capital expenditure, it said.Intensified competition in LCDs and flat-panel TVs drove Sharp to losses totaling ¥921 billion during the past two financial years.

NewsOnJapan

Property investors in Hong Kong and Singapore look to Japan for higher returns

Property investors in Hong Kong and Singapore are targeting new high-yielding real estate markets against a backdrop of uncertainty over the global economic environment and weakening economic conditions across the region.

Driven offshore as a result of curbs placed on their home markets, Hong Kong and Singapore investors have turned to offshore markets, especially Japan, according to Mark Lampard, managing director of corporate solutions, Asia Pacific, at property consultancy Colliers International.

Hong Kong investments in Tokyo property so far this year total US$1.1 billion, according to data from commercial property information service provider Real Capital Analytics. That ranked Japan the third most popular destination for local investors after traditional favourites Shanghai and London.

The Asia Pacific region is entering an era of slower growth and faces challenges such as the potential risk of liquidity outflow from Asia, says Colliers International.

"Hong Kong investors turned active in seeking external investment opportunities across the border since early last year," said Simon Lo, executive director of Colliers' research and advisory department for Asia. Their targets included both mainland and Japan properties offering higher rental yields.

"Investors have turned defensive and are concerned to secure rental returns in the coming two to three years. They are not expecting significant capital gains in a short period of time," Lo said.

In a separate study by Savills, Tokyo was named as the favourite world city, ahead of New York, for investors seeking returns above treasury yields from residential investments.

Source: South China Morning Post

Russia signals opposition to tough resolution on Syria

Speaking in Damascus after meeting Syrian President Bashar al-Assad, Ryabkov also kept up Russian criticism of a report by U.N. investigators on a poison gas attack in the suburbs of Damascus on August 21.

Western governments say the U.N. report confirmed Assad's forces were behind the attack, which led the United States to threaten punitive military strikes before Washington and Moscow reached a deal for Syria to abandon its chemical arms.

Russia says it suspects rebels staged the attack to provoke military intervention, and Ryabkov accused the investigators of all but ignoring evidence presented by the Syrian government that he said supported rebel culpability.

"We are disappointed that there is no due attention paid to this evidence in the report which the (U.N.) group presented in New York earlier this week," he told reporters in Damascus in televised remarks.

"One cannot be as one-sided and as flawed as we have seen, laying the full (blame for the) incident in Ghouta upon the Syrian government," he said, referring to Western nations' interpretation of the report on the August 21 attack.

He said the report was limited in scope and reiterated Russian calls for further investigation that would include accounts from sources such as the Internet and government evidence of alleged chemical arms use in the days after August 21.

Source: Reuters

Asian shares rise, yields and dollar fall as Fed stuns

Asian shares and currencies rallied broadly on Thursday after the Federal Reserve stunned markets and decided not to taper its asset-buying program, sending U.S. bond yields and the dollar into a tailspin.

With U.S. stocks at a fresh record high, MSCI's broadest index of Asia-Pacific shares outside Japan jumped 0.9 percent to its highest in almost four months.

Australia's main index gained 1.1 percent .AXJO to a five-year high and Japan's Nikkei managed to brush aside a rise in the yen to climb 0.8 percent to a two-month peak.

The prospect that U.S. rates could stay low for longer was further underlined by news from the White House that noted-dove Janet Yellen was the front-runner to take over the Fed when Ben Bernanke steps down.

U.S. stocks rallied to record highs on Wednesday after the Federal Reserve decided to continue with its bond buying program

U.S. stocks rallied to record highs on Wednesday after the Federal Reserve, in a surprise to markets, decided against scaling back a stimulus program that has helped fuel Wall Street's rally of more than 20 percent this year.
While equities jumped on the Fed's decision, questions remained how long the rally would last as the central bank expressed concerns about the economy's future growth with likely budget and debt limit battles in Washington to come.
"From a short-term stock market perspective it can be seen as a good thing because the market likes to see continued Fed stimulus. From a real economy standpoint, what it says is the Fed is actually more nervous about the economy than is generally perceived."
The Dow Jones industrial average  rose 147.21 points or 0.95 percent, to 15,676.94, the S&P 500  gained 20.76 points or 1.22 percent, to 1,725.52 and the Nasdaq Composite .added 37.942 points or 1.01 percent, to 3,783.641.
About 580 stocks on the NYSE and Nasdaq hit new 52-week highs on Wednesday. About 325 of them hit their highs after the Fed announcement.

Source: Reuters

Peru Still Attractive As An Investment ?

Despite the recent Latin American sell-off the region as a whole is still in decent economic shape. Peru is a prime example of this. In their most recent policy announcement, the Central Bank of Peru kept rates at 4.25%. Here is how they described their economy.

The Board of the Central Reserve Bank of Peru approved to maintain the monetary policy reference rate at 4.25 percent.

This decision is based on that economic growth in the country is close to the economy’s potential level of growth, inflation expectations remain anchored within the target range, the rate of inflation has been affected by temporary factors on the side of supply, and international financial conditions are still uncertain, even though some positive signals have been observed in the developed economies.

Their overall annual growth rate is printing between 4.6% and 6.9% over the last nine months. 

The Peruvian market fell sharply during the late spring and summer, as the market sold-off in reaction to the announcement of the Fed's potential tapering. However, prices broke out of their channel in early September, rallying through the shorter EMAs. Now prices are weakening a bit, probably to test lows.

      

Source: SeekingAlpha

Latin American stocks reversed losses after

Latin American
stocks reversed losses while currencies gained on Wednesday
after the U.S. Federal Reserve surprised investors by announcing
it would keep its bond-buying program unchanged at $85 billion
per month.

 The MSCI Latin American stock index soared
2.7 percent to 3,428.45 following the announcement after having
spent most of the session near unchanged territory.
    Brazil's real  jumped 2.49 percent to 2.2030
per dollar while the benchmark Bovespa stock index swung
into positive territory, rising 1.22 percent.
    Mexico's peso strengthened 1.84 percent to 12.6910
per dollar as the IPC stock index climbed 1.24 percent. 
    Chile's market was closed for a national holiday.
    Latin American currencies had suffered steep losses since
May on concerns a withdrawal of Fed stimulus and higher rates in
the United States could spur a stampede for the exits by
investors who had piled into the region's assets in recent
years.

Reuters

Precious Metals Prices Futures 2.38 p.m. Eastern Time

Gold Price Future     3 months      US$   1,359.84


Silver Price Future    3 months      US$       22.99

Federal Reserve FMOC Statement

Excerpts of  the Federal Reserve's Statement

Information received since the Federal Open Market Committee met in July suggests that economic activity has been expanding at a moderate pace. Some indicators of labor market conditions have shown further improvement in recent months, but the unemployment rate remains elevated.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate.

The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall, but the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market.

The Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy.

However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases. Accordingly, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.

Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee's dual mandate.

Source: Associated Press

Harnessing Natural Resource Wealth for Inclusive Growth and Economic Development

•  Dependence on natural resource endowments can be a mixed blessing. We are all familiar with the “resource curse” and the historic experience in many resource rich countries of boom-bust cycles, debt crises, and poor governance that have led to the persistence of poverty and lack of inclusiveness.
• In this regard, I am pleased to note that this conference focuses on the key challenges faced by all countries in ensuring that resource wealth contributes in a sustained and inclusive fashion to growth and higher living standards for all. With this in mind, we have deliberately highlighted two key areas; macro-fiscal issues and ways to promote economic diversification
• We focus on the important role of fiscal policy in the economic management in natural resource rich countries, where the government typically plays a dominant role in the economy through its control of natural resources and associated income. Decisions regarding taxation, expenditures—importantly including public investment, the appropriate fiscal deficit, savings mechanisms such as the role of sovereign wealth funds and the governance framework will have enormous consequences—not just for today, but also for future generations—with the potential to ensure successful development or alternatively to destabilize the economy.
• Diversification is an absolutely key area especially given the simple facts that the natural resource sectors in themselves typically employ very few people, and that the resource is exhaustible. Clearly also, it is every challenging. For inclusive growth in addition to wise use of the resources it is imperative that backward and forward linkages are developed between the natural resource sector and the wider economy. Achieving this objective involves financial sector deepening, building infrastructure, enhancing human capital, and promoting the agricultural sector.

         Source: IMF

                     Anoop Singh

                     Director of the Asia and Pacific Department, International Monetary Fund

Jean-Marc Ayrault : la pause fiscale ne "sera effective" qu'en 2015

La pause fiscale promise par François Hollande, dans un entretien en août auMonde, pour 2014 ne sera finalement "effective" qu'en 2015, a reconnu le premier ministre Jean-Marc Ayrault dans une interview publiée, mardi 17 septembre, sur Metronews.

Il justifie ce revirement dans le but de "préserver notre modèle de solidarité", ce qui implique de demander "un effort aux Français [...] notamment mais pas seulement, à ceux qui ont des revenus plus élevés". Le premier ministre ajoute que cette décision n'a pas été actée "pour boucher les trous d'un budget mais pour mettre ces nouvelles recettes au service d'un objectif", à savoir "augmenter le moins possible les prélèvements."

Mi-septembre, François Hollande avait tenté de rassurer sur le "ras-le-bol fiscal" des Français. Reconnaissant qu'il "y a eu des augmentations d'impôts depuis deux ans", il avait assuré que "les dépenses de l'Etat vont baisser en 2014, une première depuis ces trente ou quarante dernières années". Et de marteler qu'"en dehors de la TVA et du plafond du quotient", il n'y aurait "plus de hausses d'impôts".

Le Monde

Interview a James O'Neill l'ex-chef économiste de la banque d'affaires Goldman Sachs

Les États-Unis et l'Europe misent beaucoup sur la consommation dans les BRIC pour soutenir leurs exportations. De ce point de vue, le ralentissement n'est-il pas inquiétant ?

Si la demande intérieure dans les BRIC baissait sur une longue période, alors oui, cela pourrait être très gênant pour les Etats-Unis et l'Europe. Mais encore une fois, j'insiste : nous avons affaire à une "nouvelle Chine". Ce qui est important pour les Etats-Unis et l'Europe, ce n'est pas le taux de croissance de la Chine, mais le niveau de la consommation. Et cet indicateur est encourageant.

Quand on compare, mois après mois, la courbe de la consommation avec celle de la production pour jauger le rééquilibrage de l'économie chinoise, on constate que cela va dans la bonne direction. Les salaires augmentent, les droits des migrants vers les villes progressent et le gouvernement décourage l'épargne excessive. Selon moi, la consommation en Chine, mais aussi dans l'ensemble des BRIC, sera la grande aventure économique de la prochaine décen

Le Monde

Les investisseurs attendent les décisions de la Fed sur son programme monetaire

"Tous les yeux seront braqués, mercredi 18 septembre, sur les annonces de la banque centrale américaine, réunie depuis mardi en comité de politique monétaire. Les investisseurs attendent une décision sur son programme de "quantitative easing" ("assouplissement monétaire"). Pourquoi tant d'attention pour une décision dont on connaît d'ores et déjà la teneur ? Davantage qu'une banque centrale, les orientations de la Fed ont un impact bien au-delà des frontières américaines. 

Le rôle de la Fed s'organise autour de deux axes. En tant que banque centrale, elle est chargée de superviser et de réguler le système bancaire américain, de sorte àgarantir la stabilité du système financier.

Elle définit également la politique monétaire du pays, via les taux directeurs qui orientent le marché monétaire au jour le jour, et ce, en fonction de trois objectifs : le plein emploi (ou chômage incompressible : arrêt de travail entre la fin d'un emploi et le début d'un autre... On considère traditionnellement qu'un taux tournant autour des 5 % reflète une économie de plein emploi), la stabilité des prix (l'objectif d'inflation est fixé à 2 %) et le maintien de taux d'intérêt à long terme 

modérés. 

Selon les minutes de la dernière réunion du comité monétaire de l'institution, mercredi 21 août, plusieurs membres estiment qu'il faudra "bientôt" ralentir ce dispositif de soutien à l'économie américaine en diminuant le rythme de ses achats d'actifs. La Fed laisse entendre depuis plusieurs mois déjà qu'en raison de la consolidation de la reprise, cette politique dite accommodante devrait s'arrêter ou, du moins, fortement ralentir dans les mois à venir.

Dans les pays émergents. Certains d'entre eux (Inde, Turquie) font face à des sorties massives de capitaux. Rassurés par les signaux positifs venus des économies occidentales,les investisseur commencent en effet a redistribuerllesdans les pays développés, et particulièrement les Etats-Unis 

 (où les marchés battent des records), les fonds qu'ils avaient investis au plus fort de la crise sur les Bourses émergentes, qui surperformaient.

Les plus exposés sont les pays dont les comptes courants sont déficitaires, et qui sont donc particulièrement dépendants des investissements étrangers, comme l'Inde, l'Indonésie, le Brésil et la Turquie. Mais ce "retour de bâton" est également dû aux faiblesses structurelles de ces économies en construction, qui doiventtrouver d'autres relais de croissance".

U.S. must cut $2 trillion over 10 yrs to stabilize debt

U.S. lawmakers are far from finished with the job of deficit-cutting, the Congressional Budget Office warned on Tuesday, saying that $2 trillion in additional savings is needed over the next 10 years just to stabilize long-term U.S. debt.

In new long-term forecasts that will intensify the fiscal debate in Washington as critical deadlines loom, the CBO said U.S. public debt will balloon to 100 percent of the nation's economic output in 25 years if no action is taken, increasing the risk of another financial crisis.

That's up from about 73 percent this year and a 40-year historical average of about 38 percent. And the picture looks worse if Congress does away with the "sequester" across-the-board spending cuts now in place, the non-partisan CBO said.

Revenue growth from a recovering U.S. economy and a January tax increase on the wealthy are helping to shrink near-term deficits, but this is not enough to overcome the rising pension and health care costs associated with the aging Baby Boom generation, CBO director Doug Elmendorf said.

In order to cut U.S. debt levels significantly, CBO said it would take an additional $4 trillion worth of cuts over the next decade. That would shrink U.S. public debt in 2038 to 31 percent of gross domestic product (GDP), below the 40-year average.

Source: Reuters

India's central bank chief seen hawkish

New Indian central bank chief Raghuram Rajan makes his first monetary policy statement on Friday with expectations he may scale back some of the emergency measures that have helped the rupee bounce from a record low.

But in a reflection of the policy challenges faced by the former IMF chief economist who has been dubbed "The Guv" by the Indian media, Rajan is likely to strike a hawkish tone on inflation.

With price pressures rising but economic growth running at a decade low, Rajan must find a fine balance in central bank policies to support economic activity without adding fuel to inflation and giving investors fresh reason to sell the currency.

Source: Reuters

Gold Prices Futures 8.33 a.m. Eastern Time

Gold Price Futures          3 months    US$  1,296.95


Silver Price Futures         3 months    US$      21.41

U.S. Economic Indicators, MBA mortgage applications and Housing Starts

Seasonal adjustments failed to smooth out big swings in Mortgage Bankers Association's applications data where the refinancing index is up 18 percent in the September 13 week following a 20 percent plunge in the shortened September 6 week. The purchase index is up 3.0 percent in the latest week vs a 3.0 percent dip in the prior week. The report notes that the purchase index is close to where it was before the holiday-related gyrations set in which points to flat results for underlying home sales. Rates have been on the rise but did move lower in the latest week, down 5 basis points to an average 4.75 percent for conforming loans ($417,500 or less).

Housing starts rose in August but only because July was revised down. Housing may be flattening. Housing starts in in August advanced 0.9 percent after rebounding 5.7 percent in July. The August starts annualized level of 0.891 million units fell short of expectations for 0.915 million units and was up 19.0 percent on a year-ago basis. July was revised down to 0.883 million units from the original estimate of 0.896 milllion.

The gain in starts was led by the single-family component which increased 7.0 percent after declining 3.0 percent the prior month. The volatile multifamily component declined 11.1 percent after jumping 28.7 percent in July.

By region, the rise in August starts was seen only in the South (the largest Census region), up l2.0 percent for the month. Declining were the Northeast, down 8.2 percent; Midwest, down 3.3 percent; and West, down 10.9 percent.

Forward momentum is slipping. Permits fell 3.8 percent after a 3.9_ percent rebound in July. August's annualized pace of 0.918 million units was up 11.0 percent on a year-ago basis. Analysts called for 0.950 million units for August permits. Weakness for the latest month was in the multifamily component.

Housing may be slowing although it is a tough call since weakness in August was in the volatile multifamily component. Determining the true trend is going to take more data.

Source: Schwab

U.K. Wednesday Newspapers Roundup

Retail investors are likely to be able to join in the next sale of the government's stake in Lloyds, the Chancellor said yesterday. Flush from the success of the government's inaugural sale of some of its shares for 3.2bn pounds, George Osborne said: "I will consider all options for later sales of our shareholding in Lloyds, including a retail offering to the public." The sale of 4.28bn pounds of the government's shares in about three hours on Monday evening at 75p each was 2.8 times covered by demand, market sources said. Temasek, the Singaporean sovereign wealth fund, was the single largest subscriber, buying just under 200m pounds of shares, The Times says.

Residential prices soared in China's biggest cities in August, raising the possibility that the government will take fresh measures to cool the red-hot market. Prices for new homes in Beijing, Shanghai and Shenzhen - the country's three largest cities - surged 18-19% year-on-year, accelerating from previous months. Nationwide, new homes prices increased 8.3% year-on-year, up from 7.5% in July, the Financial Times writes. 

Average house prices in England surpassed their all-time peak of January 2008 to a new record high in July in a further sign the property market is heating up, official figures showed today. Home values rose 3.3% over a year ago but 2.5% of that gain was driven by the property market in London and the South East. In the capital properties were worth nearly 10% (9.7%) more in July than a year earlier. The surge prompted one economist to forecast house prices would grow by seven per cent next year and added to fears that Government efforts to boost mortgage lending are creating a housing bubble, according to The Daily Mail. 

Jack Lew, the US Treasury secretary, said on Tuesday that the administration would not negotiate over congressional approval to lift US borrowings, drawing a line in the sand ahead of high-stakes budget talks with Republicans in coming weeks. Yet after a fortnight in which President Barack Obama has zigzagged between diplomacy and military action on Syria, and backed away from nominating Lawrence Summers to head the Federal Reserve, Republicans plan to test the president's resolve, The Financial Times writes. 

Source: LiveCharts

Fed likely to reduce bond buying

 The U.S. Federal Reserve is expected to begin its long retreat from ultra-easy monetary policy on Wednesday by announcing a small reduction in its bond buying, while stressing that interest rates will remain near zero for a long time to come.

Most economists expect the Fed to scale back its monthly purchases by a modest $10 billion, taking them to $75 billion and signaling the beginning of the end to an unprecedented episode of monetary expansion that has been felt worldwide.

Fed Chairman Ben Bernanke, in what is likely his penultimate news conference before stepping down in January, is expected to reinforce the central bank's commitment to keep overnight rates near zero for a long time to come as a way to temper any jitters the bond market may feel.

The forward guidance on rates is aimed at holding down longer-term borrowing costs, which encompass investors' views on the path of short-term rates.

Source: Reuters