Sunday, 7 July 2013

TPP would affect 47 prefectures in Japan

Annual agriculture income in Japan would plunge 14 pct to 2.5 trillion yen from the average of 2.9 trillion yen in 2006-2010 if Japan joins the Trans-Pacific Partnership free trade pact and all tariffs in the nation are removed immediately as a result, an anti-TPP group said Friday.
Income would drop in all of Japan's 47 prefectures, according to the estimates by the group comprising university teachers.

Source:NewsonJapan

Trade talks between E.U. and U.S.

Talks to create the world's biggest free-trade zone between the E.U. and U.S. are going to start  amid a controversy of spying to their allies by U.S. agencies and demands of protected industries.
France for example has demanded protection for its film and television industry.
"Direct tariffs on goods and services between the two are already low, but there are other barriers such as regulatory and safety standards, inspection procedures, and preferences for domestic business.
Removing these could significantly reduce the costs for companies doing transatlantic business".
"Last year, trade in goods between the United States and the EU was worth some 500bn euros ($650bn), with another 280bn euros ($359bn) in services and trillions in investment flows".

Source :  BBC

Greece close to an EU agreement

Greece's government has said it is close to agreeing a deal to gain the latest payment of bailout money from its international lenders.
Talks have centred around 4,000 civil service jobs that are due to be cut.
Greece must pay off 6.6bn euros of debt by mid-August.
Source: reuters

Brazil. Eike Batista Misfortunes . These are his worst performing companies.

The market price meltdown of Brazilian billionare Eike Batista´s companies.

Market Value in R$ Billions                                 Market Value in R$ Billions

OGX (Oil and Gas)                                               OSX(Shipbuilding and Offshore)

41.05    june 2008     4.47  may 2013                     7.8B march 2010   0.86B may 2013

 Cash Available  2.3 billions                                 Cash Available   1.3 billions

 Total debt           7.9 billions n                             Total debt March   5.4 billions
                                                                               2013

%Debt in             92%                                       %Debt in                    72%
Foreing  Currency                                                 Foreign Currency


Saturday, 6 July 2013

Timing of the Fed or who gets out first from the(once) safe bond market. Part II

The gradual stance that the Fed will take in tapering its bond purchases and the slower growth of China's economy, with the continuing accomodative monetary policy in Japan and U.K both countries simply  have concluded that higher inflation is a price worth paying to revive economic growth. 
After the ECB meeting which left interest rates unchanged,  Chairman Mario Draghi on a news conference said that:
"The Governing Council expects the key ECB rates to remain at present or lower levels for an extended period of time, Monetary policy will remain accommodative for as long as necessary." "Our exit (from low interest rates) is very distant," he added.
 So the gradual exit from easy money by the Fed will be in a complex international  scenario,with falling prices of commodities which are already painful for emerging markets and developing economies with less growth in their economies,depreciation of their currencies, falling bond prices,tighter monetary,  higher interest rates, and falling prices of asset classess. This is the unraveling of the previous scenario of extremely low interest rates in the U.S and weak dollar policy.
  Higher interest rates and  (U.S. rates will be the benchmark), will mean also lower commodity prices enhancing the fall because of the lower growth of the Chinese economy.
   Once the market is convinced that the tapering of bond buys is without a step back,the fall of the bond prices will faster and deeper than U.S. monetary authorities thought, or the tapering will be done in a longer period than initially was thought.


Friday, 5 July 2013

Barrick's Impairment Charge for 2013

Impairment Charges

In its first quarter 2013 report, Barrick indicated that it may need to reassess the long-term gold and silver price assumptions used in its most recent annual impairment test should metal prices remain at lower levels for an extended period of time.

As a result of recent and continued significant declines in gold and silver prices, and the delay in first gold production, Barrick is conducting impairment testing. Preliminary analysis indicates an after-tax asset impairment charge in the range of approximately US$4.5-US$5.5 billion in the second quarter for the Pascua-Lama project. This is a preliminary estimate range and the impairment testing work is ongoing, including with respect to various underlying assumptions related to items such as long-term metal prices, capital costs, and the construction schedule re-sequencing work for the project. The company will complete a final impairment assessment by its second quarter 2013 results release.

In light of the lower metal price environment, Barrick is also reviewing its other assets, including goodwill, for possible impairment charges in the second quarter, which, although dependent on various analyses and assumptions which have not been finalized, are likely to be significant.

Source: Form 6-K 5fth of day July 2013

Dollar Index at 3 Year High

A widely used measure of the dollar’s value rose to a three-year high Friday after stronger-than-expected June U.S. jobs data reinforced expectations the Federal Reserve will move sooner rather than later to begin slowing the flow of monetary stimulus to the economy.
The ICE dollar index DXY, which measures the U.S. unit against six other major currencies, rose to 84.434, up from 83.291 late Thursday in North America. On a closing basis, that’s its highest in three years, according to FactSet.

Sugar Prices Crush Impact in India

This is a good time for buyers of refined sugar, but for refiners in India, the world’s biggest consumer of the sweetener and the second largest producer, not so much.
Global sugar prices have fallen to their lowest levels in nearly three years, and surplus production of cane in India isn’t helping the situation, with share prices of listed sugar companies in the country getting crushed.
Benchmark ICE sugar traded in New York has fallen from a high above 35 cents a pound in February 2011 to around 16 cents a pound recently. In the year to date, it has fallen a relatively subdued 16%, but stock prices for Indian refiners have fared much worse.Shree Renuka Sugars Ltd.India’s biggest sugar refiner, is the worst performer, having lost around 48% of its stock value in 2013  Bajaj Hindhustan Ltd. India’s top sugar producer by volume, has lost 40%, while other significant players Balrampur Chini Mill Ltd. and Simbhaoli Sugars Ltd.  have shed 19% and 36%, respectively. All of the companies’ share prices are around three-year-low levels.
Analysts say they expect sugar share prices to stay at depressed levels at least for the next several months, potentially hitting four-year lows given the limited scope refiners have to eke out profits.
From WSJ


Gold Majors' Shares Steep Drop

Canada's main stock index stumbled on Friday after a robust U.S. jobs report showed growing strength in the world's largest economy but lessened the appeal of safe-haven assets such as bullion, causing gold-mining stocks to dive.
Shares of gold producers dropped almost 5 percent, with Barrick Gold Corp  the world's largest gold miner, losing more than 5 percent of its market value to hit its lowest level in about 21 years.
Increasing signs that U.S. economic recovery is gathering speed raised fears that the Federal Reserve might dial down its massive stimulus program later this year.
Data showed U.S. job growth was stronger than expected in June and that the employment count for the previous two months was higher than initially reported.he materials sector, which includes mining stocks, declined the most among the major groups, giving back 2.1 percent. Gold miners tumbled in a volatile session after the price of the precious metal fell, with the U.S. dollar rising on the jobs news.
Barrick fell to $13.52, hitting its lowest level since May 1992.

Source Reuters

A closer look to the U.S. June's Jobs Report

According to June labor Statistics, total nonfarm payroll employment increased by 195,000 in June, and the unemployment rate was unchanged at 7.6 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in leisure and hospitality, professional and business services retail trade, health care, and financial activities.
The number of unemployed persons, at 11.8 million, and the unemployment rate, at 7.6 percent, were
unchanged in June.
Among the major worker groups, the unemployment rate for adult women (6.8 percent) edged up in
June, while the rates for adult men (7.0 percent), teenagers (24.0 percent), whites (6.6 percent), blacks
(13.7 percent), and Hispanics (9.1 percent) showed little or no change. The jobless rate for Asians was
5.0 percent (not seasonally adjusted), down from 6.3 percent a year earlier.
In June, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially
unchanged at 4.3 million. These individuals accounted for 36.7 percent of the unemployed. Over the
past 12 months, the number of long-term unemployed has declined by 1.0 million.
The number of persons employed part time for economic reasons (sometimes referred to as
involuntary part-time workers) increased by 322,000 to 8.2 million in June. These individuals were
working part time because their hours had been cut back or because they were unable to find a full-time
job.
In June, 2.6 million persons were marginally attached to the labor force, essentially unchanged from a
year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted
and were available for work, and had looked for a job sometime in the prior 12 months. They were not
counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
Among the marginally attached, there were 1.0 million discouraged workers in June, an increase of
206,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not
currently looking for work because they believe no jobs are available for them. The remaining 1.6
million persons marginally attached to the labor force in June had not searched for work for reasons
such as school attendance or family responsibilities.

Source   Bureau of Labor Statistics

Basel Committee New Standards for Risk

Global regulators proposed on Friday that banks set aside more capital to cover investments in "shadow banks" such as private equity or hedge funds to improve cover for underlying risks.
Policymakers worry that as mainstream banks become more tightly regulated, risks will shift to other financial businesses that handle credit but have been less regulated than the banks.
The Basel Committee of banking supervisors from the world's top financial centers said on Friday that more clarity and consistency is needed on its existing rule for how banks set aside capital to cover exposure to equity funds.
Basel will make it a requirement for banks to adopt a "look-through" approach, meaning that banks will have to calculate risks from their exposure to a fund as if they owned the fund. A public consultation on the proposed change will close on October 4.
"The committee believes the revised standard will more appropriately reflect the risk of a fund's underlying investments and its leverage," the committee said in a statement.
"The revised standard will also help address risks associated with banks' interactions with shadow banking entities."

Source  Reuters

Precious Metals Quotes

Gold Price    3 Months Futures     US$      1,211.47

Silver Prices 3 Months Futures     US$          18.79

Government Bonds Quotes


Government Bonds  

 
Price change
         YIELD
U.S. 2 Year-2/320.391
U.S. 5 Year-24/321.575
U.S. 10 Year-1 18/322.697
U.S. 30 Year-2 25/323.662
Germany 2 Year-3/320.137
Germany 10 Year-30/321.728
Italy 2 Year6/321.963
Italy 10 Year3/324.395
Japan 2 Year0/320.139
Japan 10 Year3/320.859
Spain 2 Year9/321.914
Spain 10 Year20/324.592
U.K. 2 Year-3/320.411
U.K. 10 Year-29/322.501

A bright spot on U.S. job growth.

U.S. job growth increased more than expected in June, which could draw the Federal Reserve closer to implementing a plan to start scaling back its massive monetary stimulus later this year.
Employers added 195,000 new jobs to their payrolls last month, the Labor Department said on Friday, while the unemployment rate held steady at 7.6 percent as more people entered the workforce.
The government revised payrolls for April and May to show 70,000 more jobs created than previously reported.
Economists polled by Reuters had expected employment to increase 165,000 last month and the jobless rate to fall a tenth of a percentage point to 7.5 percent.
The closely watched employment report was released two weeks after Fed Chairman Ben Bernanke offered an upbeat assessment of the economy's outlook and said the U.S. central bank expected to start trimming its bond purchases later this year.
The employment report also showed weekly hourly earnings rose by the most since November. That, combined with other relatively upbeat data on housing, auto sales and manufacturing, makes it more likely the Fed will proceed with its tapering plan in September.
wenty-eight of 60 economists polled by Reuters in late June said they expect the Fed to begin dialing back its purchases in September, with most expecting the program to end by June 2014.

Thursday, 4 July 2013

Precious Metals Quotes

Gold Price  3 months    Futures     US$ 1,243.90

Silver Price 3 months    Futures     US$     19.32
                                                         

BOJ upgrades economic conditions of 9 regions

The Bank of Japan upgraded its economic assessments for eight of the country's nine regions in a quarterly report released Thursday, reflecting improvements in business and consumer sentiment thanks to the yen's weakening and rises in stock prices.
It was the first time in three years and nine months that the Bank of Japan has revised up its economic assessments for at least eight regions for two straight quarters. In its previous report, the central bank upgraded its assessments for all nine regions.The latest report said that the economy "has been picking up" in the Hokkaido, Hokuriku, Kanto-Koshinetsu, Tokai and Kyushu-Okinawa regions, "has been picking up moderately" in the Kinki region, "has been picking up moderately as a whole" in the Chugoku region and "has begun to pick up" in the Shikoku region.  

Source: NewsonJapan

China's properties prices under control

Many are worried that high land prices may translate into higher property prices. Analysts say high land prices so far only occur in big cities, and the government’s curbing policies on land have also helped to prevent the prices from going higher.
Property developers bought land in China’s largest cities at record prices in June. That enthusiasm is spreading to second tier cities too. Experts say this shows property companies are more confident this year.
"We’re seeing a rebound in enthusiasm from developers in buying up land since the fourth quarter of last year. Competition has also heated up in the market. So new land is being snatched up at a quick pace." Wang Juelin, Researcher OF Min. of Housing & Urban-rural Dev't said.
Despite this, analysts say land prices are still reasonable overall, as high prices are mostly seen the country’s top tier cities.
"Once land prices exceed the cap required by the government, developers compete for building affordable housing. This prevents excessively high prices from occurring." Zhang Dawei, Gen. Manager of Marketing Dept. of Centaline Property said.
There is another reason why prices are under control. The government launched a curbing policy in 2010 to place a cap on land auctions. Once the ceiling is reached, the developer who’s willing to build more AFFORDABLE housing will get the land.

Unemployment rate on the Euro Zone

According to  Eurostat,  the rate of unemployed still progressed,in May .The rate of unemployment hits 12.2% of the working population of the euro area, against 12.1% a month earlier date. In the twenty-seven EU as twenty-eight counting Croatia, the rate shows 11%. Spain (26.9%), Italy (12.2%) and in Greece (26.8%) this "economic cancer" continues to grow.  France, doesn't escape to this problem, with an unemployment rate 10.8% against 10.9% a month earlier date. The improvement hopes don't change anything. Even if it happen, the improvement of the economy will not result in lower unemployment figures "for a year, at least," calculates Eric Heyer,of the French Observatory . In fact, employment is a variable that adjusts more slowly than others.

Source: Le Monde

EU Financial Transaction Tax

 EU commissioner for customs and taxation Algirdas Semeta on Wednesday welcomed the European Parliament (EP) vote on the financial transaction tax (FTT).
"I warmly welcome the Parliament's vote in favour of the FTT under enhanced cooperation, which 11 member states have requested," Semeta said in a statement following the EP's vote in favour of the FTT proposal.
"Today, we've had a clear signal that popular and political support for the FTT is still strong," he said, adding that the FTT, also know as the "Tobin tax," can contribute to "fair taxation, a cohesive single market and a more responsible banking sector."
The commissioner urged all the 11 member states to press ahead in reaching quick agreement,  while also protecting the spirit and purpose of this tax."
He promised that the European Commission will continue to support negotiations in every way possible, to facilitate a swift and ambitious compromise. 
Source: Xinhua

China's increasing Chain Stores

The number of shopping centers in China is likely to reach 4,000 by 2015, an official with the China Chain Store & Franchise Association (CCSFA) said Thursday.
Data from the association show that there were 3,000 shopping centers across the country in 2012, with a gross floor area of 200 million square meters.
Besides large shopping centers, convenience stores also reported fast expansion last year. The country's 20 major convenience store chains registered 28-percent sales growth, and the number of convenience stores increased 14 percent nationwide in 2012.
Consumption demand has dropped on the back of a decelerating economy and intensifying competition, causing oversupply in some local markets, said Guo Geping, chairwoman of the CCSFA, adding that the competitive edge of convenience stores will be sharpened with the development of instant foods and logistics services for online shopping.
She said the country's department stores were hit by rising costs and a bustling online retailing sector, so the most urgent task is transforming business models to reduce costs and improve customer experience.
Source: Xinhua

Haruhiko Kuroda: Optimistic on Abenomics

Bank of Japan Governor Haruhiko Kuroda claimed some success for the central bank's aggressive monetary stimulus on Thursday, saying that the economy is on track to a steady recovery with signs inflation expectations are picking up.

Speaking at a quarterly meeting of the BOJ's regional branch managers, Kuroda reiterated the central bank's commitment to maintain its ultra-easy monetary policy until its 2 percent inflation target is achieved in a stable manner.
Japan's economy is steadily heading towards a recovery since we adopted our qualitative and quantitative monetary easing in April," Kuroda said.
"We're seeing the effect of our policies, such as indicators suggesting an increase in inflation expectations."
In a quarterly report issued after the branch managers' meeting, the BOJ revised up its assessment for eight of Japan's nine regions, a sign the positive effects of Prime Minister Shinzo Abe's reflationary policies are broadening. It was the first time in nearly four years the central bank revised up its assessment for eight or more regions for two straight quarters.
Source: Reuters

Brazil Crisis.

Brazil Latin America's biggest country has had massive protests last week.
Brazilians are railing against poor public schools, hospitals and transport. They are protesting soaring prices, crime and corruption. They are lambasting a political class so self-satisfied that it failed to see, much less address, the mounting dissatisfaction that led to the protests.

Combined, the concerns reflect growing unease among Brazil's nearly 200 million people that the country's long-promised leap into the developed world has fallen short once again.
The demonstrations, sparked by protests against a rise in public transport fares, at first drew mostly educated youth from Brazil's traditional middle class, a minority that historically has had more in common with a wealthy elite than the nearly 100 million Brazilians who until recently formed the ranks of the poor.
The demonstrations took off, though, when Brazil's "new" middle class joined the fray. "This is the discontent of people for whom having enough rice and beans on the table no longer comes as a surprise
Booming commodity exports, a consumer binge and ambitious social welfare programs together fueled a decade of steady economic growth that lifted 35 million Brazilians from poverty. But now, as the economy cools, many among the new middle class say their much-vaunted ascent leaves a lot to be desired. 
The notion of middle class in Brazil broadly includes include almost anyone able to pay rent, put food on the table and perhaps pay a monthly installment on the refrigerator, microwave or television that Brazil's government often touts as a sign of their emergence. The so-called "Classe C," the bottom rung of Brazil's , about $790 a month, and, unlike the much-smaller upper middle class, relies largely on public transportation, health services and schools.
Those who can't afford private health insurance - and most Brazilians can't - are at the mercy of public hospitals that often lack sutures, spare beds and, increasingly, doctors, some of whom are so disgusted with the public health system that they limit their work to private providers. 
After average yearly economic growth of more than four percent during Lula's two terms, average growth through the end of Rousseff's term isn't expected to exceed much more than two percent. Inflation, a longtime concern, has crept back up to an annual pace of 6.5 percent.
 It is worth to note that Lula's two terms where in the period of a super boom in the price of commodities,high foreing direct investment to emerging markets, and the start of the discovery
of important oil reserve in deepwater oil fields in the coast of Brazil.
Brazil's boom is also exhausted. Demand for raw materials from China has slowed.
Brazilian consumers, meanwhile, are more burdened by debt than at any time since the central bank began measuring household credit. Growing defaults last year led banks to cut back on lending.
The slowdown muddles the message for a government accustomed to telling its citizens - indeed, the entire world - that Brazil has finally made it.
As recently as April, Rousseff was pledging that per capita income would double by 2022 - never mind that economists say that would require average annual growth of at least 6 percent until then. Two important  events in Brazil, the 2014 World Cup and the 2016 Olympics, are now having increased criticism because of the more than $25 billion needed to host them.

Greece on tightrope once again?

  Greece's Goverment difficulty to deliver results towards public reform is puting this nation in a tightrope again in front the EU and IMF, it is not meeting the conditions attached to its bailout in order to receive their next tranche of aid.
Athens, which has about 2.2 billion euros of bonds to redeem in August, needs the talks to conclude successfully.
Athens is scrambling to bridge differences with troika inspectors and wrap up the review by the end of this week, a Greek coalition official who took part in the talks told Reuters on Tuesday.
"Negotiations must be concluded by Saturday or Sunday at the latest in order to have a (troika) staff agreement that will be discussed at a Eurogroup meeting on Monday," said the official who declined to be named.
The two sides had yet to agree on how to plug a fiscal gap and Athens has missed a June deadline to place 12,500 state workers into a "mobility scheme", under which they are transferred or dismissed within a year.
Source: Reuters

China boosting loans for agricultural industralization

China has budgeted  2.58 billion yuan (417.31 million U.S. dollars) subsidy to boost the amount of loans for the agricultural industrialization, the Ministry of Finance said on Thursday.
The money is designed to cut lending interest rates for agricultural industrialization projects so as to boost farm produce supply and farmers' income.
Thirty provinces, autonomous regions and provincial-level municipalities will benefit from the money, together with Dalian, Ningbo and Qingdao cities.

China and U.S. will have Economic Summit

China and the United States will hold their fifth  Strategic and Economic Dialogue  on July 10 and 11 in Washington, Foreign Ministry spokesman Qin Gang said on Thursday.
The dialogue will be co-chaired by Vice Premier Wang Yang and State Councilor Yang Jiechi, who will be acting as special representatives of President Xi Jinping, as well as U.S. Secretary of State John Kerry and Treasury Secretary Jacob Lew. 
Both sides will discuss the implementation of agreements made during a recent summit held by the presidents of both countries, and talk about boosting coordination and cooperation on bilateral issues and major international and regional affairs, Qin said.
Source: Xinhua

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