Mr Abe Japan's Tough leader?Once Again? Japanese Diet committee OKs bill to launch U.S.-style.

Japan moved closer Wednesday to creating a U.S.-style National Security Council as a Diet committee approved a bill to set up the new framework for gathering information and speeding up decision-making in diplomacy and defense.

With the backing of the House of Representatives' Special Committee on National Security, the lower house will likely pass the bill on Thursday, increasing the likelihood it will be enacted before the current extraordinary Diet session ends on Dec. 6.If established, the NSC will empower the prime minister's office to take the lead in crafting foreign and defense policy by gathering information from various ministries and agencies.

Source: NewsOnJapan

China’s Ministry of Commerce held a press conference about the pawn business.

The pawn business is a sector that often gets a bad rep.

But in reality, pawn brokering is not only a great way for SMEs to receive fast cash, but also a nice addition to large banks. Pawn shops can also help recycle second hand products. Earlier today, China’s Ministry of Commerce held a press conference about the pawn business.

Old stuff shinning like new.

Easily mistaken for a luxury mall, a pawn shop usually sits in the middle of a busy shopping district.

Sterotypical pawn shops are viewed as institutions for poor people...and during old times they partially were.Nowadays in Beijing, some ancient pawn shops can still be found in the city.

Not only the nature of pawn brokering has changed, the business itself has also been growing

In the first three quarters of this year, about 7000 pawn shops were registered, and the total sum of loan they launched for pawners has seen a more than 23% annual growth.

But what does the future hold? will there be any competition?

Now within the Shanghai Free trade zone, the pawn business is even open for foreign investment - Under regulation of course, with over 1600 years of history, the pawn business is still slowly growing in modern China.

Source: CCTV

Roadless wheel concept adjusts to all terrains

Graduate student Ackeem Ngwenya has combined the 6000 year-old wheel with modern materials to develop a new type of all-terrain wheel assembly that switches from narrow to wide tread at the turn of a screw. His Roadless wheel system, while envisioned for rural applications in his native Malawi, has the potential to be as big a change to road (and off-road) transport as was the introduction of anti-lock braking.
We've all done it. Before embarking on a long driving trip on smooth-surfaced interstate highways or other roads of national importance, we'll raise the tire pressure to boost the gas mileage a bit. Stuck in the snow, mud, or sand? Let some pressure out of the tires to increase the contact area, while at the same time increasing the chances that the now floppy tire will grab hold. However, the benefits of trying to change the aspect ratio of a tire by simply changing pressure are rather minor, and often associated with a significant loss in tire lifetime.

The Roadless wheel system attempts to throw out the limitations of a pneumatic tire by substituting a tread material wrapped around a pair of rod networks attached by an axle. The rods are adjusted using a mechanism reminiscent of a scissor jack.

When the disks on which the rods are mounted are far apart, the wheel takes the form of a wide tire of small diameter. When the disks are moved close together, the wheel becomes a narrow tire of large diameter. The proximate rods from the two disks are mutually attached to a fixed bearing.

 The tread of the wheel must be sufficiently compliant to adapt to the changing aspect ratio of the wheel, so is likely to be some form of elastomer.

Alternately, the wheel can include compliant members that directly form the shape and supporting mechanism for the tread, which can then be as simple as a sheet of rubber.

Source: Gizmag

China: Small petrol firms call to break monopolies in the sector

The third plenum of China’s 18th CPC central committee will kick off in Beijing this Saturday. It's expected to inaugurate extensive economic reforms. Media reports indicate part of those reforms could well be breaking up monopolies in the country’s energy sector.

At two Petroleum stations in Shanghai, drivers said they routinely choose smaller stations rather than ones run by bigger players mainly for lower prices. Mr Lu has been a taxi driver for eight years.

"For taxis, the cheaper the better. Sometimes Sinopec offers discounts during the evening, but here there are discounts all day long." said Mr lu, taxi driver.

The price of number 92 fuel at this Dongliang station is 0.3 yuan per liter cheaper than that at the Sinopec station nearby. Sinopec’s price is 7.75 yuan per liter. Staff at the station says they usually try to undersell the market, and drivers confirm this.

"Compared with Sinopec and PetroChina, there are discounts here. " a driver said.

China, the world’s second-largest oil user, already relies on imports for 60 percent of its consumption and is set to double its fuel use by 2030. But right now, large state-owned oil companies still monopolize the sector. It’s not easy for smaller private operations to gain market share against the big established companies.

"In Shanghai, private stations may take up only 5 or ten percent of the market. It could be more in the suburbs. It’s just like a movie -- when the seats are full, there’s no room for late-comers." said Chen Xian, Executive Dean, School of Economics, Shanghai Jiaotong Univ..

China’s leading oil and gas producer PetroChina and Asia’s largest refiner Sinopec reported last week net profit growth of some 20 percent in the third quarter. They are benefiting from higher refining margins following Beijing’s loosening of price controls earlier this year. Domestic prices are now allowed to more closely follow international levels. But there are doubts over how far Beijing will go to shake up the state-owned firms, given the difficulty of making large-scale changes, but there is no doubt over what the effects could be.

"Competition will help consumers to get better service and prices. The oil price would be 10 percent cheaper if the oil sector were open to more players." said Chen Xian, Executive Dean, School of Economics, Shanghai Jiaotong Univ..

China’s retail oil price has risen nearly 40 percent since 2009.

France. Affaire Leonarda : la mobilisation lycéenne s'essouffle

"Leonarda Dibrani, 15 ans, avait été expulsée le 9 octobre du Doubs vers le Kosovo après avoir été interpellée par la police lors d'une sortie scolaire. Khatchik Kachatryan, 19 ans, lycéen à Paris a, lui, été expulsé le 12 octobre vers l'Arménie.

L'affaire Leonarda a donné lieu, mardi 5 novembre, à de nouvelles manifestations dans plusieurs villes et des perturbations dans quelques lycées parisiens. Cependant, la mobilisation des lycéens et des étudiants pour réclamer l'arrêt des expulsions de jeunes étrangers scolarisés semblait s'essouffler.

A la mi-journée à Paris, quelques centaines de manifestants défilaient à l'appel de la Fédération indépendante et démocratique lycéenne (FIDL), de l'Union nationale lycéenne (UNL) et de l'Union nationale des étudiants de France (UNEF), sous la pluie et sous bonne escorte policière. Lucas Ravaud, du Mouvement interlycéen indépendant, un collectif informel, a évoqué la présence de 1 000 à 2 000 personnes. A titre de comparaison, les manifestations précédentes avant les vacances de la Toussaint avaient mobilisé plusieurs milliers de jeunes.

La FIDL appelle en outre à "une semaine d'actions" à partir de lundi 11 novembre et à une deuxième manifestation jeudi. L'UNL pourrait également se mobiliserjeudi.

Selon le rectorat de Paris, 18 lycées – sur une centaine – ont été "perturbés" dans la matinée. La FIDL a recensé 30 lycées "lourdement perturbés à Paris", dont Charlemagne (4e arrondissement) ou Victor-Hugo (3e).

Des lycées de Rouen, Nancy, Gardanne, Marseille et Mende ont également été perturbés, selon la police. Des manifestations sont par ailleurs annoncées àStrasbourg, Metz, Reims, Lille (à l'appel de la Confédération générale du travail (CGT), de la Confédération française démocratique du travail (CFDT), de la Fédération syndicale unitaie (FSU), et de Solidaires), Marseille, Bordeaux et Alençon.

Le ministre de l'éducation nationale, Vincent Peillon,a exhorte lundi les lyceens mobilises a ne pas recourir a la "violence" et aux "blocus"."Leur émotion légitime a été entendue, dit-il, le premier ministre et le ministre de l'intérieur ont rédigé une circulaire qui sanctuarise l'école et le périscolaire." M. Peillon a cependant exclu toute autre mesure susceptible d'assouplir la législation en matière d'expulsion de familles d'enfants scolarisés. 

  Leonarda Dibrani a assuré ne pas vouloir regagner la France sans ses parents".

Source: Le Monde

Asia stocks subdued, euro rebounds to one-week high ahead of ECB

"Asian stocks got off to sluggish start on Thursday as investors hunkered down to take the latest pulse on the U.S. economy and implications for the Federal Reserve's easy money policy, while the euro perked up ahead of the European Central Bank meeting.

"All eyes will be on Friday's nonfarm payrolls data for further gauge on when the Fed will begin winding down its $85 billion-a-month bond-buying program.

Before that, investors will look to the first reading of U.S. third-quarter GDP data later in the day. Economists in a Reuters survey forecast a 2.0 percent annualized pace of growth compared with a 2.5 percent rate in the second-quarter".

"Markets were range bound ahead of the ECB and U.S. GDP data tonight, and U.S. payrolls on Friday," ANZ bank analysts said in a note.

MSCI's broadest index of Asia-Pacific shares outside Japan inched down 0.1 percent after snapping a four-day losing streak on Wednesday with a flat performance.

The single currency hovered near one-week highs against the dollar as strong German data prompted investors to scale back expectations of an ECB rate cut at its policy meeting later in the global day.

"The recent data enables them to wait till December and announce the rate cut as part of their broader inflation/growth forecasting exercise."

The euro was steady at $1.3515, having risen 0.3 percent on Wednesday on the back of the slight shift in expectations.

The single currency was also aided by new research papers from two of the Fed's top staff economists for more aggressive action by the U.S. central bank to drive down unemployment by promising to hold interest rates lower for longer".

Source: Reuters

Abe Risks Ire of Rice Farmers, Consumers With Latest Proposals

The Wall Street Journal Reports,"in a surprise move, Mr. Abe's ruling Liberal Democratic Party approved a plan that called for ending production rationing and across-the-board cash handouts to farmers in five years, curbing support for a key bloc that has kept the party in power for most of the postwar period".

"The proposal is part of a broader package being crafted by the LDP and the government to ease trade barriers in agriculture and other politically influential sectors, as Mr. Abe steers Japan to join an emerging pan-Pacific trade bloc endorsed by the U.S".

"But hours before the farm announcement, Mr. Abe's health minister disappointed some of the prime minister's allies by unveiling a closely watched plan for regulating online sales of over-the-counter medicines. While the market is relatively small, Mr. Abe earlier this year had made it a symbol of his push to cut red tape, vowing to set the same set of rules for e-commerce companies as brick-and-mortar drugstores. After intense pushback from pharmacies and concerns raised by safety advocates, he instead decided to put forth legislation that restricts online sales for the most potent OTC medications".

"That prompted a blistering news conference from Internet mogul Hiroshi Mikitani, once a strong supporter of Mr. Abe who said he would quit one of Mr. Abe's economic advisory panels in protest over the decision. "We were supposed to make it easier for businesses to do new things, and encourage innovation—we're about to go in the exact opposite direction," the chief executive of Rakuten Inc.,an online marketplace, told reporters.

Germany, Britain shine but Europe's recovery still fragile

 "The euro zone's economic recovery lost a little momentum last month, according to surveys that showed only modest growth in German and French businesses.

Data from non-euro zone Britain impressed again, however, and German industrial orders jumped underlining the uneven nature of overall European recovery.

Wednesday's purchasing managers' indexes (PMIs) from Markit showed the pace of growth in euro zone businesses slipped last month, although not nearly as badly as first projections.

Taken as a whole, the indexes pointed to fragile economic growth that will do little to ease the pressure on the European Central Bank to take some action, although not perhaps at its policy meeting on Thursday.

With surprisingly low inflation last month, speculation in markets and among economists has grown that the ECB is primed to stimulate the economy again - perhaps next month.

Overall, the tone of the data on Wednesday were mixed. German industrial orders rose at a far faster pace than expected in September, but euro zone retails sales slipped more than predicted during the same month.

By contrast, British indicators added to evidence the UK is spearheading Europe's recovery from recession.

UK industrial output in September came in much better than the Reuters consensus, following on from Tuesday's upbeat business surveys.

The Bank of England meets on Wednesday and Thursday and is not expected to change policy, having said it will keep interest rates at their record low until unemployment falls to 7 percent.

Economists expect the Bank to bring forward its expectation for when that will happen - currently late 2016 - when it publishes new forecasts next week.

The euro tip-toed away from a seven-week low on Wednesday after the data, as talk of extending the lifespan of the U.S. Federal Reserve's stimulus helped balance expectations of easing by the ECB in coming months".

Source: Reuters

EU to fine banks billions of euros over rate rigging

 "A number of finance firms, including Royal Bank of Scotland and Rabobank face billions of euros in fines next month from European Union regulators for colluding on global benchmark interest rates, reinforcing Brussels' hard line on the sector after the financial crisis.

EU antitrust chief Joaquin Almunia is set to unveil a record fine of at least 1.5 billion euros ($2.03 billion) on six banks, including Barclays and RBS, for rigging the yen Libor interest rate benchmark, a banking source said on Wednesday.

In addition to the yen Libor fines, likely to be the biggest so far from Brussels, Almunia will also penalise another group of banks for operating as a cartel in a separate case involving the rigging of the Euribor benchmark interest rate, reported by Reuters on Tuesday.

Fines in the two cases could run to billions of euros.

The fines will add to the spiralling cost to banks for cleaning up past misdeeds. Globally this is expected to reach about $125 billion if JP Morgan agrees a $13 billion deal with the U.S. authorities over mortgages.

This earnings season,banks set aside more money for the rising cost of fines, lawsuits and compensation".

Source:  Reuters

Aircraft: Maiden flight of next-gen MQ-8C Fire Scout unmanned helicopter

The next-generation MQ-8C Fire Scout unmanned helicopter has taken to the air for the first time at Naval Base Ventura County (NBVC) in California. Built by Northrop Grumman around a Bell 407 helicopter, the MQ-8C is designed to boast twice the endurance and three times the payload capacity of theMQ-8B variant that has clocked up over 5,000 flight hours in Afghanistan.

The maiden flight took place on October 31, with the unmanned helicopter taking off at 12:05 pm and flying for seven minutes in restricted airspace at NBVC to validate the autonomous control system. A second flight lasting nine minutes took off a couple of hours later and saw the aircraft reach an altitude of 500 ft while flying in a pattern around the airfield. A ground-based US Navy/Northrop Grumman flight test team at NBVC controlled the aircraft on both flights.

"During at-sea deployments, operators saw the need for a system that carried the same intelligence-gathering capabilities of the MQ-8B, but fly longer and carry additional payloads. Changing out the airframe, installing control systems and avionics, and then conducting a first flight of the system in a year is truly remarkable. I couldn't be more proud of the team."

The MQ-8B, which is based on the Sikorsky Schweizer 333 light piston-powered helicopter and boasts an endurance of over eight hours or the ability to carry payloads of up to 700 lb (320 kg) for short range missions.

Northrop Grumman is under contract to supply the US Navy with the first eight of 30 planned MQ-8C Fire Scouts that are set to enter service by mid-2014.

Source: Northrop Grumman

Twitter IPO Price Getting too Greedy Again

The Wall Street Journal reports that,Twitter executives originally estimated a share-price range of $17 to $20, and then on Monday raised range to between $23 and $25.

Twitter's Inc.'s initial public offering is likely to price at $25 to $28 a share, according to fund managers briefed by Goldman Sachs Group Inc.  and Morgan Stanley bankers, two of the banks underwriting the deal.

These people said that bankers were aiming to price the deal at $27, but that the company had not yet made a final decision.

Twitter executives have in the past expressed concerns  that a too-high price could see the company repeat experience of Facebook's IPO.

WSJ: Encouraging Economic Indicators

The Wall Street Journal reports that "October data from around the world are showing surprising strength. Today it was the turn of the euro zone’s services sector PMI reports, which followed on the heels of the region’s manufacturing PMIs to show better-than-expected growth. Other data from the U.K. and New Zealand were also positive. Indonesia’s growth slowed in response to rate hikes and softer commodity exports, but even there the growth rate is one that the rest of the world can envy".

On balance, the October data have so far been encouraging and, in the grand scheme of things, should feed through to a more positive assessment of overall risks by the U.S. Federal Reserve. Provided the U.S. continues to add jobs at a reasonable clip, a strengthening in global demand should help build the case at the Fed to taper its bond-buying some time in the new year, if not at the December meeting".

Discovery shines a light on potential cure for Alzheimer's and Parkinson's

It is generally believed that aggregations of proteins are responsible for brain disorders such as Alzheimer's, Parkinson's and Creutzfeldt-Jakob disease. However, the difficulty has been in detecting the aggregates responsible and removing them from the brain. Researchers at Chalmers University of Technology in Sweden and Polish Wroclaw University of Technology have found a potential solution using lasers.

Alzheimer's, Parkinson's and Creutzfeldt-Jakob disease are thought to be caused by aggregates of amyloid beta protein that start to inhibit proper cellular processes in the brain. Although it is technically possible to cure the diseases by detecting and removing the amyloid protein aggregates using chemicals, these chemicals are highly toxic and harmful to the patient.

The researchers discovered that by using a multi-photon laser technique, it is possible to distinguish between well-functioning proteins and the protein aggregates. The researchers are hopeful that once the malfunctioning proteins are detected, they can be removed using photo acoustic therapy, which is currently used in tomography.

Although different proteins create different kinds of amyloids, they generally have the same structure, which the researchers say is what makes it possible to differentiate them from healthy proteins using the multi-photon laser technique.

“Nobody has talked about using only light to treat these diseases until now," says Piotr Hanczyc at Chalmers University of Technology. "This is a totally new approach and we believe that this might become a breakthrough in the research of diseases such as Alzheimer’s, Parkinson’s and Creutzfeldt-Jakob disease. We have found a totally new way of discovering these structures using just laser light.”

Source: Gizmag

China: Opening-up state-owned sectors to private capital

On top of the government’s reform agenda is to open up more state-owned sectors including finance, telecoms and the railway industry to more private investment. CCTV reporter Guan Xin explored the trend of internet companies now venturing into the financial sector, and concluded that while the trend of freeing up China’s financial market is inevitable, the road will be bumpy.

A bold step into the financial sector... hopefully one in the right direction, several well-known private companies have pushed into the financial industry, a sector long guarded by the state.

Attracting savings and loaning to enterprises are no longer a bank’s specialty. Alibaba, Baidu, Tencent Holdings, and even the electrical appliance retailer Suning are among some of the new players.

“Our goal is to provide investment service with an easy and fast experience. Everyone should be able to invest. Financial products should not have high threshold and stay far away from ordinary people.” said Liu Chao, Financial Business Dept. Manager, Alibaba Small & Micro Financial Services Group.

Traditional banks, mostly state-owned ones, however, may view them as a threat. Particularly troubling to state banks is the competitive return that these new players offer on deposits.

Just two weeks after its initial launch, Alibaba’s online platform had 2.5 million customers transferring around 5.7 billion yuan into the fund. And Baidu received 1 billion yuan subscription of its fund on the first day. The success hasn’t gone unnoticed.

Competing directly with state firms, especially with the likes of ICBC, the world’s biggest bank, seems like a daunting task for private firms. Despite the positive reaction from the market, private internet finance could find itself mired in regulation if it steps too far into the territory.

After the intervention of the Chinese Securities Regulatory Commission, Baidu took the "8% guaranteed annual return" out from its marketing slogan.

"Constraints are not a problem. To me constraints sometimes mean opportunities...." said Gu Yunling, Chief Risk Officer, Turbo Financial Group.

Despite lacking clear rules, the government still has good reason not to stamp out the green shoots of the industry just yet.

China’s new leadership has recognized the importance of feeding entrepreneurs and the private sector with credit. A shortfall in that segment of the market birthed a massive shadow banking market four years ago where capital-starved businesses survive on high-interest loans.

Li Zhiguo is venturing into the financial sector and created a bookkeeping and financial management application.

“Recently the State Council has called for financial innovation, and to provide financial services to ordinary Chinese people, and small enterprises. I think that shows it’s a good direction. So we should venture into the field and do some exploration, and make adjustments according to the country’s regulations and policies.” said Li Zhiguo, Founder, Wacai.com.

The new trend draws great attention, not just for the future of online financing, but for the life of private business in China and the calibre of real reform currently underway. But the foray of internet companies into the financial sector despite huge risks is living proof that the opening up of predominately state-owned industries to private capital is an inevitable trend. 

Source:CCTV

China: Focusing on Creating an Innovative Private Sector.

On top of the government’s reform agenda is to open up more state-owned sectors including finance, telecoms and the railway industry to more private investment. CCTV reporter Guan Xin explored the trend of internet companies now venturing into the financial sector, and concluded that while the trend of freeing up China’s financial market is inevitable, the road will be bumpy.

A bold step into the financial sector... hopefully one in the right direction, several well-known private companies have pushed into the financial industry, a sector long guarded by the state.

Attracting savings and loaning to enterprises are no longer a bank’s specialty. Alibaba, Baidu, Tencent Holdings, and even the electrical appliance retailer Suning are among some of the new players.

“Our goal is to provide investment service with an easy and fast experience. Everyone should be able to invest. Financial products should not have high threshold and stay far away from ordinary people.” said Liu Chao, Financial Business Dept. Manager, Alibaba Small & Micro Financial Services Group.

Traditional banks, mostly state-owned ones, however, may view them as a threat. Particularly troubling to state banks is the competitive return that these new players offer on deposits.

Just two weeks after its initial launch, Alibaba’s online platform had 2.5 million customers transferring around 5.7 billion yuan into the fund. And Baidu received 1 billion yuan subscription of its fund on the first day. The success hasn’t gone unnoticed.

Competing directly with state firms, especially with the likes of ICBC, the world’s biggest bank, seems like a daunting task for private firms. Despite the positive reaction from the market, private internet finance could find itself mired in regulation if it steps too far into the territory.

After the intervention of the Chinese Securities Regulatory Commission, Baidu took the "8% guaranteed annual return" out from its marketing slogan.

"Constraints are not a problem. To me constraints sometimes mean opportunities...." said Gu Yunling, Chief Risk Officer, Turbo Financial Group.

Despite lacking clear rules, the government still has good reason not to stamp out the green shoots of the industry just yet.

China’s new leadership has recognized the importance of feeding entrepreneurs and the private sector with credit. A shortfall in that segment of the market birthed a massive shadow banking market four years ago where capital-starved businesses survive on high-interest loans.

Li Zhiguo is venturing into the financial sector and created a bookkeeping and financial management application.

“Recently the State Council has called for financial innovation, and to provide financial services to ordinary Chinese people, and small enterprises. I think that shows it’s a good direction. So we should venture into the field and do some exploration, and make adjustments according to the country’s regulations and policies.” said Li Zhiguo, Founder, Wacai.com.

The new trend draws great attention, not just for the future of online financing, but for the life of private business in China and the calibre of real reform currently underway. But the foray of internet companies into the financial sector despite huge risks is living proof that the opening up of predominately state-owned industries to private capital is an inevitable trend. 

Source: CCTV

Automotive: Toyota's hyper-radical FV2 concept pushes personal transportation boundaries

Toyota's already bold pursuit of new vistas in the realm of personal transportation took another quantum leap forward today, when the Japanese giant released details of the FV2, a concept car more closely related to the Kirobo humanoid communication robot than any vehicle currently on public roads.

In trying to explain the FV2 succinctly, it's probably best to start with how it isn't different from a contemporary car. It has four wheels. That's about it, and what's more, it rearranges those four wheels in a diamond shape and it tilts in corners, a bit like a motorcycle with giant training wheels on each side.

The FV2 can be driven from a seated position with the canopy closed, or from a standing position with the canopy open, with the transparent canopy becoming a full-height windshield with an extensive augmented reality display.

In both cases, the vehicle is steered, accelerated and braked by body movement.

It's not the first Toyota to use an external high-resolution display on its exterior, with the FUN

Vii doing the show rounds for the last two years after being shown at the Tokyo Motor Show in 2011. Toyota's experiments with expressing the driver's emotions on a vehicle's exterior date back more than a decade to the Personal Mobility Concept of 2003. 

One of the many themes of the FV2 is the expression of Toyota’s “Fun to Drive” philosophy, and the computer-human interface we first experienced with the Segway and its natural weight-shift steering has been incorporated into the FV2 to create a greater physical bonding between car and driver.

As cars and robots converge, advanced technologies will also be used to enhance the driving experience by connecting emotionally with the driver, and the FV2 is the first vehicle to incorporate some of the lessons learned in the Toyota Heart Project, a new communication research study featuring the well-known Kirobo and Mirata humanoid communication robots.

Japanese robotics research is well advanced in the area of companion robots using artificial intelligence plus voice analysis, image recognition of facial expressions, body movement and hand gestures to respond in such a way as to create an emotional connection between humans and robots.

Vehicle-to-vehicle and vehicle-to-infrastructure communications are also incorporated in the FV2, though the fine detail is not yet known.

Just how much this vehicle is a promotional exercise and how much it is real will be known a fortnight from now, when the Tokyo Motor Show opens.

Source: Gizmag

World Gold Council´s Feldman Says: Gold is between a Commodity and an Alternative Currency

**The best way to think about gold is really it sits between a commodity and an alternative currency. It trades much more like a currency. Bank for International Settlements actually advises banks to think about gold as a currency in terms of how they categorize it, because it because it has very specific characteristics particularly how it trades via the dollar and so we think about it as sitting between a commodity and currency. And I think that when you’re asking the question about price formation, clearly prices are formed in the future and the futures market. What we saw happen earlier this year, like with all commodities, was a disruption in the futures’ market in terms of the net long position declining significantly as speculative investors took down their trades in gold that affected the price. But then, what did we see on the back of that? We saw incredibly strong demand particularly out of Asia.

Kevin Feldman

Euro Zone Retail sales fell more than expected in September

Euro Zone Retail sales fell more than expected in September, data showed on Wednesday, as shoppers held back with purchases amid a slow economic recovery weighed down by record high unemployment and tight access to credit.

The volume of retail trade fell 0.6 percent on the month after a revised 0.5 percent rise in August, the EU's statistics office Eurostat said. Analysts polled by Reuters expected only a 0.4 percent decline.

Sales of both food and non-food products fell and the volume of sales of automotive fuels was flat on the month.

Compared with the same period last year, September retail sales were up 0.3 percent, following three straight months of declines, the data showed.

Domestic demand in the euro zone is stifled by the bloc's longest recession since the creation of the euro in 1999. It is also dented by record high unemployment of 12.2 percent and uncertainty over when the economy will pick up more strongly.

The decline in retail sales was especially significant in the southern Europe, with Portugal recording an all-time low with a 6.2 percent slump on the month and Spain's 2.5 percent decline was the biggest since April 2012.

Slovenia, now at risk of needing international financial assistance in case it fails to fix its banks and reform the economy, saw a 4.0 percent fall month-on-month in sales in September, the biggest decline since February 2009.

Source:Reuters

U.K. Industrial Output Grew 0.9% in September

 British industrial output grew more strongly than expected in September as it bounced back from a fall the previous month, providing some reassurance that the country's economic recovery is not being driven only by consumption.

Output in the industrial sector - which makes up about a sixth of Britain's economy - climbed 0.9 percent during the month and was pushed up most strongly by manufacturing, the Office for National Statistics said.

Economists had expected a rise of 0.5 percent, according to a Reuters poll of economists.

Sterling jumped to a one-week high against the dollar and British government bond prices fell as investors took the data as another sign that the Bank of England might bring forward its timeframe for raising interest rates.

But economists cautioned against reading too much into Wednesday's figures and Britain's economy was still being driven by consumption and the services sector.

Alan Clarke at Scotiabank said the September recovery in industrial output merely reversed August's drop. "Taking the two together shows there was nearly zero growth in the last two months," he said. "There can only be better news to come."

Growth in industrial output over the three months to September slowed to 0.6 percent and meant there was no change to the estimate of Britain's overall economic growth of 0.8 percent between July and September.

Britain's economy has staged a surprisingly strong recovery in 2013 after struggling to get over the financial crisis. But it has depended largely on consumer spending which has been buoyed by a recovery in the housing market.

A survey by mortgage lender Halifax published earlier on Wednesday showed British house prices in the three months to October were 6.9 percent higher than a year earlier.

The Bank of England meets on Wednesday and Thursday and is not expected to change policy, having said it will keep interest rates at their record low until unemployment falls to 7 percent.

Economists expect the Bank to bring forward its expectation for when that will happen - currently late 2016 - when it publishes new forecasts next week.

Compared with a year earlier, industrial output in September was 2.2 percent higher, the strongest annual growth since January 2011, helped by a rebound in oil and gas after maintenance work hit output last year.

The narrower category of manufacturing rose by 1.2 percent, compared with forecasts for a 1.1 percent rise.

A survey of purchasing managers last week suggested Britain's manufacturing sector was enjoying its fastest growth in export orders in more than two years but was still expanding more slowly than the construction and services sectors.

Source: Reuters

Financial markets question value of ECB rate cut

Last month's dive in euro zone inflation has put a European Central Bank rate cut back on the agenda, but with bank-to-bank lending rates already near zero, markets are struggling to see what difference it might make.

In recent months, further ECB cuts had all but been written off. Troubled economies were showing signs of stabilisation, the bank's main borrowing rate was at a record low and its deposit rate, which became more important when it flooded markets with ultra-cheap cash in the crisis, was at zero.

But after a couple of low-ball inflation numbers, the mood is switching towards a possible 25 basis point refi cut to 0.25 percent soon - albeit not this week according to a Reuters poll.

The question is whether a cut would make any difference.

The short answer may be no. The ECB has long complained its low rates are not getting through to euro zone trouble spots where worries about debt levels and lending to and by banks remain high.

For euro traders and for the money market rates that drive the prices of loans to firms and consumers, the greatest significance of a cut may be the signal the ECB sends.

Having been seen as in a neutral gear until last week, the shift back towards easing has changed the mood and caused a spike in FX market volatility.

The euro has dropped over 2 percent against the dollar over the last week as rate cut speculation intensified, but traders reckon it may need hints of more extreme measures for it to move to $1.30. It was at $1.35 on Thursday.

UBS is one of those forecasting a cut on Thursday, but Mansoor Mohi-uddin, head foreign exchange strategy, said options such as negative deposit rates, more long-term cheap loans or even quantitative easing would have a greater impact.

"These are instruments likely to be chosen as policies of last resort. But the risk of the ECB having to eventually consider such tools is set to keep the single currency under this year's highs," he said.

Source: Reuters

Ferrari Chairman: Chinese market will be very important in next decade

Not all luxury brands’ growth numbers are slowing down in China. Legendary luxury car maker Ferrari’s Chinese business is still booming. This year marks the company’s 30-year anniversary of entering Hong Kong’s market. The luxury car maker celebrates its 3 decade long legacy in China. Ferrari’s Chairman Mr. Luca di Montezomolo says the Chinese market is growing, and will be the most important in the next decade.

Source: CCTV

ASIAN MARKETS MIXED AS WEAKER YEN BOLSTERS TOKYO

Asia stock markets were mixed on Wednesday as the weaker yen gave Japanese stocks a boost while traders in Hong Kong mostly sat on the sidelines ahead of key economic data at a Communist Party policy meeting starting at the weekend. 

The meeting is expected to shed light on the future direction of Chinese economic policy. 

The benchmark Nikkei 225 index closed up 111 points at 14,337 in Tokyo while the Hang Seng reduced 2 points at 23,036.

Nissan recovered 2% after Tuesday's 10% tumble after it slashed its full-year earnings guidance. 

Traders also eagerly anticipated Toyota's earnings. The car giant said quarterly profit soared 70% as it continues to reduce costs and the weaker yen boosted its earnings. It also raised its earnings forecast. 

Elsewhere Fast Retailing slipped 0.8% after it said same-store sales at its Uniqlo causal clothing chain dropped 13.8% in October as the warmer than normal weather and typhoons put off shoppers.

Industrial robot maker Fanuc rose 1.5% while heavyweight mobile operator SoftBank declined 2.1%. Kyocera firmed 1.3%.

Source: LiveCharts

Fed Staff urges Cutting Jobless threshhold,Increasing Inflation target

Federal Reserve (Fed) staff research papers to be presented at the International Monetary Fund (IMF) annual research conference on Thursday and Friday suggest that the US monetary authority might have solid reasons to lower the unemployment threshold and allow inflation to move beyond its current target.
According to the report, one of the papers came to the conclusion that the Fed should consider lowering its call to guarantee maintaining interest rates at historically low levels as long as the unemployment rate remains above 6.5%. The study's economic model shows that "reducing the unemployment threshold improves measured economic performance until the unemployment threshold reaches 5.5%". 

The other paper warned of the danger of "hysteresis", the possibility that periods of high joblessness in an economy increase the rate of unemployment below which inflation begins to accelerate. According to the agency, the study suggests that the Fed should drive economic growth even if this pushes inflation over its 2% target "for a certain period of time". 

Due to these two papers,Goldman Sachs Chief Economist Jan Hatzius, arrived at the conclusion that the Fed will cut its unemployment threshold to 6% at the March 2014 meeting at the same time it begins to taper its asset purchase program. The idea is that the dovish threshold cut will counterbalance the "hawkish" QE reduction. Hatzius did note that both decisions could come as early as the December Fed meeting.

Source: LiveCharts

Barclays: US economy held up well during government shutdown

Wall Street had largely recovered from an earlier swoon following the release of a better than expected reading on the US services sector, with initial comments from economists being rather upbeat. Similarly, long-term US Treasury yields were off their morning highs. 

That came as traders prepared for a European Central bank policy meeting, on Thursday, Friday's US non-farm payrolls report and the Chinese Communist Party's four-day conclave, which was slated to start on Saturday. 

Quite talked about as well, overnight Goldman Sachs Chief Economist John Hatzius told clients that his "base-case" was now that come March 2014 the US central bank will lower its unemployment rate threshold for a policy rate increase, albeit while at the same time initiating the tapering of its programme of quantitative easing. 

However, said change in the unemployment threshold could come sooner. Hence, so too may the start date for QE, Goldman added.

In parallel, front-month West Texas crude futures were continuing to grind lower. 

Acting as a backdrop, Boston Federal Reserve Bank President Eric Rosengren on Tuesday morning declared himself dissatisfied with the current pace of jobs growth in the US.

Source: LiveCharts

Euro under pressure ahead of ECB

The euro came under selling pressure on Tuesday as investors bet that the European Central Bank could cut or signal a future interest cut when it meets for its policy meeting on Thursday.

The single currency changed hands at $1.3476 from $1.3511 on Monday. 

Also of note was the European Commission's downgrade to its Eurozone gross domestic product forecast for 2014 to 1.1% from 1.2% previously. The commission also expects the economy to contract 0.4% and joblessness to remain at its previous forecast of 12.2%.

Meanwhile interest in the dollar picked up after data showed US services-sector activity expanded at a faster than expected rate in October.

The Institute for Supply Management said its survey of purchasing managers rose to 55.4% in October from 54.4% in September. It came in ahead of expectations of a decline to 54.0% and gave strength to the view that the Federal Reserve may consider scaling back stimulus.

The dollar index, which measures the US dollar against a basket of six others, rose to 80.709 from 80.605 on Monday.

Sterling advanced to $1.6048 from $1.5952 on Monday as investors cheered a stronger than expected Markit/CIPS UK Services PMI for October. The index rose to 62.5 in October from September's 60.3 after a strong increase in new business.

Source: LiveCharts