Repsol anunció la venta de su participación de 10% en un gasoducto en Perú a Enagas SA

La española Repsol anunció la venta de su participación de 10% en un gasoducto en Perú a Enagas SA, también de España, por 219 millones de dólares.

Repsol SA indicó el viernes que la venta de sus acciones en el gasoducto de Transportadora de Gas del Perú le representará alrededor de 75 millones de dólares en plusvalías. El acuerdo será completado en los próximos meses, señaló en un comunicado.

TGP transporta gas natural y licuado desde los campos de Camisea en el interior de Perú hasta la planta LNG en Pampa Melchorita, 170 kilómetros (110 millas) al sur de Lima.

Repsol ha informado que sus ganancias netas el año pasado cayeron 48% a causa de interrupciones de la producción en Libia y márgenes más estrechos en las operaciones de refinerías.

Las acciones de Repsol cayeron 2,1%, a 3,8 euros, en transacciones de la tarde en la bolsa de valores de Madrid.

Fuente: Associated Press

Google Has Removed Multiple Third-Party Snapchat Apps From Its Play Store

The defining characteristic of Snapchat — disappearing photos – has (inevitably) led to a swathe of third party apps that allow Snapchat users to save Snaps, rather than being forced to watch them fade away.

Although speedy Snapchat users can screengrab a Snap within the app its interface does tell the sender that their Snap has been saved. However third party hacks allow people to save Snaps without the sender being notified, and thus undermine the intimate sharing proposition that’s core to the whole service.

So, with that in mind, it’s interesting to note that some third party Snapchat photo-saver apps built for the Android platform have been taken down from Google’s Play Store. Call it the mystery of the suddenly disappearing Android Snapchat hacks.

According to an eagle-eyed tipster, Mountain View appears to have recently spring-cleaned a swathe of Snapchat hacks from its Play Store. ”I noticed yesterday that almost all of the third party Snapchat apps were pulled from the app store. There used to be dozens of them, and today there are 2 or 3 left,” said the tipster.

One of the disappearing apps, Snapcapture for Snapchat posted an apology to users who had paid for its app on Facebook — along with a link where people can circumvent Play’s ban and download a build from its own servers.

The developer of the app, innovationZ, has set its email to auto respond with the following message:

Dear customer,
Google removed our application “SnapCapture for Snapchat” from the Play Store due to violation of the developer agreement. We are truly sorry to announce that we decided to stop any distribution and sale of “SnapCapture for Snapchat”.
Customers who already paid for the service can still access it by in

stalling this update:http://innovationz.de/SnapCaptureNoRoot_support.apk

 Stay tuned and like us on Facebook where we keep you updated!

https://www.facebook.com/snapcaptureappBest regards

innovationZ

Another third party app the tipster spotted as being pulled from Google Play is SuperSnap for Snapchat.

Source: TechCrunch

China's Year of the Horse: Spring Festival Gala

                                 Shade choreography,dance and music.
                                 Eastern Creativity. Short film big accomplishment.

China's Year of the Horse: The Spring Festival Gala

China's Year of the Horse: The Spring Festival Gala

China: The Spring Festival Gala

China: The Spring Festival Gala 2014

                                    Superior Acrobatics,harmonic couple and movements,they
                                     can turn into one. Finally gracious movements like butterflies.

Argentina's unpredictable monetary policy. Ay,Cristina!

 In the midst of Argentina's biggest currency devaluation in a decade, with the peso's plunge rattling financial markets worldwide, President Cristina Fernandez's first public address in weeks was silent on the matter.

She didn't say a word about the currency, but instead took to national television last week to announce the latest government measure - a new form of high school scholarship.

While the president has avoided mention of currency policy, the increasingly unpredictable messages from her ministers have amplified the risks weighing on the peso.

An announcement last week suggesting long-awaited relief from currency controls for ordinary Argentines in practice meant a trickle of U.S. dollars for an affluent minority.

Officials also promised to cut the tax rate on spending dollars overseas, but revoked the measure just two days later.

Critics say the government's erratic decision-making is the biggest risk looming over the volatile peso, as the policies that triggered the currency crunch have only become more contradictory as the crisis unfolds.
Even the dynamics of the peso's 15 percent drop last week are shrouded in uncertainty. At the start of the historic slide, on Wednesday, there was no government intervention, but by Thursday the central bank was intervening heavily to hold the line, as it has this week. Officials blamed a "speculative attack" in the tightly controlled interbank market.

With the right mix of policies, the devaluation could have helped boost exports and brought relief for Argentina's dwindling foreign reserves. But the chaotic approach has meant the central bank is burning more quickly through reserves and there is even more pressure on perilously high inflation.

As veterans of previous crises, Argentines have assumed a familiar defensive crouch, hoarding any dollars they have and spending pesos like they are going out of style.
Trade on a major grains exchange has dried up as farmers stockpile their soybeans rather than taking pesos. Goods are backing up at the border as officials try to slow the impact of more expensive imports.

And ordinary supply chains are frozen with uncertainty in a country where the dollar is a reference for everything from real estate to raw materials.

"You pick up the phone and 90 percent of your suppliers will tell you they're out of stock," said Gaston Luccisano, who runs a kitchen goods store in the middle-class neighborhood of Caballito. "The guy could be staring at a stack of plates but he won't sell until he knows what it will cost to restock."

Many economists say officials are obsessing over symptoms while aggravating the illness with an improvised approach.

Economy Minister Kicillof, a former professor of Marxist, spent this week chasing down what he calls speculative price gouging by major corporations.

In daily meetings with business leaders, he and top officials have warned cement makers to avoid "unpatriotic" pricing and forced retailers to roll back new price tags.


BLEEDING RESERVES

Devaluations can help exporters and eventually slow the drain on Argentina's foreign reserves, which fell over 30 percent in the past year to below $29 billion. But shock and uncertainty over the measure has also fueled the rush for dollars.

Reserves have fallen more than $2.3 billion so far this month as the central bank fights to defend the new exchange rate

- more than ten times what was lost in all of December.
Consumer prices have risen about 4 percent in four weeks, according to economic consultancy Elypsis, who put the annual inflation rate near 30 percent. Private economists reported inflation of about 25 percent last year - more than double the price increases recognized in the government's official index.

To interrupt the inflationary feedback loop, the government would need a coordinated program to cut back deficit spending, stop the money presses at the central bank and keep wage hikes under control, economists say.

The central bank has taken some tentative first steps since the devaluation, hiking a key interest rate this week and signaling tighter monetary policy.

The best case scenario, according to Ritondale of Econviews, would be interest rate hikes triggering a sharp economic slowdown. The economy could shrink 3 or 4 percent this year, he said, cooling inflation and restoring enough of a trade surplus to replenish foreign reserves.

That would be an orderly adjustment compared to the crisis set off in 2001, when a string of presidents resigned amid riots and looting as the unemployment rate climbed to more than 20 percent.

There is little or no risk a similar financial collapse, as Argentina's exclusion from international credit markets since then has left the country with few foreign debts.

Most Argentines are also numbed by years of an overheating economy, discussing the latest prices like the weather. "So, have you bought anything?" is a common conversation starter.

But the potential for social conflict is real.

The test may come in March, when labor talks will have powerful unions out in force, threatening strikes and protests to keep wages rising with consumer prices. Labor disruptions are as regular as the seasons in Argentina, but broader economic frustration this year could make things volatile.

The pressure would be difficult for an avid inflation hawk - and the president is anything but. At a political rally after a stinging primary defeat in last year's midterm elections, Fernandez showed her colors.

"Do you know what it means when they say we should govern according to inflation targets?" she shouted to flag-waving supporters. "I will translate it for you. It means they want to cap your wages."
If the government's fight against inflation has been inconsistent, currency measures have been downright contradictory.

Two years ago, officials attacked the "dollarization" of the economy, discouraging the listing of apartments and cars in anything but pesos. Last year they reversed course, printing central bank paper indexed to the dollar and facilitating dollar-denominated commerce despite the scarcity of greenbacks.

In May, Fernandez dismissed critics suggesting the possibility of a devaluation: "They are going to have to wait for another government."

Yet last week her government oversaw the peso's biggest daily drop since 2002.

The recent loosening of currency controls was equally unexpected.

Last week, officials announced access to dollars for private savings for the first time in two years, creating even more demand for scarce foreign reserves. Until then Argentines could only turn to far more expensive dollars on the black market.

But by Monday it became clear the new currency market would be tightly controlled, with just one in four Argentines meeting salary requirements and only a fifth of their wages eligible.

Officials also promised last Friday that the tax rate on Argentines' overseas credit cards bills would fall in line with the new market for dollar savings.

That is, until Kicillof scrapped the idea two days later.

While some have read the waffling as signs of moderation, others see a government without a plan.

Source: reuters

Keystone XL poses little climate risk: US State Department

   As Expected   the U.S. State Department found the Canada-U.S. oil pipeline would not greatly increase carbon emissions because the oil sands in Alberta will be developed anyway, a department official said today on a call with reporters.

Rumours swept through Washington late Thursday that the long-delayed review of the 1,179-mile (1,900-km) pipeline to bring oil from Canada to Nebraska would finally be released as soon as Friday.

"The Environmental Impact Statement is in the final stages of preparation and we anticipate a release of the document soon," a senior State Department official said late on Thursday, speaking on condition of anonymity.

The comment gives a clearer insight into where the long-awaited assessment stands. One government official said the overdue report, part of a process lasting more than five years that has strained relations with Ottawa, would be released on Friday.

Supporters say the TransCanada Corp project would create thousands of jobs and reduce U.S. reliance oil imports from nations that are less friendly than Canada. They also point to U.S. government reports about the dangers of moving crude oil by rail as an alternative to the pipeline.

Critics of the pipeline plan say it would harm the environment and hasten climate change by promoting oil-harvesting methods in Alberta that produce high levels of carbon dioxide emissions.

After several more steps that could take months, the final word on Keystone will come from the president.

A decision in favour of the pipeline could undermine Obama's environmental credentials and anger activists who are some of the Democratic Party's strongest supporters. A decision against the pipeline could undercut Obama's pledge to boost employment and U.S. energy security while alienating an important international ally and oil supplier.

REPORT MAY DISAPPOINT ENVIRONMENTALISTS

Canadian officials said this month they expected the report to come out soon after Obama's annual State of the Union speech, which took place Tuesday.

And the American Petroleum Institute, the oil industry's top lobbying group, has predicted that the report could be released this week, citing administration sources.

"We're expecting to hear the same conclusion that we've heard four times before: no significant impact on the environment," Jack Gerard, API president, told Reuters in an interview last week.

Most indications for some time have been that the updated report will hew close to last year's draft, which said the project will not add substantially to carbon emissions.

That is sure to disappoint environmentalists. But the report is likely to show a nuanced interpretation of the environmental benefits and costs of Keystone.

The project involves building a pipeline from Alberta, Canada, to Steele City, Nebraska, where it would connect with a previously approved line. That would create a system that could move more than 800,000 barrels of crude per day from Alberta's oil sands to refineries on the U.S. Gulf Coast.

The State Department official emphasized that the release of the final environmental statement for the pipeline was "not a decision but another step in the process prescribed by the executive order."

The release of the environmental review starts the clock running on another review period, during which eight U.S. federal agencies will have 90 days to comment on whether Keystone XL is in the national interest.

Some agencies, including the Departments of Defense, Commerce, and Energy, are expected to focus on the energy security and economic case for the pipeline.

But the Environmental Protection Agency and the Department of Interior, which have expressed reservations about the pipeline in public comments, are among the other bureaus that will weigh in.

Sources on Capitol Hill and in the administration said recent talk about the review was that the environmental community would be disappointed, suggesting a favorable view, on net, of the pipeline's benefits.

But the findings will not be a one-way street. "Environmentalists will likely be disappointed until they read the whole report," said an official who had seen a draft but declined to discuss the findings in detail.

A report pending from the State Department's independent Inspector General was likely to be issued at the same time as the State Department's review, sources said.

The Inspector General has been investigating a possible conflict of interest surrounding the company that did the original environmental review, Environmental Resources Management.

Source: BNN

Breaking News: Keystone XL pipeline would have little impact on climate: State Department

The State Department on Friday released its final environmental review of the Keystone XL pipeline project, which would allow delivery of up to 830,000 barrels of oil a day from Western Canada and the Bakken Shale Formation to Steele City, Nebraska. The review is the last step before the State Department gives its final determination on the controversial project. The report concludes the pipeline "is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States."

Source: Marketwatch

China Voice: Japan's history education tricks "false and dangerous"

Japan's revision of teaching manuals was a false and dangerous move that not only risks generations of confrontation but also threatens regional development and will eventually harm Japan itself, experts said on Thursday.

Japanese Education Minister Hakubun Shimomura on Tuesday announced that the ministry has revised the country's teaching manuals for junior and senior high schools to claim areas disputed between Japan and China and between Japan and South Korea.

The new manuals describe the disputed territories as "Japan's integral parts," including the Diaoyu Islands, which are inherent territories of China.

Tokyo and Seoul are also at odds over a pair of islets in the Sea of Japan. They are known as "Dokdo" in South Korea and "Takeshima" in Japan.

Zhu Yan, a professor of political science and economics at Takushoku University in Tokyo, said that the revision of Japan's teaching manuals this time was to show current Japanese Prime Minister Abe Shinzo's right-leaning, tough attitude toward territorial issues.

"Japan now has many textbooks and schools may choose by themselves. But once the guidelines for writing textbooks are revised and Abe's provocative act becomes social consensus, it will be dangerous for the situation," said Zhu.

So far, there are still a number of scholars and politicians in Japan who believe that Japan should admit the existence of territorial disputes and reflect on past aggression. Murata Tadayoshi, honorary professor at Japan's Yokohama National University, has said that the disputed islands between Japan and China are not Japanese inherent territories.

Banri Kaieda, head of Japan's main opposition party, the Democratic Party of Japan (DPJ), also blasted Abe's foreign policies in a Diet session on Tuesday, saying the current government has taken provocative actions that have further escalated tensions between Japan and neighboring countries.

Wang Taiping, former Chinese ambassador to Japan and now researcher at the China Institute of International Studies, said the status quo is "serious." Wang rebuked Japan for teaching the next generation false claims to the island.

Diaoyu Island and surrounding islands have been Chinese territory since ancient times, a fact that should be properly dealt with by Japan, according to Wang.

"What's more, beneath the Diaoyu Island textbook dispute is Abe's deeper-rooted dream of achieving his ultimate goal through rewriting history," he said.

Abe has been walking a path that aims to challenge post-war order, rewrite Japan's peaceful constitution, re-militarize Japan and regain the so-called "greatness" of the island nation, without the burden of history, Wang said.

But those attempts to manipulate public opinion are doomed to fail, as "lies can't cover up the facts, and there will be no future for those who do not face up to history," said Wang.

Just three days ago, during the 70th anniversary of the liberation of Auschwitz and the end of the siege of Leningrad, German President Joachim Gauck wrote a letter to his Russian counterpart, Vladimir Putin, to apologize for the suffering inflicted by German troops.

"Whereas Japan's behavior was just the contrary. It reflects the militarism of the country. A nation that cannot face up to history is hopeless," said Fu Qiang, a lawyer and president of a group providing legal support for those who were captured or enslaved by the Japanese during World War II in east China's Shandong Province.

Business leaders also expressed concerns over Abe's move to revise the teaching manuals.

Bao Shuping, CEO of Shanghai Hyron Software Co., Ltd., whose major shareholders are Japan's Omron Corporation and Shanghai Jiaotong University, said that the most desirable thing for enterprises is stability in Sino-Japanese trade and business exchanges.

"We disagree with Mr. Abe's wayward act in turning 'right,' which has added fuel to the already tense relations," Bao said.

"Peaceful relations and sustainable non-governmental exchange should be cherished and sustained," said Bao.

Another Japan-related businessman in China who preferred not to disclose his name or company said strained political ties between the two countries will have varying effects on different industries.

"Japan's electronic devices and cars have certain advantages, but if their sales fall in China, their loss will be huge," he said.

Source: Xinhua

Turks hoard dollars fearing lira rout will continue

Turkish households and firms are hoarding dollars, suggesting they have little faith the lira will be spared a further emerging markets sell-off despite a massive rate hike this week.

It is adding to pressure on Prime Minister Tayyip Erdogan as elections near.

The central bank raised interest rates by around 500 basis points at an emergency meeting on Tuesday despite Erdogan's vocal opposition, stunning markets and causing a spike in the battered currency. [ID:nL5N0L24FE]

But the lira has since erased much of those gains, returning to where it was just before the rate hike. It is still some way from Monday's record low of 2.39, however, trading at 2.2735 to the dollar .

Locals' forex holdings rose 2 percent to $122 billion in the week to Jan. 24, jumping 13 percent year-on-year, according to data from the central bank released on Thursday, suggesting they are not selling dollars as they did in the past in currency crises to benefit from a cheaper lira.

"Corporates have started buying forex for hedging purposes as they think the lira will not appreciate," said a senior forex manager at an Istanbul bank.

"Moreover, individual investors and households - who used to sell as much as $10-15 billion whenever the lira depreciated - are hoarding dollars and even increasing their holdings, piling extra pressure on the lira," he said.

Ratings agency Moody's said on Friday the pressure on the currency was likely to persist despite the central bank's actions, which it said had also significantly weakened Turkey's growth prospects.

"Locals continue to accumulate FX," said Istanbul-based TEB-BNP Paribas strategist Erkin Isik, estimating Turks' total forex holdings had risen some $5 billion in the past three weeks.

"It will be more difficult for the central bank to reverse this mood of local investors, if global risk sentiment remains weak," he said.


RACE AGAINST TIME

Erdogan has said "a Plan B or a Plan C" for the economy may be announced by the government in the coming days or weeks, although his ministers have given no details, beyond saying capital controls are out of the question.

The lira fell 17 percent in 2013 and extended its slide this year as a graft scandal hit the government, heightening investor concern about political stability just as a gradual end to U.S. monetary stimulus dampened appetite for emerging market assets.

The slump means Turks now need more than twice as many lira to buy dollars as they did at the currency's peak six years ago, hitting their pockets as they prepare to vote in a cycle of local, presidential and general elections beginning in March.

The lira's slide has also left Turkish firms with foreign debts badly exposed, forcing them to scrap some investments at a critical time as the government battles the corruption scandal and tries to revive economic growth.

Turkey's leading business group TUSIAD estimates that within just one month Turkish firms' foreign debt has risen 25-30 percent due to the currency weakness and higher risk premiums which push up borrowing costs.

The higher borrowing costs have also raised concerns about banking sector profits. The banking share index <.XBANK> was down 2.3 percent in Istanbul on Friday, underperforming a 1.4 percent decline in the main stocks index <.XU100>.

All this bodes ill for an economy which has seen growth rates of 9.2 percent in 2010 and 8.8 percent in 2011 shrink to just 2.2 percent in 2012 and a projected 3.6 percent last year.

Erdogan has built his reputation around economic success since coming to power in 2002, transforming its reputation after a series of unstable coalition governments in the 1990s ran into repeated balance of payments problems and economic crises.

Mexico central bank holds rate, eyes peso for any inflation impact

Mexico's central bank kept interest rates on hold at a record low on Friday, as policymakers seek to underpin a nascent recovery while keeping an eye on the country's currency, whose weakening could contribute to accelerating inflation.

The Banco de Mexico maintained its benchmark interest rate at 3.50 percent, as expected by analysts polled by Reuters, after cutting rates in September and October to boost growth.

In a statement announcing the interest rate decision, the central bank board said the Mexican peso's swings could increase the risk of more inflation, which has breached the bank's target ceiling.

"There is the possibility that a new period of increased volatility in international financial markets could lead to a currency adjustment which could potentially affect inflation," it added.

Mexico's annual inflation rate in mid-January shot up to 4.63 percent, its fastest pace in eight months and well above the central bank's upper policy limit of 4 percent.

The bank said that while the rise in inflation was probably temporary, it could not discount it having a more durable impact.

"You cannot rule out the risk that the recent adjustments in relative prices could lead to increases in medium-term inflation expectations that could lead to second round effects," the bank statement said.

The Mexican peso has weakened 2.8 percent this month against the dollar as investor jitters mounted on a worldwide emerging markets sell-off.

There was no mention of any possible rate adjustment in the statement by the central bank, the Banco de Mexico (Banxico).

But the central bank's stance raised questions if any interest rate hike may come later this year.

"(The statement) is important because it means that maybe because of the volatility in the markets, in the FX markets, Banxico could move sooner than expected," said Nomura Securities senior Latin America strategist Benito Berber, who noted the bank's "neutral" statement had "a little bit of a hawkish flavor."

"It could be that they move, if volatility continues and the economy grows, say in the second half of 2014," he added. "What is even more interesting is that the (yield) curve is going down, meaning that the market was positioned for an even more hawkish statement."

Mexico's central bank governor Agustin Carstens said in an interview published this week the bank was weighing whether monetary policy needs adjusting after a spike in inflation, but he also expected the price surge to be temporary. [ID:nL2N0L31UD]

Carstens said he expected food prices, a major component of the consumer price index gauge and which have recently risen, to correct during this year, while other prices linked to fiscal policy would correct within a year. He also suggested a rate hike would not help correct current price pressures.

In a Reuters poll last week, the median of analysts surveyed projected the central bank will raise its benchmark rate to 3.75 percent in the first quarter of 2015, pushing back expectations for a hike in the second half of this year in the previous poll.

"Overall I see no indication of a near-term or a short-term change in monetary policy, but they remain vigilant if things deteriorate from here," said Alberto Ramos, senior Latin America economist at Goldman Sachs in New York, adding that he expects an interest rate hike to come toward the end of 2014.

Following aggressive hikes by South Africa and Turkey this week, yields on Mexican short-term interest rate swaps rose sharply to price in a rate rise as soon as July .

Mexico's central bank lowered borrowing costs in September and October after an economic contraction in the second quarter and policymakers have been expected to keep borrowing costs steady amid a tepid recovery in U.S. demand for Mexican exports.

South Africa's rand begins to recover after volatile week

South Africa's rand was slightly weaker against the dollar on Friday but showed signs of steadying after a volatile week in which it hit a new five-year low.

The rand was at 11.2600 to the dollar at 1449 GMT, down 0.5 percent from Thursday's New York close, though it firmed slightly earlier in the session after data showed South Africa recorded a wider 2.78 billion rand ($249 million) trade surplus in December from 770 million rand the previous month [ID:J8N0IR010].

"It seems to be settling in ranges for now but still very much emerging market headline driven," said Rand Merchant Bank FX trader Jim Bryson.

In a volatile week which saw investors shun emerging market assets, the U.S. Federal Reserve reduce its monthly bond purchases by a further $10 billion and the South African Reserve Bank announce a surprise interest rate cut, the rand swung between a high of 10.9050 and a five-year low of 11.3900.

Ongoing strikes in the platinum mining sector have also kept the rand under pressure, with the Association of Mineworkers and Construction Union this week rejecting a 9 percent wage offer from leading producers.

Despite the central bank increasing its repo rate by 50 basis points to 5.50 percent on Wednesday, the rand continued to weaken as the market viewed the move as inadequate

More uncertainty could be in store for the rand next week, given the nervousness about emerging markets, Bryson said.

"The danger is that we re-test 11.38," he said.

Government bonds remained on a weaker footing, with the yield on the 2026 government bond rising 11 basis points to 7.405 percent while that on the 2015 paper was 8.5 basis points higher at 8.93 percent.

Source: Reuters

INVESTMENT FOCUS-Financial flows put rich countries at risk from emerging market turmoil

 Any spill-over damage to the developed world from a sell-off in emerging markets is likely to come through violent swings in financial flows rather than via lost trade, with Japan seen as most vulnerable.

Tokyo stocks, which rely heavily on fickle flows from foreigners, have seen the third worst start to a year in the past half century, partly as investors sought to make up for losses in emerging markets by pulling out of Japan.

The impact of the emerging market rout is also evident in the United States, where foreign central banks are cashing in Treasuries to spend at home. Further selling and related upward pressure on yields may prompt the Federal Reserve to maintain its monetary stimulus for longer. 

In the euro zone, sharp falls in emerging currencies may aggravate disinflationary pressures by lowering import prices for goods manufactured in developing economies.

Emerging assets have come under pressure as concerns about a slowing China and the Federal Reserve's stimulus wind-down triggered an exodus of foreign capital.

A spike in global risk aversion and the corresponding surge in the safe-haven yen hit Tokyo stocks <.N225>, which lost over 8 percent this month.

While Japan has a large savings base, domestic investors tend to hold more government bonds and their equity allocation tends to be buy-and-hold. According to the Tokyo Stock Exchange, 70 percent of the daily liquidity in its main section is driven by foreign investors.

This leaves Japan vulnerable to ebbs and flows of foreign capital, regardless of better economic fundamentals and the

"Abenomics" reforms introduced by Prime Minister Shinzo Abe.

"Japan will be a hostage to issues that are affecting emerging markets. When there's risk aversion, Japan gets sold," said Jonathan Schiessl, investment manager at Ashburton.

"People flooded back into Japan with Abenomics but there's a risk of foreign capital withdrawal."

Trade channels are less likely to pose a threat to the developed economy. Gross exports to emerging economies are less than 5 percent of economic output in the United States, according to Goldman Sachs.


US, EUROPE

Developed market financial conditions could tighten, as a result of feedback via portfolio adjustments driven by the emerging turmoil.

In the case of the United States, foreign central banks may be forced to liquidate their Treasury holdings further to defend their currencies.

Friday's data showed overall foreign holdings of U.S. debt such as Treasuries, mortgage-backed securities and agency debt which are stored mainly by foreign central banks at the Fed fell to $3.325 trillion in the week ended Wednesday, the largest weekly decline since June.

The benchmark 10-year Treasury yield has fallen to a 2-1/2 month low of 2.67 percent as investors sought safe-haven Treasuries but a sustained sell-off from foreign central banks may push up the yield.

The related financial tightening may be enough to persuade the Fed to push back the timing of the first interest rate hike, or even slow the pace of its stimulus wind-down.

"Financial markets could transmit shocks directly, tightening DM financial conditions in the process... Investors use DM markets as hedging tools during times of stress or because pressures to reduce risk more generally force selling of more liquid assets," Goldman said in a client note.

"An undesirable tightening in financial conditions would probably ultimately be met by central bank responses."

Falling emerging currencies and weak demand in emerging economies as a result of financial shocks would be a disinflationary combination for developed economies, especially in Europe where inflation is on an alarming downward trend.

Friday's data showed euro zone consumer price inflation fell in January to 0.7 percent, reinforcing warnings from the IMF that deflation was a potential risk.

The ECB is expected to stay put until mid-2015 after cutting its key interest rate to a record low of 0.25 percent in November, but deflation risks could change the plan.

Europe is also at a higher risk from an emerging economic slowdown, given the exposure of its corporates to the developing world.

European companies derive more than 23 percent of revenues from emerging markets, compared with around 14 percent for Japanese and U.S. firms, according to MSCI.

"The euro area periphery could find itself under scrutiny again. Those who compete directly with countries whose currencies are falling sharply may also struggle more, with parts of the euro area periphery and commodity producers again the most likely to suffer here," Goldman said.

Decoupling economies in a Global Economy?

   There is no such scenario of an US economy decoupling from an economic slowing,in China,India,Turkey
Brazil,Russia,and many other emerging economies. And an anemic recovery in the Euro Zone and a fragile an still in progress Japanese recovery.
     The real present  economic scenario is the starting of the tapering of the QE program of the Federal
Reserve which in turn comes with an exodus of money from stocks and bonds in the emerging markets,compounded with a concern about a slowing Chinese economy. This brings less exports for countries that have China as its first trading partner.
   So we have an scenario of higher interest rates,falling currencies, falling prices of certain commodities,and high volatility in stock, bond and currencies of developed and emerging economies.
 Analysts and officials of developed economies tend to be optimists in times of crisis. When the mortgage crisis began in the US economy, they said that the rest of the economy was decoupled fron this problem.
  When the problem started in the Euro Zone they said that it was not important for the US economy.
   What should they expect this time?
  

Travel: China : Nanshan in Shandong's Longkou.

Travel: China Fanjing Mountain in Guizhou province

Fanjing Mountain in Guizhou province.As the highest mountain of the Wuyi Mountains, Fanjing Mountain is a national nature reserve in East Guizhou.[Photo/icpress]

IMF says emerging market turbulence raises concerns over liquidity

The International Monetary Fund urged central banks on Friday to ensure that a financial market rout in the developing world does not lead to an international funding crunch.

An IMF spokesman said some emerging market countries need to take "urgent action" to improve their economies, which are under threat by a recent sell-off in markets from India and Turkey to Brazil.

"The turbulence also underscores the need for vigilance among central banks over liquidity conditions in international capital markets," the spokesman said.

Many investors have blamed the selloff on the U.S. Federal Reserve, which recently started winding down a bond-buying stimulus program. A number of central bankers in poor countries agree, as vast sums of money printed by the Fed in recent years have pumped up asset prices in their countries.

"I have been saying that the U.S. should worry about the effects of its policies on the rest of the world," Reserve Bank of India Governor Raghuram Rajan said on Friday, a day after slamming what he said was a breakdown in global monetary coordination.

But the IMF has said some developing countries need to look in the mirror when seeking causes for the volatility.

Jose Vinals, financial counselor and director of the IMF's monetary and capital markets department, said on Tuesday that the Fed was acting prudently and that a big part of the selloff had to do with a subset of emerging market countries.

The IMF spokesman on Friday went into further detail, saying many poor countries have "solid fundamentals" with high currency reserves and room to engage in fiscal stimulus. Others, however, are showing a "need for urgent policy action to improve fundamentals and policy credibility."

Source: Reuters

Financial flows put rich countries at risk from emerging market turmoil.

Any spill-over damage to the developed world from a sell-off in emerging markets is likely to come through violent swings in financial flows rather than via lost trade, with Japan seen as most vulnerable.

Tokyo stocks, which rely heavily on fickle flows from foreigners, have seen the third worst start to a year in the past half century, partly as investors sought to make up for losses in emerging markets by pulling out of Japan.

The impact of the emerging market rout is also evident in the United States, where foreign central banks are cashing in Treasuries to spend at home. Further selling and related upward pressure on yields may prompt the Federal Reserve to maintain its monetary stimulus for longer. [ID:nL2N0L42J4]

In the euro zone, sharp falls in emerging currencies may aggravate disinflationary pressures by lowering import prices for goods manufactured in developing economies.

Emerging assets have come under pressure as concerns about a slowing China and the Federal Reserve's stimulus wind-down triggered an exodus of foreign capital.

A spike in global risk aversion and the corresponding surge in the safe-haven yen hit Tokyo stocks <.N225>, which lost over 8 percent this month.

While Japan has a large savings base, domestic investors tend to hold more government bonds and their equity allocation tends to be buy-and-hold. According to the Tokyo Stock Exchange, 70 percent of the daily liquidity in its main section is driven by foreign investors.

This leaves Japan vulnerable to ebbs and flows of foreign capital, regardless of better economic fundamentals and the

"Abenomics" reforms introduced by Prime Minister Shinzo Abe.

"Japan will be a hostage to issues that are affecting emerging markets. When there's risk aversion, Japan gets sold," said Jonathan Schiessl, investment manager at Ashburton.

"People flooded back into Japan with Abenomics but there's a risk of foreign capital withdrawal."

Trade channels are less likely to pose a threat to the developed economy. Gross exports to emerging economies are less than 5 percent of economic output in the United States, according to Goldman Sachs.


US, EUROPE

Developed market financial conditions could tighten, as a result of feedback via portfolio adjustments driven by the emerging turmoil.

In the case of the United States, foreign central banks may be forced to liquidate their Treasury holdings further to defend their currencies.

Friday's data showed overall foreign holdings of U.S. debt such as Treasuries, mortgage-backed securities and agency debt which are stored mainly by foreign central banks at the Fed fell to $3.325 trillion in the week ended Wednesday, the largest weekly decline since June.

The benchmark 10-year Treasury yield has fallen to a 2-1/2 month low of 2.67 percent as investors sought safe-haven Treasuries but a sustained sell-off from foreign central banks may push up the yield.

The related financial tightening may be enough to persuade the Fed to push back the timing of the first interest rate hike, or even slow the pace of its stimulus wind-down.

"Financial markets could transmit shocks directly, tightening DM financial conditions in the process... Investors use DM markets as hedging tools during times of stress or because pressures to reduce risk more generally force selling of more liquid assets," Goldman said in a client note.

"An undesirable tightening in financial conditions would probably ultimately be met by central bank responses."

Falling emerging currencies and weak demand in emerging economies as a result of financial shocks would be a disinflationary combination for developed economies, especially in Europe where inflation is on an alarming downward trend.

Friday's data showed euro zone consumer price inflation fell in January to 0.7 percent, reinforcing warnings from the IMF that deflation was a potential risk.

The ECB is expected to stay put until mid-2015 after cutting its key interest rate to a record low of 0.25 percent in November, but deflation risks could change the plan.

Europe is also at a higher risk from an emerging economic slowdown, given the exposure of its corporates to the developing world.

European companies derive more than 23 percent of revenues from emerging markets, compared with around 14 percent for Japanese and U.S. firms, according to MSCI.

"The euro area periphery could find itself under scrutiny again. Those who compete directly with countries whose currencies are falling sharply may also struggle more, with parts of the euro area periphery and commodity producers again the most likely to suffer here," Goldman said.

Source:Reuters

Indian central bank chief: U.S. should be mindful of global policy impact

 The United States should be more aware of how its policies affect the rest of the world, India's central bank chief said on Friday, a day after complaining that global monetary policy coordination had broken down.

Raghuram Rajan, a former chief economist at the International Monetary Fund, took charge at the Reserve Bank of India last September during the country's worst financial crisis since 1991.

India's financial markets have boomed as U.S. Federal Reserve efforts to bolster economic growth at home with cheap money encouraged investors to seek higher returns in emerging economies. As the Fed began to talk of unwinding its policy last year, the money began to flow back out.

"I have been saying that the U.S. should worry about the effects of its policies on the rest of the world," Reserve Bank of India Governor Rajan said at an event on Friday organised by The Times of India newspaper.

"We would like to live in a world where countries take into account the effect of their policies on other countries and do what is right, rather than what is just right given the circumstances of their own country," he said.

Rajan's comments were echoed by the IMF on Friday, which called for "vigilance" by central banks to ensure that a financial market rout in the developing world does not lead to an international funding crunch. [ID:nL2N0L50TM]

The turn in Fed policy, combined with signs the Chinese economy is slowing, has sent markets from Turkey to South Africa and Brazil reeling over the past week.

Turkey and South Africa responded by raising interest rates this week to help support their currencies. The Reserve Bank of India also tightened monetary policy, saying the action was aimed at pushing down high consumer inflation.

On Thursday, Rajan had called on developed countries to play their part in restoring international monetary cooperation during an interview with Bloomberg India TV.

"International monetary cooperation has broken down," Rajan told the TV channel.

Source:  Reuters

Brazil falls short of 2013 fiscal goal, downgrade risk looms

Brazil fell far short of its consolidated primary surplus goal for 2013, posting its weakest result in more than a decade as the rapid corrosion of the country's finances adds to fears of a credit downgrade.

The country posted a primary budget surplus of 10.407 billion reais ($4.30 billion) in December , central bank data showed on Friday, below the median forecast for a surplus of 11.9 billion reais.

In all of 2013, the primary budget surplus, which represents the public sector's excess revenue over expenditures before debt payments, was 91.3 billion reais, short of the 111 billion reais goal set for the year. The result is equivalent to 1.9 percent of the country's gross domestic product.

The primary budget balance is closely watched by creditors, since it measures a country's capacity to service its debts.

Efforts to restrain spending are especially relevant now as many investors are exiting emerging markets on fears that the once-booming economies are on the verge of a sharp slowdown.

Overall, the consolidated budget deficit of Brazil, which includes interest payments, swelled in 2013 to 157.55 billion reais, equal to 3.28 percent of GDP - the highest since 2010. In 2012, the deficit equaled 2.48 percent of GDP in 2012.

Under Brazilian accounting, the consolidated public sector budget encompasses governments at the federal, state and local level, as well as a range of state-owned companies.

Initially, Brazil's primary surplus goal was 156 billion reais, equal to about 3.1 percent of GDP. But that was reduced in mid-2013 after the government lost billions of reais in tax breaks and increased public spending in a bid to jump-start the economy.

If it wasn't for a surge in extraordinary revenues coming from corporate tax settlements and an oil field auction bonus late last year the country's primary surplus would have been much lower.

"The risk of a (credit) downgrade remains high," said Flavio Serrano, senior economist with Espirito Santo Investment Bank in Sao Paulo. "The extraordinary revenues accounted for about half of the central government's (primary) surplus."

A credit downgrade could raise borrowing costs for Brazil, particularly at a time of exodus from emerging markets. markets. [ID:nL5N0L44C7].

Brazil's credit rating is currently two notches above junk status by the three leading Wall Street credit ratings agencies.
lthough Brazil is in better fiscal shape than many developed nations, the rapid deterioration of its accounts under President Dilma Rousseff has worried investors and prompted Standard & Poor's to threaten a credit rating downgrade as soon as this year.

In 2011, the first year of her presidency, Rousseff was able to exceed the fiscal target despite a slowdown of the economy. Since then, fiscal accounts have fallen sharply as she has made repeated attempts to fire up an economy that has been stuck in a rut for the last three years. The Brazilian economy likely grew just above 2 percent in 2013.

An increase in the transfer of government capital to state-run development bank BNDES, which is not included in the budget, has increased the country's gross debt over the last few years and worried rating agencies.

Rousseff has promised to reduce transfers and rein in spending this year to regain fiscal credibility, which many economists believe is key to ease high inflation expectations and reignite economic growth in coming years.

The government plans to announced a consolidated primary surplus goal of about 2 percent of GDP for 2014 in February, government officials have told Reuters.

Although that figure will likely keep the country's debt burden on a downward path, many private economists doubt the administration can reach that goal without cutting public investment or resorting to accounting tricks.

"They will have to reduce investments. There is no other way," said Cristiano Souza, economist with Santander, who expects the government to announce a goal of 2 percent of GDP.

"It will be a hard year, but it needs to be done. You need to announce a big number and you need to deliver that number because you need to gradually regain (the market's) confidence."

Rousseff faces growing spending pressures in an election year in which she is widely expected to run for a second term. A likely increase in electricity subsidies this year as reservoir levels remain low will also keep pressure on the government's finances. In late 2012, the government took money from a sovereign fund to bolster its fiscal results.

It is the second year in a row that the government fell short of its annual primary goal.

A slowdown in public spending would also prevent the central bank from hiking rates much more and damaging a feeble economic recovery. The central bank has raised its benchmark Selic rate by 325 basis points since April to tame inflation.

Source: Reuters

Russian central bank unlikely(wish) to raise rates to defend rouble

Russia's central bank is unlikely to follow other emerging markets and raise interest rates to put a floor under its sliding currency - at least not for now, analysts say.

But they warn that if the rouble's depreciation goes on, leading either to a panic among ordinary people or to much higher inflation, the policy calculus could yet change.

This week, the Turkish and South African central banks have both raised rates - in Turkey's case dramatically - fuelling investor speculation about whether Russia might also be forced to take similar measures.

The rouble has lost 5 percent this year, the biggest plunge since the 2008-9 financial crisis, testing the central bank's resolve to complete a shift to inflation targeting, an approach that makes interest rates its most important tool.

Higher rates, making it more rewarding to hold money in rouble accounts or bonds, could be one way to persuade people to hold on to the Russian currency.

Nevertheless, economists polled by Reuters this week predict that Russia would hold its key policy rate at 5.5 percent until the third quarter - and then cut, not hike. [ID:nRUPOLL]

"At the moment it's highly unlikely that they will raise interest rates," said Liza Ermolenko, emerging markets economist at Capital Economics in London.

"If the rouble falls a lot further, if there is a further escalation in the emerging-market crisis, or if the oil price drops, this is a possibility. But it will take a much deeper fall in the rouble before the central bank will do that."

or now, the central bank is making clear that it won't allow the currency market jitters to deflect it from its goal of letting the market freely determine the rouble's level by 2015.

Central bank Governor Elvira Nabiullina reiterated that goal this week, indicating that the bank will progressively reduce its forex market interventions even if the rouble keeps falling.

But despite policymakers' apparent nonchalance, Russia cannot afford to ignore the rouble's slide entirely. In the worst case, it could provoke a panic among savers, leading to a run on rouble deposits similar to the financial crises in 1998 and 2008.

The share of forex bank deposits held by households and companies nearly doubled to 43.5 percent in the months before February 2009. That panic lagged behind, and exacerbated, an initial slide in the rouble.

Forex deposits accounted for 26 percent last November, the latest central bank figures show, reflecting complacency among savers before the currency rout began to spread across emerging markets.

"The rouble weakening is now almost exclusively driven by a panic among households," said Alexander Morozov, chief Russia economist at HSBC. "Going forward, we should expect more and more readiness of the central bank to somehow stop this panic. That may include a temporary hike in policy rates."

Analysts note that the scale of the latest turmoil is still minor compared to past rouble trouble, suggesting that drastic measures are not yet called for.

So far this year, the central bank has expended less than $10 billion in foreign reserves, out of almost $500 billion available. It went through $200 billion in a matter of weeks at the height of the 2008-9 crisis.

Higher interest rates in Russia would, moreover, be highly unpalatable both on economic and political grounds. The central bank has been under political pressure for more than a year to cut interest rates and boost an economy whose growth has slowed to a crawl.

According to government estimates on Friday, the economy grew by just 1.3 percent in 2013, the lowest since the 2009 slump. President Vladimir Putin has made clear that he sees a reduction in borrowing costs as a key goal - and he has tasked Nabiullina with finding ways to do it. 

or now, the central bank is making clear that it won't allow the currency market jitters to deflect it from its goal of letting the market freely determine the rouble's level by 2015.

Central bank Governor Elvira Nabiullina reiterated that goal this week, indicating that the bank will progressively reduce its forex market interventions even if the rouble keeps falling.

But despite policymakers' apparent nonchalance, Russia cannot afford to ignore the rouble's slide entirely. In the worst case, it could provoke a panic among savers, leading to a run on rouble deposits similar to the financial crises in 1998 and 2008.

The share of forex bank deposits held by households and companies nearly doubled to 43.5 percent in the months before February 2009. That panic lagged behind, and exacerbated, an initial slide in the rouble.

Forex deposits accounted for 26 percent last November, the latest central bank figures show, reflecting complacency among savers before the currency rout began to spread across emerging markets.

"The rouble weakening is now almost exclusively driven by a panic among households," said Alexander Morozov, chief Russia economist at HSBC. "Going forward, we should expect more and more readiness of the central bank to somehow stop this panic. That may include a temporary hike in policy rates."

Analysts note that the scale of the latest turmoil is still minor compared to past rouble trouble, suggesting that drastic measures are not yet called for.

So far this year, the central bank has expended less than $10 billion in foreign reserves, out of almost $500 billion available. It went through $200 billion in a matter of weeks at the height of the 2008-9 crisis.

Higher interest rates in Russia would, moreover, be highly unpalatable both on economic and political grounds. The central bank has been under political pressure for more than a year to cut interest rates and boost an economy whose growth has slowed to a crawl.

According to government estimates on Friday, the economy grew by just 1.3 percent in 2013, the lowest since the 2009 slump. President Vladimir Putin has made clear that he sees a reduction in borrowing costs as a key goal - and he has tasked Nabiullina with finding ways to do it. 

Source: Reuters