Iran Oil Exports Fall in April, Says IEA

    The WSJ reports,"Iran’s oil exports fell in March having reached a 20-month peak two months earlier, a global energy watchdog said on Thursday, potentially easing concerns that Tehran could breach a six-month cap agreed with the West in a broader deal over its nuclear program.

In its monthly market report, the International Energy Agency said that “estimated April import volumes [by foreign buyers of Iranian oil] were down by about 180,000 barrels a day to 1.11 million barrels a day.”

The export numbers, which include condensates, compared with 1.29 million barrels a day in March and a 20-month peak of 1.58 million barrels a day in February, it said. Condensates exports stood at around 230,000 barrels a day in April compared with 150,000 barrels a day in March, the agency said.

The IEA’s data confirmed statements by Iran’s deputy oil minister for international affairs Ali Majedi made to The Wall Street Journal last week that crude exports—which exclude condensates—averaged 1.2 million barrels a day in the past three months. That number—which excludes condensates—suggested a reduction from February levels of 1.3 million barrels a day.

In November, Iran agreed to cap its crude exports—excluding condensates—to 1 million barrels a day on a six-month average. The commitment is part of a broader interim deal with six world powers over its nuclear program.

Some countries such as India have reduced their intake of oil from Iran as they seek to adjust to U.S. sanctions limiting their imports of Iranian oil.

On an average basis, Iran’s oil exports, however, have been higher this year. Iran’s Oil MinisterBijan Zanganeh said earlier Thursday that oil exports amounted to 1.5 million barrels a day on average. That contrasts with a low of about 700,000 barrels a day in October, according to IEA estimates".

IMF: France: 2014 Article IV Consultation—Concluding Statement

"Economic objectives are the right ones and policies to attain them have been correctly identified. Very substantial fiscal adjustment—3 percent of GDP in the past three years—has been achieved and the structural fiscal deficit has been halved since 2010. But the adjustment strategy followed until now—with an emphasis on raising revenue—has reached its limits. Against this backdrop, the Stability Program and the National Reform Program lay out a course for the next three years with expenditure reduction and measures to increase the supply response of the economy at its core.

In our view, the course for fiscal policy is appropriate. Over decades, a permanent structural fiscal deficit—driven by public spending that has outpaced GDP—has boosted public debt. The resulting erosion of fiscal space constrained the government’s ability to sustain demand as the economy slowed down in 2012-13. The concomitant rise in taxes has weighed on the capacity of the economy to grow. Recreating room for policy maneuver has become critical to enable the government to respond more flexibly in the face of possible future shocks. And cutting spending has become critical to help put social safety nets on a sound footing for future generations. For these reasons, we support continued adjustment as envisioned in the Stability Program.

However, the fiscal policy objectives are very challenging. First, the planned reductions in taxes mean that the cutbacks to spending relative to trend will need to be very large if public finances are to be brought back to balance over the medium term, as they should. The needed cuts have been put at euro 50 billion over the next three years. If achieved, these expenditure savings would be remarkable by historical standards. Second, the recovery of economic activity is likely to remain subdued. We project real GDP growth of 1 percent this year and 1.5 percent in 2015, as supply side measures will boost growth only gradually. Even so, risks of a weaker rebound persist. With the economy operating well below capacity, we also expect inflation to remain at around 1 percent. All of this will make the task of the authorities very difficult. More accommodative monetary conditions would help with the implementation of the fiscal program and bring forward the benefits of structural reforms.

Execution risks are sizeable. Achieving the deficit objectives while delivering on the tax cut commitments leaves no room to deviate from the announced expenditure reductions. The major risks are that the initial plans may be diluted in sequential annual budgets and that cuts in transfers to local governments may be compensated by unsustainable cuts in investment, higher taxes or higher debt. This would undermine the government’s fiscal rebalancing strategy. Also, if there is an overreliance on containment rather that structural measures, expenditure growth will bounce back once pressures subside".

IMF:  France: 2014 Article IV Consultation

U.S. Consumer prices rise sharply in April

 Consumer prices posted the biggest increase in April since last summer as the cost of many staples rose, making it harder for Americans to stretch their paychecks to pay for typical household expenses.

The consumer price index jumped a seasonally adjusted 0.3% last month to mark the largest gain since June, the Labor Department said . The increase matched the MarketWatch forecast.

Although most economists expect consumer prices to taper off later in the year, they have climbed sharply in the past few months. The pace of inflation rose to 2% from April 2013 to April 2014, up from 1.5% in the prior month.

In April, energy prices rose 0.3%, led by a 2.3% advance in the cost of gasoline.

Food prices rose 0.4%, spearheaded by a 2.9% spike in beef. That was the largest increase in beef prices since 2003.

Excluding the volatile food and energy categories, core consumer prices increased 0.2%. The cost of housing, medical care, airline tickets and new cars all rose.

The core rate has risen 1.8% in the past 12 months, and it’s been stuck between 1.6% and 1.8% for more than a year. That’s well below the level the Federal Reserve considers harmful to the economy, however.

Source: Marketwatch

The Euro Zone Grew 0.2% IN Q1 Q/Q . Expected Growth was 0.4%

 The euro zone economy grew much less than expected at the start of the year and inflation remained locked in the 'danger zone' below 1 percent, increasing pressure on the European Central Bank to ease monetary policy at its next meeting in June.

The 9.5 trillion euro economy expanded only 0.2 percent quarter-on-quarter in the first three months of 2014, the same as the downwardly revised rate in the last quarter of 2013, while economists had expected 0.4 percent growth.

The first quarter figure stayed positive mainly thanks to strong growth in the biggest economy Germany, which compensated for stagnation in France and shrinking output in Italy, the Netherlands, Portugal and Finland.

"Today’s figure is a major disappointment, as it suggests that the euro zone is still far away from reaching the escape velocity required for a sustainable recovery," said Peter Vanden Houte, chief euro zone economist with ING.

With growth so weak and consumer price growth well below the ECB target, the bank is preparing a package of measures for its June meeting, including cuts in all its interest rates and steps to fight the risks of deflation. 

"The package...the ECB appears to be preparing is welcome... but the overall steps are likely to be too small to make a real difference," said Nick Kounis, economist at ABN AMRO.

"More aggressive easing than the ECB currently seems to be considering would help from that perspective," he added.

German quarterly growth of 0.8 percent marginally exceeded forecasts and was double the pace at the end of 2013. The zero growth in France was a disappointment compared with expectations of 0.2 percent growth.

Inventory changes and public spending were the only factors which kept the French economy from contracting while Germany's performance was driven largely by domestic demand, French and German statistics office data showed.

France will now need 0.5 percent growth each quarter to meet a government forecast for 1 percent growth in 2014, Natixis Asset Management chief economist Philippe Waechter said.

"France's public finance plan has been built on the 1 percent growth forecast. If we don't achieve it, France will not meet its (debt and deficit) targets for 2014 and 2015," Waechter said. Missing the deficit targets again is likely to put Paris on a collision course with European Union rules under which it has to cut its deficit below 3 percent of GDP by 2015.

France is not the only euro zone member in the doldrums.

Italy defied growth expectations and contracted 0.1 percent, denting a fragile recovery begun at the end of last year when the country finally put an end to its longest recession since World War Two. [ID:nL6N0O12NT]

The euro zone growth outlook for the second quarter was poor too, which will not help reduce the risks of deflation.

"We believe GDP growth is unlikely to be stronger in Q2 than in Q1. This 'recovery' remains far too weak to halt deflationary pressures," said ING's Vanden Houte.

Germany expects domestic demand to drive growth of 1.8 percent this year and Finance Minister Wolfgang Schaeuble said that everything pointed to a broad economic pick-up.

Meanwhile France is facing a public sector strike by the hardline FO labour union over civil service pay freezes - a reminder of the difficulties of enacting reform and making the French economy more competitive.

Greece, after four years of tough reforms introduced in exchange for a 240 billion euro bailout, continued to shrink year-on-year in the first quarter, but at the slowest pace since early 2010, adding credibility to expectations that Athens will limp out of a six-year recession this year.

The silver lining is the absence of pressure from the markets, with borrowing costs for many euro zone countries at record lows.


DON'T BLAME THE EURO

The ECB has said a strong euro is one of its concerns, given the downward pressure it puts on import prices and exports.

France wants euro zone governments to take action on the currency and has called for negotiations to weaken it after EU parliament elections next week.

But the head of France's Medef national employers association said on Tuesday that Paris should not use its call for a weaker euro as a substitute for much-needed reforms.

Other euro zone countries which have taken strong medicine to improve competitiveness are starting to see the benefits.

Spain reported first quarter GDP growth of 0.4 percent two weeks ago, giving a year-on-year expansion of 0.6 percent, the strongest in three years. The Spanish government upped its 2014 growth forecast to 1.2 percent from a previous 0.7 percent.

In global terms, much depends on demand for European goods from China, but there are positive signs elsewhere.

Japan clocked its fastest pace of growth in more than two years in the first quarter, raising hopes the economy will have enough momentum to tide over an expected slump following an April 1 sales tax hike. 

And the United States is expected to bounce back from a weather-ravaged start to the year

Source:  Reuters

U.S. jobless claims sink 24,000 to 297,000

The number of people who applied for U.S. unemployment benefits fell by 24,000 last week to 297,000, marking the lowest level since May 2007, the government said Thursday. Economists polled by MarketWatch had expected initial claims to total 321,000. The second straight big drop in new claims is probably related, at least in part, to a late Easter holiday. Easter fell on April 20 this year compared to March 31 in 2013, a big gap that makes it harder for the government to seasonally adjust its numbers before and after the holiday. Still, claims have been hovering near post-recession lows for most of 2014 and the latest report is another sign that the pace of layoffs remains extremely low. The average of new claims over the past month fell by a smaller 2,000 to 323,250. The monthly figure smooths out the jumpiness in the weekly data and offers a better look at the underlying trend. Also, the government said continuing claims decreased by 9,000 to a seasonally adjusted 2.67 million in the week ended May 3. Continuing claims reflect the number of people already receiving benefits. Initial claims from two weeks ago, meanwhile, were revised up to 321,000 from 319,000. 

Source: marketwatch

NBG share offering oversubscribed

  The share offering was substantially oversubscribed, confirming a strong interest by institutional investors in National Bank,” announced NBG. NBG officials stated that major foreign investors such as Fidelity, Pacific Investment Management Co.(PIMCO), and York Capital, were among the buyers of the stock.

Source: Emerging Markets

VimpelCom Rout Seen Extending as Ukraine Saps Currencies

VimpelCom Ltd. (VIP), the worst performer among the most-traded Russian shares in the U.S. this year, will probably keep falling as weakening currencies in two of its biggest markets erode earnings, according to IFC Metropol.

Ukraine’s hryvnia has sunk 31 percent since the nation’s bloody standoff with Russia began in November, while the ruble is down 4.6 percent. Those losses, the worst among major eastern European countries, are cutting into the wireless phone company’s dollar-based financial results.

The company yesterday lowered its 2014 sales and earnings targets after trailing analysts’ estimates in the first quarter, citing increased competition and currency declines. VimpelCom, which is listed on the Nasdaq Stock Market, fell 5.4 percent to $7.81 in New York. It was the worst performance on the Bloomberg gauge of the most-traded Russian shares in the U.S, which rose 0.2 percent. The wireless provider has plunged 40 percent this year, compared with the index’s 17 percent decline.

Revenue and earnings before interest, taxes, depreciation and amortization will drop by a “low to mid-single digit” percentage this year, the company said. It had previously predicted both would be “stable.”

The ruble has gained 5.8 percent from this year’s low on March 14 and traded yesterday at 34.618 per dollar. The hryvnia fell 19 percent during the period to 11.93.

The company, which is controlled by the Russian billionaire Mikhail Fridman, operates in more than a dozen countries. About 39 percent of its 2013 revenue came from Russia, its largest market, data compiled by Bloomberg show. Ukraine was the fourth-largest, accounting for 7 percent of sales.

VimpelCom sank to the lowest since July 2012 on trading volume about 2.9 times the average of the past three months. OAO Mobile TeleSystems (MBT), Russia’s biggest mobile phone company, gained 1.5 percent to $17.61 in New York. OAO MegaFon (MFON), the second-biggest, increased 2 percent to $27.35 in London.

VimpelCom’s revenue is expected to decline for third consecutive year in 2014, falling 6.6 percent to $21.1 billion, before resuming growth in 2015, according to the average estimate of 11 analysts surveyed by Bloomberg.

Source: Bloomberg

China to boost production-oriented service industries

China will accelerate the development of production-oriented service industries in a bid to step up industrial restructuring and prop up economic growth.

Priorities will be given to the development of research and design, commercial services, marketing and after-sales services, and will be driven by the market and innovation, according to an executive meeting of the State Council chaired by Premier Li Keqiang on Wednesday.

The move is expected to stimulate domestic demand, boost social employment and improve people's livelihoods, as well as stabilize economic growth, according to the meeting.

Wang Jun, deputy director of the China Center For International Economic Exchanges' consultancy department, said the move indicated the country has started to tap the potential of industrial restructuring to maintain economic growth, rather than direct stimulus to investment and industry.

It will help improve growth quality and efficiency in the long run, he said.

Zhang Zhiqian, researcher with the Investment Research Institute under China Jianyin Investment, also endorsed the move that seeks impetus from structural adjustment, as the dependency on expanding investment would lead to serious side effects including overcapacity and environmental issues.

China's economic growth continued to shrink in the first quarter, as downward pressure still existed. However, the country's rapidly-growing service industry has been emerging as a new engine for its slowing economy.

In the January-March period, China's tertiary sector increased 7.8 percent year on year to 6.29 trillion yuan (1.02 trillion U.S. dollars), making up 49 percent of the country's GDP in the first quarter. Its growth pace was also faster than the 3.5 percent of agriculture and 7.3 percent of the industry sector.

According to the meeting, design and application of new materials, products and techniques will be strengthened. Improvements will be made in information technology and energy saving services, as well as logistics services for manufacturers.

The move will help the sector to move up the value chain, and prompt integrative development of the country's tertiary, agriculture and industry sectors, the meeting said.

"The high-tech production-oriented service industries will accelerate the country's industrial upgrade and prompt 'Made in China' to evolve to 'Created in China'," Zhang said.

In addition, financial services for the manufacturing of construction equipment, delivery vehicles and production line will be promoted, while the country will encourage service outsourcing and the nurturing of high-end talents.

The central government will ease market access to attract social capital to the industries, encouraging Chinese enterprises of the sectors to invest overseas and lifting access restrictions gradually for foreign companies on architectural design, accounting audit and commercial logistics.

Enterprises of research and design, inspection and certification, and energy saving will be allowed tax breaks that have been enjoyed by high-tech companies.

According to the meeting, value-added tax will be promoted to the entire tertiary sector and favorable policies will be introduced to build a sound environment for companies in production-oriented service industries.

In addition, the country will continue to develop service industries concerning daily life, such as health, elderly care and information consumption, in a bid to improve people's well-being and build a new engine for healthy economic and social development.

A draft of the Food Safety Law was approved at the meeting, which requires full supervision, stricter punishment, accountability, increased risk monitoring and improved food safety standards.

The draft is still subject to deliberation of the Standing Committee of the National People's Congress, according to the meeting.

Source: Xinhua

Japan Inc. poised to rake in record profits this fiscal year

Japanese listed companies this fiscal year will likely match or surpass their record total profits from fiscal 2007, underscoring their recovery from the financial crisis and the March 2011 earthquake and tsunami.

The Nikkei tallied pretax profits for companies that have released results for the year ended March 31 as of Wednesday, excluding financial and power companies. Total profits swelled 36% last fiscal year and are seen climbing 2% this fiscal year.Combined fiscal 2014 pretax profits at 1,258 companies are projected at around 29 trillion yen ($281 billion), or 98% of fiscal 2007's figure. Although Toyota Motor and NTT expect profit declines, 62% of businesses are forecasting growth.
Companies that have boosted earnings globally are drawing particular attention. Mitsubishi Heavy Industries is focusing on areas where it can compete worldwide, and it expects its first record profit in 18 years this fiscal year on the back of its strong energy and aviation-related businesses.

Source: NewsOnJapan

WSJ: Interest Rates Sink Globally in Expectation of Stimulus

        The WSJ reports,"global bond rates dropped to their lowest levels of the year Wednesday, as central bankers signaled their determination to jolt the world's largest economies out of their malaise.

Investors piled into U.S., German and British government bonds—used to price everything from mortgages to car loans—driving down their yields. The yield on the 10-year U.S. Treasury dropped to as low as 2.523%, its lowest level in more than six months. In Germany, 10-year bund yields fell to their lowest point in a year.

The persistently sluggish economies in Europe and the U.S. have confounded central bankers and surprised investors, many of whom anticipated that this year would see relatively strong economic growth after years of monetary stimulus. In the U.S., despite rock-bottom interest rates, housing activity remains relatively depressed, companies have yet to pick up hiring and inflation has remained worryingly low.

"The global economy hasn't fired up despite all the heavy monetary stimulus,'' said Mary Ann Hurley, vice president of trading at D.A. Davidson & Co. in Seattle.

The prospect that central banks will continue to inject money into the world's bond markets, as well as enact policies to keep interest rates low, has acted as a green light for the world's bond buyers".

Bank of England Gov. Mark Carney on Wednesday said the U.K. central bank is in no rush to raise interest rates even though some U.K. economic data on manufacturing and employment have been stronger lately.

Mr. Carney's comments came a day after The Wall Street Journal reported that Germany's central bank, which has resisted the idea of further stimulus, is now willing to back an array of measures by the European Central Bank to fight stubbornly low inflation. Ten-year U.K. government bonds fell to their lowest yields since the end of October.

U.S. Federal Reserve Chairwoman Janet Yellen said last week that the U.S. central bank would continue to keep interest rates near zero for a considerable period.

Central banks have spent trillions of dollars buttressing financial markets and the global economy since the 2008 financial crisis. While the Fed has begun tapering its monetary stimulus, it is still buying $45 billion of Treasurys and mortgage bonds each month.

Investors came into this year anticipating rates would move higher as economies picked up steam and as the Fed pulled back stimulus efforts.

The yield on the 10-year U.S. Treasury was about 3% at the beginning of the year, and Wall Street strategists and economists were predicting rates would rise steadily beyond that.

"Bond bears have eggs on their faces this year," said Gary Pollack, who helps oversee $12 billion assets as head of fixed-income trading in New York at Deutsche Bank AG's private wealth management unit.

This year through Tuesday, U.S. Treasury bonds have handed investors a total return of 2.18%, according to data from Barclays PLC. The S&P 500 has returned 3.4% in the same period, while the Dow Jones Industrial Average has returned 1.7%, according to FactSet and including price gains and dividend payments.

German government bonds have delivered investors a return of 3.5% so far this year and U.K. government bonds 3.17%. Total return includes price appreciation and interest payments and is calculated in local-currency terms.

By the end of the day Wednesday, the 10-year U.S. Treasury note was 21/32 higher in price, yielding 2.544%. In Europe, the yield on the 10-year German government bond fell to 1.37%, while the yield on the 10-year U.K. government bond dropped to 2.583%.

Analysts say "Everybody at the start of the year bet on higher yields," 

S&P not very optimistic on Greek Banks

WSJ: Tencent Mints Money From Mobile

         The WSJ reports,"Tencent's first-quarter earnings were complicated by this year's deal-making frenzy, but underlying trends were promising. Net profit surged by 60% from a year earlier. This was partly due to one-time gains from the disposal of various investments, including two e-commerce units that Tencent traded to online shopping site JD.com as part of a complex deal where it took a 15% stake in JD. Revenue rose a healthy 36% from a year ago.

Crucially, Tencent's mobile strategy is paying off. Its flagship WeChat mobile-messaging service, similar to Facebook's  WhatsApp, and a second messaging app QQ Mobile, were major drivers of top-line growth. Revenue from games on the two platforms tripled from the previous quarter to more than 1.8 billion yuan ($288.9 million), or nearly 10% of total revenue. Analysts had expected a figure of just around 800 million yuan.

Tencent shares soared early this year on excitement over WeChat, as analysts theorized it alone could be worth more than $30 billion, or around a quarter of Tencent's market capitalization. Expectations that Tencent's mobile-payments platform would take a big slice of all of China's retail transactions was another justification for its lofty valuations.

The stock is now down over 18% from its high in March. New regulations on mobile payments snuffed out some of the excitement, as did the generalized pullback in global tech stocks. China's regulatory framework for Internet finance still hasn't been settled. And now that Tencent has outsourced much of its e-commerce operations to JD, the two companies need to show they can grow margins and take on the leading player in that space, rival Alibaba.

But with some froth taken out of Tencent's shares, investors can concentrate less on far-flung scenarios and take solace that mobile monetization has begun. That's a message worth receiving".

EUROZONE INDUSTRIAL PRODUCTION CONTRACTED BY 0.3 PER CENT IN MARCH

The Eurozone's industrial production contracted at a 0.3 per cent month-on-month pace in March, according to Eurostat.

Versus a year ago output was 0.1% lower. 

Economists had been expecting a fall of 0.3% on the month and of 0.9% in comparison with a year ago.

In terms of monthly rates of change production was lower across all sub-sectors, led by a 0.4% decline in energy and another 0.8% decrease, the largest one, in the production of intermediate goods.

In terms of quarterly rates of change industrial output was 0.2% higher after having expanded by 0.5% over the previous three months. 

Production levels diminished in all the main countries within the single currency area: Germany, France, Italy and Spain. 

Source: LiveCharts

WSJ: China Gets Upper Hand in Russia Gas Deal

            The WSJ reports,"Vladimir Putin is due in Beijing this month, and the conversation between the ex-superpower and the budding one is sure to involve energy. The Ukrainian crisis has Europe, which buys 75% of Russia's gas exports, talking loudly about finding new sources. That means Moscow needs to court new buyers. It also needs to find new avenues of capital, considering a net $51 billion—equivalent to 2.5% of GDP—flowed out of the country in the first quarter.

On both counts, China is Russia's best bet. With a goal of doubling its gas market by 2020, China is one of the fastest-growing energy markets in the world. Plus, Beijing offers an alternative to Western funding. It has already struck financing deals worth more than $300 billion for long-term oil supply with Rosneft, says Citigroup.That should convince Russia's state-controlled Gazprom  that it needs China National Petroleum Corp. more urgently than the other way around.

The two sides have been negotiating a 30-year gas-supply deal for about a decade, but have been stuck over the price. Gazprom wants something linked to the price of oil, the way it sells in Europe. Yet that rests on the premise that gas and oil compete as fuels. China has likely resisted the idea since in its critical power-generation sector, the alternative to gas isn't oil, but ultra-cheap coal.

The problem is the coal market is nowhere near as liquid as oil, so another option is to link to prices at gas hubs. CNPC had previously wanted to base its price off U.S. benchmark prices. But that is unrealistic given the U.S. gas market's relative isolation from the rest of the world. Gazprom said both sides agreed not to use that benchmark.

Until recently, market prices weren't conducive to a deal. Russia charged its European customers about $12.5 per million British thermal units two years ago. China paid about $10 per mmBtu for Central Asian gas. Russia could afford to say no to matching the lower price, perhaps because it thought China needed gas badly, partly to combat pollution.

In the past year, though, CNPC has gained the upper hand. Gazprom's European price has fallen to about $10.8 per mmBtu as of April, as it offers discounts to compete against Norwegian and African supplies. Meanwhile, U.S. gas exports are set to grow on the back of its shale revolution, possible given added impetus by a desire to reduce Russia's market power amid the Ukraine crisis. This gives China more options down the road. And as for China's desperation to tackle pollution, a gas deal wouldn't clear the skies overnight anyway.

Gazprom may also need to tap Chinese financing. It has to spend $80 billion to build the China pipeline and associated projects, according to James Henderson at the Oxford Institute of Energy Studies. That gives CNPC another bargaining chip".

Fitch Ratings: OAO Lukoil currency outlook at "BBB" with negative outlook

U.S. wholesale prices surge in April to 0.6%

U.S. wholesale costs posted the biggest increase in April since the fall of 2012 as they rose sharply for the second straight month, suggesting that price pressures might be building a bit after an extended period of extremely low inflation.

The producer price index jumped a seasonally adjusted 0.6% last month following a revised 0.5% increase in March, the Labor Department said Wednesday. Economists polled by MarketWatch had expected a 0.2% increase.

The index also showed wholesale costs appear to be accelerating. Producer prices have risen 2.1% in the past 12 months, up from 1.4% in March and just 0.9% in February.

Yet economists caution against reading too much into the PPI because the index underwent its first major makeover in years at the start of 2014. The index has been quite volatile in its new incarnation.

Excluding the volatile categories of food, energy and trade, core wholesale prices rose a smaller 0.3% last month, the Labor Department said Wednesday.

The price of goods jumped 0.6% in April as the wholesale cost of food and gasoline rose.

The price of services also increased 0.6%, led by higher costs for airline tickets. Grocery and liquor-store costs advanced as well.

Personal consumption, a new index designed to foreshadow changes in the consumer price index, surged 0.7% in April.

Source: marketwatch

Pacific Rubiales: Mexico probably represents the “best short-term opportunity”

Pacific Rubiales Energy Corp. (PRE), Latin America’s largest non-state oil producer, hasn’t been approached by a potential buyer, Chief Executive Officer Ronald Pantin said today.

The appointment of a strategic adviser is limited to the future of the company’s midstream assets, Pantin said during an investor event in New York.

“We have not been approached by anyone,” the CEO said. “We have these guys for Pacific Midstream.”

Pacific Rubiales is seeking to raise as much as $1.4 billion in asset sales to trim debt built up through at least 10 acquisitions of other companies and oil-block stakes in the past two years, Pantin said in a Jan. 28 interview. His latest comments come after people familiar with the matter told Bloomberg in March that the Bogota-based company had hired Bank of America Corp. (BAC) to review its strategic options.

The company plans to sell shares in infrastructure assets next year, Pantin said. That’s after it accepted an offer for a 38 percent stake in its Pacific Midstream investment vehicle, which includes pipeline and energy transmission assets, at the start of the year.

Pantin said Mexico probably represents the “best short-term opportunity,” the company has.

“We have been in Mexico for two years now, not only looking at regulations, laws, possible contracts, but also reservoir levels.”

Pacific expects to be among the first companies to sign contracts in Mexico and is open to a joint venture with Petroleos Mexicanos, the state energy company.

Bloomberg: Asian Stocks Index Extends Biggest Rally in Seven Weeks

Asian stocks rose, with the regional benchmark index extending its biggest rally in seven weeks yesterday, as U.S. equity gauges held at record highs and investors weighed earnings.

The MSCI Asia Pacific Index rose 0.3 percent to 139.72 as of 10:56 a.m. in Tokyo with all but one of its 10 industry groups climbing. The measure jumped 1.1 percent yesterday, the biggest advance since March 24.

“The U.S. economy and corporate earnings are strong, which are reflected in that stocks haven’t fallen from record highs,” said Takahiro Nakano, a Tokyo-based senior strategist at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank by market value. In Asia, “earnings have been good, but companies are conservative about their outlook, making it hard for investors to raise hopes.”

Among companies on the Asian gauge that reported quarterly results from April 1 through yesterday and for which Bloomberg had estimates, 52 percent beat profit expectations, according to data compiled by Bloomberg.

Japan’s Topix (TPX) index added 0.1 percent as the yen traded at 102.20 per dollar after falling a third day yesterday. South Korea’s Kospi index rose 0.7 percent. Australia’s S&P/ASX 200 Index fell 0.2 percent and New Zealand’s NZX 50 Index added 0.2 percent. Taiwan’s Taiex index advanced 0.1 percent, while Singapore’s Straits Times Index increased 0.9 percent as the market reopened following a holiday.

Hong Kong’s Hang Seng Index advanced 0.3 percent. The Hang Seng China Enterprises Index of mainland companies traded in the city added 0.5 percent. The Shanghai Composite Index was little changed.

The Asia-Pacific gauge traded at 12.7 times estimated earnings as of yesterday compared with 16.1 for the S&P 500 and 15.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

China Telecom seeking private investment: paper

 State-owned China Telecom Corp Ltd , China's third-largest carrier, is seeking private investment for new businesses, the official English-language China Daily newspaper reported on Wednesday.

"Joint ventures and acquisitions are both possible ways for us to cooperate with private firms," China Daily quoted China Telecom chairman Wang Xiaochu as saying.

China's government is pushing reforms that would introduce mixed public and private ownership in state-owned enterprises, such as China's three telecommunications carriers.

Source: Reuters

Global economy still faces considerable risks: leading economic organizations

 World economy still faces various risks despite its recent improvements, and further efforts on growth and consolidation are needed, said heads of world's leading economic organizations on Tuesday.

High unemployment, significant output gap, low investment, rising inequality and slowdown in emerging economies still have an impact on global growth prospects, said chiefs of the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), the World Bank, the International Labor Organization (ILO) and the World Trade Organization (WTO) in a joint statement with German Chancellor Angela Merkel released after their meeting in Berlin.

"The global economy has noticeably improved, but is still far from a robust, sustainable growth," the statement said.

"Considerable risks of various kinds remain," said the leaders. "The debt level of most industrialized countries remains too high at the level of the state, enterprises and households. In many countries, the unsatisfactory development of the labor market must continue to be addressed urgently."

They urged governments to continue their efforts on promoting growth and ensuring fiscal consolidation.

Structural reforms should continue to be implemented in the euro zone to strengthen the stability and competitiveness in the common currency area.

In the United States, a credible medium-term budget is needed for its fiscal consolidation, as the country still suffers from a high level of debt.

Emerging economies, meanwhile, must retain their strategies to ensure sustainable growth, improve adaptability to external shocks, and to reduce poverty.

According to IMF, global economy would grow by 3.6 percent in 2014 and by 3.9 percent in 2015.

Source: Xinhua

China's Jan.-April industrial added value up 8.7 %

 China's industrial added value expanded 8.7 percent year on year in the first four months of 2014, official figures revealed on Tuesday.

On a month-to-month basis, industrial added value in April also rose 8.7 percent from a year earlier and 0.82 percent from the previous month, the National Bureau of Statistics said.

Source: Xinhua

China's fixed-asset investment up 17.3 %

China's urban fixed asset investment surged 17.3 percent year on year to 10.71 trillion yuan (1.74 trillion U.S. dollars) in the first four months, the National Bureau of Statistics said Tuesday.

The growth rate was 0.3 percentage points slower than that for the first quarter.

Source: Xinhua

China's April retail sales up 11.9 %

 China's retail sales grew 11.9 percent year on year to 1.97 trillion yuan (322.97 billion U.S. dollars) in April, the National Bureau of Statistics (NBS) said on Tuesday.

In the first four months, China's retail sales grew 12 percent year on year to 8.18 trillion yuan. The growth rate was the same as that in the first quarter.

Retail sales in rural areas outpaced those in cities and towns.

Sales in rural areas rose 13.2 percent in the first four months from the same period last year. Retail sales in urban areas climbed 11.7 percent year on year in the same period.

The Consumer Price Index (CPI), a main gauge of inflation, increased 1.8 percent year on year in April, much lower from the 2.4 percent in March, said the NBS last Friday.

Largely because of the relatively low CPI, retail sales remained flat in the first four months as in the first three months, according to Niu Li, an economist at the State Information Center, which is under the National Development and Reform Commission

Source: Xinhua

WSJ: Oil Exports Face Washington Bottleneck

U.S. benchmark oil prices got a jolt upward Tuesday morning after Energy Secretary Ernest Moniz, speaking at a conference, said the issue of allowing exports of crude was "under consideration." This, it seems, matters more than another set of weak economic data from China or news that Libyan oil output could double after protests there ended.

Allowing more exports of U.S. crude oil, effectively banned since 1975, would raise the price of grades like West Texas Intermediate toward that of foreign benchmarks such as Brent. Rising U.S. output of light, sweet oil is running into the constraint of domestic refineries built to use a lot of imported heavy, sourer oil. The result is a landlocked glut of crude oil, capping prices and potentially discouraging some future drilling.

But anyone expecting export policy to change soon should remember that this is an election year. The first thought of many voters, especially those recalling gas-station lines in the 1970s, is that exporting U.S. oil will raise pump prices. It probably wouldn't, given that products such as gasoline are influenced more by global prices. Allowing exports could actually help to curb prices over time by encouraging more U.S. drilling and supply.

Try explaining that in a sound bite, though. Given that, plus the fact that oil exports figure large in the opposition to the Keystone XL pipeline, and there is little incentive for the White House to weigh in now. The same goes for many members of Congress.

Moreover, the issue of oil exports divides the industry itself. Refiners, who can freely export refined products, benefit from the ban holding down the cost of their main input, crude oil. This, too, muddies the political waters. As Kevin Book at ClearView Energy Partners points out, Sen. Mary Landrieu heads her chamber's energy committee and has long supported natural-gas exports. However, her state, Louisiana, also hosts nearly one-fifth of U.S. refining capacity. Facing a hard re-election battle, she may be reluctant to advance the oil-export cause too much.

Lithuania gets a better natural gas deal with OAO Gazprom,price will fall at least 20%

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