Brazil: Central Bank raised interest rate to 9.5%

In a decision widely expected by financial markets, the Central Bank’s Monetary Policy Committee (Copom) raised the base interest rate of the economy 0.5 percentage point to 9.5% from 9%. And it has indicated that monetary tightening started in April will continue at its next meeting in November.

  Copom decided unanimously to raise the Selic rate to 9.50% per year, without bias. The Copom considers that this decision will contribute to bringing inflation down and ensure that this trend will continue next year." 

Copom has one more meeting in 2013, scheduled for November 26 and 27. With the same statement, it is possible that the market will move towards a consensus that the Selic can indeed achieve and even exceed double digits, since the wording is associated with 0.5 percentage-point hikes.

Currently there is disagreement among economic analysts and market operators about the possibility of the base interest rate, which in April was at a record low of 7.25%, rise back to double digits.

Some of them believe that, with the signs of economic slowdown and lower inflation rates reported recently, the Central Bank (BC) can finish its job in November with an increase of 0.25 percentage point, which would raise the Selic rate to 9.75%.

But some believe that, to tame inflation and bring it closer to the center of the target of 4.5%, interest rates must rise to 10% or more. 

Recent statements by BC Economic Policy director Carlos Hamilton Araújo have reinforced the market’s conviction that the Copom may go beyond 9.75%, the "magic number " that seemed to have been consolidated within the market as a "ceiling" for the current adjustment cycle.

Source: Valor International

White House:"After a discussion about potential paths forward, no specific determination was made"

President Barack Obama and congressional Republicans found no specific way forward to break their impasse over a government shutdown and extending the U.S. debt ceiling at a meeting on Thursday, the White House said.

The session of about an hour and a half between Obama and Republican leaders of the House of Representatives was described as a good meeting where Obama heard House Speaker John Boehner explain Republican proposals for a short-term extension of the U.S. debt ceiling.

"After a discussion about potential paths forward, no specific determination was made," said a White House statement. "The president looks forward to making continued progress with members on both sides of the aisle."

Source: Reuters

Alibaba led a US$ 206 investment in ShopRunner Inc

"Alibaba Group Holding Ltd. has led a $206 million investment in a rival to Amazon.com Inc. one of its biggest U.S. moves as the Chinese e-commerce giant considers an initial public offering here.

Alibaba invested in ShopRunner Inc., which offers unlimited two-day shipping from retailers including Toys "R" Us Inc. andRadioShak Corp a $79 annual fee.American ExpressCo.  has also taken a small stake in ShopRunner.

As part of the deal, eBay Inc.  sold its prior 30% holding in ShopRunner for a profit, said a person familiar with the matter. The deal values ShopRunner at about $600 million, the person said, and completes a funding round in which Alibaba previously chipped in about $70 million. It isn't clear exactly how much Alibaba invested, but it did put in the majority of the funding"

Source: The Wall Street Journal

Tablets are going to be part of 21st-century childhood, Michael Acton Smith

Michael Acton Smith: 'We don't want kids – or anyone – to be spending all their time with their face in the screen, but I think tablets are going to be part of 21st-century childhood'
With more than 60 million registered users, Moshi Monsters is already one of the most popular children's virtual worlds. Now it's set to go fully mobile before the end of 2012.

However, the full Moshi Monsters experience is set to make the leap from desktop to tablet. Chief executive Michael Acton-Smith talked about the company's plans in a speech at the Children's Media Conference in Sheffield, saying a team is already hard at work on the app.

"We're hopefully going to launch Pocket Moshi or Moshi-on-the-Move or whatever it's called in the next few months," he said. "We're going to make it free, and hopefully have millions of kids playing it."

Acton-Smith admitted that Mind Candy took time to come around to the idea that apps could be a big growth area for children's entertainment

"18 months ago, we were saying like most people 'are kids really going to have mobiles? Are parents going to buy £500 iPads for their kids? And the answer is absolutely yes," he said.

"We really firmly believe at Mind Candy that the tablet device is going to be the dominant form of entertainment for kids over the next few years. As revolutionary and exciting as what Disney did in the 1920s… what Henson did with Sesame Street, and what Pixar did in the film world."

Mind Candy has also considered launching Moshi Monsters on Facebook, although Acton-Smith said the social network's official no-under-13s policy led it to shelve the idea. This may change.

"If Facebook did develop a kids version, which has been whispered about for a while, we would absolutely look at putting our content on there."

Even so, mobile and particularly tablet is the bigger focus for Mind Candy as it continues to build Moshi Monsters in a multi-platform brand.

"If we just focused on desktop, in the next year or two we'd be a dinosaur," said Acton-Smith.

Source: theguardian

Fra dodici anni il 46% delle maggiori corporation avrà sede nei Paesi emergenti. Oggi è il 17%

Uno studio del McKinsey Global Institute prevede che nel 2025 il 46% delle 500 maggiori corporation della classifica di Fortune sarà basato in economie emergenti. Era il 5% nel 2000.
«Questa potente ondata di nuove imprese potrebbe alterare profondamente le dinamiche competitive da tempo stabilite nel mondo», commenta lo studio. Se ci si riferisce alla lista delleFortune 500, le corporation con sede in Paesi emergenti erano 24 nel 2000 e saranno 230 tra una dozzina d’anni, secondo le proiezioni di McKinsey. 
Nel mondo ci sono oggi ottomila imprese con un fatturato superiore al miliardo di dollari: tre quarti vengono da Paesi sviluppati. Entro il 2025, altre settemila raggiungeranno quella dimensione e il 70% di queste nuove imprese avrà il quartier generale in Paesi emergenti.
Delle 150 imprese europee nella classifica delle 500 di Fortune, quattro su dieci siano nate prima del 1900; è ora in arrivo una nuova generazione che le minaccia direttamente. Devono rispondere alla sfida in fretta.
Quello che può succedere — nota McKinsey — è simile all’onda delle case automobilistiche giapponesi che invasero i mercati occidentali negli anni Ottanta. Ma in una misura molto maggiore e non in un solo settore. La sudcoreana Samsung che conquista quote di mercato alla Apple è l’esempio più evidente del momento. Si ripeterà moltiplicato. Anche perché le nuove imprese saranno probabilmente agili, con costi più bassi delle concorrenti occidentali; meno preoccupate dei risultati a breve termine ma più focalizzate sui tempi medio-lunghi delle imprese quotate a Wall Street o nelle Borse europee.

Corriere della Sera

Alitalia,Soldi freschi per assicurare continuità aziendale

Sono le Poste Italiane il soggetto pubblico individuato dal governo per correre in aiuto ad Alitalia. L’azienda - secondo quanto si apprende da fonti vicine al dossier - parteciperà all’aumento di capitale della compagnia da 300 milioni con una cifra intorno ai 75 milioni e una partecipazione fra il 10 e 15%.
Nella nota diffusa da Palazzo Chigi si evidenzia che alla compagnia «servono discontinuità, stabilizzazione dell’azionariato e una importante ristrutturazione attraverso un nuovo progetto industriale». L’entrata di Poste «e’ fondata su queste premesse - spiegano da Palazzo Chigi- Il Governo si aspetta che i soci si assumano appieno le loro responsabilità». La «nostra parte è stata fatta»: è il commento del premier Enrico Letta. E il ministro delle Infrastrutture e dei Trasporti Maurizio Lupi esprime soddisfazione per l’accordo : «Ce l’abbiamo fatta - sottolinea Lupi - Abbiamo lavorato intensamente in queste settimane per ottenere questo risultato»«Dobbiamo evitare il commissariamento di Alitalia, trovare una soluzione ponte e rinegoziamo al meglio questa alleanza anche con Air France ma difendendo gli interessi del paese».
«Nel consiglio di amministrazione di Alitalia di venerdì «penso» arriverà il via libera a una manovra finanziaria «da 500 milioni, di cui 300 come aumento di capitale e 200 di prestiti dalle banche», ma se così non fosse «sabato ci vengono a portare loro la licenza» per poter volare, ha detto Riggio ha ricordando che l’Ente dell’aviazione civile deve applicare in questi casi i regolamenti comunitari e ha aggiunto: «Vediamo se domani vengono fuori questi quattrini, ma se la compagnia non ha né liquidità né fondi per far fronte ai propri impegni i suoi aerei vanno a terra».

Bank of England is unlikely to raise rates before unemployment falls to 7%

"The Bank of England has rejected calls for a rise in interest rates despite a strong run of surveys showing the economy is recovering at its fastest pace since 2010.

In a widely expected decision, the central bank's interest rate setters kept the base rate at 0.5% and the level of its monetary stimulus to the economy, known as quantative easing, at £375bn.

Some analysts have called for a rise in interest rates in response to the improving economic picture and a recent jump in housing market activity.

However, the bank's monetary policy committee has agreed to maintain its current policy stance until the unemployment rate falls to 7%. It expects to reach this milestone in 2016 after 750,000 jobs have been created.

Governor Mark Carney believes the economy remains weak and much of the current 2.7% inflation rate can be blamed on one-off shocks.

The bank is known to be extremely concerned at the level of business investment, which has continued to fall this year despite the pace of recovery picking up since the spring and many commentators describing it as a well-advanced and sustainable expansion of economic activity. Without a return to healthy rates of business investment, senior Bank staff fear the economy will be forced to rely on consumer spending to maintain growth".

Source: The Guardian

IMF Christine Legarde: There would be very dangerous consequences for the US economy and the global economy,if the default was not prevented

"Shares and oil prices rose strongly on Thursday amid hopes that policymakers in Washington were buckling under the global pressure for them to settle their differences and prevent a US debt default.

The International Monetary Fund and the Organisation for Economic Cooperation and Development both issued sharply worded warnings to Republicans and Democrats amid signs that America's Asian creditors were becoming alarmed at the potential consequences of the impasse.

Reports in Washington that the Republicans would agree to a six-week extension of the debt ceiling from next week's 17 October deadline led to a 200-point rise in the Dow Jones average in early trading. Brent crude was up by $2 a barrel and the FTSE rose by 92 points as the Republican leader in the House of Representatives John Boehner said it was time for meaningful talks with president Barack Obama.

Speculation about a deal emerged after Jack Lew, the US Treasury secretary said there would be chaos if the US defaulted – a message rammed home by the IMF's Christine Lagarde and the OECD's secretary general Angel Gurría.

Lagarde, the IMF's managing director, said there would be very dangerous consequences for the US Economy and very dangerous consequences outside the US economy if the default was not prevented.

She distanced herself from the infighting in Washington, noting: "The IMF does not make recommendations about how, politically, this can be resolved. We don't take a political view. We just look at the economic consequences.

"When it affects the largest economy in the world, we are bound not only to look at the immediate domestic consequences but at what happens elsewhere, so that we can have a dialogue with our members to help them prepare. I hope we will be able to look back in a few weeks and say what a waste of time that was. But we have to look at the risks no matter how unlikely they are to materialise."

Lagarde said there were two channels through which a debt default in the US would spread to the rest of the world. "One would be the trade channel, caused by a reduction in economic activity in the US from the third quarter onwards. The second would be the financial channel – the result of uncertainty and material issues. We are likely to see volatility, uncertainty and consequences for the rest of the world."

Source: The Guardian

Investors' Worries About Stalemate Shift to End of the Year

"Signs that the fiscal impasse in Washington might be thawing sparked a strong price rally in very-short-term Treasury bills Thursday, but prices of longer-maturing T-bills fell as investors saw the risk rising of another stalemate at the end of the year.

Investors bought the U.S. debt securities after lawmakers indicated they were closer to a deal for a short-term increase in the country's borrowing limit, which reduced fears over a U.S. default in the near term. The Treasury Department has said it could run up against its borrowing limit around Oct. 17.

The prospects for an agreement cheered financial markets Thursday, stemming a multiday selloff in some T-bills. The yield on the T-bill due Oct. 17 topped 0.5% earlier Thursday but has since tumbled to as low as 0.215% and recently traded at 0.38%, according to Tradeweb. Yields fall as bond prices rise.

The T-bill due Nov. 7, the benchmark one-month T-bill, traded at a yield of 0.2% Thursday, down from 0.279% Wednesday. The yield rose above 0.35% on Tuesday, the highest level since the depths of the financial crisis in 2008.

But a potential deal for a six-week extension of the U.S. borrowing limit merely puts off the threat of default until early December, said some analysts.

The T-bill due Dec. 19 yielded 0.11% Thursday, higher than the three-month T-bill, which was yielding 0.04%, and the six-month T-Bill's 0.06%.

Investors sold longer-maturing U.S. debt, which is generally considered a safe-haven investment, as fears about a default abated. The benchmark 10-year note's yield rose to the highest level in nearly three weeks. In recent trade, the 10-year note was 17/32 lower in price, yielding 2.716%.

"That is taking some of the fear bid out the Treasury market."

Source: The Wall Street Journal

U.S. Treasury Secretary Jack Lew said he would be unable to prioritize some payments over others

The Obama administration says it will be unable to pay all of its bills if Congress does not raise the $16.7 trillion debt ceiling by October 17. Treasury Secretary Jack Lew said he would be unable to prioritize some payments over others among the 30 million transactions his department handles each week.

"It would be chaos," Lew told the Senate Finance Committee.

The Republican plan would postpone that day of reckoning by roughly six weeks, which would give them more time to seek spending cuts, a repeal of a medical-device tax, or other measures they say are needed to keep the national debt at a manageable level.

Democrats have called for a debt-ceiling hike that would extend government borrowing authority for more than a year.

The House could vote on the measure as early as Thursday afternoon, though timing remained unclear. House leaders cancelled a planned recess and said they would remain in Washington next week to keep working on the problem.

Opinion polls indicate that Republicans appear to be getting more of the blame for the standoff. The Republican Party's approval rating now stands at a record low of 28 percent, according to Gallup, down 10 points from pre-shutdown levels. The Democratic Party's approval rating has dipped slightly to 43 percent.

Business groups that have close ties to the Republican Party have also pressed for an end to the brinkmanship and some are laying plans to mount primary challenges next year to lawmakers who refuse to raise the debt ceiling.

With the October 17 deadline a week away, Obama is scheduled to meet with House Republican leaders at 4:35 p.m. EDT (2035 GMT). He is also due to meet separately with Senate Democrats and Senate Republicans.

Source: Reuters

House Republican: Temporary Debt-Ceiling Increase but ban the Treasury Department use of extraordinary measures to avoid default.

  According to the Wall Street Journal:
"The House Republican plan to extend the debt ceiling for six weeks would permanently ban the Treasury Department from using extraordinary measures to avoid default, congressional aides said.

The provision would ban practices, used by Democratic and Republican administrations for decades, which have effectively allowed the Treasury to limit investments in pensions and other funds when the government bumps up against its borrowing limit. These steps have extended the time that Treasury can continue borrowing and paying the nation's bills while Congress debates terms for raising the debt ceiling.

The White House has not said it whether it would accept the condition as part of any deal, though it effectively would be surrendering tools it uses to avoid falling behind on federal payments. The Democratic-led Senate could reject the provision.

Even though the steps are called "emergency" measures, they have become employed so routinely during recent fiscal standoffs that Congress often waits for the emergency steps to be exhausted before beginning negotiations on raising the borrowing limit".

Euro Zone Sees House Prices Rise

  According to an article published in the  Wall Street Journal of today"

"Euro-zone house prices rose slightly in the three months to June, the European statistical agency Eurostat said on Thursday, in another indication that the currency area's economy is slowly mending.

Separate national figures released since June suggest the rise may have continued in recent months, with Dutch and Irish prices rising in July and August. Eurostat has only recently begun issuing the euro-zone data on housing prices.

House prices across the 17-country euro zone were 0.3% higher in the second quarter of this year compared with the first three months, although they were still 2.2% lower than in the second quarter of 2012. The quarterly gain was the first since the second quarter of 2012, when prices rose 0.1%.

House prices in the euro zone are still 5.5% below the peak reached five years ago, according to Eurostat. Home prices plummeted in some countries as the impact of the 2008's global financial crisis caused banks to reduce mortgage lending and many people lost their jobs. Now, with the economy emerging from an 18-month-long recession in the second quarter, conditions are beginning to change.

"The economies which are showing reasonable strength at the moment are beginning to see their housing markets improve," said Professor Michael Ball, housing expert and professor of urban and property economics at Henley Business School at Reading University in the U.K. "There is evidence of economic growth, rising jobs and mortgage availability is quite good, and above all mortgage interest rates remain quite low."

IFC to sell rupee-linked bonds to fund India investment

The International Finance Corporation (IFC), the World Bank's investment arm, plans to raise $1bn (£630m) by selling Indian rupee-linked bonds.

IFC will use the proceeds to finance "private sector investment in India".

It said the bonds, which will be sold outside India, will strengthen the country's capital markets and attract greater foreign investment.

Foreign investors have been sceptical of entering India amid uncertainty over policies and a slowdown in growth.

Analysts said the IFC bonds were likely to help attract investors who have been looking to enter India but needed assurance.

"This lends the weight of the credit rating of the World Bank to the potential investment," Vishnu Varathan, a senior economist with Mizuho bank told the BBC.

"By co-working with the World Bank you get some of the credit risks involved with India off the table."

British shop prices fell in September for the fifth straight month

British shop prices fell in September for the fifth straight month, driven by deep discounts on non-food items, the British Retail Consortium said on Wednesday.

Prices fell by 0.2 percent compared with a year ago, the smallest drop since June.

The decline in prices was slowed down by easing deflation in the prices of clothing and footwear, furniture and electrical goods along with a return to inflationary territory in health and beauty products.

Source: Reuters

China developer Sept sales show little sign of property curbs

China Overseas Land & Investment Ltd , the largest property developer by market value, and smaller rival Shanghai Shimao Co Ltd posted strong nine-month contract sales on Thursday, despite official efforts to curb the market.

The government wants to prevent a bubble from forming and head off unrest if people cannot afford to buy homes. However, it cannot tighten too much as a strong property market has helped offset an economic slowdown.

China Overseas Land reported contract sales of HK$111.8 billion ($14 billion) in the first nine months of the year, or 93 percent of its 2013 target of HK$120 billion. The nine-month figure was a 22 percent rise from the HK$91.9 billion it reported last year for the same period.

Shimao contract sales grew 44 percent to 10.14 billion yuan ($1.7 billion) in the January-September period.

"As of September, the company has already hit its full-year sales target in advance," Shimao said in a statement posted on the website of the Shanghai stock exchange.

Contract sales are recorded when buyers purchase a property and are an indication of developers' future revenues.

Source: 

U.S. Jobless claims increase

The number of Americans filing new claims for jobless benefits jumped last week, reflecting both continued reporting problems in California and private-sector employees out of work in connection with the government shutdown.

"Initial claims for unemployment compensation increased by 66,000 to a seasonally adjusted 374,000 in the week ended Oct. 5, the Labor Department said Thursday. Economists expected 312,000 new claims would be filed. The weekly gain is the largest in nearly a year and pushes claims to the highest level since March.

About half of the increase came from California, which is working through a conversion to a new computer system, a Labor analyst said. Last month, California underreported claims for two weeks.

About 15,000 of the new claims filed were from nonfederal workers who were out of work because of the shutdown, the analyst said.

"Several states indicated that they were seeing some of that activity," he said.

The data only reflect those seeking aid from state programs. While federal workers apply through states, they are paid from separate funds. Figures showing those shutdown-related applications will first be released next Thursday.

Figures from local officials, however, indicate federal employees are filing in droves. The District of Columbia has received more than 11,000 applications from federal workers in the first seven days that they could apply for benefits, a spokeswoman said. That is nearly ten times the number of federal claims filed nationwide the week before the shutdown. The District of Columbia, Maryland and West Virginia have all increased staffing or paid overtime to keep up with the federal claims".

Source: The Wall Street Journal

Britain's economy grew 0.8 pct in third quarter

 Britain's economy grew by 0.8 percent the third quarter, helped by a rise in industrial output, the National Institute of Economic and Social Research said on Wednesday.

That is slower than growth of 0.9 percent in the three months ending August as estimated by the leading macro-economic think-tank, but faster than an official expansion of 0.7 percent in the second quarter.

The institute reckons that Britain's gross domestic product remains 2.5 percent below its pre-recession peak.

"We do not expect output to pass its peak in early 2008 until 2015," it said.

Official data showed earlier on Wednesday that British industrial output unexpectedly fell by 1.1 percent on the month in August, the biggest drop since September 2012.

Despite this, NIESR estimated that industrial production provided a positive contribution to GDP growth in the third quarter.

Source: Reuters

U.K. :STOCKS REBOUND STRONGLY FROM THREE-MONTH LOW

UK markets jumped strongly on Thursday morning following three straight days of losses as hopes build over a resolution to the political deadlock in Washington and the continuation of monetary stimulus by the Federal Reserve.

After hitting a three-month low yesterday, the FTSE 100 rebounded strong this morning, rising as much as 1.1% by midday as bargain hunters stepped. The index ended at 6,337.91 on Wednesday afternoon, its worst level since July 3rd.

As expected, the Bank of England's Monetary Policy Committee (MPC) decided to hold the Bank Rate at 0.5%. The central bank has vowed to maintain the rate at its record low until the unemployment rate falls from its current level of 7.7% to 7%. The MPC also kept its asset purchase programme unchanged at £375bn. 

Signs of progress in Washington; taper could be delayed

The government shutdown, entering its 10th day on Thursday, is still weighing heavily on the minds of investors, but some small signs of progress were lifting sentiment this morning. 

According to reports, House Republicans are now warming to the idea put forward by President Barack Obama to have a short-term increase in the debt ceiling while leaders continue to wrangle over the budget and a deficit-reduction plan. However, Obama continues to reiterate that the reopening of government would come without conditions to change policy.

"All this essentially means is that negotiations will be delayed by a couple of months, at best, and we'll be back in the same situation again come Christmas," said Market Analyst Craig Erlam from Alpari. "Unfortunately though, under the circumstances that is a positive thing, not just for the financial markets but the global economy, which would suffer hugely if the US was forced to default on its debt."

Markets were also reacting to last night's minutes of the latest Federal Open Market Committee meeting which showed that most members at the central bank still thought it would be appropriate to begin tapering quantitative easing before the end of the year. However, given that the meeting took place before the government shutdown, many now believe that a taper could be delayed until next year.

Analyst Michael Gapen from Barclays said: "the ongoing federal government shutdown and upcoming expiration of the debt ceiling suggests that the decision to taper could be pushed into 2014. A sooner resolution to the fiscal risks that cloud the outlook could keep December on the table, but a longer stalemate could dampen growth sufficiently and lead to a tapering in Q1 14 or later."

Also spurring hopes for a continuation of stimulus was yesterday's nomination of well-known dove Janet Yellen as the next chair of the US Federal Reserve. Yellen will be the first female at the head of the US central bank and has been an advocate of the aggressive monetary easing started by her predecessor, Ben Bernanke, who steps down on January 31st 2014.

Source: LiveCharts

ECB AND CHINA SIGN OFF ON CURRENCY SWAP

The European Central Bank (ECB) and the People's Bank of China (PBC) established a bilateral currency swap agreement "in the context of rapidly growing bilateral trade and investment between the euro area and China, as well as the need to ensure the stability of financial markets". 

The swap agreement will be valid for three years and have a maximum size of 350bn yuan when yuan are provided to the ECB and €45bn when euros are provided to the PBC.

"From the perspective of the Eurosystem, the swap arrangement is intended to serve as a backstop liquidity facility and to reassure euro area banks of the continuous provision of Chinese yuan," the ECB said in a statement. 

Source: LiveCharts

Global PC shipments drop to a five-year low

Global shipments of personal computers (PCs) have hit a five-year low, according to new figures from the research firm Gartner.

Shipments totalled 80.3m units in the three months to September, down 8.6% from a year ago.

PC sales have now fallen for six quarters in a row, hurt by the growing popularity of tablets and smartphones.

Gartner said falling prices of tablets had further hurt sales of PCs in emerging markets.

"Consumers' shift from PCs to tablets for daily content consumption continued to decrease the installed base of PCs both in mature as well as in emerging markets," Mikako Kitagawa, principal analyst at Gartner,said in a statement.

"A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets."

Source: BBC

Brazil hikes interest rates fifth time

Brazil  raised interest rates for the fifth straight time on Wednesday and gave no indication of backing off its battle with high inflation even as Latin America's largest economy struggles to pick up speed.

The central bank raised its benchmark Selic interest rate to 9.5 percent from 9.0 percent as expected by all but two of the 65 economists polled by Reuters last week.

Several economists were surprised the central bank made no changes to the statement accompanying its decision, suggesting it could maintain the current pace of rate increases at its next meeting in November.

"The central bank isn't giving any indication that it will stop the monetary tightening," said Arnaldo Curvello, head of asset management at brokerage Ativa Corretora in Sao Paulo.

"Probably at the next meeting we will have another increase of 50 basis points, but there are doubts in the market about what comes afterwards," he said.

Before the meeting, most economists believed the Selic would end the year at 9.75 percent, according to a weekly central bank poll released on Monday.

But a growing number of economists have started to bet that interest rates could climb back into double digits next year to ensure inflation expectations for 2014 and 2015 fall toward 4.5 percent, the centre of the official target range.

Consumer price data released earlier on Wednesday showed 12-month inflation eased in September for the third straight month to 5.86 percent. But economists in the central bank's survey see little room for inflation to slow further, projecting a year-end rate of 5.82 percent in the central bank survey.

Some analysts say the bank may need to raise rates to between 11 and 12 percent to get inflation back to 4.5 percent.

Source: Reuters

U.S. House Republicans weigh 6-week debt limit hike

 U.S. House of Representatives Republicans are still weighing a short-term debt-limit increase, possibly for six weeks, with no decisions going into a closed-door party meeting on Thursday, according to a senior Republican aide.

"It's one of the options being considered," the aide said, without outlining the other options. The aide also did not say whether any temporary increase in U.S. borrowing authority would contain policy changes, such as spending cuts or changes to President Barack Obama's 2010 health care reform law.

Source: Reuters

Land-hungry Hong Kong looks underground, as developers eye parks

Wild boar and water buffalo are not an image most people associate with one of the world's great global financial centres.

Yet in Hong Kong, where more than 7 million people are packed into just 30 percent of the territory, the green belts, country parks, woodlands and wetlands that take up the rest of the land provide ample space for such animals to roam.

That could be about to change. As officials scour the territory for new places to build, the prospect of going underground, creating man-made islands or developing the city's cherished parks are all among the options being discussed.

One idea is to build a cross-harbour pedestrian corridor - with shops and entertainment facilities along the way - underneath the city's kilometre-wide Victoria Harbour.

Encroaching onto the green spaces has strong support from Hong Kong's powerful property tycoons, who are feeling the heat from a series of tightening measures aimed at reining in prices that have jumped 120 percent since 2008.

But some business executives say the rural habitats that make up the bulk of the former British colony's roughly 1,100 sq km (425 sq miles) help give the city an edge over rival global finance centres in the eyes of many expatriates.

ew World Development Co Ltd's  chairman Henry Cheng Kar-Shun and billionaire Lee Shau Kee, chairman of Henderson Land Development Co Ltd , also see country parks as an ideal solution to the city's housing problem.

The government forecasts it will need to build one new town that would house roughly 600,000 people per decade over the next 30 years due to the continuous inflow of people to the city, both from mainland China and elsewhere.

Sea reclamation is another option. Hong Kong's 6,800 hectares of reclaimed land - about 6 percent of its territory - already houses 1.9 million people.

Six areas for future reclamation have been proposed by the Development Bureau to potentially create up to a further 3,100 hectares of land.

Another plan on the drawing board is man-made islands close to the city's financial district, where the Development Bureau aims to create up to 2,400 hectares of "extension of urban area" to accommodate large-scale community and industrial facilities.

Source: Reuters

Japan's strong core machinery orders rose in August to their highest level since the global financial crisis

Japan took another step forward to cementing a durable economic recovery, as core machinery orders rose in August to their highest level since the global financial crisis, a welcome sign for achieving sustainable growth.

The 5.4 percent month-on-month rise in core orders, which exclude those for ships and electric power utilities, was the first rise in three months, data from the Cabinet Office showed on Thursday.

The reading also beat economists' median forecast for a 2.0 percent gain, and followed a slight fall in July.

The value of core orders reached 819 billion yen ($8.4 billion), the biggest since the September 2008 collapse of U.S. investment bank Lehman Brothers triggered the global recession.

The outcome is an encouraging sign for Prime Minister Shinzo Abe, who is hoping the positive mood generated by his reflationary policies, dubbed "Abenomics", will lead to a virtuous cycle of higher capital spending, growth in wages and private consumption.

Source: Reuters

Kerry assures China's Li U.S. committed to ending fiscal crisis

 U.S. Secretary of State John Kerry assured China's Premier Li Keqiang the United States was committed to resolving a fiscal impasse after the Chinese leader raised the issue in a meeting on the sidelines of an Asian summit in Brunei, a senior State Department official said on Thursday.

The official, speaking on condition of anonymity, said Kerry made clear that the U.S. government shutdown, now in its ninth day, and friction over the U.S. budget "is a moment in Washington politics and reaffirmed the President's commitment to resolving the issue."

The official said the debt issue was "briefly referenced" during the meeting.

China is the biggest holder of U.S. debt and some Chinese officials have raised concerns over a drawn-out crisis in Washington. According to data from the U.S. Treasury, Beijing holds $1.28 trillion (803.51 billion pounds) of Treasury debt. It also has additional U.S. agency debt.

Source: Reuters